From education to employment

Apprenticeships – time for less noise and more evidence

Daisy Hooper, CMI

What’s in a name? ‘Apprentice’ conjures up an image of a young worker, learning on the job. But take away the name and what we actually have in English apprenticeships is a system based on high quality standards, informed by real world employer needs. It is one that focuses on the long term skills gaps in our economy and, given our woefully low rates of employer investment in quality training, it ensures that employers are helping to bridge those gaps.

Some say apprenticeships should target the young and not be all things to all people

Some say apprenticeships should target the young and not be all things to all people – but  we are starting to see very positive results. In reality, amid much talk in political circles of the need for growth, it is the often-ignored apprenticeships that are quietly delivering improved productivity across the UK.

We see apprentices who missed out on – or were denied – educational opportunities when they were younger accessing their first high quality experience of learning while earning through management apprenticeships. They are going on to identify innovations, helping their organisations to grow, and in turn hire new staff – including young people – and to support them once there.

At Broadly Speaking – an SME based in Tavistock near Plymouth their apprentice – Brooke – fell through the education net when she was leaving school but has now identified savings and improvements in the millions of pounds, securing the future for a firm employing 30+ people.

At Diamond Hard Surfaces, a micro manufacturing company based in Northamptonshire, new ways of operating, identified through the apprenticeship, resulted in the company growing by 60% in 2020-21.

It is too easy to dismiss these as isolated examples.

It is too easy to dismiss these as isolated examples. The available data, including a survey of around 800 apprentices, points to system-wide positive results. Our modelling found that management apprentices completing now are estimated to be adding almost £700m a year to the economy by the end of the decade and they are projected to add £7bn to the economy in total by then (for a cost of £2bn); that’s a 300% return on investment. We also see significant productivity gains for business – around 27% per apprentice in the private sector – and pay rises for individuals averaging £6,000. And that is during the apprenticeship.

Productivity directly affects the wages and incomes of us all

This matters because productivity directly affects the wages and incomes of us all along with the ability of our economy to pay for the public services our society relies upon.

The social mobility value

The social mobility value – of management apprenticeships in particular – is also misunderstood: 39% of CMI management apprentices are from a low socioeconomic background (compared to 36% in the UK labour force as a whole and 27% in higher education) and 71% come from families where neither parent went to university.

A shift that dilutes the apprenticeship system risks letting employers off the hook and allowing more of the funds to be used for training that would have happened anyway. Employers don’t have a strong record here – the Employer Skills Survey 2019 found that 30% of employers said at least half of all their training was for basic induction or health and safety training, and less than 10% of the private spending on training by UK employers goes to high-quality on- or off-the-job formal training from external providers.

Why not build on the best of the system?

So rather than water down or halt progress when we are starting to see results, why not build on the best of the system? Young people are under-represented compared to before the newer high quality standards were introduced. That’s why we are calling for an Apprenticeship Opportunity Fund, which could be funded by the levy and administered through existing bodies such as Combined Authorities or local Chambers of Commerce. The fund could be used to support smaller businesses to take on apprentices and help younger workers through their programme.

This is not only the view of CMI, but one shared by the Federation of Small Business and others. Policy and Advocacy Chair Tina McKenzie said: “Apprenticeships are a great way to bring fresh perspectives into a business and to upskill the next generation. We are pleased to see this report, as an important step to help more small firms hire apprentices – boosting skills, growth and economic prosperity. It is crucial in the current reform debate that the apprenticeship levy is not diluted into a general skills and training levy – as this would reduce the apprentice levy funds available for small employers which need them most.”

Degree-level and management apprenticeships are not the enemy

Finally, degree-level and management apprenticeships are not the enemy – they are an important part of a skills system designed to deliver high quality training, and the jobs and economic benefits that follow on. More than 80% of the UK’s 2030 workforce are already employed and one person in four manages someone else – their skills need to keep pace with our evolving economy.

Apprenticeships are indeed about more than that young worker learning on the job, they are beginning to change the profile of the UK’s workforce, providing genuine skills that ensure we have the human capital, the talent, necessary for future prosperity. 

By Daisy Hooper, Head of Policy and Innovation, CMI

Daisy is Head of Policy and Innovation at the Chartered Management Institute, the only Chartered professional body for managers and leaders. CMI works with business and education to inspire people to become skilled, confident and successful managers and leaders. Daisy leads CMI’s policy and impact work, including recent publication The Everyone Economy, looking at how to maximise talent in the UK, and Management Transformed, looking at the skills managers and leaders will need in a world transformed by technological change and societal disruption. She has a background in higher education, and teaching and learning policy.

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