Why apprenticeships work for small businesses

Managing people

28 January 2022

Though taking on and training a new staff member can require a bit of time investment as an employer, adding to your team through an apprenticeship programme can create a lot of benefits for businesses. From contributing to your company, whatever its size and sector, to cementing your place in the community, employing an apprentice can have more impact than you might think.

The benefits of taking on an apprentice 

Boosting employers

According to the  Government apprenticeship website, 78% of employers said apprenticeships helped them improve productivity. In addition to more efficient working, it also boosts morale as apprentices are often young people who are just happy to get a foot in the door within their desired industry. In fact, 90% of apprentices stay at their company after completing their course making it a great investment to have an apprentice.

Generate new ideas

Bringing in new staff can always help develop new perspectives and teach existing staff new ways of working. 74% of employers said apprenticeships helped them improve the quality of their product or service. Given that the cost of taking on an apprentice is usually quite low, hiring one is a great way to diversify your team and bring extra resources into your business.

Bridging skills gap

Apprenticeship usually bring in quite young new employees who are digital natives and help the team develop new technology skills. However, you can also upskill existing employees using an apprenticeship training programme. Investing in your existing team can help boost the morale and loyalty of existing staff. 86% of employers said apprenticeships helped them develop skills relevant to their organisation and according to a UK Commission on Employment study 88% of employers felt apprenticeships were a cost-effective way to train staff.

Individual benefits

Some 75% of young apprentices surveyed by the YMCA said that the experience improved their skills and career prospects and 80% would recommend an apprenticeship. It’s not just the apprentices themselves that feel better about their employability - according to Reed, 15% of employers state that apprentices are more employable than those with other qualifications.

Improving the economy

The training you provide to an apprentice also has the power to improve the entire business ecosystem. A study by the Department for Business, Innovation and Skills worked out that every pound invested in training a level 3 apprentice delivers £26 to the wider economy. And that’s great news for business too.

Common apprenticeship misconceptions

If you’ve heard of apprenticeships before and thought that it wouldn’t benefit your business due to time or money constraints, neither of those needs to be a barrier, even for small businesses. So, let’s set the record straight about apprenticeships:

Apprentices don’t need to be a huge time commitment

As a small business owner, it’s possible that an apprentice will be your only employee, but they don’t necessarily need to be a full-time commitment either. Some businesses (especially in fields such as construction where they've been taking on apprentices for a long time) often share an apprentice with another business in the same industry.

This means that you can have all the benefit of the extra labour from an apprentice for part of the week but don't have the full-time commitment of training them and would split the paying of wages as well. This may be a great compromise for small business owners looking to take on their first apprentice.

Apprentices are extremely cost efficient

In exchange for spending 20% of their employed time on training and study, the national minimum wage rate for apprentices tends to be lower than your usual employee:

  • Aged 16 to 18 OR Aged 19 or over and in their first year: The current National Minimum Wage rate for an apprentice is £5.28 per hour.
  • Aged 19 or over and have completed their first year: Your apprentice is entitled to the National Minimum Wage or National Living Wage rate for their age group.

If cost is your primary concern when considering whether or not to take on an apprentice, there’s also funding opportunities available and support from the government which you can read more about in a later section.

Apprentices can be used by any industry

There’s a common misconception that apprenticeships are only for young, school leavers going into trade work as construction. However, that is not the case and there are thousands of companies that even offer higher and degree apprenticeships. According to UCAS, “employers including Deloitte, BMW, and the BBC take on apprentices and opportunities span across sectors, from engineering to law.”

How to get an apprentice

The great thing about apprenticeship programmes is that they can be quite flexible. The level of training and length of time that the apprenticeship covers can vary and if you do not want to hire and train the apprentice yourself, you can use an apprenticeship training agency. Once you have a clear idea of what you want your company and the apprentice to get out of working with you, it’ll be easier to move forward with hiring someone.

The UK Government highlights a few simple steps for hiring an apprentice:

  1. Choose an apprenticeship
  2. Find an organisation that offers training for the apprenticeship you’ve chosen.
  3. Advertise your apprenticeship
  4. Make an apprenticeship agreement and commitment statement with your chosen apprentice.

For more information, read the full government guidance on how to take on an apprentice.

How to fund an apprentice

Employers usually do not bear the full brunt of paying for an apprentice’s training regimen – the government will often help to pay for apprenticeship training. The amount that the government will cover depends on whether you pay the apprenticeship levy or not. You pay the levy if you’re an employer with a pay bill over £3 million.

As a small business, it’s unlikely that you’ll need to pay the apprenticeship levy which means you’ll pay just 5% towards the cost of training and assessing an apprentice and the government will pay the rest up to the funding band maximum.

If you employ fewer than 50 employees, the government will pay 100% of the apprenticeship training costs up to the funding band maximum for apprentices aged:

  • 16 to 18
  • 19 to 24 with an education, health and care plan provided by their local authority or has been in the care of their local authority

There may be additional funding or grants depending on where your business is based as Scotland, England, Wales and Northern Ireland will have different support available. To find out more about different funding options and what financial responsibilities the employer has when hiring an apprentice, read more here.

National Apprenticeship Week

Every year, there’s a week-long celebration of apprenticeships bringing together businesses and apprentices to highlight the positive impact that apprenticeships make to individuals, businesses and the wider economy. If you’ve had an apprenticeship programme in the past, you should consider getting involved and shouting about how an apprenticeship has worked for your company.

If you’ve only just started considering a programme, follow the conversations happening to learn more during National Apprenticeship Week or find out more about the process of hiring an apprentice on the dedicated UK government portal at any time.