An SME's guide to employing an apprentice

Posted on: 25 February 2014

82% of small business owners have never thought of hiring an apprentice, yet they can increase productivity by £214 per week.

This quick reference guide is packed with useful information to help small business owners when considering employing an apprentice.

What is an apprenticeship

25% of small business owners don't know enough about apprenticeships to consider hiring one.

An apprenticeship is basically a paid job with training. Apprentices spend between one and four years working towards a national qualification, at the intermediate, advanced or higher level.

Apprenticeship Frameworks are developed by business representatives and organisations like Sector Skills Councils. These frameworks form the basis of every Apprenticeship and consist of:

  1. A nationally recognised vocational qualification (NVQ)
  2. Functional skills, such as problem solving and communication
  3. A technical certificate that’s relevant to the specific Apprenticeship
  4. Personal learning and thinking skills
  5. Employer rights and responsibilities

Each Apprenticeship Framework is linked to a specific job role or occupation. So when you advertise an apprenticeship vacancy, you know that applicants will suit the role as well as your business and industry sector.

On-the-job training makes up most of the Apprenticeship. Depending on the occupational area, the training organisation and you the employer, off-the-job training can be done at your business, elsewhere, on day release or in blocks.

What levels of apprenticeship are available?

There are three:

  1. Intermediate level – equivalent to five A*-C GCSEs
  2. Advanced level – equivalent to two A levels
  3. Higher level – equivalent to a degree

On-the-job training makes up most of the Apprenticeship. Depending on the occupational area, the training organisation and you the employer, off-the-job training can be done at your business, elsewhere, on day release or in blocks.

What isn't an apprenticeship?

Contrary to popular belief, an apprenticeship is not

  1. …just for kids. There is no upper age limit on an apprenticeship, although Government funding is weighted towards the 16-18 age group
  2. …just for tradesmen. There are 1,500 job roles covered in over 170 industries, including media, manufacturing, law and engineering.
  3. …just for big businesses. SMEs are increasingly seeing the benefits of apprentices and can also get grants to help fund the cost.

Would an apprenticeship be good for my small business?

According to our research, 82% of small business owners have never considered employing an apprentice. Yet there’s plenty of evidence to support the benefits of an apprenticeship to business generally. According to the National Apprenticeship Service (NAS), 96% of employers that have taken on an apprentice have seen the benefits. The NAS also reports an average £214 per week increase in productivity for businesses that take on an apprentice.

The National Audit Office says that for every £1 spent developing an apprentice, £18 is invested back into the economy.

Other benefits include reduced staff turnover (80% of employers feel that Apprenticeships do this)

  • improved staff skill levels (82% of employers take on Apprentices to build the skills capacity in their business)
  • a future talent pool
  • readiness for when the recession ends.
  • having enthusiastic and motivated people in the team that want to stay
  • being able to afford valuable people who you can mould to your business and industry
  • qualifications in your workforce
  • being able to attract new talent because of the apprenticeship opportunities you’re offering
  • the opportunity to re-skill existing staff, giving them renewed motivation and improving your productivity

How do I find an apprentice?

In general you don’t find apprentices, they find you

First of all it’s worth browsing the NAS website and then homing in on the small business section. Having appointed Jason Holt as the Small Business Apprenticeship Ambassador, the NAS is showing its commitment to making apprenticeships more accessible to SMEs as well as advocating the benefits to them, so there’s plenty of useful information in here.

There is also a dedicated small business support team at the NAS who can answer any queries you may have over the phone: 08000 150 600.

Next you need to decide whether or not you want to work with an apprenticeship training organisation.

Generally, all but the biggest employers use one, although it is possible to do it on your own.

Apprenticeship training organisations are colleges of further education or independent training providers (private or voluntary sector) that manage the advertising of your apprenticeship vacancy and then your apprentice’s training while they work for you. They can also help manage the recruitment process as well as give you and your apprentice advice on how to make the most of the relationship.

Your vacancy will be advertised on the Apprenticeship vacancies website, where you can also find a learning provider.

As a small business, you can consider using an Apprenticeship Training Agency. An ATA will recruit, arrange training for and ultimately employ your apprentice, all for a fee. This gives you the employer flexibility to try out the scheme before committing, and also means that should you decide an apprentice isn’t right for your business, the ATA will find them another employer.

If your business is in the engineering, manufacturing, transport, construction, leisure, dental nursing or voluntary sector, you may want to consider using a Group Training Association. A GTA gives SMEs access to apprenticeships that are specific to their industry.

