The AGR Apprenticeships Survey 2017

The AGR Apprenticeships Survey 2017

The AGR Apprenticeships Survey 2017

Organisations that are not AGR members can purchase this report for £150 + VAT

All information contained in this report is believed to be correct at the time of publication but the publisher does not accept responsibility for any loss arising from decisions made upon this information.

Association of Graduate Recruiters © 2017

All rights reserved.

Association of Graduate RecruitersBath PlaceLondon EC1A 2JE

The key findings for this report were collected in April 2017 and the report was published in June 2017.

This survey, analysis and commentary have been produced by Samuel Gordon, AGR Research Analyst. For any queries please email [email protected] or contact 020 7033 2465.

3

Contents

ContentsForeword 4Executive summary 5

1. Apprenticeships at student employers 7

2. 2017 trends 12

Predicted changes in hiring 13

Hiring by level and by sector 16

Responses to the 17

Apprenticeship Levy

Minimum entry criteria 19

Attraction 21

3. Comparing graduates and apprentices 26

Resourcing 27

Soft skills gaps 29

Recruiters’ key challenges 32

4. Appendix 33

Employer diversity initiatives 34

Methodology and respondent 36

profile

of respondents are paying the Apprenticeship Levy

100%

Foreword

4

challenges for recruiters, and have very different gaps in soft skills. Understanding these differences will help employers to tailor their approaches to both forms of talent and to make the most of them.

As usual, delve into this report, share the findings with colleagues, and let us know how we can support your decisions. We are constantly evolving our research and want to do what we can to ensure that our industry keeps creating great opportunities for students both in 2017 and well into the future.

Stephen IsherwoodChief Executive, AGR

Samuel GordonResearch Analyst, AGR

Stephen Isherwood

Samuel Gordon

Welcome to AGR’s first Apprenticeships Survey. While we typically capture insight on apprenticeships in our Annual Survey, which launches in September, this year we have brought forward a set of key research questions so that you can make well-informed decisions on apprenticeships as soon as possible. We have also combined this new information with existing AGR research to create the most holistic picture. All 144 survey respondents are paying the Apprenticeship Levy in 2017 and they represent a wide range of organisational sizes as well as collectively employing more than 2.4 million staff.

The number of apprenticeships is rising rapidly among Levy-paying student employers. Intermediate, Advanced and Higher level apprenticeships are all on the rise, with varying trends by sector. Half of employers are starting programmes in response to the Levy and a wide range of attraction and selection activities are being carried out as employers seek the best young talent for their organisations. Competition for apprentices will rise in future and employers will need to stay up to date with the latest trends.

Employers wishing to compare the relative merits of apprentices and graduates will also find a number of key differences. Broadly speaking, organisations attract and select these two types of talent in the same way. However, graduates and apprentices go onto different types of contracts, programmes of different lengths, make up different shares of the workforce, pose different

Forewordapprentices hired by survey

respondents in 2017

12,281

Executive summary

5

Levy-paying student employers are rapidly expanding their apprenticeship programmes in 2017. The overall growth in apprenticeships is predicted at 59% this year, although 8% of respondents are still unsure of the volumes of apprentices they will be recruiting. 74% of employers say that their apprentice programmes will have no impact on graduate hiring. There appears to be strong demand for student talent.

Employers are still evolving their approaches to the Apprenticeship Levy (see Chapter 2.1 for a description). 58% say that managing their organisational response to the Levy is one of their biggest challenges in 2017. On average, they expect to reclaim 33% of their Levy bill to train new apprentices this year, with 23% saying that a lack of government-approved apprenticeship standards in

Executive summary

their sector is one of their top challenges. 50% are starting new programmes as a result of the Levy with some reclaiming their Levy bill to upskill existing staff instead.

Apprenticeship trends also vary by level of apprenticeship. 34% of apprenticeships in 2017 are Advanced level apprenticeships. Intermediate-level apprenticeships make up the highest volumes in the IT & Telecommunications, Construction and Banking sectors. 42% of employers have an A-level requirement for Higher level apprenticeships and just 5% require students to have relevant work experience to apply.

In terms of resourcing, apprentice recruitment teams typically have 35 apprentices for every team member with an average of 3 staff in a team.

growth in apprenticeships predicted this year

59%

6

Apprentice intakes are typically 1% of staff while graduate intakes are 1.9%, for those organisations recruiting both types of talent. 35% of organisations employ apprentices on fixed-term contracts and in 59% of these cases the hire has to apply for a job at the end of the programme. The programmes themselves vary between 1-6 years long depending on the nature of business needs.

So far, apprenticeships in 2017 have received an average of 19 applications for every vacancy (relative to 68 applications per vacancy for graduates in 2016). 53% of firms have an attraction & marketing budget for apprentices with an estimated average spend of £743 per hire. 45% of organisations market specifically to parents, and 65% offer students work experience. 37% outsource at least some of their marketing, reflecting the importance of partnerships in our industry.

