In addition, more than four in five businesses polled (86%) now offer apprenticeship programmes. 63% say they plan to expand their apprenticeship training in the future and 54% have created new schemes. Yet more than one in four firms (26%) are simply absorbing the cost of the Apprenticeship Levy as a tax on doing business. Seven in 10 firms (71%) that responded highlighted apprenticeship reform as their biggest priority.

Businesses are increasingly aware of the T Level reforms, with 79% of respondents actively aware of the new qualification. 77% were aware of the work placement element – up from 35% last year.

Encouragingly, links between business and schools, colleges and universities have also expanded, with over nine in 10 participants (94%) now having a partnership. Firms are also strengthening their existing engagement with a balance of over half increasing their presence in secondary schools (+56%) and further education colleges (+51%).

Matthew Fell, CBI Chief UK Policy Director, said:

“Education is a top priority for business, who understand its impact on productivity and living standards.

“Firms are generally happy with the academic knowledge of young people applying for jobs in the past year but prioritise ‘work readiness’ when recruiting school and college leavers. It’s clear that more emphasis is needed on ensuring young people have the character, behaviours and attributes to succeed in the world of work.

“Businesses place a high value on young people having relevant work experience and are stepping up to provide this, for example, by increasing their presence in secondary schools and colleges.

“With over half of businesses anticipating the need to upskill and retrain their workforce in the coming year, it’s clear that we are entering a decade that will be defined by a step-change in the level of retraining for those already in work. Turning the UK into a nation of lifelong learners will be critical to ensure our country is well placed to reap the benefits of digital, technology and other changes in the workplace.

“A powerful partnership between business, government and education institutions is essential if we are to ensure that our education and skills system is fit for the modern world – companies stand ready to play their full role."

Rod Bristow, President, Pearson UK & Global Online Learning, said:

“Today’s students are set to live to over 100 years old, whilst technology, automation, globalisation and an unpredictable political environment continue to affect everything about our world – especially work and education – with no sign of abating.

"The implications of these trends are huge: multiple jobs, career-focused pathways and work-based learning take on a dramatically increased significance in this environment, with increasing attention on learning for life and work.

"That's why these findings make for heartening reading. We are seeing more companies engaging with government and education institutions to solve productivity challenges together. Our call to action is to continue this work together to ensure the UK can thrive in the biggest economic transformation since the industrial revolution."

Technical education is highly valued, but the Apprenticeship Levy requires urgent reform

Businesses are committed to making the Apprenticeship Levy and T Levels work.

While an increasing number are offering apprenticeships and expanding their programmes, a stubbornly high number continue to see the Apprenticeship Levy as a tax. Whoever the next Government, they must work with business to agree how the Apprenticeship Levy can evolve into a more flexible ‘skills levy’.

Key Apprenticeship Levy findings

• Asked about the impact of the Levy, over half of respondents (54%) have created new apprenticeship programmes – up from 34% last year
• But a quarter of firms (26%) are absorbing the Levy as a cost – the same as last year

Apprenticeships – what next?

• Greater flexibility in the use of funds emerged as the key priority for change, with seven in 10 firms that responded (71%) highlighting it as their biggest priority
• Nearly eight in 10 respondents (78%) said they would be either dissatisfied or very dissatisfied if restrictions were placed on how Levy funds can be used

Key T Levels findings

This year’s survey tells a better story on increasing employer awareness for T Levels. 79% of respondents are either very or somewhat aware of T Levels (48% were unaware of them last year) and 77% are aware of the work placement element (up from 35% last year).

The next Government should continue to work with companies on the design and delivery of T Levels – particularly among SMEs – to ensure that they are available to 16 to 19-year-olds alongside other academic and vocational routes. The next Government should also recognise the importance of career-focused routes like BTEC.

Instilling a culture of lifelong learning is a priority for companies

Technology is rapidly changing the workplace, while adult participation in education is at its lowest in two decades. Most firms recognise the scale of the change needed and are committed to upskilling and retraining their people.

Key findings include:

• 84% intend to increase or maintain their investment in skills training for their people in the year ahead. Only 2% of respondents said they won’t need to boost the skills of employees over the next 12 months
• 55% of respondents expressed the need to both upskill and retrain employees in the next year
• 59% of businesses continue to cite lack of funds and the cost as a barrier to training. They also continue to see sparing time for employees to train (52%) as a significant barrier

Higher education remains highly valued by employers

Graduate openings have continued to grow with nearly nine in 10 businesses (85%) either maintaining or increasing their graduate recruitment.

This is the sixth year in a row that respondents have reported increases in graduate openings, in spite of media speculation about ‘too many’ people going to university.

Other key findings include:

• When it comes to businesses recruiting graduates, two-thirds of respondents (67%) cite attitudes and aptitudes for work as the most important factor