One of the most common misconceptions we encounter about apprenticeships is the idea that the time it takes to train a candidate creates a bigger financial burden on an organisation than simply hiring a qualified individual in the first instance.
In fact, not only do apprentices provide significant cost savings, but also most large organisations are actually already paying towards apprenticeships – even if they do not recruit any themselves – thanks to the government’s Apprenticeship Levy.
What is the Levy?
The Apprenticeship Levy is a tax first introduced in the July 2015 budget, and came into effect on April 2017. All UK employers with a payroll exceeding £3m must contribute .05 percent of their total payroll towards the levy.
Each company pays its levy to HMRC through PAYE in the same manner as contributions to income tax and national insurance. The government also contributes an additional 10 percent to each monthly payment. Payments are then held by HMRC, and organisations can then access the funds to finance their apprenticeship programmes. Any amount that remains unused after 24 months will be reclaimed by HMRC and used to contribute to the national fund.
The Levy is the very definition of “use or lose it”. Companies that don’t currently operate any apprenticeship programmes are continually paying into the Levy and missing the opportunity to reap its rewards.
How the Levy funds apprenticeships
The Levy can be used to fund the training of both current employees and new apprentices on any approved Apprenticeship Standards – such as Raytheon Professional Service’s Cybersecurity Apprenticeship programme.
Alongside the funding from the Levy, running apprenticeships offers several other significant financial advantages, particularly when it comes to taking on college or university leavers. An employer will not need to pay National Insurance for any apprentice under the age of 25 and on an annual salary less than £40k. For an apprentice earning £25k per annum, this represents a saving of £2,280 per year for the employer compared to the salary of a full-time employee.
Rather than creating a financial burden, apprenticeship programmes like Raytheon’s actually creates a powerful cost saving opportunity.
The real value of apprentices
While the financial savings can be a powerful incentive, this is only one element of what makes an apprentice so valuable. The most valuable aspect is the opportunity to access a workforce of passionate and talented young people and grow their abilities in-house. This has become increasingly essential in fields like cybersecurity which have long suffered from a crippling lack of skilled and qualified workers.
Raytheon’s Cybersecurity Apprenticeship programme will enable organisations to immediately bolster their security teams with upskilled current employees or new recruits who will steadily enhance their abilities with a blended approach of on-the-job learning and offsite teaching and assessment. After two years, successful candidates will be fully qualified and certified cybersecurity professionals. With the cyber skills gap leading to an aggressively competitive market and vastly inflated salaries, the ability to upskill or take on and train apprentices in house represents one of the most cost-effective ways a company can access security talent.
Get in touch with our team now to find out how your organisation can work with Raytheon Professional Services to establish and manage a successful Cyber Security Apprenticeship programme.