Selection processes for apprentices differ to those for graduates. Employers are less likely to use video interviews, psychometric tests or assessment centres and appear more likely to use bespoke application forms as opposed to asking for formal CVs. 44% of organisations outsource at least one aspect of their selection process for apprentices.

Executive summary

Employers may expect apprentices to have better soft skills than these hires have in practice. 91% of organisations believe that at least some apprentices lack expected soft skills, compared with 49% of employers stating this for graduates. The key skills for apprentices to focus on are seen as business-appropriate communication, time management and professionalism. Organisations are likely to need to invest in remedial skills training, review the nature of their work experience programmes and communicate their expectations to students in order to make the most of apprentice hires.

Finally, employers expect a wide variety of challenges related to apprenticeships this year. Many of these are similar to the challenges highlighted by graduate recruiters. However, improving diversity and responding to competition are the key issues which are seen as more pronounced for apprentices. There are plenty of areas for employers to share best practice and plenty of scope to keep evolving and improving our industry’s approach to apprenticeships.

Executive summary

of employers use fixed-term contracts for apprentices

35%

Chapter 1

8

Apprenticeships at student employers

Type of Level Number of Examples of recently approved standards apprenticeship approved standards

Intermediate 2 37 Fishmonger, Construction Steel Fixer

Advanced 3 68 Composites Technician, Facilities Management Supervisor

Higher 4,5,6,7 60 IS Business Analyst, Nuclear Technician

Degree 6 and 7 22 Power Engineer, Healthcare Science Practitioner

Table A: Current apprenticeship levels and standards

AGR employers (referred to as ‘employers’ for most of the rest of this report) recruit students from a variety of sources onto a variety of programmes. Member organisations come from over 17 sectors, recruit into all regions of the UK, and run graduate development schemes, apprenticeships, internships, year-long industrial placements and direct entry school leaver programmes. These employers are a robust proxy to the wider market for graduate hires although are increasingly managing multiple pipelines of talent. They are also starting to link their programmes e.g. encouraging interns to re-apply for graduate roles.

Apprenticeships are training programmes that combine on-the-job learning with study. They lead to a qualification. UK employers who hire apprentices must ensure that certain criteria are met, such as 20% of the time of these hires being spent on off-the-job training, and the apprenticeship must also be in line with industry-recognised standards which have been formally approved. The number of currently approved standards is shown below.

55% of AGR employers hired apprentices in 2016. However, they have been gradually increasing the use of apprenticeship programmes for some time. Over the last five years, the share of employers with higher apprenticeship programmes has doubled from 12% to 23%, and the overall volume of apprentices rose by 13% in 2016 alone. A quarter of employers collaborated with other employers to promote apprenticeships last year.

Source: https://www.gov.uk/government/publications/apprenticeship-funding-bands

of employers collaborated with peers to promote apprenticeships

in 2016

23%

55% of AGR employers hired apprentices in 2016.

However, they have been gradually increasing the

use of apprenticeship programmes for some

time.

Chapter 1

9

In 2016, intermediate level apprenticeships were used by the highest share of student employers, and apprentices at different levels were typically paid different amounts. Intermediate level apprentices were paid a median starting salary of £14,000 which is well above the minimum apprenticeship wage of £3.50 an hour. Graduates are typically paid £27,500 on graduate programmes, which is 72% more than the median starting salary for the highest level of apprenticeship at £16,000.

This year, organisations who recruit both types of talent typically recruit more graduates than apprentices. An annual intake of apprentices is typically 1% of the workforce while an annual intake of graduates is typically 1.9%. Three sectors – the Construction, Energy and IT & Telecommunications sectors – have more apprentices than graduates, which perhaps reflects

a historical focus on apprenticeships and the technical nature of these industries. By contrast, the Accountancy and Legal sectors have far more graduates than apprentices, reflecting their focus on bringing in students to become professionally qualified. Apprentices and graduates appear to be meeting different sets of business needs.

>>

Type of Level Equivalent educational Share of AGR employers Median starting apprenticeship level hiring in 2016 salaries in 2016

Intermediate 2 5 GCSE passes at grades A* to C 28% £14,000

Advanced 3 2 A level passes 27% £14,050

Higher 4,5,6,7 Foundation degree and above 23% £16,000

Graduates n/a University degree 96% £27,500

Table B: Information on apprentices for 2016

Figure 1: Graduate and apprentice intakes as a share of the workforce – 94 employers who hired both types of talent in 2017, representing 12,191 graduate hires and at least 10,569 apprentice hires. Note: these numbers represent one annual intake as opposed to the hires currently on internal programmes

median starting salary for an intermediate-level apprentice

in 2016

£14,000

Chapter 1

10

Only 33% of employers hire apprentices onto permanent contracts. 21% of employers also have apprentices re-apply for a permanent role at the end of their fixed-term contract. Employers stated that whether the apprentice moves to a permanent role depends on business requirements, role availability and satisfactory performance.

By comparison, 67% of employers offer permanent contracts for graduates. Part of this difference could be due to the fact that 94% of graduate employers state that they run graduate programmes to build a pipeline of future leaders. The use of permanent or fixed-term contracts is linked to workforce planning.

