Apprenticeships and the Apprenticeship Levy A guide for employers 1
We are... your competitive edge World-renowned qualifications and membership to further your career in financial services The CISI is proudly part of the 2
Foreword 2017 will see a great number of changes in the world of apprenticeships. Government reforms aim to increase the number of apprentices in England and reduce the skills gap. The levy on employers with a UK PAYE bill of over 3 million is estimated to raise approximately 3 billion by 2020 which will be reinvested in training apprentices, transforming the UK s workforce. Financial services employers are fast learning the benefits of offering apprenticeships. They provide a fantastic opportunity for employers to train both new and existing members of staff, to ensure they learn the right knowledge, skills and behaviour to carry out a specific job role. Most importantly, they provide staff with a robust training programme and the opportunity to study for a relevant professional qualification whilst earning a salary. Apprentices play an important role in the profession and we fully support the development of the new apprenticeship standards. They are more flexible than the old frameworks and include our high level qualifications and most introductory qualifications. Designed by employers, they can be tailored to meet the needs of your business. This guide provides information and practical support surrounding the changes to apprenticeships and funding in 2017. It has been designed to help you prepare for the changes, coming into effect in April 2017. Simon Culhane, Chartered FCSI Chief Executive Chartered Institute for Securities & Investment (CISI) The CISI has qualifications available in nine approved apprenticeship standards, for more information go to page 9 1
Benefits to firms Apprenticeships are great for business investing in the future of your business and your staff An effective way to develop talent and meet your firm s training needs Provides your firm with the skills force it needs for the present-day and future Opportunity to develop existing employees capabilities and skills Can be a costeffective way to recruit staff 84% of apprentices said their career prospects have improved 70% of employers said apprenticeships improved product quality and service Apprenticeship Evaluation: Survey of learners (2014), Department for Business Innovation & Skills Apprenticeship Evaluation: Survey of employers (2014), Department for Business Innovation & Skills 26-28 The typical return Apprenticeships provide for every 1 of government investment in apprenticeships at levels 2 and 3 BIS research paper 229 (2015) Further education: measuring the net present value in England 2
What employers are saying: Apprentices bring a fresh approach to roles, they re exceptionally keen and have a very positive attitude to starting in the workplace. Phillip Paige, VP Junior Talent Pipeline Manager, J.P. Morgan What apprentices are saying: In four years time (when I would have just completed my degree) I will have four years worth of experience, my CISI and NVQ qualifications from my apprenticeship plus any extra CISI qualifications I may have completed and the skills and knowledge necessary to excel in the finance profession - the latter something I may not have received at university. Charlie Head, Client Services Voice Associate, IFDS My apprenticeship has offered everything I was looking for. Profession insight, relevant qualifications and a great platform for my career. Connor Day, Apprentice, Rathbones 3
Changes to apprenticeships and the apprenticeship levy Apprenticeship reform is central to the government s agenda to boost employability and reduce the skill gap. From 6 April 2017, the apprenticeship levy will be launched across the UK. The levy will encourage more organisations to offer apprenticeship programmes to develop and upskill both new and existing members of staff and allow employers to take control of their own funding of apprenticeships. In order to run an apprenticeship programme, employers will need to register online with the Department for Education (see page six for more information) and choose an approved training providers from the Register of Apprenticeship Training Provider (RoATP). This register (https://www.gov.uk/guidance/registerof-apprenticeship-training-providers) will encourage diversity of apprenticeships, supporting quality and employer choice What does the levy mean? The facts: From 6 April 2017 all UK employers with an annual PAYE bill of over 3 million will pay an annual levy of 0.5%. This payment will be taken on a monthly basis by HMRC. Funding for apprenticeship training will be accessed and managed differently depending on whether you are a levy, or non-levy employer. The levy pot can only be used to fund training and assessment of apprenticeships in England. Wales, Scotland and Northern Ireland have their own arrangements for funding apprentices. It can be spent on apprenticeship training for all employees at all levels and ages, including those with a degree. What can the levy be spent on? An approved apprenticeship standard or framework All relevant training costs for an apprenticeship An approved training provider An assessment organisation All end-point assessment costs for the apprentice The full cost of the qualification specified within the apprenticeship Membership of the CISI (where applicable) Up to the funding band maximum to the apprenticeship What can t the levy be spent on? The cost of setting up an apprenticeship programme Management of the apprentice or apprenticeship programme (including any required training) Employment and salary cost of the apprentice Travel and subsistence costs Traineeships or work placements Professional qualifications that are not specified within the apprenticeship 4
