Since 2017, it has been full steam ahead for apprenticeships in the UK.
For SMEs with a turnover below £3 million, pick the right people, and it is win-win – because thanks to the Apprenticeship Levy at least 95% of the training costs will be paid for you, and you are likely to receive a minimum grant of £1,000, too.
Apprenticeships are not just for young people, but it is a popular pathway for people starting out in work. The national living wage of £11.44 is reserved for 21-year-olds and older. Currently for those aged 18-20 it is £8.60 and for under-18s and apprentices just £6.40; potentially helping employers further with cost.
What have Labour said about apprenticeships?
The new Labour administration has indicated it will drive up the minimum wage more quickly as a matter of urgency and have just one living wage, not rates determined by age. They have also said they will make changes to apprenticeships.
They want to reduce unemployment amongst 18–21-year-olds. Particularly, they have proposed changing the Apprenticeship Levy to a Growth and Skills Levy which would still fund apprenticeships but have a broader remit. However, any change here is unlikely to be immediate and not torpedoing the concept of Apprenticeships, so it seems sensible to think of them as business as usual for now.
What are the benefits of hiring apprentices?
Three quarters of a million people were undertaking an apprenticeship in England in 2023. Here are some of the features which make them attractive:
- Fill a skills gap – If you are missing a particular skill in your business, an apprentice could be a great solution. With more than 600 different types of apprenticeship available for funding, the chances are you can handpick exactly what you need and get someone trained up.
- Take advantage of the subsidy – Subsidies do not hang around forever and the current climate is favourable for taking on apprentices. All things being equal, it is a cost-effective way to grow and train your team.
- Grow a loyal team – Good apprentices will value the opportunity you give them, helping them learn a trade, and gain real workplace experience. This will often be repaid with loyalty and dedication. According to the government, 80% of employers see a significant increase in retention.
- Fresh ideas and energy – Apprentices are bound to see things a little differently to you, and as long as you hire well, bring an energy to make their mark. They may also have skills which they take for granted but which are a good addition to your business.
- Grow your business – For many businesses the objective is growth and apprentices can make for an important component to that. One apprenticeship provider found that about 75% of employers found that apprentices both helped improve productivity and improved the quality of a product or service. Moreover, they stated that the National Audit Office says that every £1 spent on apprentices puts £18 back into the economy.
- Help the rest of your team develop – If you already have a team, taking on apprentices could be a great way to release their potential. Your apprentices can work under them, slowly taking on more of their roles whilst they themselves mature into more senior duties.
Things to watch out for
For all the positives that are associated with apprentices, there are a few things to watch out for. As we highlighted above, Labour is considering changing the rules, so act sooner rather than later if you want to be sure of the current set up. Bear in mind that a key component of the apprenticeship scheme is training – both on the job and at least 20% of their time off it.
As you will know, whenever you recruit, you need to do so with careful thought and a robust process. Taking on apprentices is no different. Pick the wrong people and it will be a frustrating experience, maybe even a waste of everyone’s time. But choose well and you may just find a hidden gem. You will need to have a proper apprenticeship contract for them.
The current minimum wage for apprentices is low – and as we all are well aware everything is so much pricier now. You can pay more than the minimums and if so will likely attract more interest for your roles from higher quality candidates.
We can help
If you want to consider apprentices as part of your hiring strategy, talk to us. We can help you work out where they fit in and assist with the hiring process too, including drafting the appropriate apprenticeship contract.