Apprenticeship programmes also vary in length. 54% of intermediate programmes are just one year long, while 70% of higher level apprenticeships are three years or longer. Of the three sectors who provided enough information to establish trends by level within their sector – the Retail, Construction and Engineering sectors – the Retail sector had programmes that were the shortest in length with 71% of Intermediate level programmes being one year long.

By comparison, graduate programmes are overwhelmingly two years long. This reflects their focus on building leadership skills and wider business awareness: graduate employers state that most key soft skills can be learnt within a year, and 81% of employers offer multiple rotations between business units that typically last six months each.

>>

Figure 2: Types of contract apprentices are recruited onto – 130 employers with at least 12,277 apprentice hires. Source of graduate data: AGR Development Survey 2017

Figure 3: Length of programmes – 121 employers with at least 12,273 apprentice hires. Source of graduate data: AGR Development Survey 2017

• What ratio of graduates to

apprentices is best suited to

your organisation’s business

model?

• What share of intermediate

level apprentices are

expected to progress

to advanced level

apprenticeships and beyond?

• Does guaranteeing a

permanent role at the end of

an apprenticeship programme

make the programme more

attractive to prospective

applicants?

Questions to explore:

?

Chapter 1

11

13

This chapter covers the ways in which employers are attracting and selecting apprentices in 2017 and responses to the Apprenticeship Levy in terms of reclaiming Levy bills and starting new programmes. Comparisons with graduates are based on data from the AGR Annual Survey 2016, unless stated otherwise.

2017 trends

The Apprenticeship Levy is a UK government initiative which came into force in April 2017. This Levy requires all UK employers with a payroll of over £3 million to pay 0.5% of that payroll to the government, although these funds can be recouped for the specific purpose of training apprentices. These apprenticeships can be for existing staff or new hires or a combination of both. The Levy affects less than 2% of UK employers but is expected to change the landscape for apprenticeships overall.

Predicted changes in hiringLevy-paying student employers are significantly scaling up their apprenticeship programmes in 2017 with overall growth in new apprentice hires predicted at 59%. Some of this growth is accounted for by the repackaging of existing programmes as apprenticeships. Intermediate apprenticeships make up the largest share of apprenticeships by volume, and are expected to grow at the fastest rate. The composition of apprenticeships by level is also expected to change; as one finance sector employer stated “[Our] split is very much weighted towards Advanced to date, although the Levy will change this”.

1 Based on 132 employers who provided hiring volumes.2 Based on 103 employers who provided hiring volumes by level.3 Based on 89 employers who provided hiring volumes for both 2016 and 2017.

Chapter 2

Sector % of employers hiring Predicted growth in 2017 Number of apprentices1

Overall 83%1 59%1 12,281

Intermediate 40%2 287%3 4,492

Advanced 72%2 9%3 3,967

Higher 75%2 21%3 3,320

Table C: Hiring trends for apprentices in 2017

Figure 4: Change in composition of apprenticeships – 89 employers with at least 10,976 apprentice hiresNote: only those employers who provided a split of apprenticeship volumes by level in both years

14

Chapter 2

These hiring predictions should be treated as a guide only. 44% of organisations started recruiting for apprentices between January-April of this year, and a number are still recruiting. Employers also highlighted ongoing uncertainty e.g. “It is difficult for us to forecast a number for 2017, apprentices are recruited locally within the business units and recruitment of these is not planned ahead.” and “Still trying to determine opportunity and appetite to bring apprentices on board.” The market for apprentices is still in flux even though growth is expected.

This predicted growth in new apprentice hires also appears to having little impact on graduate hiring. 74% of employers stated that their apprentice and school leaver programmes were having no impact on the number of graduates hired in 2017. Employers are even more certain of this now that the Levy has come into force: just 51% of employers stated that there would be no impact on graduate hiring when asked a similar question in mid-2016. Demand for apprentices and graduates does not appear to be strongly connected at this stage.

>>

Figure 5: When employers start recruiting for apprentices – 119 employers with at least 12,227 apprentice hires.

Figure 6: Impact of apprenticeship/school leaver programmes on the numbers of graduates hired in 2017 – 139 employers with at least 12,281 apprentice hires.

44% of organisations started recruiting for apprentices

between January-April

44%

15

Chapter 2

• As more Higher level

apprenticeship standards

get approved, how will this

change your organisation’s

apprenticeship strategy?

• How might your internal

planning cycles need to

change to account for

growing competition for

apprenticeship talent?

• As apprenticeship

programmes grow, how are

they likely to affect graduate

recruitment in future?


?

16

Chapter 2

Hiring by level and by sectorExpected growth rates in apprenticeships vary by sector. The largest volumes of apprenticeships were in the IT & Telecoms and Banking sectors, while the highest growth rates were in the Retail and IT & Telecoms sectors. The Energy, water or utilities sector was the only sector to experience a decrease.

