Apprentice or graduate, that is the question facing many organisations.
We are in a time of great change and challenge. Political and economic turmoil has resulted in many industries experiencing a shortfall of skilled labour. That’s not all, after nearly a decade on from the global financial crisis the British economy continues to struggle with high youth unemployment. Combined both these issues need a strategic approach and a practical solution.
Apprenticeships are the key and also a solution to the age-old education-to-work transition problem.
In the UK its estimated 15% of establishments have taken on apprentices, that’s more than 100,000 employers. This is proportionally below other European countries like Germany were 24% of establishments employ apprentices.
To address this, the UK Government is planning to invest £2.3 Billion on apprenticeships by 2020 and have 3 million apprenticeship starts in England by the same year. In addition to this they have launched an apprenticeship levy that has shifted more of the cost onto employers, with the goal of getting them to either expand existing programmes or introduce new ones. This has been a monumental structural shift in the UK apprenticeship market and has fundamentally altered the way companies fund their staff recruitment, development and training.
The levy only applies to companies with a pay bill of over £3 million a year, meaning that less 2% of UK employers actually pay it. Although it remains to be seen if the eligibility thresholds will be lowered in the future.
Companies based in England and not on this programme, will still have most of their apprenticeship training and assessment costs paid for by the government. They will however be required to make a of contribution of around 10% to the overall costs.
This is an overall picture of the topic and where everyone stands. Let’s now set out the main points that interested employers should consider when looking to develop the own apprenticeship programmes.
The question on many people’s minds will be ‘What do I get out of it?’
Everyone wants to bring bright new talent into their organisation. The trick is how. Apprenticeships is not new answer, but an age-old, recognised, youth-friendly and successful recruitment model that has worked well in the past. The difference now is that it’s being taken more seriously to reach out to a wide pool of young people, who often struggle with traditional recruitment methods.
HR professionals who want their companies to succeed must realise that this is a time of significant change for apprenticeships in England. They must plan accordingly to take full advantages of the opportunities the situation offers. The good news is that over the last few years we have started to see many employers investing in programmes designed to help them win the war for talent.
For employers, having an apprenticeship scheme can bring a number of benefits. Companies can use them as a cost-effective mechanism to get the skilled workers needed for their future development. Apart from training people in those specific areas where they are needed the most, apprentices also tend to be more loyal, meaning they are likely to stay longer.
Companies can also make the most of government funding, save on the costs of recruitment and build their brand.
In addition to all of this, employers can get help from the government to pay for apprenticeship training. As previously mentioned, recent changes to the way how funding works, means that those with a yearly wage bill over £3 million, must pay an apprenticeship levy. This is essentially a tax on employers used to fund apprenticeship training.
However, setting up a successful programme entails detailed planning. Directors must familiarise themselves with the key features of apprenticeships, establish where it fits in within their strategic workforce settings and most importantly gain the support of senior managers and colleagues. Only when they have done this should they start looking for right training provider.
Now for the apprentices;
For young people getting their first job can be one of the most difficult steps of their career. With limited or no work experience, it’s a challenge for them to make an immediate impression on employers and get invited to that all-important interview. This is true for everyone who has just left school, college or are university graduates.
One way of plugging this experience and skills gap is through apprenticeships. They are an excellent way of participants gaining hands-on work experience in a real-world environment. Not only will they get a mixture of on-the-job training with classroom learning, but they will also be paid, thereby earning whilst they learn.
For many it’s an alternative to university, gap years, volunteering, internships, entry-level jobs and traineeships, all good but not quite what some are looking for. They will get an immediate chance to be taught by qualified professionals and trained on the latest tools, technologies, equipment, systems and techniques.
There are some drawbacks. Apprenticeships aren’t right for everyone and have some negative points. For a start you can’t gain access to certain careers like Medicine or Science through them. Furthermore, there has always been a high take-up of apprenticeships in low-skill fields, meaning the starting salary might be less than that of a graduate, who are still more valued by some employers. These are all issues that need to be addressed.
Despite all these cons, there are, as they say, many reasons to be cheerful about apprenticeships. It’s now more widely accepted that they not only fill the gap between education and employment, but also impact businesses and enrich individual lives.
For instance, they have been shown to increase female participation in male-dominated subjects, boost applications from underprivileged groups and made it easier for existing staff to reskill and change career. Furthermore, they can help with improving the socioeconomic and ethnic composition of teams and tackle gender bias in unrepresented roles.
There’s no denying it, apprenticeships provide a key skills solution for employers and an important route into work for young people. They are here to stay, a force for good and need to be supported.
Although there is a long way to go until they are viewed in the same light as a university education, they are on the way to achieving parity.
To sum up, employers who take on apprentices are sending out a clear signal that they are prepared to invest in the future. However, to bring maximum benefit to their companies and unlock the true power of apprenticeships, they must be prepared to work collaboratively with others to design and deploy high-quality apprenticeships
Iejaz Uddin, CEO at Dayjob.com