The impact of rising inflation on households and individuals has dominated headlines over recent months, driven by news of the widespread strikes happening across our public sector with workers fighting, in part, against the real term pay cut they are facing, says Nicola Hay.
But it is not just the public sector facing pay cuts. According to the latest ONS data, real-terms annual pay growth across both the public and private sector fell by 2.6 percent in the period from September to November 2022 — one of the largest falls in growth since comparable records began. At the same time, the ongoing cost-of-living crisis has put added financial strain on the lives of individuals and families across the UK.
These wider economic factors are putting pressure on employers to help staff – both with immediate monetary support but also with long-term career development opportunities that can support wage increases in the near future. We are also witnessing an end to the jobs boom of 2022, where employees could secure pay rises by switching jobs, resulting in more common pay rise request from staff. But the challenge for companies is meeting these inflation-busting pay increases while themselves navigating a recession and the impact that has on the business’ own future and growth objectives.
The value of upskilling through apprenticeships
Given the pace of rising inflation, up-skilling for an internal promotion offers the best means for boosting a person’s progression up the career ladder, while also supporting a business’ growth ambitions during an economic downturn. One way of doing so is through dedicated apprenticeship programmes.
Apprenticeships offer several benefits to employers reassessing their learning and development offering. They can be flexible to a business’ needs, for instance; a company may choose to focus on attracting early talent – those with the knowledge to identify fresh new ideas and business opportunities. Equally, a programme could be designed to support more experienced members of the workforce while addressing any potential critical skills gaps, such as experience with new technology.
In both cases, investing in developing the skills of staff will not only help improve business resilience, by helping to create a diverse, multi-skilled workforce, but it will equally support with staff retention and satisfaction by speeding up their way into higher paying positions.
Making the most of the Apprenticeship Levy
The value apprenticeship programmes can offer in upskilling the workforce has long been hailed by Government. So much so that in 2017 the Government launched its Apprenticeship Levy. Businesses can utilise the Levy to fund apprenticeship training programmes across all levels.
Since the Levy’s inception, we’ve seen large numbers of businesses adopt it and utilise it creatively to unlock new skills and talent, but we’ve also seen many more struggle to get to grips with the many different ways they can use it to support business growth.
To break free of this stranglehold on growth, many business leaders are keen to invest more strategically to equip their existing workforce with the necessary skills to fill critical vacancies. This has sparked a renewed interest in the Apprenticeship Levy, particularly to support professional apprenticeships.
The breadth of professional apprenticeships available to firms has never been wider – from accounting to nursing and data to law, there’s an apprenticeship that can support the upskilling of almost any employee and business area. Making the most of what’s on offer can support businesses in boosting employee moral, supporting staff retention while creating efficiencies that deliver business growth.
Final thoughts
As organisations reassess their company employee benefits, companies should consider boosting learning and development provision alongside providing added financial support, to help staff navigate the wider cost of living challenges.
The businesses we work with have found it useful to step back and scope out how they can effectively use apprenticeships to support their workforce planning and people development plans across their organisation. Implementing apprenticeship training and leveraging the Apprenticeship funding into L&D policies is a simple and cost-effective way of benefitting both the staff member and the business.
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Nichola Hay MBE, Director of Apprenticeship Strategy and Policy at BPP.
Recognised for her services to apprenticeships and skills in the Queen's 2021 New Year Honour List, Nichola Hay has worked in the further education sector for over 20 years, helping UK businesses to upskill and reskill employees across their entire organisation to help shape professional at every level.
Nichola is at the forefront of thought leadership and guidance on the challenges and opportunities within the UK's apprenticeship market - including how to maximise the value of the apprenticeship levy, whether a business pays into it or not.
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