Based on 132 employers who provided overall hiring volumes. Not enough Public sector responses to report on this sector. The sum of all levels may not add to the overall total as only 103 employers were able to provide the levels of their apprentice hires. 1. Excluding one employer undergoing a restructure.

>>

Sector 2017 Average per % growth Intermediate Advanced Higher

hires employer from 2016

Overall 12,281 93 59% 4,492 3,967 3,320

Accountancy or professional services 1,108 139 72% 1 65 1,042

Banking or financial services 1,906 147 18% 885 723 264

Construction/Built Environment 709 59 15% 194 88 159

Energy, water or utilities 613 68 -8%1 265 296 52

Engineering or industrial 1,511 72 33% 197 837 477

IT & Telecommunications 3,100 388 125% 2,189 818 93

Law firm 150 7 52% 21 63 45

Retail 1,273 141 363% 450 666 157

Table D: Apprenticeship hires in 2017

Figure 7: Apprenticeship volumes by level of apprenticeships – 103 employers with at least 11,779 apprentice hires

• How do you expect growth

in apprenticeships in your

sector to change over the

next five years?

• Which sectors is your

organisation competing with

for apprenticeship talent?

• Which organisations can

you collaborate with on

apprenticeships?


?of apprenticeships are

intermediate level

38%

17

Chapter 2

Responses to the Apprenticeship LevyRespondents to this survey are typically reclaiming part of their Levy bill to train new hires. On average, they are reclaiming just 33% of their Levy bill for this purpose. This estimate is in line with research by BPP1, which suggests that organisations intend to use an average of 43% of their Levy bill overall in 2017.

The low use of funds for new hires appears to be due to ongoing planning around the Levy and also use of these funds to upskill existing staff instead. Comments included: “In year 1 the majority of funding will be directed in using apprenticeships to strengthen existing internal development programmes”, “We are likely to initially use the levy with existing staff” and “External hires expected to be 5-10% of overall targets.”

Different sectors are typically reclaiming different shares of their Levy bill too. Energy, water or utilities and Accountancy or professional services firms appear to be using the highest shares, which could be due to existing apprenticeship standards being available and having apprenticeship programmes already being in place. As several employers commented: “[Use of Levy bill] depends on sign off of two trailblazer degree apprenticeships in time for September intake” and “The approval of new trailblazer standards change these numbers drastically”.

Employers also expect to reclaim higher shares of their Levy bills in future. Comments included “Would see this increasing significantly from next year”, and “It will be phased and in year one much less but in year two and three much more”. External factors and government support for employers could affect hiring plans.

Half of employers are starting new apprenticeship programmes as a result of the Levy with this being most common in the Retail and Engineering sectors. However, these statistics should be

interpreted with care: a low share of employers starting new programmes does not mean low growth in the number of apprenticeships. It may reflect a number of existing programmes already in place and undergoing expansion. The number of apprenticeships started for new hires as a result of the Levy is still unclear.

>>

Figure 8: Average estimated share of Levy bills used to train new apprentice hires in 2017 – 123 employers with at least 10,705 apprentice hires. Note: employers selected ranges e.g. 1-20%, 41-60%, and these averages were calculated based on the midpoints of the ranges e.g. 11%, 51%

1 Source: http://employers.bpp.com/insights/employer-research/index.html. Employers selected ranges of spend e.g. 1-25%, and the 43% average is based on a weighted average of the midpoints of these ranges.

18

Chapter 2

>>

Figure 9: Share of employers starting apprenticeship programmes as a result of the Levy – 144 employers with at least 12,281 apprentice hires.

• How might external factors

affect your apprenticeship

targets and can you plan for

different scenarios?

• How quickly can you ramp up

the amount of Levy funding

you can reclaim?

• What tools do you need

to convince internal

stakeholders of the value

of using your Levy bill for

apprentices?


?

19

Chapter 2

Minimum entry criteriaMost employers have some minimum academic entry criteria for their apprenticeship hires. This type of criteria is more common for more advanced levels of apprenticeship. Interestingly, use of entry criteria for graduate programmes is lower than for Higher/Degree apprenticeships, which could reflect the more generalist nature of graduate programmes (see Chapter 1) and the fact the 82% of graduate employers do not mind which degree subject their candidates have studied.

Use of specific minimum entry criteria also varies by level of apprenticeship. For example, the share of employers relying on 5 or more GCSEs drops from 67% to 37% of employers between Advanced and Higher apprenticeships. Reliance on A-level results increases from 7% to 79% of employers between Intermediate and Higher/Degree apprenticeships. Employers appear to rely on the most recent qualifications of candidates as a sign of future performance. Only 4-5% of organisations require candidates to have had work experience.

>>

Figure 10: Use of entry criteria by level of apprenticeship – 118 employers with at least 12,007 apprentice hires.

Grade requirements, where they exist, vary widely by employers and by apprenticeship programme. For example “We generally ask for a grade B in Maths GCSE and then English and some technical subjects and the A-levels vary according to the Level 4 or above we’re recruiting for.”, “We ask for minimum of 300 UCAS points or equivalent and a minimum of B for English Maths and English GCSE.” and “Engineering Higher [apprenticeships] - 3 A-levels in Maths and Physics or Equivalent B or above”. Maths and English requirements were the most common subject-related GCSE requirements.

