How can apprenticeships benefit small businesses?
Have you given much thought into the question – how can apprenticeships benefit small businesses? We have, and with National Apprenticeship Week 2018 starting today, what better time to share these benefits with you?
Trades and skills have to be learned; without good apprenticeship and traineeship schemes, the country will find itself without these skills – resulting in a shortage of qualified members of the workforce. If you don’t have the skilled team you need coming through the employment pipeline, it can put serious restrictions on the growth of your business.
This is the theme for this year’s National Apprenticeship Week. Apprenticeships work for the individual, the employer, the community and for the economy.
Putting an apprenticeship scheme in place for your business is a cost-effective way of recruiting fresh talent. Don’t think your company is too small; irrespective of size, businesses can recruit an apprentice with an apprenticeship duration ranging from 12 months to four years. This long-term investment is an opportunity for you to create a workforce that is not only trained in the skills needed for your business, but also the work habits and company culture you want too.
Where to start – Apprenticeships are divided into different levels, so the starting point is deciding which level is the best fit for your business.
- Intermediate: level 2 (equivalent to 5 passes at GSCE grades A – C).
- Advanced: level 3 (equivalent to 2 A Level passes)
- Higher: Level 4,5,6 and 7 (foundation degree and above)
Training your apprentice – An apprentice does a lot of training on the job, which can be a worry if you feel you don’t have the time to organise this. There is support out there when you connect with a training organisation as part of your apprenticeship scheme.
Don’t think you can’t afford an apprentice – An apprentice costs less than you think and is an affordable way to recruit and train a new employee. In fact if you employ less than 50 staff (this covers most small businesses out there) and take on a 16-18 year old apprentice, training is fully funded by the Government and you are granted £1000 as the apprentice’s employer. That’s made you stop and think!
Apprenticeship Agreement – You must also draw up a contract agreement for the apprentice; this should include payment terms (you must pay your apprentice no less than the Apprenticeship National Minimum Wage), working hours that must be a minimum of 30 hours per week and the same benefits as other employees, like holiday entitlement etc. Don’t be put off by the paperwork, falling at the first hurdle; the admin work really is quite straightforward.
Bring new life into your business – A small business can grow quickly; taking on a new project can often suddenly see the need for more employees with various skill-sets, and an apprentice can be a great option in these circumstances. On the flip side, a steady small business might be family run or have had the same team for several years; bringing an apprentice into this environment is a great way of bringing a fresh new perspective to your business.
Filling skill gaps – Apprenticeship schemes give small businesses the ideal opportunity to take on an employee and train them for a specific role; this could be in accountancy to allow you to do more of this in-house, or marketing, an important area for every business. Discussing your requirements with an apprenticeship provider will help to ensure you are matched with an apprentice to suit your needs.
Forget the myths – They would have it that apprenticeships are costly, don’t fit small businesses and are only for manual skills. Not the case at all. They are highly effective in small businesses, less costly than you think especially with the changes in the Apprenticeship Levy, and you will find more and more apprentices in IT, business admin, marketing and other non-manual skills.
Changes in the Apprenticeship Levy & Funding
If you’re an employer with a pay bill of over £3 million per year, you will have to pay the Apprenticeship Levy.
For the many small businesses in the UK where this levy doesn’t apply you will receive more support for apprenticeships as part of the changes which came into effect in May 2017.
- Instead of paying a third of the cost of apprenticeships, you now pay just 10% with the Government paying 90%.
- Offer apprenticeships for 16-18 year olds and you will benefit from a £2000 incentive payment, split 50/50 between the employer and training provider.
- If you have less than 50 staff and take on a 16-18 year old apprentice, the apprenticeship will be fully funded by the Government. Take on a 19-24 year old apprentice who has an Educational and Health Care Plan, or was formerly in care, and again the apprenticeship will be fully funded by the Government.
- The new apprenticeship funding system is made up of 15 funding bands with upper limits ranging from £1,500 to £27,000.
So how can apprenticeships benefit small businesses?
Apprentices are usually eager to learn and enthusiastic about pushing forward with new ideas. When treated well they can become long loyal employees after their training period has ended.
Their energy and enthusiasm can encourage a more upbeat and positive attitude amongst your existing staff, leading to greater productivity.
It is an opportunity to take on raw talent and tie it to the skills you need in your business.
It is said that apprentices can boost productivity to businesses by an average of £214 per week.
Give something back – ‘Apprenticeships give people of all ages and all backgrounds a real chance to get on the ladder of opportunity,’ says Robert Halfon, Apprenticeships and Skills Minister.
Embrace the talent on offer and look at taking on an apprentice. It will add a fresh dynamic to your workforce and could take your business to the next level.