UK Business Schools Benefit from Apprenticeship Strategy

QS takes a look at what the UK apprenticeship levy might mean for business schools

When we think of an apprentice, an image of a worker in the manufacturing sector, or a hairdresser, usually springs to mind. However the perception of an apprentice is changing, with a growing number of managers joining program formats which were once the preserve of manual trades. 

In the UK a sea change may be underway in executive education. The introduction of the apprenticeship levy by the government, in April 2017, is seen as an opportunity for business schools to enrol more students into courses for senior working managers. The levy compels large employers — those with an annual payroll of more than £3 million — to spend 0.5% of the total on apprenticeship training. 

The levy was widely seen as a way to get more young people into professional occupations. But, many corporations are willing to spend their levy pot on up-skilling more senior staff, to address the UK’s poor productivity record. Employers at first complained of the levy as being akin to a tax. Yet attitudes appear to be changing, with the Chartered Management Institute alone signing up around 900 senior executives, from more than 120 firms, to begin master’s degrees funded by the levy. 

“It’s a game-changer as far as corporate education goes because for the first time ever UK firms are being almost required to put money into workforce development,” says professor John Board, dean of the Henley Business School. “We’re moving away from a world in which we persuade firms to spend money, to them coming to us to use money they will have to spend anyway.” 

The government mandates firms spend their cash within two years, or risk losing it. “That’s the immediate incentive for firms,” professor Board says. 

In November, Henley Business School announced the launch of a new initiative to deliver apprenticeship programs for UK businesses. The courses will combine traditional academia with workshops, digital learning and on-the-job experience, enabling apprentices to study whilst working. One of the first programs to be offered, will be the Chartered Manager Degree Apprenticeship (CMDA), which will help managers to hone their leadership skills. 

Professor Board expects demand not only from large companies but also SMEs in England, who if under the £3 million levy threshold can still get funding from the government to cover 90% of training costs. 

The benefits of apprenticeships to companies of all sizes are huge, believes Simon Constance, people advisory services partner with EY, the professional services firm. 

“The levy is an opportunity for them to invest in developing their workforce, which they otherwise wouldn’t have,” he says. “There’s so much focus on productivity in the UK and one of the observations of the government is that senior managers in the UK economy aren’t well skilled enough to improve productivity. We need to invest in their capability.” 

As a levy-payer, EY plans to in future look at getting more senior managers onto apprenticeship programmes, according to Constance. “Apprenticeships enable managers to improve career development and develop business skills in areas such a strategy, marketing and finance,” he says. 

Cranfield University’s School of Management, is also hoping to capitalize on the new apprenticeship levy. In March this year, the school launched a new executive MBA program with Grant Thornton, the accounting firm, aimed at businesses that need to spend levy money. 

The course hopes to address the UK’s skills gaps, with one survey showing that 71% of organisations admitted they failed to effectively train first-time managers, according to Cranfield. “Developing the skills and knowledge of managers in organisations is critical to ensure we can drive productivity and growth and ensure sustainable, long term results,” says Sacha Romanovitch, Grant Thornton’s UK CEO. 

While the levy is a good opportunity for business schools, it potentially represents a threat to their long-established executive education courses. The fear is that employers will cut back on sending managers to traditional EMBAs, in favour of specialist apprenticeship courses. “There is a likelihood that the pattern of buying will change, but we will deliver the same volume of programs,” says professor Board. 

EY’s Constance adds that business schools will need to re-think the way they deliver executive education. “They will need to develop their ability to support distance learning and pay more attention in their course design to how students can directly apply their knowledge on the job.”

Seb Murray
Written by Seb Murray

Seb is a journalist and consulting editor who has developed a successful track record writing about business, education and technology for the international press.

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