The benefits of apprentices for your business

Apprenticeships are recognised as a great way for someone to gain qualifications and work experience while getting paid, but they are also hugely beneficial for businesses that offer them – something still not recognised by a lot of employers.

National Apprenticeship Week (NAW) 2018 took place between the 5th and the 9th of March 2018, so we are championing the benefits that apprenticeships can bring to both businesses and individuals. With that in mind, let’s take a look at three of the main benefits that apprenticeships can bring to a business and the key legal points you need to bear in mind if you’re considering a hire.

Long-term skills

Businesses both small and large can face challenges when it comes to planning for the future. This is especially true when a business requires skills that are in high demand. It can be daunting knowing that skilled members of your workforce are going to retire in the not-so-distant future, or that they could easily be poached by other businesses.

Taking on new apprentices or utilising apprenticeship funding to upskill existing members of staff, helps to create a pipeline of talent for the future and shows your commitment to staff development. Studies have shown that investment in staff training encourages staff to stay with a company, which brings us on to our next benefit.

Loyalty

Apprenticeships are hugely effective as a method of building staff retention and loyalty – it’s far more likely that someone you’ve spent time and effort training will stay with your company longer than those that don’t benefit from training. Apprentices tend to feel valued by the company that started them out on their career path and are, therefore, likely to stick around.Industries that normally see a very high turnover of staff should certainly consider apprenticeships as a way of combating this. It’s not just the apprentices themselves that are likely to be more loyal either – other employees are likely to see that you’re investing in people, which can improve morale and general company culture.

Cost-effectiveness

One of the biggest bonuses for employers is that, due to apprenticeship programmes being between 90-100% government funded or funded via company levy pots and new recruit apprentices being paid a lower national minimum wage, it’s a very cost-effective option when it comes to strengthening or expanding the workforce.

This is especially useful for smaller businesses that want to be able to expand rapidly or have skills gaps, but are in the catch-22 situation of not being able to afford training or additional employees immediately, because they don’t have the skilled employees needed to boost their profits.

What you need to know

Hiring an apprentice isn’t a complicated process and it’s not something that requires you to have a HR department to organise. Here are the key legal points to consider:

Finding an apprentice

You can either find an apprentice yourself, just like any other hire, or you can advertise your vacancy via the ‘recruit an apprentice’ tool through a training provider.

Checking eligibility

Apprentices must be aged over 16, not in full time education and a resident in England. Scotland, Wales and Ireland have their own apprenticeship schemes and alternative eligibility criteria to adhere to.

Apprenticeship framework and standards

There are different frameworks and standards available in over 200 employment sectors – the most relevant framework relating to the apprentice’s job role will need to be selected.

Training

An apprenticeship must be delivered by an approved apprenticeship training provider who is listed on the register of apprenticeship training providers (ROATP).

Pay

Apprentices must be paid the minimum wage, which is currently £3.50 per hour, but this is reviewed annually and once an apprentice is over 19 or out of their first year of training, normal minimum wage will apply.

Your obligations

You must have a signed commitment statement in place with your apprentice and the training provider, and you must allow the apprentice to spend at least 20% of their time on off-the-job training and provide an appropriate mentor for the apprentice.

Paying for training

If you are a non-levy paying employer with fewer than 50 employees and you take on a 16-18 apprentice or train a 16-18 year old member of staff, you would receive 100% government funding for training. If you take on a 19+ year old apprentice or utilise funding to train an existing member of staff you would need to pay 10% of the fees as a co-contribution and the government would pay the additional 90%.

If you are a non-levy paying employer with over 50 employees you would pay 10% contribution regardless of the age of the apprentice or existing member of staff. The government would pay the additional 90%.

If you are a levy paying employer with a salary bill of over £3 million, you will have a levy pot which you can utilise to train an apprentice or existing member of staff, once your levy pot runs out you would be required to make 10% contribution for any additional costs.

All employers taking on or training a member of staff aged 16-18 (levy and non-levy) are entitled to receive a £1000 cash incentive payment, payable in two instalments of £500 after 3 months and £500 after 12 months.

In addition to Digital Marketing Apprenticeships, Virtual College offers a number of additional training courses that may be helpful for businesses that are looking to generally boost skills in their workforce. Click here to see the courses available.