Figure 11: Academic entry criteria by level of apprenticeship – 118 employers with at least 12,007 apprentice hires.

20

Chapter 2

By comparison, entry criteria for graduates are usually linked to one measure of academic performance. 71% of employers rely on candidates having achieved a 2:1 degree (an upper second class honours degree), even if the share of employers using this entry criteria declined by five percentage points between 2014 and 2016. Reliance on minimum UCAS tariffs and relevant work experience is also far more common for graduates than apprentices, perhaps reflecting a different set of expectations and the need for employers to find the best candidates from a larger volume of applicants.

Overall, apprentices seem to be subject to a broader set of minimum entry criteria than graduates. One possible reason for this difference could be the relative lack of information on apprentices, as they are less experienced and many Levy-paying organisations have less experience of hiring them. Use of minimum criteria is likely to change in the future as organisations become more sophisticated in their approach to apprenticeships..

>>

Figure 12: Minimum entry criteria for graduates – 194 employers with 22,164 graduate hires in 2016.

• How applicable is the use of

strengths-based assessment

for apprentice hires?

• What is the correlation

between academic

achievement at secondary

school and on-the-job

performance?

• How does the use of UCAS

tariffs affect social mobility

goals?


?

21

Chapter 2

AttractionTo date, apprenticeships in 2017 have received an average of 19 applications per vacancy. This is much lower than the average of 68 applications per vacancy for graduate vacancies last year, suggesting that apprenticeship roles are still much less popular than graduate roles. This value is also a lower bound: some employers mentioned that they were yet to open for applications, were only marketing for some roles, or were recruiting locally. These figures should be treated as a guide only and Law and Accountancy firms appear to be the most attractive.

Employers appear to invest less on attracting apprentices than attracting graduates. Just 53% have an attraction & marketing budget for apprentices, with an estimated average spend of £743 per hire in 2017 compared to £1,722 per hire on attracting graduates in 2016. Employers typically visit fewer schools than university campuses and also recruit school leavers from a lower share of possible locations.

>>

Figure 13: Applications per vacancy for apprentices – 78 employers with at least 8,517 apprentice hires.

Figure 14: Average attraction & marketing cost per hire - 48 employers with at least 6,281 apprentice hires.Source of graduate data: AGR Annual Survey 2016, based on 110 employers with 15,792 graduate hires.

applications per vacancy for apprenticeships in 2017

19

22

Chapter 2

Type of location Total number of Number that Number that visited/hired from universities/schools1 employers visit3 employers hire from3

Graduates Universities 1641 20 30Apprentices Secondary schools 5,4472 26 24

Table D: Comparing attraction & marketing activity

1. http://www.universitiesuk.ac.uk/facts-and-stats/Pages/higher-education-data.aspx2. https://www.gov.uk/government/statistics/schools-pupils-and-their-characteristics-january-20163. Averages, based on the AGR Annual Survey 2016

Employers are attracting apprentices via a wide range of attraction & marketing activity. 37% outsource some aspect of their attraction & marketing, with 26% of employers outsourcing at least some of their online marketing specifically. 45% market to the parents of apprentices, indicating a need to change the perceptions of apprenticeships in order to encourage students to apply.

Figure 15: Attraction & marketing activity for apprentices – 137 employers with at least 12,269 apprentice hires.

of employers market to the parents of apprentices

45%

23

Chapter 2

Employers listed a wide range of other specific actions too. Organisations referred to targeted advertising through third parties, employability programmes for NEETs, drawing from existing part-time staff, advertising to parents of potential apprentices via a staff intranet, and visiting universities to encourage graduates to join apprenticeship schemes. Working closely with professional bodies was another approach. Employers are pursuing a diverse range of options.

However, the main attraction & marketing activities are broadly similar between apprentices and graduates. Use of online marketing is the most common in both cases. This method complements rather than substitutes for face-to-face interactions: over 80% of employers still use print media and still make visits to campuses. There appears to be scope for more apprenticeship recruiters to use competitions to engage students.

>>

Figure 16: Comparing attraction & marketing activity – 137 employers with at least 12,269 apprentice hires. Source of graduate data: AGR Winter Survey 2015.

• Is applications per vacancy a

suitable metric for localised

recruitment campaigns?

• What are the best ways

to engage the parents of

apprentices?

• How can organisations tailor

their attraction & marketing

to improve diversity and

social mobility?


? The main attraction and

marketing activities are broadly similar between

apprentices and graduates. Use of online marketing is the most common activity

in both cases.

of employers use competitions to engage potential apprentice

hires

28%

24

Chapter 2

Employers appear to invest less in selection processes for apprentices than they do for graduates. Just 38% of organisations have a selection & assessment budget for apprenticeships, and they spend an estimated average of £669 per hire in 2017 relative to an average of £1,661 spent per graduate in 2016.

