How Retailers are spending their Apprenticeship Levy

Discover everything you need to know below — from key insights to helpful tips that make a difference.

In 2017, employers were able to start spending their Apprenticeship Levy. For some, the levy is still seen as a tax burden or an administrative hassle. In Retail, margins are tight and, along with the Living Wage, Business Rates and the impact of Covid-19, the levy could be written off as an unwanted cost.

But over the last four years, we have seen many retailers go on a journey—from anger, frustration or confusion, through to seeing that apprenticeships can be used to solve real problems in their business.

Below we identify four broad ways retailers are planning to use their levy.

We have spoken with over 50 employers and also work closely with the Retail Trust to support their members. Many HR Directors and L&D Managers have found that once they feel confident in the ways in which the levy can be used, they can make use of it for business-critical training—training that improves retention, morale and boosts productivity.

Some common surprises for employers:

You don’t necessarily need to increase headcount or recruit new staff – the levy can be used for existing staff, no matter how long they’ve been with you.
The levy can be spent on employees of any age, experience level or qualifications – even if they have a degree.
Apprenticeships aren’t just for those with low-level skills. They’re now available up to degree and Masters level for anyone wanting to develop their skills.
You don’t have to market the programme as an “apprenticeship” if you don’t want to—you can name your programme as you like, so long as it follows funding rules.
Your existing programmes and training materials may cover some elements of the apprenticeship.

4 Key Strategies Retailers Are Using:

1. Creating a Pipeline of Talent

While you don’t have to recruit new staff, offering candidates a job with support and training is an attractive recruitment tool, especially in competitive markets.

2. Succession Planning and Improving Skills at Entry Level

To reduce reliance on external hires, retailers are improving the core skills of entry-level colleagues in stores, warehousing, and customer service. Junior managers are also being upskilled to prepare them for the next step.

3. Upskilling Specialist Staff – Buying & Merchandising, HR, Digital, Procurement, Project Management

Apprenticeship standards are designed by employers for real job roles. Retailers can now invest in specialist roles with tailored standards including:

Buying & Merchandising
HR
Procurement
Project Management

4. Improving People Management and Leadership Across the Business

Many L&D departments haven’t had the budget to upskill their managers—until now. The levy provides a new opportunity to invest in leadership. The Management Standards address common pain points in retail, resonating strongly with HR and Operational Directors.

Fareport has also launched new Learning & Development qualifications so that L&D teams can benefit too.

Common Themes in Retailer Strategy:

Most are not paying the Apprenticeship Minimum Wage but mirroring their usual recruitment wage.
Many are running competitive tender processes or using trusted partners to ensure high-quality, tailored training.
While financial incentives (e.g. NI reductions, grants for 16–18 year olds) are available, the primary driver is cost savings through improved retention and productivity.