As Sajid Javid and Nick Morgan have stated, ‘apprenticeships have long been recognised as a crucial way to develop the skills wanted by employers’. In this guide, we explain the steps involved in creating a successful apprenticeship programme and recruiting apprentices, including the availability of government funding. We also explore the current social and political context, which has brought renewed focus on the benefits of employing apprentices.
We will cover:
- What is an apprenticeship?
- Social and political context
- What types of roles are suitable for apprenticeships?
- Available funding
- The benefits of employing an apprentice
- Barriers to employing an apprentice
- Employer’s responsibilities when employing an apprentice
- How to employ an apprentice
- How to ensure the apprenticeship is a success
What is an apprenticeship?
An apprenticeship combines paid employment, on-the-job learning and studying towards a relevant training course. On completion, the apprentice will receive a nationally recognised qualification. As the CIPD states, the ‘apprentice’s learning takes place in context and provides a real understanding of the working world, combining practical skills with theoretical knowledge’.
Traditionally, apprenticeships have been associated with school leavers. But while those wanting to become an apprentice must be aged 16 or over, the age limit of 25 was removed in 2004, and there is now no upper age limit. All apprentices must be eligible to work in the UK.
There are different apprenticeship levels available, ranging from intermediate (equivalent to five GCSEs) to degree level (equivalent to a bachelor’s or master’s degree). Apprenticeships last for one to five years, depending upon the level of qualification the apprentice is studying.
Between August and October 2023, there were 130,830 new apprenticeships created – a 7% increase on the same period the year before.
Social and political context
Government policy changes over the last few years show a renewed focus on apprenticeships as a way of increasing national productivity (which has remained relatively stagnant since the financial crisis), improving social mobility and tackling skills shortages.
In 2015 the Apprenticeship Levy was announced, requiring large employers (those with an annual wage bill of £3 million or more) to contribute 0.5% of their wage bill to pay for the training costs of its apprentices. If the fund isn’t used after 24 months, it is reallocated to a central fund which can be accessed by smaller businesses. Further information on the apprenticeship levy is available here.
On top of that, the government announced a commitment to increasing the quality and quantity of apprenticeships, with the aspirational goal of reaching 3 million starts by 2020, a figure that wasn’t achieved). Sadly, the pandemic had a negative impact on the creation of new apprenticeships, as it did on the job market as a whole.
What types of roles are suitable for apprenticeships?
Historically, apprenticeships have been used for skilled trade occupations, such as electricians and plumbers, while in recent years there has been a trend towards using apprenticeships for professional and technical occupations.
Apprenticeships are now available in a wide range of occupations including: creative and digital media; public relations and marketing; business and administration; legal; public health and social care; hair and beauty; catering and hospitality; accounting; agriculture; human resources, cyber security and engineering.
Available funding when employing an apprentice
Most businesses are eligible to receive a 95% government contribution towards the cost of training and assessment, which is paid directly to the training provider. In some circumstances, there may be a grant of £1,000 available to support the apprentice in the workplace. This may apply if the apprentice is: 16-18 years old; 19 to 25 years old with an education, health and care plan; 19 to 25 years old and they used to be in care; or if the apprentice was previously made redundant. Find out more here.
Different rules apply to those businesses that are required to pay the apprenticeship levy, i.e. those with an annual wage bill of £3 million or more. Further information is available here.
Check your eligibility for funding on the gov.uk website.
The benefits of employing an apprentice
In 2021, the St Martins Group analysed the financial costs and benefits of employing an apprentice. The research found an annual net benefit to employers of £2,496 during the apprentice’s initial training period. This analysis took into consideration the cost of employing an apprentice (i.e. wage costs, training costs and other expenses such as supervisory costs) as well as government subsidies and productivity output. This financial benefit is likely to increase significantly after the completion of the apprenticeship when the training costs are removed and productivity increases.
The benefits aren’t only financial; employing an apprentice enables a business to develop the skills and expertise needed to achieve current and future organisational goals. This is particularly relevant given the current labour market and the challenges faced by employers due to skills shortages. Apprenticeships provide a longer-term solution to filling skills gaps.
What’s more, the St Martins Group reported the following additional benefits of employing apprentices:
- provides value for money
- offers a cost-effective labour source
- improves diversity
- improves public perception
- contributes to employee morale
- better service delivery
- higher levels of client satisfaction
- development of improved products
- higher levels of productivity.
Furthermore, the Department for Education’s Apprenticeship Evaluation found that most businesses that employ an apprentice experience higher rates of retention, engagement and morale, and the ability to attract good staff.
Barriers to employing an apprentice
Despite the clear benefits, the St Martins Group identified a number of barriers preventing businesses from employing an apprentice, including: the time required to manage apprentices; identifying the right apprenticeship programme; administration time; additional training costs; and too much bureaucracy/effort.
Employer’s responsibilities when employing an apprentice
When taking on an apprentice, employers have the following obligations and responsibilities:
Terms and conditions of employment
Apprentices are employees, and are entitled to receive the same conditions of employment as other employees in similar roles. This includes annual leave, sick pay, other benefits such as childcare vouchers, and equal access to facilities. Similarly, apprentices are entitled to a safe working environment and protection from discrimination and unfair dismissal.
Apprentices must be provided with a statement of employment particulars, specifying their pay and benefits, the duration of employment and other relevant terms and conditions. For further information please refer to our employment contracts guide.
