1. Getting to grips with the future landscape 19 th May 2016

2. © British Telecommunications plc Agenda Apprenticeship Levy Planning the Apprenticeship Levy Getting to grips with the current and future recruitment landscape Creating the opportunities for early talent pipeline in line with the needs of the business Building progression pathways to learn and grow

3. © British Telecommunications plc The Spending Review set the rate and scope of the levy Apprenticeship Levy WhatWhyHowWhen

4. © British Telecommunications plc Apprenticeship Levy – what is it? The purpose of the Levy is to fund an increase in the number and quality of apprenticeships The Levy was announced by the government in the Summer Budget 2015 and Spending Review in September 2015 It applies to all UK employers – both private and public – with an annual pay bill of more than £3 million With an estimated £2-3 billion likely to be raised by the levy across the UK – the funding can cover a wider spectrum of programmes and levels, such as degree apprenticeships The levy will be UK wide, therefore employers that operate across the devolved nations will pay their contribution based on all UK employees. However the vouchers they can then draw down can only be spent in England –The amount entering your English digital apprenticeship service account will reflect what you have available to spend through the English apprenticeship system –It will ultimately be up to the devolved administrations to decide how the money is spent For example: If 100% of pay bill is in England100% of levy payment in digital account If 80% of pay bill is in England80% of levy payment in digital account

5. © British Telecommunications plc Apprenticeship Levy – why is it being introduced? According to BIS UK productivity is lagging against other developed economies, only Japan lower GDP per hour worked, with underinvestment in training The government committed to significantly increase the quantity and quality of apprenticeships in England to reach 3 million starts in 2020 New Institute for Apprenticeships led by employers to support quality apprenticeships in April 2017 Government seeking Employers to be at the heart of designing new Apprenticeships Standards through the Trailblazer programme Apprenticeships will be given equal legal protection to degrees Concerns over quality of apprenticeship with short, low level and poor quality apprenticeships following findings from Richard and Wolfe reports

6. © British Telecommunications plc Apprenticeship Levy – how will it work? You will need to pay the apprenticeship levy if you are an employer, in any sector, with a pay bill of more than £3 million each year https://www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work#paying-the-apprenticeship-levy The levy will be charged at a rate of 0.5% of your annual pay bill. You will have a levy allowance of £15,000 per year to offset against the levy you must pay. This means you will only pay the levy if your pay bill exceeds £3 million in a given year You will pay the levy to HM Revenue and Customs (HMRC) through the Pay as You Earn (PAYE) process

7. © British Telecommunications plc Apprenticeship Levy – when will it start? Apr 16 Paying the apprenticeship levy Accessing money paid under the apprenticeship levy Buying apprenticeship training What you can spend apprenticeship funding on – all employers Eligibility for training Jun 16 Provisional funding bands provisional level of the government support provisional level of the extra payment for 16-18 provisional amount that will be paid for required English and maths training eligibility rules on funding spend setting up organisation to deliver training Oct 16 the final levels of funding, government support, 16 to 18 payments, and English and maths payments for apprentices starting from April 2017 full, draft funding and eligibility rules Dec 16 final detailed funding and eligibility rules further employer guidance from HM Revenue and Customs (HMRC) on how to calculate and pay the apprenticeship levy Information Levy Start Apr 17 Scheduled operational start the Apprenticeship Levy Existing funding contracts to meet provisions prior to April 17 Any provision up to end of March 17 will be funded under the existing funding model A new online Digital Apprenticeship System (DAS) will be launched Institute of Apprenticeships in place New Funding Model commences in line with DAS levy paying employers will be able to see funds appear in digital account monthly - this means that the first time funds go into digital account will be late May 2017. From this point onwards they can start spending their levy funds.

8. © British Telecommunications plc Planning for the Apprenticeship Levy Considering the optionsPast, Present and FutureBusiness engagement and knowledge share

9. © British Telecommunications plc Considering the options for the Apprenticeship Levy create programs for existing employees Build platform for potential to process skills, knowledge and learning continue quality assurance and compliance measures through existing and new programs explore in-house capabilities and external solutions, e.g. telecom apprentices consider assessment centre capabilities investigate supply chain opportunities grow our apprenticeship volumes create new masters degree for graduates design standards in new business areas OperationalStrategic Development Compliance

10. © British Telecommunications plc Past, Present and Future Traditional Future Skills Professions

11. © British Telecommunications plc Business engagement and knowledge share Early talent pipeline Funding model changes Trailblazers Apprenticeship strategy and plan Quality assurance Recruitment plans Induction plans Assessment plans and ratios Coach and tuition needs Business strategy Line of business specifics Overall recruitment plans Talent pipeline Future skills Learning and development strategy Apprenticeship Team Business Leads

12. © British Telecommunications plc Getting to grips with the current and future recruitment landscape Understanding business strategy and purpose Business demands and commitments Sustain and grow our existing position What do we need What can we offer Building the process and plan

13. © British Telecommunications plc Business Strategy and Purpose At BT, we use the power of communications to make a better world Making ConnectionsCreating PossibilitiesDelivering Value We’re an organisation of almost 90,000 people across 60 countries BT Business Provides communication services including IT and mobile for businesses in the UK and ROI BT Consumer Provides voice, broadband and TV services for retail consumers in the UK BT Global Services Provides managed services for big businesses, multinationals and the public sector BT Group Functions Provides the services that keep BT running BT Technology, Service & Operations Designs, tests, builds and runs BT’s global networks and systems BT Wholesale Runs our networks, and provides network services to other communications companies Openreach Looks after our network, and suppliers products and services that are linked to it EE Delivers mobile and fixed comms services to consumers, businesses, government & the wholesale market

