HR · 5 September 2017

Majority of small businesses fail to understand the value of apprenticeships

Many firms still don’t understand the rules surrounding apprenticeships

Some three quarters of small UK business owners don’t feel they sufficiently understand the rules around hiring apprentices, despite roughly the same proportion – 77 per cent – acknowledging the benefits apprentices often bring to companies.

With many young people making decisions about their future in recent weeks, following the release of A Level and GCSE results, a study from telephony provider XLN has found that just 19 per cent of 18 to 24 year-olds in Britain would choose to go to university, whilst 25 per cent of 25 to 34 year-olds would opt to do an apprenticeship if given the choice now.

In total, just 33 per cent of workers aged between 18 to 55 who responded to a survey said that they thought having a degree was an essential tool for climbing the career ladder in most companies, whereas over half agreed that practical, on-the-job experience had proved more useful than academic qualifications.

According to the founder and CEO at XLN, Christian Nellemann, the government isn’t publicising apprenticeships enough. He called for greater awareness of the benefits apprentices can have for the UK’s smaller employers.

“The cost of hiring one full-time employee is often greater than the annual profit of a typical British small business. But how do you grow if you can’t afford to hire anyone? It’s a concept that’s as old as any business idea,” added Nellemann.

Commenting on the survey results, he made the point that for businesses with a wage bill of under £3m a year, a category into which many of the UK’s small companies fit, the government will provide a £1,000 incentive for taking on an apprentice – its so-called Apprenticeship Levy.

“[An employer] can also expect to get the formal training aspect of the apprenticeship covered by the government,” Nellemann went on to say.

“The publicity surrounding apprenticeships is not sufficient in educating businesses on the protocol of hiring apprentices, likewise it would seem that many young people see work or university as their only options.”

The UK Apprenticeship Levy, introduced on 6 April this year, meant that companies with an annual payroll above £3m will be charged 0.5 per cent on annual bills to fund the government target of three million new apprenticeships by 2020.

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Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.

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