>>

Figure 17: Average selection & assessment cost per hire – 28 employers with at least 4,850 apprentice hires.Source of graduate data: AGR Annual Survey 2016, 110 employers with 15,792 graduate hires.

of organisations have a specific selection & assessment budget for

apprentices

38%

25

Chapter 2

>> Selection processes for apprentices also have a few key differences to selection for graduates. Employers are more likely to use phone interviews and less likely to use video interviews, psychometric tests or assessment centres. Specific application forms are sometimes used in place of generic CVs e.g. “We don’t use CVs any longer but a relevant application form which is then screened. It helps ensure the candidate provides the right information and if they are younger they struggle with a CV anyway”. The use of assessment centres is also different, for example “We also run work placement programmes in place of the traditional assessment centre that will include work based tasks and interviews” and “Some locations opt for assessment centres whereas others hold face to face interviews, we don’t encourage the use of both as we feel it’s overkill for apprentice recruitment”. 44% of employers outsource at least part of their apprentice selection process.

Figure 18: Selection & assessment activity for apprentices – 135 employers with at least 12,269 apprentice hires.

Figure 19: Comparing selection & assessment activity – 135 employers with at least 12,269 apprentice hires.

• Which types of psychometric

tests are most suitable for

younger candidates?

• How can you ensure high-

quality partnerships with

external providers?

• How are you tailoring

your processes to manage

candidate expectations and

a younger audience?


?

27

This section compares a range of metrics for graduates and apprentices. Resourcing levels, gaps in soft skills and key future challenges are explored. All graduate data is from the AGR Annual Survey 2016, unless indicated otherwise.

Comparing graduates and apprentices

ResourcingThere are typically three staff members in an apprenticeship recruitment team and 36 apprentice hires for every team member. Larger intakes of apprentices have larger teams on average. Resourcing levels for apprentices are typically lower than those for graduates.

Chapter 3

Figure 20: Average team sizes for graduate and apprentice recruitment – 92 employers with at least 9,955 apprentice hires.

Figure 21: Average hires per recruitment team member – 92 employers with at least 9,955 pprentice hires.

apprentices for every apprentice recruiter

35

28

Chapter 3

Responsibility for graduate and apprentice recruitment also typically sits within the same team. 72% of employers adopted this structure in 2016. Only organisations which hire more than 250 apprentices are more likely to have apprentice and graduate recruitment in different teams.

>>

Figure 22: Share of employers with graduate and apprentice recruitment in the same team – 136 employers with 16,122 graduates and 9,788 apprentice hires in 2016.

of employers with over 250 apprentices have apprentice/graduate recruitment

in the same team

57% • How do specific resourcing

needs for apprentices differ

for resourcing needs for

graduates?

• What are the pros and cons

of combining graduate and

apprentice recruitment

functions in the same team?

• How can other teams

within your organisation

support your apprenticeship

resourcing?


?

29

Chapter 3

Soft skills gapsMany employers expect apprentices to have better soft skills than they actually do. 91% of employers think that at least some of their apprentices lack the soft skills they expect. This compares to 49% of employers stating that graduates lack expected soft skills, based on the AGR Development Survey 2017.

Part of this difference could be due to an “expectation gap” rather than a skills gap. Uncertainty around how apprentices will behave could be leading employers to have expectations that are unrealistically high. Graduate recruiters may also have more consistent (or more clearly

communicated) expectations which are easier for candidates to meet. Employers have an active role to play in closing the gaps.

To this end, employers listed a wide range of soft skills that apprentices need to focus on. 64% of employers highlighted business-appropriate communication as a skill that apprentices lack when starting work. The top five skills – including time management, professionalism, confidence, and presentation skills – could also all be considered as basic work-readiness skills. These can act as a guide for informing work experience programmes and designing more effective skills training.

>>

Figure 23: The ten most common soft skills which apprentices lack – 84 employers with 8,674 apprentice hires. Note: based on the share of employers who think apprentices lack each skill. Employers were asked in an open-ended question to list up to three skills, with responses grouped by common themes. of employers say apprentices

lack business communication skills

61%

30

Chapter 3

Targeted action by employers and schools could potentially close these gaps quickly. A key finding from the AGR Development Survey 2017 was that most employers think that most key soft skills can be learnt within a year. The estimated time taken to learn five of the listed skills is shown below. Based on their work and experience, employers feel that teamwork skills can be learnt in the shortest time.

Clarifying what employers expect of apprentices is another key step which could help to close any soft skills gaps. As shown below, graduate recruiters expect that graduates will lack some soft skills when they start work. Awareness of these gaps makes it easier for organisations to design soft skills training and undertake employability initiatives. Reaching consensus on the soft skills gaps for apprentices is a key step towards more focussed remedial training and better pastoral care.

>>

Figure 24: Employer views on the time it takes students to learn key skills – 136 employers with 14,284 graduate hires. Source: AGR Development Survey 2017.