Levy paying employer Non-levy paying employer 0.5% of your annual UK pay bill over 3m will be collected in monthly instalments through PAYE from April 2017. The Digital Apprenticeship Service (DAS) is not available for non-levy paying employers. Levy payments will appear in your Digital Apprenticeship Service (DAS) account. You will be able to register for your DAS account from February 2017. You will need to choose your training provider from the RoATP and negotiate a deal with them. Funds will be accessed through your DAS account from May 2017. Each levy-paying employer will receive an annual one-off allowance of 15,000, to offset against the levy, from government which will be available via your DAS account. Apprenticeships will be funded through a co-investment scheme in which government will pay 90% of training and assessment and you will be required to contribute the remaining 10% up to the maximum amount of government funding available for that apprenticeship. Each apprenticeship has been allocated within one of 15 funding caps. Each monthly payment will be available for 24 months. If you run out of levy funding, the remaining balance of the apprenticeship will switch to the same co-investment scheme as non-levy paying employers. Therefore employers will receive 90% funding for the remaining balance of the apprenticeship. Additional funding is available if you employ less than 50 members of staff, or if your apprentices are 16-18 years old or 19-24 and have an EHCP. If you employ apprentices aged 16-18 or, aged 19-24 with an Education, Health and Care Plan (EHCP) you will receive an additional 1,000 in government funding. Calculate your apprentice levy Use the Skills Funding Agency s online tool to work out if your firm will pay the levy, how much your organisation will have available to spend on apprenticeships and how much the government will contribute towards the cost of training: https://estimate-my-apprenticeshipfunding.sfa.bis.gov.uk/ Example of apprenticeship levy payments: Employer with 1,000 employees, each with a gross salary of 20,000 Annual pay bill: 1,000 x 20,000 = 20,000,000 Levy applied: 0.5% x 20,000,000 = 100,000 After allowance is applied: 100,000-15,000 = 85,000 The organisation will pay an annual levy payment of 85,000 towards apprenticeship training (paid monthly). A10% top up on your allowance will be applied to your digital account. 5
Guide to building and running an apprenticeship programme Follow our step by step guidance to deliver and develop apprenticeships for your business. Setting up an apprenticeship programme will differ if you are a levy or non-levy paying employer. By introducing apprenticeship programmes across our business, we have successfully created entry points for young, passionate and enthusiastic people to build a great career in financial services. By supporting work-based learning, development and increasing their knowledge through valuable qualifications such as the IOC, we ensure a committed and knowledgeable workforce who provide an excellent level of service for our clients and their customers. Darren Digby, Resource Specialist Future Talent International Financial Data Services 1 Register Register online with the Department for Education to run an apprenticeship programme at https://www.gov.uk/guidance/ manage-apprenticeship-funds 2 Levy Payers only Register for an employer s digital account through the digital apprenticeship service at: https://www.gov.uk/guidance/ manage-apprenticeship-funds All your levy funds, will be held in your digital account for you to access monthly. You will then be able to direct the funds held in these accounts to approved training providers to pay for apprenticeship training and assessment. Tips Don t let your levy payments expire, each monthly payment is available for 24 months. After this time, any expired levy payments will no longer be available for you to spend, and will be rerouted to help other firms fund apprenticeships. Non-levy paying employers will have access to government funding via their chosen training provider. 3 Identify a suitable apprentice role Identify the role that you would like to recruit an apprenticeship for. Identify an apprenticeship standard with CISI qualifications at cisi.org/apprenticeship. Talk to the CISI; we can provide you with the specific guidance to help you understand which apprenticeship standards are best for you (details are available on page 9 of this brochure). Tips Recruiting your apprentice may not be an external process; your apprentice can be an existing member of staff who is progressing within the business or moving to a new role. With the development of higher and degree apprenticeships, you can now access a wider range of qualifications to help support your business. Remember, there must be a job available for the apprentice after the apprenticeship has been completed. 6
4 Identify a training provider Until May 2017, you can find a training provider at: findapprenticeshiptraining.sfa. bis.gov.uk Please note, if you wish to deliver some or all of your apprenticeship training internally, you will need to be approved as a provider. From May 2017, you will need to choose a provider from the RoATP. Negotiate a price for apprenticeship training, up to the maximum funding. Concessions are available for those aged 16-18, or those aged 19-24 and have an EHCP. Training providers can help you identify apprenticeship standards and develop a training plan to suit both your needs and satisfies apprenticeship requirements. Tips Some apprenticeship standards include membership of a professional body to assist apprentices with their professional development. E.g CISI membership is available for funding on the Level 2 Investment Operations Technician; Level 3 Investment Operations Administrator; and Level 4 Investment Operations Specialist standards. 