INVESTING IN SKILLS – WHY SMES SHOULD EMBRACE APPRENTICESHIPS
Released On 8th Feb 2024
Alternative routes to employment are in the National Apprenticeship Week spotlight this week. Do you think apprenticeships are right for your business?
Apprenticeship opportunities are far more diverse and accessible for businesses than many people think.
We’re going to lift the veil on the real benefits of taking on apprentices.
Can I take on an apprentice?
You may think that your business is not large enough or that you operate in a sector unsuitable for apprenticeships.
However, most businesses in a variety of industries can take on apprentices.
In doing so, you’ll benefit from training experience, new ideas, cost-effective productivity and a diverse workforce.
There are 15 sector areas in which the Government will provide financial support for firms looking to take on apprentices.
These include business, construction, creative and design, education, marketing, finance and accounting, and care.
To address financial concerns, the Government also provides support to businesses with apprentices through the apprenticeship levy – paid by all businesses with a wage bill of £3 million per year or more.
If your annual wage bill is less than this threshold, you will not pay the levy. You will still have access to Government apprenticeship funding and support.
You will only be asked to contribute five per cent of the cost of training and the Government will pay the remainder, up to the maximum funding amount allocated to that particular band.
The benefits of apprenticeships to SMEs
Historically, the advantages of an apprenticeship have focused on the individual and their career progression. However, businesses, particularly innovative SMEs, also benefit significantly from taking on employees that train while they work.
Diversifying the workforce
Apprenticeships provide an alternative route to employment for those who may not thrive in an academic environment. This is not necessarily an indicator of intelligence or ability to work within your sector.
By providing this access, you pave the way to grow your team based purely on the qualities that matter to you – dedication, creativity, curiosity and an ability to integrate seamlessly into your team.
You’ll also be creating a team with a diverse range of experiences, ideas and viewpoints, which will only serve to push your business into new territory.
A boost to retention rates
Numerous reports have shown the impressive impact of apprenticeships on staff retention rates – on average, 80 per cent of employers report a higher staff retention rate as a result of offering apprenticeships.
A high staff retention rate is hugely positive for your reputation as an employer.
It also enhances team collaboration and relationships, higher engagement and efficiency and lowers ongoing costs of hiring.
On this basis alone, apprenticeship roles make good financial sense for SMEs eyeing long-term growth.
Cost-effective productivity
Reflecting the benefit of training to apprentices and the investment made by employers in their skills, the National Minimum Wage for apprentices is lower than that of other contracted workers.
It is currently set at £5.28 until April 2024, when it will rise to £6.40 per hour.
Additionally, 77 per cent of apprenticeship beginners are aged 19 or over.
This means that they would be entitled to at least £8.60 per hour (from April 2024), with many entitled to the National Living Wage of £11.44, if they were in regular employment.
If you are able to provide a high-quality training opportunity to an apprentice, both growing and utilising their skills, then this may represent a significant labour cost saving over the course of the apprenticeship.
Filling the skills gap
Apprenticeships are available across a wide range of sectors. These include those where specialist skills are in short supply, for example, in agriculture, engineering and health and science.
You will have the opportunity to train apprentices with the exact skills required to succeed within your sector.
Filling the skills gap from within can provide a cost-effective opportunity to develop your operations and ensure your long-term success.
Strengthening local ties
By taking on apprentices, you can contribute to the local economy and community.
Apprenticeships provide valuable employment and training opportunities to young people and job seekers in the area, helping to stimulate growth that benefits the community directly.
This community engagement can enhance your business’ reputation as an employer and build stronger relationships with local people.
Need practical support?
Deciding to take on an apprentice can be a major step if you haven’t previously considered the option.
Managing and allocating funding can be a significant challenge, which is why it is important to speak to an experienced accountant that can help you to shape your financial planning around investment in skills and training.
To find out how we can help you manage your finances to support your apprenticeship scheme, get in touch with us today.
