Should your business hire an apprentice?

The traditional view of an apprenticeship is one that involves a skilled manual trade and young people, but they are now so much more than this. Anybody from the age of 16 can be an apprentice and modern apprenticeships now also cover more sectors than ever, covering more than 1500 different roles. There are now apprenticeships available that can take people all the way up to degree level. First lets look at the origins and history of the UK apprenticeship.

Brief History of Apprenticeships in the UK

The concept of apprenticeships in the UK is 100's of years old. Prior to 1563, they were regulated by trades and craftsmen guilds. From 1563 to 1814, in England and Wales, an act of parliament 'The Statute of Artificers 1563' covered apprenticeships and made it illegal to practice a trade without having a minimum of 7 years prior training as an apprentice, however in practice over the term of the act, apprenticeships ranged from only 1 year to 15 years depending on the trade in question. A fee was often charged to the parents of the apprentice, which limited access of the poor.

Apprentices could be as young as 10 but generally between the age of 14 and 21. An extension to the act in 1601 'Overseers of the Poor' meant that anyone under the age of 21 who was a child of a pauper, vagrant or in family that was 'over burdened' with children, could be imprisoned for refusing to be an apprentice.

Overtime, after the extension of the act in 1601, there was an increase in apprentices due to an increase in the number of people from higher levels becoming an apprentice in areas such as manufacturing due to changing economic situations until they were found within nearly all levels of society.

The Modern Apprenticeship

The popularity of apprenticeships in England has increased significantly since 1996 rising from 65,000 in the year 1996/1997 to a peak in 2011/2012 of 521,000 followed by a slight drop thereafter.

There has also been an impressive increase in the number of people over the age of 25 starting an apprenticeship

One point of note is the massive drop off of apprenticeships within small and medium companies with drops of 40% and 45% respectively since changes to the funding were implemented in 2016.

The following graphs are taken from the April 2020 House of Commons briefing paper Apprenticeship Statistics

Figure 1 - Apprenticeship Starts in England by Year

Figure 2 - Apprenticeship Starts in England by Age

Figure 3 - Apprenticeship Starts in England by Company Size

Advantages of Employing an Apprentice

Low Cost for a High Reward

If your annual wage bill is less than £3 million pound your business will not be subject to the apprenticeship levy which is at the time of writing 0.5% of the pay bill.

If your annual wage bill is less than £3 million and you employ fewer than 50 employers through your business including any connected business' then the government will pay 100% of training costs under the following circumstances on the 1st day of the apprenticeship:

The apprentice is between 16 and 18 years old (or 15 years old if the apprentice's 16th birthday is between the last Friday of June and 31 August)
The apprentice is between 19 and 24 years old and has an Education, Health and Care (EHC) plan provided by their local authority or has been in the care of their local authority

If your annual wage bill is less than £3 million and you employ more than 50 employers through your business including any connected business' or your apprentice doesn't fall under the above criteria then the government will pay 95% of training costs

You also do not need to pay employers national insurance for any apprentice that you employ that is under the age of 25.

For more information on apprenticeship funding visit the Apprenticeships Employer Hub.

Inject New Ideas and Ways of Thinking to Your Business

The introduction of both young people straight from school or college and experienced older people from either related industries of completely unrelated industries can bring with it fresh ideas and proven strategies and process' that could help improve your business and take it to the next level. Do you ever feel like things are done the way they are because 'that is how we have always done it'?

These new methods could also help instill a fresh vigor to your current team.

Improved Long Term Development of Your Business

In addition to new ideas, apprentices can also add to the array of skills within your workforce and the sharing of knowledge between apprentices and long term employees with experience within the business and wider industry can help develop and improve the quality of employees throughout the business.

A crucial thing for any business is to keep up with technological advances and ensure that they do not fall behind their competitors. Many a business has failed to keep up and innovate, and where they once dominated their respective market, they either ceased to exist or fell away to such an extent that the probability of recovery was minimal. Apprentices can aid in your business' ability to always be at the forefront of technological advances.

The relationships built during the apprenticeship will help build the confidence of apprentices as they will always have a help network behind them as they move forward.

Increased productivity

78% of employers have reported an increase in productivity after employing apprentices.

Studies by the Centre for Economic and Business Research (CEBR) have also shown that within the engineering and manufacturing sectors, the achievement of completing an apprenticeship resulted in an average of £414 per week increase in that employee's productivity for the year 2012 / 2013.

The following graph is taken from a 2013 report for the CEBR written by Daniel Solomon showing the excellent results in productivity that apprentices can bring to your business within the engineering and manufacturing sector.

Figure 4 - Productivity Gains by Sector in £ per Week

Flexibility of Training and Schedule

Training your staff on the premises allows you to schedule the training to suit the needs of the business allowing for it to be structured around potential busy periods and other members of staff holidays and other commitments.

The training can also be structured to meet the needs of your business in terms of required skills to perform the roll and can help instill the companies philosophy and working culture giving you more control over and ability to improve the range of skill sets within your team.

Aid staff retention

A report that was published by the Skills Funding Agency highlighted that 80% of companies that responded indicated an increase in staff retention when they run apprenticeships.

By seeking out and taking on an apprenticeship, the candidate has indicated a desire to learn and with this in mind, will be a driven individual who wants to succeed and progress which will be beneficial to both them and the business that has invested in them.

The structured form of learning provides the candidate with a clear vision of the path that they are embarking on, detailing clear goals and milestones that they will be working towards. If this progression pathway is clear and defined post apprenticeship, retention could be further increased.