Finally, if you want to be more proactive in finding an apprentice, many employers post their apprenticeship vacancies on Twitter using the hashtag #Apprenticeship.

How do I make the most of my apprentice?

If you’re going to invest in an apprentice, you need to:

  • have the right mentality, otherwise you and they won’t get out what you all put in
  • know what you need – having a clear job role that suits their abilities will make sure you all see the benefits
  • spend time with them, preferably upfront, setting expectations and monitoring performance going forward
  • give them opportunities, making them more likely to thank you by exceeding your expectations
  • stretch them, because you never know their true capabilities until you do
  • mentor or coach them – don’t you want them to be as successful as you one day?

What does an apprenticeship cost my business?

An apprentice is by no means free. Nor should they be, because they’re an employee like all your others.

Our research suggests that one in three small business owners wouldn’t hire an apprentice because they don’t have enough money.

They do, however, require different types of investment. And you may not see the benefits until some time in the future, which makes it harder to assess their worth.

By employing an apprentice, you are not only investing in a member of staff, you are putting something towards the future of the economy.

The costs are:

1)     Money – you must pay an apprentice a wage and you will also contribute to their training costs.

It is your legal responsibility to pay an apprentice at least the minimum wage. But if you value their contribution and see them as a part of your business’s future, you’ll pay them the wage that recognises the value they bring to your business, as you would with any employee.

Government funding is available for some apprenticeships, which will go towards some or all of the costs of training. But funding varies depending on the age of the apprentice and your sector, so it is worth speaking to the NAS to understand what the costs might be before you start the recruitment process.

2)     Time – it is worth investing your time in developing their knowledge of your industry, your business and your customers. That way you benefit from their improved contribution and they have a better sense of involvement and value. As a result, they’re more likely to stay when their apprenticeship is over.

3)     Commitment - you could be training the future leader of your business, so committing to ensuring they achieve their qualification will only add to the value of the apprenticeship to both of you.

What would an apprentice get out of working with me?

Only 49% of small business owners feel responsible for helping inspire future generations to become successful in business.

It’s down to you and your apprentice as to what they get out of it. They have to get a qualification, but other added bonuses for them are:

  • Improved self confidence
  • Management experience
  • Commercial and business thinking
  • Unique skills, including in dying trades
  • Inspiration to aim high in their career or start their own business

What is an apprenticeship grant and am I eligible?

Also known as AGED 16-24, the apprenticeship grant is aimed at smaller business that haven’t taken on apprentices before. Up to £1,500 of Government funding is available through the scheme, which is open until 31 December 2014.

In order to be eligible, your business has to fit a list of criteria, which includes (amongst others):

  • inability to recruit an apprentice without the grant
  • employing under 1,000 people
  • not having employed an apprentice in the previous 12 months.

Grant applications are submitted by your approved training organisation and are available on a first come, first served basis.

I employ less than 10 people. Can I get an apprentice?

Any employer can take on an apprentice. The good thing is that the more diverse range of activities expected of people working in very small businesses is appreciated by the apprenticeship programme, so your apprentice is eligible for additional unit qualifications. These are usually in the areas of business administration, law, accounting and HR, and are agreed with your training provider.

Additional units are fully funded for 16-18 year olds, with lower levels of funding available as the age of the apprentice goes up.

What’s the difference between an apprenticeship and a traineeship?

Traineeships were launched in August 2013 to help young people get into work. They’re different to apprenticeships in that you don’t have to pay wages and they’re over a shorter period of time. Click here to find out more about what traineeships are and whether they’re suitable for your business.

What are my responsibilities to my apprentice?

An apprentice should be treated the same as any employee in your business, so they have the same rights over pay (see above), holiday and hours (they must be paid for at least 30 hours a week as well as training as part of their apprenticeship, usually one day a week).

What is National Apprenticeship Week?

Since 2008 the UK has held a National Apprenticeship Week to promote the value of apprenticeships to people and business. This year’s event is 3-7 March 2014.

To find out more, read our article ‘5 reasons SME's could benefit from employing an apprentice’ and get involved via the NAW website and by following #NAW2014 on Twitter.

Where can I find out more information?

Useful resources for finding out more include:

  • National Apprenticeship Service
    • Website: www.apprenticeships.org.uk
    • Twitter account: @Apprenticeships
    • LinkedIn: National Apprenticeship Services
    • YouTube channel: ApprenticeshipsNAS
  • Apprenticeships in Scotland - www.apprenticeshipsinscotland.com
  • Gov.uk
  • The Guardian - www.theguardian.com/education/apprenticeships

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