5 Recruit your apprentices When you register your apprenticeship programme with the government you will automatically gain access to advertise vacancies on the National Apprenticeship Service (apprenticeships.gov.uk). The website is a great source of information on apprenticeships, and all vacancies are advertised there. Advertise your vacancies as you do any other job vacancy e.g via your website or with recruiters You will interview and recruit your apprentice in the same way that you will do for any other member of staff. Tips Your training provider may also be able to help advertise your vacancies as many have this function available. Any existing member of staff regardless of age, experience and prior qualifications is able to become an apprentice. However, they must be learning a new skill set or knowledge. The CISI can help you access school leavers who are interested in careers in financial services. For more information contact educationdevelopment@cisi.org 6 Once your apprentice starts When you hire an apprentice, they must be treated as any other employee. Apprentices will be eligible for the same benefits as any other member of staff e.g. annual leave entitlements. You must have an apprenticeship agreement with your apprentice. This is an employment contract between you and your apprentice which must be in place prior to the apprentice commencing their apprenticeship. Your apprenticeship agreement must include the following: The length of the apprenticeship The training you will provide Their working conditions The qualifications they are working towards You will be able to agree with your training partner which elements of the apprentice s learning and development you can deliver and which you will require their support with. You must have a commitment statement signed by you (the employer), the apprentice and the training provider and record the apprenticeship in your digital account. Tips Make sure that the apprentice is taking part in learning throughout the apprenticeship. They are permitted to do 20% off the job learning which must be evidenced in the end-point assessment. Remember your apprentice does not need to have the term apprentice in their job title. Enjoy your apprentices! Many employers have found that the energy and enthusiasm they bring not only makes them excellent employees, but also lifts the performance of the teams around them. 7
The CISI can help you establish an apprenticeship programme at your firm The CISI has been working with employer groups to develop a range of apprenticeship standards which are aligned to specific job roles in the financial services profession. The standards provide apprentices with the relevant knowledge, skills and behaviours to enable them to successfully complete their role. There are 21 financial services apprenticeship standards available and CISI qualifications currently exist in nine standards*. Many well-known employees have successfully introduced apprenticeship schemes. Organisations such as JP Morgan, Barclays, IFDS and Mercer have welcomed the benefits that they bring to their staff and firm. Whether you wish to recruit a new starter to the profession or upskill an existing member of your staff we can help you Identify a suitable apprenticeship standard to suit your chosen job role Provide guidance on how to run an apprenticeship programme Keep you up to date with apprenticeship developments and newly approved standards The apprenticeship scheme is perfect for those people that want to step onto the corporate ladder without going through university. Not only do you avoid university fees, you get paid while you learn! Joseph Hall, Investment Operations Technician, Mercer * Up to date as of February 2017 Apprenticeship standards currently exist in England only. To find out more about apprenticeships in: Wales: Scotland: Northern Ireland: businesswales.gov.wales/skillsgateway/apprenticeships apprenticeships.scot nidirect.gov.uk/campaigns/apprenticeships 8
CISI qualifications are embedded in the following apprenticeship standards: Apprenticeship Apprenticeship Apprenticeship CISI Qualification Funding Band Max gov Entitled to name Level duration included in funding Membership standards available of the CISI through apprenticeship Investment Operations Level 2 12-18 months Level 2 Fundamentals 7 5,000 One year s membership Administrator of Financial Services of the CISI at Affiliate level Investment Operations Level 3 18-24 months Level 3 Investment 9 9,000 One year s membership Technician Operations Certificate (IOC) of the CISI at Associate level Senior Financial Level 3 12-24 months Level 3 Investment 9 9,000 X Services Customer Operations Certificate (IOC) Adviser Compliance/Risk Level 3 15-18 months Level 3 Combating 9 9,000 X Officer Financial Crime Level 3 Global Financial Compliance Level 3 Risk in Financial Services Level 3 Managing Cyber Security Investment Operations Level 4 18-24 months Level 3 Investment 9 9,000 Specialist Operations Certificate (IOC) Level 4 Managing Operational Risk in Financial Institutions Level 4 Investment Advice Diploma (IAD) Level 4 Certificate in Investment Management One year s membership of the CISI at Associate level Paraplanner Level 4 24-36 months Level 4 Certificate 9 9,000 X in Paraplanning inc. the following examinations: Principles of Financial Planning Financial Advisor Level 4 24-30 months Level 4 Investment 9 9,000 X Advice Diploma (IAD) Senior Compliance Level 6 36-42 months Level 6 Diploma 15 27,000 X /Risk Specialist in Investment Compliance Relationship Level 6 48 months Level 4 Investment 15 27,000 X manager Advice Diploma (IAD) - Banking Level 6 Private Client Investment Advice and Management (PCIAM) Apprenticeship standards and assessment plans can be found at cisi.org/apprenticeships For more information For support and guidance on implementing an apprenticeship programme and for more information on the levy, contact apprenticeships@cisi.org or +44 20 7645 0714 9
About us: The CISI is the professional body of choice for professionals in capital markets, corporate finance, compliance, risk, financial planning, Islamic finance, operations and wealth management in the UK and in a growing number of major financial centres globally. Formed in 1992 by London Stock Exchange practitioners, the CISI has a global community of more than 40,000 members in 116 countries and in 2016 more than 40,000 CISI exams were sat in 80 countries. The Institute s mission is to set standards of professional excellence and integrity providing qualifications and promoting the highest level of competence to its members, other individuals and firms. cisi.org CISI, 20 Fenchurch Street, London EC3M 3BY apprenticeships@cisi.org cisi.org/apprenticeships +44 20 7645 0714 the_cisi @CISI cisi.org/linkedin cisi.org/youtube March 2017 10