14. © British Telecommunications plc Business demands and commitments BT Business BT Consumer BT Global Services BT Group Functions BT Technology, Service & Operations BT Wholesale Openreach EE People, Process and Systems Current and Future Demands Attraction Strategies ApplicationsScreening Selection Process OfferRecruitmentInduction Business Recruitment Plan

15. © British Telecommunications plc Sustain and grow our existing position Business Administration Management/Business Accounting Finance Information, Communication and Technology Software Engineering Network Engineering Cyber Security Software Developer Network and Communications IT Analyst Telecoms Human Resources Management Maintain existing programmes across our business Advanced (959) 81% and Highers 19% (219) Grow existing and new programmes, e.g. HIghers

16. © British Telecommunications plc Creating the Opportunities for early talent pipeline in line with the needs of the business ApprenticeshipFast TrackGraduate MBA Leadership Traineeship Work Placement ApprenticeshipTraineeship Work Placement Key Strategic Talent Programmes Early Talent Pipeline

17. © British Telecommunications plc Traineeship and Work Placement Programmes Trainee Programme Seven week course Aimed at 16-24 year olds not in employment, education or training Course covers - Employability skills training - Work experience - BTEC Level 1 Business Administration - Maths and English qualification if needed Post Course We give twelve weeks support after the course to help the transition to training or employment Work Placement Programme Two week course Aimed at 16-24 year olds not in employment, education or training Course covers - Employability skills training - Work experience

18. © British Telecommunications plc BT Traineeships and work placements We have agreed a partnership with the Rio Ferdinand Foundation The Rio Ferdinand Foundation are very supportive and keen to promote our BT traineeship and Work Placement opportunities to their young people to bridge the gap into work We will be launching in 4 locations across the UK in the next year Our partnership with them will help expand our scope into hard to reach groups of young people that otherwise we’d have no ability to contact The impact we have on young people will be as rigorously measured and results compiled in an open source social impact report at the end of the year so others can benefit from our insight From January 2014 we have delivered 1300 starts - in 16/17 we will deliver another 800 starts Currently 90% of our referrals come from Jobcentre Plus We will incorporate tech literacy into the content of our course

19. © British Telecommunications plc The reward of seeing these young guys evolve was priceless and I would have no hesitation in supporting the programme in the future. BT employee The reward of seeing these young guys evolve was priceless and I would have no hesitation in supporting the programme in the future. BT employee The two big successes for me were seeing the young people grow in confidence in just 6 weeks and for my team to do something different. They’re all reflecting on what they heard and saw and that’s challenged their own thinking on their respective careers BT employee The two big successes for me were seeing the young people grow in confidence in just 6 weeks and for my team to do something different. They’re all reflecting on what they heard and saw and that’s challenged their own thinking on their respective careers BT employee This opportunity helped me to get my life back on track. I met some amazing people during the course, gained the experience I needed and got myself back on my feet. BT Trainee This opportunity helped me to get my life back on track. I met some amazing people during the course, gained the experience I needed and got myself back on my feet. BT Trainee I would tell anyone who was thinking about this to give it a try. The support I had was second to none, plus it has given me something to add to my CV which is valuable for employers to see when trying to get a job BT Trainee I would tell anyone who was thinking about this to give it a try. The support I had was second to none, plus it has given me something to add to my CV which is valuable for employers to see when trying to get a job BT Trainee

20. © British Telecommunications plc Building progression pathways to learn and grow Mapping apprenticeship standards to our award winning Academies Creating potential career pathways within apprenticeship programmes Developing our apprenticeship degree programmes

21. © British Telecommunications plc Mapping apprenticeship standards to our award winning Academies Customer First Contact centre Digital Marketing Product and portfolio management Sales Service management Technical Architecture and solution design Automotive engineering Field engineering Mechanical and electrical engineering Network engineering Research and innovation Software engineering TV services Business Business support services Business transformation Facilities and property services Finance HR Legal, governance and compliance Major contract management Procurement Programme and project management Regulatory Reporting analysis and planning Security Supply chain Leadership Range of Programmes to support leadership and management at various stages of career The Academy is BT's new approach to learning. It's a way for people to continuously develop their skills and careers and provides tools, programmes and communities to help learn, develop and grow Existing Programs Future Plans

22. © British Telecommunications plc Creating potential career pathways within apprenticeship programmes RecruitmentProgressionCareer Path Aligning our new starts onto our programmes to grow future skills Potential next step for our existing apprentices now and future e.g. advanced to higher programme Existing employee onto programme that fits their development plans and professional aspirations

23. © British Telecommunications plc Developing our apprenticeship degree programmes Matching standards to needsFinding the right providerGetting timescales that align with the business need Identify needs, build standards, design and deliverWorking with provider and industry leadProgramme start in 15/16, 18 months in the making Considerations Story so far

24. © British Telecommunications plc Bringing it all together Developing transferable skills and knowledge to make those connections Demonstrating return on investment to BT and the wider society which we work and live in to deliver value Building the talent pipeline to create possibilities now and in the future