Apprenticeships – everything you need to know

What are apprenticeships?

Apprenticeships are a Government backed scheme to encourage and help fund company training and development of employees. You can employ apprentices at any level in your business while getting funding from the Government to help pay for their training.

There is some confusion around what constitutes an apprenticeship and what companies need to do to access the funding so we’ve put together a summary of everything you need to know.

Why set up an apprenticeship?

There are many reasons why companies might decide to establish an apprenticeship programme from a regular source of hard-to-hire skills to driving diversity. Here are our top 6:

1. Home-grown talent

86% of employers said apprenticeships helped them develop skills relevant to their organisation (gov.uk). Hiring an apprentice is a productive and effective way to grow talent and develop a motivated, skilled, and qualified workforce.

2. Better retention rates

80% of companies who invest in apprentices report an increase in overall employee retention (Skills Funding Agency).

3. Diversity

Apprenticeships allow companies to introduce diversity from the ground up, building it into their foundations as individuals progress. They are a key part of creating a stronger and fairer workforce, where people of all backgrounds are given opportunities to fulfil their potential. Click here for some statistics on D&I surrounding apprenticeships.

4. Address the skills gap

The current skills gap costs the UK £63 billion a year, with an estimated 600,000 job vacancies in digital technology alone (The Edge Foundation). An effective apprenticeship scheme that meets the specific needs of your organisation is an effective way to close skills gaps whilst injecting fresh perspectives

5. Improve Productivity

78% of employers said apprenticeships helped them improve productivity, and 74% of employers said apprenticeships helped them improve the quality of their product or service (Gov.uk).

6. ROI

As described in this article most businesses can get government funding for 100% or 95% of the training!

Key elements of an Apprenticeship:

• Offer a combination of practical training in a job with time for study
• They range from GCSE equivalent to degree level (up to MBA)
• Apprenticeships take between 1-5 years’ to complete, depending on the level
• They can be tax deductible or government funded training
• Employees must earn at least the minimum wage whilst they train

Key requirements for an Apprentice:

• 16 years old or over
• Living in England. If you don’t live in England, check out apprenticeship options in Scotland, Wales, or Northern Ireland
• Not in full time education

Key employer considerations:

If you’re taking on an Apprentice, you’ll need to:

• Pay your Apprentice at least the minimum wage
• Provide at least 20 days paid holiday + bank holidays per year
• Allow at least 20% of their normal working hours to be spent on ‘off-the-job’ training or studying
• Offer a genuine job, with a contract long enough to complete their apprenticeship
• Ensure they work alongside experienced staff and learn job-specific skills

Funding for Apprenticeships:

Levy

If you’re an employer with a pay bill over £3 million each year, you must pay a 0.5% tax on your payroll into the apprenticeship levy. If you are in this position, you should create an account on the apprenticeship service to:

• Receive levy funds for you to spend on apprenticeships
• Manage your apprentices
• Pay your training provider

The total amount that you pay towards the levy goes into a pot which you can put towards the cost of employing or training an apprentice. Any funds in this pot expire after 24 months, so you use it or lose it.

Non-Levy

If you are an employer with a pay bill under £3 million each year, you will not be paying the Levy. The good news for you is that the government will still help and support you in employing apprentices by sharing the cost of training and assessing your apprentices. You will pay 5% towards the cost of apprenticeship training with the government paying the rest (95%) up to the funding band maximum.

Further financial incentives

Employers can also qualify for an additional £1,000 payment for taking on an apprentice who is:

• 16 to 18 years old
• under 25 with an education, health and care plan or has been in the care of their local authority

There is additional funding available in the wake of the coronavirus pandemic and employers who hire a new apprentice between the 1st August 2020 and 31st January 2021 can claim further financial incentives from the government (£2,000 for each apprentice aged between 16 and 24, £1,500 for those over 25).

What jobs qualify for Apprenticeships?

Most job sectors now offer apprenticeship opportunities, with a wide range of courses available for both entry and non-entry level apprentices. There’s a misconception that apprenticeships only exist in vocational careers but courses exist in industries from construction to data science.

For a full list please click here.

Most companies use apprenticeships to either bring in school leavers into the business or to retrain existing team members:

Entry-level Apprenticeships:

The first option is to begin recruiting entry-level apprentices which is a great way of bringing young, fresh talent into your business who can then progress through your organisation. In order to recruit, you’ll need to go through the following steps:

• Identify skills gaps and choose the most suitable apprenticeship for your company
• Find a training provider that offers that apprenticeship
• Check what funding is available
• Advertise the apprenticeship opening (you can do this for free through the Government service, but a good training provider will help you too)
• Select your apprentice, ensuring their eligibility

Companies that hire multiple entry-level apprentices in any given year and that do so regularly often opt to centralise the training and support into an official programme (although that certainly isn’t necessary to have a successful apprenticeship intake).

Whether you opt for a formal programme or not you will want to consider elements to maximise your chances of success in addition to the training mentioned above:

• Do you want a rotational programme (across multiple departments) or limited to one?
• Can you add to your onboarding programme to provide a little more structured support?
• Many businesses create a peer group ‘buddy’ system to add pastoral care
• Do you need to provide additional training to hiring managers and department heads?

For a more detailed guide on the government website, please click here.

Non-entry level Apprenticeships:

Apprenticeships are available to individuals of any age and experience level meaning as an employer, you can also use your Levy to upskill and train your existing staff as well. Seeing as two thirds of professionals would take a lower salary in return for sponsorship of a recognised qualification from their employer (CV Library), this could be a great option to engage staff and improve retention!

There are a wide range of courses available so first it’s important to understand the skills gap you are currently lacking within your organisation, and from here it will be easier to identify which Apprenticeship may be the most suitable. We’ve seen a number of non-entry level Apprenticeships work really well for our clients to:

• Advance technical skills;
• Foster internal mobility between different roles; and,
• Develop future leaders.