Apprenticeships: Why Should Small Businesses Consider Taking Them On?

Via a number of government grants and schemes, your small business can benefit in many ways by recruiting an apprentice worker

Apprenticeships: Why Should Small Businesses Consider Taking Them On?

Amidst the ongoing Brexit discussions and a recent general election campaign, small business owners would be forgiven if they hadn’t noticed that a revolution of sorts has been taking place in the world of apprenticeships.

Schemes enabling individuals to gain a route into the workplace through apprenticeships have been a part of the employment landscape for several decades. But during 2017, two significant changes are taking place aimed at making apprenticeships better quality and more valuable for the employee; as well as a more attractive proposition for the end employer.

At the end of May, all UK businesses with paid a bill of more than £3m – having made their first payment towards the new apprenticeship levy. While these outgoings won’t affect the UK’s 5.5 million small businesses, the monies raised may do, as much of this will be redistributed towards companies of all shapes and sizes through a new online apprenticeship service, set to go live for companies that are not paying the levy during 2018.

In addition, apprenticeship schemes across a variety of industries are being updated by groups of employers working in the respective sectors, creating new trailblazer apprenticeship standards which hope to improve the effectiveness of training and assessments.  The standards will include end-point assessments, carried out by independent examining bodies, to ensure a streamlined and consistent approach has been undertaken for every apprentice within that industry.

Both the levy and the new standards have been adapted in response to the government’s stated commitment to achieve three million apprenticeship starts by 2020.

But if more people are to enter – and hopefully complete – apprenticeships, then small businesses are going to be vital in helping them to achieve it. But why exactly should a business in its early or growth phase hire one or more apprentices? Here’s three immediate areas which come to mind:

1. Cost-effectiveness

One of the great advantages of an apprenticeship is the cost advantage available both to employer and apprentice.  For the business, apprentices typically represent highly motivated individuals, with just over half of recruitment experts informing our research that apprentices taken on in the past five years had performed better than those with a degree (compared to just five per cent who believed the opposite). Yet they can represent better value for money than simply hiring skilled staff who will come at a price.

For school leavers, who make up a large chunk of apprentices, they can find a route into employment that doesn’t rack up a potential bill of many thousands of pounds or a student debt that could take decades to pay off. One in five 16-18 year olds based in the UK recently told AAT that their strongest consideration for an apprenticeship over a degree would be the ability to avoid heavy university debt, and indeed one in two of them are currently seriously considering apprenticeships as their route into employment.

2. Highly skilled employees

While an apprentice who is also a school leaver may come to your office as a novice in the workplace, the high quality of training they are being given, coupled with the on-the-job opportunities they are receiving, means that they can become highly-skilled in a relatively short space of time. The work experience that they are receiving while at your firm is also often something that is missing from a graduate’s CV.

Apprenticeships are by no means restricted to school leavers, however. There are a growing number of apprentices who are choosing that pathway later in their working lives, perhaps to enter a different career that they’ve always wanted to be a part of or to try something new. The advantage here for your business is that these individuals can be learning, and implementing the teachings from their apprenticeship course, while maintaining the skills from the areas they have focused on earlier in their career.

In addition, your existing employees might be well positioned to benefit from apprenticeships, in order to upskill or fill a void in a particular business area. This can be particularly useful for employee retention, as workers are more likely to remain with your business if they feel they are continuing to learn new skills.

3. Funding opportunities

Even though as a start-up firm you will not be responsible for paying the new levy, funding should nonetheless still be available to your business, and you’ll be able to control how this funding is spent with regards to apprenticeship training. For 16-18 year olds, the Government will provide 100% of their apprenticeship funding, meaning that, at no cost to your business, school leavers could complete their training and assessment requirements. Your only responsibility will therefore be to provide their pay (at least the minimum wage for an apprentice) and support for the actual jobs they carry out!

For apprentices aged 19 and over, 90% of the contribution towards their training will be made by the Government. Your business will be asked to contribute the remaining 10%.

In addition, if your business employs less than 50 people and your apprentice is aged 16-24, you may qualify for a £1,500 grant through the National Apprenticeship Service. This grant can be used for up to five apprentices, should you meet the application criteria. There may be funding available if you’re covering the formal qualification training as well.

Apprenticeships – accelerating ambitions for the nation’s workforce

The new levy and trailblazer standards aim to address chronic underinvestment in skills, simplify funding opportunities for business, and ensure a greater focus on training for the nation’s workers. 2017 is the year of the apprentice – and all small businesses should be encouraged into creating, or improving upon, an apprenticeship scheme that can lead to an excellent long-term investment for your business.


Steven Drew is AAT’s head of markets and products. To find out more about the new apprenticeship reforms, head to train.aat.org.uk/

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