Figure 25: Key soft skills gaps for graduates – 177 employers with 17,527 graduates in 2015 Note: share of employers who feel that graduates lack these skills when hired. Source: AGR Development Survey 2017.

of employers believe business communication skills can be learnt

in less than a year

95%

• What is the fastest way

to raise awareness of

apprentice skills gaps and

identify solutions to these?

• How long might it take

students to learn each of

the identified skills, and how

could this time be reduced?

• How does employability

support for apprentices vary

for employability support for

graduates?


?

31

Chapter 3

32

Chapter 3

Recruiters’ key challengesApprentice recruiters expect similar challenges to those of graduate recruiters in 2017. Responding to the Levy is seen as the biggest challenge by far, with 58% of organisations highlighting this. 23% of respondents also stated that a lack of government-approved apprenticeships in their sector was a top challenge in the year ahead, highlighting the need for continued support around the Levy. Attracting student candidates, improving apprenticeship diversity, coping with competition and improving retention were seen as bigger challenges for apprentices than for graduates. These challenges could be more pronounced because many employers are recruiting apprentices for the first time.

Employers made a range of specific comments about Levy-related challenges. These included “Current frameworks are not fit for purpose so we would need to design our own”, “Ensuring there are enough standards out there in the right format to support our needs”, “Gaining buy-in from other areas of the business to taking apprenticeships” and “Identifying suitable vacancies for apprentice applicants”. Managing responses to the Levy is likely to continue to be a challenge for some time.

Employers mentioned a varied range of other challenges too. These included “Not really sure yet what the challenges will be with regard to skills as not yet hired”, “Spotting potential at school leaver level when we are more used to hiring at graduate level” and “The levy is irrelevant. It assumes the only thing stopping employers taking on more apprentices is the cost of course fees, which is marginal compared to their employment and supervision costs”. Employers will need to stay up to date with the latest trends in order to respond to these evolving challenges and to gain the most value from apprenticeships in future.

>>

Figure 26: Key expected challenges in 2017 – 131 employers with at least 11,061 apprentice hires. Note: Employers were asked to list up to three challenges in each case. Souce of graduate data: AGR Annual survey 2016.

• How can organisations

collaborate to address each

of these challenges?

• How will diversity and social

mobility considerations

shape your response to these

challenges?

• What expertise exists in

graduate recruitment that

might be transferable in

terms of solving challenges

in apprentice recruitment?


?

34

Appendix

Employer diversity initiativesApprentice recruiters indicate that improving apprentice diversity is one of their top three challenges in 2017. There is currently limited information on apprenticeship diversity initiatives at AGR employers. However, a wide range of information exists for graduate diversity initiatives. Some of these findings may be transferable to apprentice recruitment and so are included here for reference.

Diversity strategies for apprentices could be used more widely. 40% of employers had some form of diversity strategy for their apprentices in 2016, compared to 73% of employers having a diversity strategy for graduates. Employers in the Accountancy, Energy, water or utilities and IT & Telecommunications sectors were the most likely to have an apprenticeship strategy in place and so can potentially provide the most case studies for how to implement one successfully.

Chapter 4

Figure 27: Use of apprenticeship diversity strategies in 2016 – 169 employers with 22,011 graduate hires in 2015. Source: AGR Diversity & Inclusion Survey 2016.

35

Employers adopt a holistic approach to improving diversity. While gender diversity is overwhelmingly the main focus for graduate employers – 83% see this as a high or medium priority in their organisation – ethnic diversity and social mobility rank highly as well. Efforts to cater for disabled candidates are also on the rise, with a 19 percentage point increase in employers monitoring disability in 2016. There are potentially many aspects of apprenticeship diversity to consider.

There are many potential investments which could improve the diversity of intakes as well. Contextual recruitment systems – which provide data about the educational/social context of a candidate in order to give employers a more holistic view of their potential – are seen as having the highest impact on graduate diversity. A wide range of other methods are also being used, with scope for all of these to be more effective, and partnerships with other organisations are very common.

>>

Chapter 4

Figure 28: Priority of different types of diversity in graduate recruitment processes in 2016 – 168 employers with 22,037 graduate hires in 2015. Source: AGR Diversity & Inclusion Survey 2016.

Figure 29: Use of specific diversity investments in 2015, ranked by perceived effectiveness – 84 employers with 16,119 graduate hires. Note: only those employers who could comment on the impact of their investments. Source: AGR Diversity & Inclusion Survey 2016.

36

There is also more than one way to support apprentices from minority groups once they are in the workplace. Graduate employers currently offer in-house support networks, tailored development plans/programmes, and access to coaching to support the development of graduate hires with specific characteristics. However, use of these methods is rare, and while in-house support networks are the most frequently used these are usually for all staff rather than being specific to junior hires. More data is needed on whether different groups of hires have different developmental needs before the effectiveness of these methods and their applicability to apprentices can be established.

