HR · 11 August 2016

Smaller employers hold key to government’s apprenticeships strategy

Small employers have the potential to double the number of apprentices they take on

Britain’s small businesses have the potential to double the number of apprentices they take on to over two million, a new report on apprenticeship reform has suggested.

The study, from the Federation of Small Businesses (FSB), found that one-in-four of the organisation’s member firms currently employ an apprentice, but that a further quarter would consider hiring one in future.

If the situation were reflected throughout the rest of the UK’s 4.7m smaller employers, there is the potential to deliver more than a million new apprenticeships, the FSB report ‘Make of Break: Getting apprenticeship reform right for small businesses’ concluded.

Smaller employers can therefore be considered crucial to achieving the government’s planned target of reaching three million new apprenticeships by 2020.

Despite this potential, the report also identified some major challenges holding firms back from taking on more apprentices. Small business owners are often less able to contribute towards the cost of training an apprentice, for example.

The FSB encouraged government to focus on packages of support and the incentives it offered smaller employers – better targeting the businesses that are least likely to be able to afford the upfront cost of taking on an apprentice.

“We are at a make-or-break moment,” said FSB national chairman Mike Cherry. “While many small firms are committed to apprenticeships, many more continue to be worried about the time and personal commitment required.”

Cherry went on to identify three areas in which the government needed to reform the apprenticeship system: “Ministers need to focus on more targeted and localised information for businesses with high growth potential, specific and practical guidance on how a smaller company can take on an apprentice, and a more generous package of incentives and support for those which do”, he said.

The report also demonstrated the reliability small firms have in providing a route to full-time employment for apprentices. Apprentices in roughly two-thirds of FSB-member businesses were offered a permanent role once they’d completed their training.

However, business owners revealed a continued reluctance to hire apprentices. Nearly a third of FSB members expressed doubts about hiring school-leavers as apprentices due to a perceived lack of skills and knowledge, while 31 per cent were concerned about juggling apprentice training with day-to-day business operations.

Speaking with Business Advice earlier this year, CEO of employer-apprentice matching consultancy LDN Group, Simon Bozzoli, agreed that the government needed to be doing more to implement a successful apprenticeships strategy.

“Employers still need lots of support to help them appreciate that it’s not about hiring a completely competent person on day one. It’s about hiring someone who will become more competent as time goes on,” added Bozzoli.

The government is expected to announce it renewed apprenticeship funding plans in August 2016.  As part of its recommendations, the FSB called on government to set up a focus group of 100 small business owners to contribute to reform of the apprenticeship strategy.

Hear more from LDN Group’s Simon Bozzoli – Connecting London’s employers with young apprentices.

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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.