Apprenticeships can play an important role within a company, bringing in a fresh perspective to business. An apprentice can develop new skills and knowledge from on and off-the-job training which can be harnessed to fill specialist skill gaps within your company.
What is an apprenticeship?
Apprenticeships are work-based training programmes that can be found across a range of sectors in the UK, including but not limited to:
- Customer service
Apprentices are employed directly by their employer or via an Apprenticeship Training Agency (ATA). Employers can employ an apprentice directly from an ATA for a small fee.
Apprenticeships are a useful way for businesses to recruit and train new employees or to train existing employees to widen their skill set and knowledge.
What obligations must be met when hiring an apprentice?
- A potential candidate cannot be in full-time education and must be over the age of 16.
- It is not a legal requirement to employ an apprentice once they complete their contract but many employers do as they have trained the apprentice to fill a particular role.
- Apprenticeships must last for a minimum of a year.
- Apprenticeships are fixed-term contracts specified by the employer and by the end of the fixed-term, the apprentice will have gained the relevant skills or qualifications needed to fill the role they are training for.
- Apprentices must be paid for their working hours plus (at least 30 hours per week) any training required as part of their apprenticeship (off-the-job training constitutes 20% of their working hours).
- Apprentices are entitled to at least 20 days paid holiday each year, plus bank holidays.
- The current minimum wage for an apprentice is £3.90 per hour which applies to anyone under the age of 19 and anyone who is 19 or over and is in the first year of their apprenticeship. Once the first year has been completed, they must then be paid at least the minimum wage rate for their age.
For more information on hiring an apprentice and the obligations that must be met, please visit the government’s website.
The benefits of hiring an apprentice for small businesses
There are many advantages to employing an apprentice; whether they are new recruits or staff you are upskilling, your business could benefit from the following:
- 80% of companies who take on apprentices have seen a significant increase in employee retention as apprentices bring a new dynamic and fresh energy to the team – especially in small businesses.
- Apprentices can bring new ideas and perspectives, and as they develop with their qualification they begin to match the specific skills you need to develop your business.
- Successful apprentices often become loyal employees as 90% often stay on after their qualification has finished.
- Apprenticeships aren’t limited to the younger generation; they are also an effective way to upskill your existing employees.
- Offering apprenticeships opens up your business to applicants who may not be in the position to apply otherwise. Only taking applicants with certain qualifications, degrees or grades limits who can apply and may not attract the right talent for the job.
- Employers who take on apprentices can receive funding from the government to help with the cost of an apprentice.
The downside of hiring an apprentice
Whilst there are many advantages to hiring an apprentice there are a few disadvantages that you should consider:
- There are additional costs to employing an apprentice – you need to pay for their salary as well as their training. However, it is possible to receive funding to help cover these costs from different bodies.
- Apprentices are often younger and could just be starting in the world of work. You may need to give them extra guidance in their job role including workplace etiquette, email and phone protocol when dealing with clients and other employees.
- Apprentices must complete at least 20% of their working hours as off-the-job-training and you must consider this when assigning their tasks or planning their working week.
- The process for hiring an apprentice can be lengthy – you need to find a candidate that you believe will not only fit your company but will learn and grow at the pace you want to be a successful addition to your business.
Apprenticeship funding: The Apprenticeship Levy
The Apprenticeship Levy was introduced on the 6th April 2017 and requires any business with an annual turnover of over £3 million to contribute 0.5% of their annual profit to the levy fund.
The Apprenticeship Levy was brought in to:
- Increase the uptake of vocational training to fill existing skill gaps
- Offer anyone who has reached the legal age to leave school the chance to gain further qualifications, and;
- Give businesses the benefit of stable staff for a couple of years.
If your business contributes towards the Apprenticeship Levy you will be able to apply for vouchers which can be used to pay for training and assessments of any apprentices you employ.
You have 24 months to spend the vouchers which will expire after this time. Vouchers cannot be used towards the cost of the apprentice’s wage, the cost of setting up the apprenticeship programme, managerial costs or apprentice travel and subsistence costs.
It is also possible to fund internal development programmes for existing members of staff. Providing training will help towards the development of staff and the business’ progression as a whole.
If your business does not contribute towards the Apprenticeship Levy you will still be required to pay a small amount towards training an apprentice if you choose to take one on.
For more information on how to apply for apprenticeship funding, what you can spend funds on and how to manage apprenticeship training, please visit the government’s website.
Adding an apprentice to your limited company’s payroll is hassle-free with Churchill Knight
If you own a small business and decide to offer an apprenticeship to a lucky candidate, Churchill Knight & Associates Ltd can facilitate the implementation of an additional person to your company’s payroll on your behalf.