Could The New Apprenticeships Scheme Change British IT?
At CoedCode this week we had a talk and panel discussion from a range of industry representatives on ways into IT. It was clear that often ITers, particularly women, had had to hustle to get into and stay in their jobs in tech — from moving schools to paying for their own extra training in evenings and weekends.
For an industry with a chronic shortage of workers isn’t that a bit odd?
In the UK though there is now a new route into tech that MIGHT make it easier. It’s called the Apprenticeship Scheme and I’m about to tell you all about it.
Q1. Describe a skills gap
“Every company is a digital company and almost every job is a digital job” — Chris Mairs, Chief Scientist, Metaswitch Networks, UK Digital Skills Workforce Report
“23% of parents believe digital skills to be irrelevant to their children’s future career success” — O2 UK Skills Report
- The UK needed 745K new tech workers in 2013–2017 (O2).
- 975K young people are not in education, employment or training (2014).
- There are 100K unfilled vacancies at Microsoft’s UK partners alone (2014).
Q2. What is the UK doing about it?
- Schools lack qualified CS teachers. Universities and fees aren’t suited to all students. Basically, the education sector is moving way too slowly & with insufficient budget.
- The informal, 3rd sector helpfully runs hackathons etc.. outside the slow-moving education system, but that’s fragmented with no clear funnel to jobs.
- Parents and students need a convincing path to digital qualifications & jobs.
- From April 2017, UKGov started levying large businesses to subsidise apprenticeships up to professional-level qualifications in every sector, including tech.
- This is called the Apprenticeship Levy and the money is going to subsidise apprenticeships in every subject at every level from GCSE (16 year-old) to MSc (post graduate) equivalent, for all ages.
- The UKGov message is clear — money is now available, industry must act directly and supplement the education sector.
“The UK aims to have 3 million apprentices by 2020” — The Rt Hon Sajid Javid (UK Business Secretary)
“nearly 40% of firms have no understanding, or haven’t heard of the [apprentice] levy” — Marcus Mason, British Chamber of Commerce (BCC)
Q3. What are apprenticeships?
- An apprenticeship is a genuine job with an accompanying skills development programme.
- Big employers (payroll>£3M) will pay a 0.5% payroll levy from April 2017.
- Levy funds can be used to pay for apprentice training & assessment from an approved supplier.
- For smaller employers UKGov covers 90% of training costs even though they don’t pay the levy.
- Usually there is no employer’s NI to pay for an apprentice.
- UKGov provides a £1500 grant per apprentice for companies with <50 employees.
Sounds good. But…
- Out of 120K UK IT businesses, 95% employ fewer than 10 folk. They won’t have departments for handling apprentice recruitment.
- 3 million is one apprentice for every ten workers throughout the whole UK economy or ~140K new tech-sector apprentices. Generating that number of good technical apprentices will be difficult — but they don’t have to be new to the sector. Upskilling is also allowed.
Q4. What defines an apprentice?
An apprentice must:
- work with experienced staff
- learn job-specific skills
- study for a work-based qualification during their working week (for example, at a college or training organisation)
Age or level of experience are not pre-requisites.
2015/16 Apprentice Stats
- 509,400 new apprentices started in England. 904,800 people were on an apprenticeship.
- People aged 25+ accounted for 44% (224,100) of apprenticeship starts. People aged 19–24 accounted for 30% (153,860) and <19s 26% (131,420).
- The majority of apprenticeship starts were in the service sectors. 71% of all starts were concentrated in 3 sectors: Business, Administration & Law; Health, Public Services & Care and Retail & Commercial Enterprise. IT accounted for just 3% of apprentices — far less than our fair share by headcout or revenue.
- Higher (post-degree) apprenticeships were 5% of all starts. Intermediate (post-GCSE) apprenticeships represented 57%.
- 53% of apprenticeships starts were by women (268,730) and 47% by men (240,630).
Q5. What is the rest of the tech industry doing?
Existing commercial models:
- ATAs (apprentice training agencies) are employment agencies for apprentices. They directly employ and manage individuals who undertake their apprenticeship with an approved training provider whilst being hired out to ‘host employers’. Aim is to remove friction for SMEs and make money. There are currently only 66 approved ATAs across the UK covering all sectors.
- Microsoft place thousands of apprentices every year (5.8K in 2014) into their own supply chain. They help their suppliers with the recruitment/organisation.
- Some other large organisations also run similar internal and external projects (Cap Gemini, Unilever etc..) This is likely to become more common post-levy. Large companies may do this internally.
So clearly the bigger companies are waking up to apprentices but there’s no clear story for SMEs — though it sounds like apprenticeships could be very valuable.
I would love to investigate the current apprentice situation for tech companies, particularly SMEs that want to use apprenticeships for upskilling staff. What’s best practice now? How do you even start? What are the right courses? How do you tell if your company is the right fit for apprentices or could you use the apprenticeship funds to develop existing folk?
I met up with a local London apprentice agency Corndel, who also spoke at CoedCode, to ask about how apprenticeships might work in practise and I’ll talk more about that next…
For this blog post I heavily referenced the Digitial Skills for Tomorrow’s World report from Maggie Philbin (below).
https://www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work how the apprentice levy works (ukgov)
https://www.gov.uk/take-on-an-apprentice national apprenticeship service (ukgov)
https://www.gov.uk/take-on-an-apprentice taking on an apprentice (ukgov)
http://www.ukdigitalskills.com/wp-content/uploads/2014/07/Binder-9-reduced.pdf Digital Skills for Tomorrow’s World
- Apprentice statistics in England