>>

Chapter 4

Figure 30: Share of employers offering specific on-the-job support for hires with these characteristics – 140 employers with 14,244 graduate hires. Source: AGR Development Survey 2017

This survey was sent to 306 employers in April 2017 and 138 responses were received from Levy-paying organisations, representing a 45% response rate. Six universities also contributed, meaning that 144 Levy-paying organisations responded in total. Survey respondents are hiring at least 12,281 apprentices in 2017 (with some organisations still confirming their hiring volumes) and represent organisations with over 2.4 million UK staff.

Responses were analysed via a mixture of statistical and manual methods. Individual responses were checked for input errors e.g. “25” rather than “25%” and in some cases re-confirmed with employers and updated. Statistical software was used to generate key statistics including frequencies and means. Specific values perceived to be outliers (e.g. 100% above the next highest value in a particular sector) were also checked with responding employers and updated or excluded from the analysis.

Methodology and respondent profile

When reporting on trends, the minimum threshold used for reporting on a sector is five employer responses. This is to ensure reliability of the trend and to maintain the anonymity of respondents. The number of employers who responded to each question is listed below each graph along with a lower bound on the number of apprentices they are hiring (due to some organisations unable to confirm the number of 2017 hires).

survey respondents with over 2.4 million staff

144

37

This report also includes references to previous AGR reports. Key reports are listed above and are available for AGR members upon request.

A wide range of sectors, firm sizes and apprenticeship intake sizes are represented in the data. Employers with small intakes of apprentices were the most common respondents, while 8% of respondents did not provide hiring volumes for this year. Larger organisations are better represented than smaller ones. Law firms, Engineering firms and Banking or financial services firms were the sectors with the highest number of respondents overall.

>>

Chapter 4

Survey Date of publication

AGR Development Survey 2017 March 2017

AGR Annual Survey 2016 September 2016

AGR Diversity & Inclusion Survey 2016 June 2016

AGR Development Survey 2016 March 2016

AGR Winter Survey 2015 September 2015

Table E: AGR surveys referred to in this report

of respondents are recruiting 1-25 apprentices

24%

Figure 31: Intake sizes of responding organisations – 144 employers with at least 12,281 apprentice hires.

Figure 32: Business sizes of responding organisations – 144 employers with at least 12,281 apprentice hires.

38

Chapter 4

Figure 33: Business sectors of responding organisations – 144 employers with at least 12,281 apprentice hires.

of respondents are engineering or industrial firms

15%

• Aberdeen Asset Management

• Accenture• AkzoNobel• Allen & Overy• Amey Plc• Aon• Arcadia• Arcadis• Ark• Arriva• Arup• Atkins• Aviva• AXA UK• Babcock

International• Baillie Gifford• Bakkavor• Barratt

Developments• BDO• Bentley Motors• Berkeley Group• Bloomberg• BNP Paribas

Real Estate• Bond Dickinson• Boots UK• Bristows• British Council• BT• Burges Salmon• Burness Paull• BWB• CBRE UK• Centrica• Charles Russell

Speechlys• City, University of

London• Civil Service• Clifford Chance• Clyde & Co

• Lancaster University• Lendlease

Construction• Leonardo• Lidl• Lloyds Banking

Group• Lloyd’s Register• Lockheed Martin• LV=• Mace• Marks & Spencer• McDonald’s

Restaurants• Merlin

Entertainments• Morgan Sindall• Mott MacDonald• MUFG• National Audit

Office• National Grid• Nationwide• NBIM• Nestlé• Nomura• Northumbria

University• Pinsent Masons• Pladis• PwC• QinetiQ• RBS• Redrow Homes• Reed Smith• RM• Roche• Rolls-Royce• RSM• RWE• Sainsbury’s• Santander• Schroders• ScottishPower

• Commerzbank AG• Costain• Danone• Deloitte• DLA Piper• DWF• Dyson• EDF Energy• Enterprise Rent-A-

Car• Equiniti• Essentra• Eversheds

Sutherland• Expedia• Explore Learning• EY• FactSet• FCA• FDM Group• Firstco• Fladgate• Fujitsu• Gardiner & Theobald• Go-Ahead• Gowling WLG• Grant Thornton• GSK• Howard Kennedy• HSBC• IMI Precision

Engineering• Innogy• Interserve• Irwin Mitchell• Jacobs• Jaguar Land Rover• JLL• John Sisk & Son• Johnson Matthey• Kennedys Law• KFC• KPMG• L.E.K. Consulting

• Severn Trent Water• Shearman & Sterling• Shoosmiths• Smith & Williamson• St George’s

University Hospitals NHS Foundation Trust

• St. James’s Place• Stephenson

Harwood• Tarmac• Tata Steel• Taylor Vinters• Taylor Wessing• Tesco• Thales• Thames Water• Thomson Reuters• Transport for

London• Travis Perkins• UK Power Networks• University of

Edinburgh• University of

Huddersfield• University of

Liverpool• Virgin Media• Vodafone• Wates• Wates Group• Watson Farley

& Williams

Survey respondents are listed below in alphabetical order.>> Responding organisations

39

Responding organisations

The Association of Graduate Recruiters6 Bath Place, Rivington Street, London, EC2A 3JE

Documents

The AGR Apprenticeships Survey 2017