The Apprenticeship Levy is certain to change the UK’s workforce, and we can already see how it is starting to uniquely affect different sectors.
Retail is particularly interesting because of a number of factors. Not least, the sheer size of the sector means that it will contribute £235m in Apprenticeship Levy in the first year alone, and in a market with such tight margins this will not go unnoticed.
The Apprenticeship Levy will force a shift towards multi-skilled and more skilled job roles. This will have a major impact on retail in particular, where such a large number of employees currently work in roles that require fewer certifiable skills.
Will this mean the end of traditional roles such as cashier and shelf-stacker? Will it accelerate the trend towards automation? Perhaps it will mean discharging more responsibilities onto shop-floor staff. Not only the levy, but also the retail industry’s move towards an omnichannel customer experience, would suggest that yes, big changes are coming.
Opportunity to up-skill
The necessity to train people to a national framework of apprenticeship standards will mean employers have to get more from each individual. Employment is becoming more expensive, not only because of the levy but also thanks to the minimum wage increase and changes to National Insurance. This could well mean fewer part-time jobs, lower headcount and more multi-skilled roles.
“If traditional cashier and shelf-stacker roles have to dramatically adapt because of the levy, one positive effect is that it will make retail a more attractive proposition to high-calibre school-leavers”
We may start to see skills being developed in retail that are more in line with the hospitality sector: personal skills such as service; not just technology-driven.
And if traditional cashier and shelf-stacker roles have to dramatically adapt because of the levy, one positive effect of this is that it will make retail a more attractive proposition to high-calibre school-leavers as more skilled jobs have clearer career progression opportunities.
Another potential side effect of this is that UK retailers may be able to claw back some competitive advantage against mainland European rivals such as Aldi and Lidl. The levy will mean that individuals on the shop floor are required to have more product knowledge, more stock management knowledge and be more productive, and recruitment policies will reflect this.
This model is already the norm in places like Germany, and has been for years, an d is one way that its retailers have been able to make such a killing on margin. Bringing UK practices into line with this could level the playing field.
“The levy gives smaller businesses a vehicle and an incentive to get into structured training, and support is available from sources such as industry charity retailTRUST”
Next there is the consideration of how smaller levy-payers will get what they need out of the levy. The big multiples and corporate retailers can afford to create bespoke apprenticeship programmes, but what about the mid-tier?
This could actually be a big opportunity for them: the levy gives these businesses a vehicle and an incentive to get into structured training, and support is available from sources such as industry charity retailTRUST, which is able to help employers in developing best practice and provide advice as to how best to use their levy pots to provide real added value for both employer and the industry.
And while they may not be able to compete on scale with the big corporate retailers, the mid-sized companies might look to utilise their levy pot to develop higher-level apprenticeships – even up to degree level – perhaps to develop senior management pipelines and create advantage there.
One final consideration, particular to industries such as retail, is seasonality.
Now that the levy is scheduled to take effect in April 2017, this will affect the sector because retail recruitment and staffing decisions have traditionally followed calendar cycles such as school years and, of course, the autumn spike. Will employers now be saving up their recruitment budgets instead?
I do not see this as a problem because the bigger picture is one of opportunity rather than threat. Now that the Government has clarified details about the levy, the retail sector can start to plan ahead, and with expert support available, take every advantage of the imperative to up-skill.
- Richard Marsh is operations director at Capita Talent Partnerships