Apprenticeships are a cost-effective way for businesses to ‘grow their own’ talent. They combine ‘on the job’ day to day training in a business with ‘off the job’ learning. Apprenticeship schemes enable people to gain real work experience and understanding of life in a workplace while gaining practical and theoretical skills leading to recognised qualifications.
Apprenticeships can be offered to those over the age of 16 who are not in full-time education and have the right to work in the UK. Anyone at any stage in their career can start one, especially if they are looking to upskill.
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Employer incentives for employing an apprentice
- 80% of employers have maintained or improved future skills in the business.
- 70% of employers have seen improvements in the goods and services they offer.
- 66% of employers have experienced improved staff morale.
According to the Centre for Economics and Business research on the economic impact of apprenticeships, there is a net gain to the employer while apprentices train, and a higher output once employed. In the long term, it is estimated that each apprenticeship created is worth an estimated £38,000 to the economy!
As a business, it is beneficial for you to be able to support your local community and Apprentices can often bring new ideas and perspectives and give your workplace a new dynamic
Apprenticeship Grant for Employers
Since April 2017, businesses with a wage bill of £3 million or more are required to pay an apprenticeship levy. This is regardless of whether they offer an apprenticeship scheme or not. This money can then be used to pay towards the cost of the apprenticeship training and assessments. If a business does not use all the available funding, they are able to transfer up to 25% to other employers.
If you are not paying the levy then you are eligible to have 95% of the funding through the government, meaning you only need to pay 5% of the training and assessment costs.
The precise apprenticeship funding rules and incentives to employers, such as savings on National Insurance contributions, are updated annually so it is important to refer to the latest government guidance.
Understanding the apprenticeship process
It is important to remember that whilst businesses get funded contributions, you still need to manage your apprentice and ensure that they have a clear training plan. it is advisable to have an apprenticeship agreement in place to ensure both parties understand what is expected during and after the apprenticeship. You need to ensure you pay your apprentice at least the minimum wage (details can be found here of the national minimum wage rates), give them set working hours, holidays and any other benefits they would be entitled to.
Are there any disadvantages in supporting apprenticeship programmes?
Having an apprentice is an investment. You need to ensure you are allocating the time they need for off the job training, currently, this needs to be a minimum of 20% of their working hours, likely to be one day per week. They also need time within the workplace to gain the skills they need to complete their qualification so you will need to be mindful of this when planning work and the impact on those supporting the apprentice, allowing reasonable time and resources. In the short term, this may impact the productivity of those supporting apprentices.
As apprentices are often younger, this could be their first experience of life at work so they will need guidance in workplace etiquette.
It can be a lengthy process hiring an apprentice and you will need to find someone who you believe will learn and grow.
There are of course costs that you will also need to pay including a salary but there is often funding available to help support with training expenses.
What apprenticeship courses are there?
Apprenticeships traditionally provided a structured route for young people aged 16 to 18 into the skilled labour market, however, changes in government policies have brought about a new focus. Apprenticeships are now available in a wider variety of occupations and sectors.
Businesses are able to find a provider for their apprenticeship scheme and agree the costs for the training. The provider must ensure that the apprentice is eligible to do the course and that they will receive any funding available.
If you would like help with taking on your first apprentice, improving the effectiveness of your apprenticeship process or creating an apprenticeship agreement, please contact a member of our MAD-HR team, who will be happy to help.