Is a perceived lack of government support preventing SMEs from hiring apprentices?

By SME Insurance

Posted 13/11/17

In the last five years the UK has seen a steady growth in apprenticeships with 2 million programmes created between 2010 and 2015 [1], and more than 800,000 learners participating in an apprenticeship in 2015/16 alone [2].

Are SMEs benefiting from this growth? We conducted a study with our clients to find out [3]The findings revealed that 71% of those who responded feel there is not enough government support for small businesses looking to train a young person within their company. While as many as 56% of respondents claim they have never taken on an apprentice.

Perception vs reality

Although the new Apprenticeship Levy [4] was introduced by the government in April this year, our study has highlighted that there may be some perceived obstacles surrounding taking on an apprentice. 

Perceptions: the not-so-good

  • 53% perceive that apprentices require a lot of training and support.
  • 33% believe apprentices may not be committed to a career within the industry.
  • 25% perceive that apprentices lack experience.

Conversely, 69% of the SMEs questioned view apprentices as having a long-term benefit to the workforce, amongst other advantages.

Perceptions: the good

  • 71% feel that apprentices are enthusiastic.
  • 63% perceive apprentices to be dedicated.
  • 51% recognise that apprentices bring valuable ideas and fresh thinking to businesses.
  • 68% stated that there is the potential for an apprentice to go on to occupy a senior position in the business.

When it comes to wages, on average, the surveyed SMEs would be willing to pay £11,800 (£227 per week) as a starting annual salary for an apprentice once qualified, which is higher than the UK average apprentice wage of £5,304 (£102 per week), according to official figures from Gov.uk [5] top of this, this salary could increase to £16,040 (£308 per week) – the average maximum annual salary which an apprentice could earn within the business.

From the study and opinions of the UK SMEs surveyed, it’s safe to say the general perception of apprentices is good, however perhaps the government has more work to do to promote the benefits of the new Apprenticeship Levy to give SMEs the confidence to take on and train young people within their small business.

 

Sources

[1] Statistics supplied by the BBC relating to the forecasted number of Apprenticeships by 2020: http://www.bbc.co.uk/news/election-2017-39923393

[2]Statistics supplied by the governmental FE apprenticeships data library: https://www.gov.uk/government/statistical-data-sets/fe-data-library-apprenticeships

[3] Survey of 193 small and medium sized businesses across the UK, conducted by SME Insurance Services.

[4] The new Apprenticeship Levy will come into force from 6 April 2017, requiring all UK employers earning over £3million per year to invest in Apprenticeships: https://www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work#pay-apprenticeship-levy

[5] Statistics supplied by the governmental National Minimum Wage rates, of an apprentice earning £3.40 per hour, working 30 hours a week: https://www.gov.uk/apprenticeships-guide/pay-and-conditions

Posted 13/11/17

Author: SME Insurance

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