Pay
Apprentices are entitled to receive the National Minimum Wage. The relevant rate differs according to the apprentice’s age and whether they have completed the first year of their apprenticeship. From 1st April 2024, the apprentice rate will be £6.40 per hour for those aged 16-18, as well as those aged 19+ during their first year of apprenticeship. Information on the current national minimum wage is available here. The gov.uk website also has a useful calculator.
Apprenticeship agreement
An apprenticeship agreement must be provided to the apprentice for their signature. This should cover:
- The skill, trade or occupation the apprentice is being trained for;
- The name of the apprenticeship they are working towards;
- The start and end dates for the apprenticeship; and
- The training that will be provided.
Training plan
Apprentices must work towards an approved apprenticeship, with a duration of one year or more. The apprentice must be given the opportunity to learn on the job, to ensure they have the knowledge and skills needed to pass their apprenticeship and achieve their qualification.
Apprentices are also entitled to paid time off to attend apprenticeship training and to study. A training plan must be agreed between the apprentice, employer and training provider. This should cover:
- the planned content and schedule for training;
- what is expected and offered by the employer, the training provider and the apprentice; and
- how to resolve queries or complaints
Steps to employing an apprentice
Follow these steps to creating an apprenticeship programme and employing an apprentice:
1. Select an apprenticeship
The first step is to clearly define the business strategy and objectives, as these will inform the skills needed to achieve organisational performance. For example, if a company is planning to start selling its products online, it may need employees with web development or digital marketing skills.
Once you have identified the skills needed within the organisation, you can use the gov.uk website to select a relevant apprenticeship.
2. Choose a training provider
Carefully consider which training provider is best suited to the needs of the business (the gov.uk website has a list of training providers). Factors to consider include available qualifications, method of learning (for example, e-learning or in person), cost, location, pastoral care available, recruitment support, accreditations, and feedback from other employers.
3. Create an apprenticeship services account
The next step is to create an apprenticeship services account here. This will enable you to manage funding and to advertise your apprenticeship.
4. Advertise your vacancy
Create and post on your apprenticeship service account here. The advert should clearly state that the vacancy is for an apprenticeship and include relevant factors such as: the training provided, the training provider, the duration of the apprenticeship, hours of work, and wages. The gov.uk website has a list of apprenticeship vacancies.
You can also use a variety of other methods to advertise the vacancy, for example recruitment websites, professional networking sites, social media, local jobcentre, and careers fairs. Some training providers will offer recruitment support. Developing links with local schools and colleges may be a really effective way of sourcing candidates. And don’t forget to advertise the role internally; you may have existing employees who are interested in a change of career path.
If you don’t want the commitment of employing an apprentice yourself, there are flexi-job apprenticeship agencies who will hire and train apprentices. Further information is available here.
5. Conduct a selection process
There are several different selection methods that can be used during the recruitment process. Interviews are a useful way of assessing a candidate’s communication skills, presentation, and ability to work under pressure, as well as their motivation for applying for the role and previous experience. Skills based assessments can be used to determine whether a candidate has the skills or abilities required for the apprenticeship. Psychometric testing can be particularly useful when selecting from candidates with minimal work experience (such as school leavers) as they measure a candidate’s ability, aptitude and personality, rather than their career history. It can be used to assess whether a candidate is a suitable match for the job role.
6. Provide the relevant documents
As mentioned above, the new apprentice must be provided with a statement of employment particulars, as well as their apprenticeship agreement and training plan.
How to ensure the apprenticeship is a success
It’s important to recognise that many apprentices are young and inexperienced and may need more support in the workplace. Here are some tips to ensure the apprenticeship is mutually beneficial, and a success for both the business and the apprentice.
Identify the training plan and agree learning goals
Work collaboratively with the training provider to agree the relevant learning goals, i.e. what do you want the apprentice to learn during the apprenticeship? The training plan then needs to be clearly identified and structured to ensure that theoretical learning is combined with on-the-job work experience.
Deliver on-the-job learning
Ensure the apprentice can learn and develop their skills while in work. The more time and effort the employer invests in coaching and developing the apprentice, the more productive and highly skilled the apprentice will become.
Commit management resource
Ensure the line manager has the capacity to train, coach, and support the apprentice. Dedicated time should be set aside for coaching and training, as well providing feedback (both positive and constructive) and discussing wellbeing.
Protect off-the-job training time
Ensure apprentices have time to complete their training and studies, which will enable them to develop their theoretical knowledge. Be mindful of the pressure apprentices are under to learn a new job and to complete their qualification, particularly if this is their first employment.
Regular communication with the training provider
Keep in regular contact with the training provider to discuss the apprentice’s progress. Where gaps are identified, the employer and training provider should work together to ensure that the apprentice is supported to develop their skills.
Offer a mentor programme
Mentor programmes have been shown to have a positive impact on the experience of apprentices. The benefits include embedding the organisation’s culture and behaviours, supporting communication between the apprentice and employer, and improving skills and knowledge transfer. A mentor programme involves an experienced colleague using their expertise to advise, guide, and support learners.
Provide wellbeing support
Some apprentices, particularly those from disadvantaged backgrounds, may experience personal issues that impact them in work. Ensure your apprentices have access to support such as an employee assistance programme or NHS counselling services. Further information on employee assistance programmes is available here.
What can we do to help?
If you would like advice on employing an apprentice, please contact our team on 0330 223 5253 or office@fitzgeraldhr.co.uk. We would be delighted to help you.
We hope you found this guide useful. You may also find the resources below helpful.
