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Is apprenticeships the way forward for UK business?

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Apprenticeships have had something of a ‘bad Press’ over the last few years, with many businesses reporting mixed results. We’ve heard of somewhere the apprentice didn’t come back from lunch on day one and others, like ourselves, who have a had nothing but success with the scheme.

Over the past 13 years, we have taken on four full-time apprentices, one becoming a director of the Company. In this blog, we thought it would be helpful to share our experiences.

According to the government, over 2m apprenticeships have been created in the past 10 years, covering a diverse range of sectors. From Retail to industrial and Commercial. All offering real career opportunities, coupled with external and on the job training or in other words, ‘earn while you learn’

For some businesses, apprenticeships are seen as ‘cheap labour’ or ‘hard work’. This is despite a recent report from economic forecaster, Centre for Economics and Business Research (Cebr) that found, on average, each apprentice achieves an increase in productivity of £10K or more and helps their Organisation be more competitive in the modern market-place.

So, has that been our experience?

There is no doubt (fully documented) that our apprentices have given us higher productivity at a lower cost point. In addition, we have also gained numerous other benefits. For example, in the mechanical and electrical engineering industry, as with many other sectors, there is currently a severe skills shortage. It is also becoming increasingly difficult to recruit the specialist staff we need to take our business forward.

One of the key benefits of our apprenticeship scheme has been the ability to transfer specialist skills from our existing experienced staff to the new and less qualified entrant.

Training has been a major factor in our successful involvement with apprenticeships. Bypassing on skills, delivered – in house, that are specifically relevant to our business and industry, helps us future proof the business.

We’ve also found that it’s a two-way process.

Our apprentices bring the outside world into our business. This is especially important for time served staff who have been doing what they are doing for such a long time with a possible reluctance to change.

We’ve found that apprentices bring a new dimension to the working environment.
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In addition to our ‘cascading training – helping us mould younger staff into the company ethos and Processes, our apprentices bring new ideas, techniques and fresh skills into the workplace.

This has proven to be especially beneficial with regard to the application of new technology such as social media and computer software. The external, structured and classroom delivered training, is Ofsted rated and results-driven.

It is also highly subsidised.

Much of this funding comes from the apprenticeship levy, currently payable by companies who have an annual wage bill of £3m+. This means that non-levy paying businesses, such as ourselves, contribute just 5% towards training and assessment.

This we pay directly to our training provider with the government paying the difference. However, employers with fewer than 50 staff, and fulfilling certain criteria, can claim up to 100% of the training costs as well as a £1000 starting bonus.

So, is this our only cost?

There are wages. It’s a condition of the Apprenticeship Agreement – mandatory for claiming government funding, that apprentices 18 years and over are paid the national minimum wage of (currently) £3.90 per hour in the first year, rising to £6.15 the next year for 18-20-year-olds and then up to £8.21 for over 25s.

We estimate the average weekly wage for an apprentice is around £200.

To summarise. After considering the costs and time involved, we believe employing apprentices offer us innumerable benefits. In addition to increasing our skills base with quality training and new ideas, we have reduced recruitment costs, increased productivity, and improved customer service.

It’s also been proven that there is greater job satisfaction and higher retention levels with apprentices, as supported staff feel more engaged and motivated to stay. This has certainly been our experience. As we said earlier, one of our apprentices is now a director of the company while others are achieving substantial personal progress.

Do we think apprenticeships are the way forward for UK businesses?

Our experience has been nothing but positive. We firmly believe our business has greatly benefitted from the apprenticeship scheme. We have an up-skilled workforce, a through-put of new staff and estimate that the investment we have made, in on-site and off-site training, will pay for itself, from increased productivity, within about two years from completion.