The new apprenticeship levy - KPMG United Kingdom
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Apprenticeship levy: a game changer for graduate recruiters

Apprenticeship levy: a game changer

Together, the new levy and new degree apprenticeships are a potent mix. They are set to transform the way people study for and gain their degrees.



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  • The combined impact of the new apprenticeship levy and new degree-level apprenticeships is set to transform graduate recruitment.
  • Degree apprenticeships will join conventional university courses as the potential route to a degree.
  • Employers that want to continue to attract the best young talent will need to consider offering degree apprenticeships.
  • Planning needs to begin now as the rise of degree apprenticeships could demand a major rebalancing of recruitment and training strategy.


The new apprenticeship levy comes into effect from April 2017. Many businesses are concerned about the new charge, which is expected to raise £11.6 billion in the next six years. However, if you are in the business of recruiting talent, thinking about the new levy purely as a tax is to ignore its wider impact and opportunities. 

The levy is not the only recent change to apprenticeships. Under new rules, apprenticeships can now be applied to any job role – including management, finance and digital – in some cases it can result in a degree or master’s qualification. 

Together both the new levy and new degree apprenticeships are a potent mix. They are set to transform the way people can study for and gain degrees. This means, as a graduate recruiter it may be time to rethink your organisation’s strategy for attracting the best talent.


A new way to graduate

Degree apprenticeships, launched by the government in 2015 are now being developed and trialled by employers. These are designed by industry and qualify for funding through the new levy. Both points make them highly attractive for employers. 

It’s not hard to see how this scenario might evolve. With the levy incentivising employers to hire more apprentices, in a few years, degree apprenticeships could become a significant route to a degree - transforming the marketplace for talent. Degree apprenticeships with the best employers could become as sought after as places on degree courses with top universities.

All change for employers

This shift has major implications if your business needs graduates. If you continue to only recruit through a conventional graduate programme, you may find that as degree apprenticeships become more widely offered, you will have a different pool of candidates to choose from. So you need to start planning for this scenario now. 

If you make degree apprenticeships part of your talent strategy, you will need to carry out a major rebalancing of recruitment, training and even pastoral care.

Employers will be able to use the funds they paid into the levy to fund apprenticeship education. In the context of re-balancing your workforce, the new levy starts to look like an opportunity to invest rather than a new tax. 

Action to take now

To capitalise on the opportunities arising from the new levy and the new degree apprenticeships, here are three points to consider:

  • What is your current dependency on graduates?
  • Where do you want your business to be in five years and what graduates will we need to get us there?
  • Will your existing graduate recruitment strategy deliver the talent needed?

Degree apprenticeships present an opportunity to recruit from a wider talent pool and build a more diverse workforce. This new way of getting a degree will still appeal to young people who excel academically but it also opens the door to people who thrive in a practical environment. 

The new apprenticeships could also help to increase the proportion of employees with strong academic credentials active in the workplace. This in turn could lead to vital gains in productivity, helping to address one of the most serious structural challenges faced by UK companies. 

The apprenticeship levy

From April 2017, all business with a wage bill of over £3m will pay an annual levy of 0.5% of the total. The levy will be used to establish a national fund from which employers can draw to pay for apprenticeship training.  The new levy will apply to the new higher and degree apprenticeships as well as intermediate and advanced level apprenticeship schemes. 

Degree apprenticeships

Under new rules, apprenticeships can now be applied to any job role – including management, financial and digital – and can be used as a route to a degree or even a master’s qualification. These new apprenticeships, which offer people of all ages an alternative way to gain a degree, qualify for funding through the new apprenticeship levy. 


KPMG and The Open University (OU) are joining forces to launch an apprenticeship service that enables employers to identify and fulfil their future training needs. Read more


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