Apprenticeships remain a popular way in to work for many young people. Official figures from the Department of Education show 119,500 took up apprenticeships in the first three quarters of 2017/18 – more than ten times higher than in the same period the previous year.
Apprentices have proven to be more loyal to their companies than those without workplace training and they are more likely to work through the ranks faster too. They also tend to be promoted within the first five years of joining a company, which demonstrates dedication and drive.
But what does a business need to know if they are stepping into the apprenticeship zone for the first time?
Depending on the size of the business, full or part-funding is available to cover the cost of training. The funding system for apprenticeships was revised in April 2017 when the apprenticeship levy was introduced. This required all UK employers with a pay bill of over £3 million per year to invest 0.5% of the value of their pay bill, minus an apprenticeship levy allowance of £15,000 per financial year, into their apprenticeship service account. The contributions are automatically taken from the company’s PAYE scheme and added to its apprenticeship service account.
The Government then applies a 10% top-up to the funds available, and employers can put this money towards apprenticeship training within the company. So, for every £1.00 that enters the company’s account via its PAYE scheme, the Government will put in 10p. Employers can then put this money towards apprenticeship training within the company.
While this has worked well, Government has seen room for improvement and has taken steps to boost apprentice numbers. Last October, Chancellor Philip Hammond announced an extra £90 million of government funding to enable employers to invest a quarter of their apprenticeship funds on people working for businesses in their supply chain – up from 10% previously.
To incentivise SMEs to further increase their uptake of apprentices, those with annual wage bills less than £3m do not have to pay the levy but have been expected to pay 10% of the cost of training an apprentice aged 19 plus (those 16-18 are fully funded). The Government then makes up the remaining 90%.
Mr Hammond has said there will be an adjustment to this that will see that 10% contribution halved to five per cent at some point in the future, but no date has been set yet.
These changes bring enormous benefits to prospective apprentices and future employers. Some companies will be looking at apprenticeships for the first time, opening new doors to school and college leavers looking to gain both employment and training. The apprenticeship levy updates have helped to level the playing field too, bringing an opportunity to refresh and, in some cases, revise employers’ preconceptions of apprentices, and reinforce just what an asset they can be to a business.
Essex-based Clear IT Solutions wanted to offer its customers the best solutions and it wanted staff that it could shape and develop to meet its own business growth plans. One of the key benefits of the current system was the reduced cost of hiring an apprentice. We guided the company through the funding application and how to get the maximum financial benefits through Capital Accelerated Growth in Education (AGE) grants as well as additional top up schemes offered by Essex County Council. The company has since employed six apprentices over the past four years - four of which are still with the business with one now employed as a line manager.
Apprenticeships are a credible alternative to higher education and graduate schemes, getting young people into meaningful employment as a hands-on member of a company with technical training built in. According to the Institute for Apprenticeships and Technical Education, apprenticeships help to close the skills gap for employers and deliver a skilled workforce, with 87% of employers satisfied with their apprentices’ training and 75% noting an improved product or service as a result of the training.
There are many examples where businesses have thrived because apprenticeships have enabled them to grow while building a workforce with relevant, required skills. In this unsteady economic climate, that is a win-win for all; businesses who needs skills and talent and for young people who need opportunities and a valid career path. 2019 looks set to be an interesting year…
Rod Harris, Operations Director, Intequal
About Intequal: A Microsoft Apprenticeship Programme Provider delivering framework apprenticeships since October 2013 and new standards since March 2016. The senior management team has over 40 years’ experience in managing employer-led apprenticeships in various organisations.
Intequal has delivered over 400 framework apprenticeships for 160 employers with a completion rate of 89.5%. Its repeat business with employers is at 43% and 86% of its clients are SMEs.
Intequal programmes have been developed using input and feedback from customers. Intequal has a cutting edge delivery model via online, instructor-led and or blended classroom sessions giving countrywide reach. This minimises workplace disruption for both the employer and apprentice. All apprentices are supported throughout their apprenticeship to ensure successful completion.
Intequal apprenticeships are part of a wider Microsoft programme to promote IT and digital apprenticeships across the UK. Intequal is a Microsoft Learning Partner (Silver) and CompTIA Partner, demonstrating its technical capabilities, strengths and quality of delivery.