Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.

Getting Started

Time to hire an apprentice?

Developing talent for the modern economy

Time to hire an apprentice?

Traditional ‘trades’ such as plumbers or carpenters no longer dominate apprenticeships. ‘Big 4’ accountancy and consulting firm, EY, runs an apprenticeship in digital and technology, where apprentices can specialise in software engineering or data analytics. Pharmaceutical giant GSK has apprenticeships in laboratory science, research and development, finance, sales, and business administration. And it’s becoming more common for smaller technology businesses to use apprenticeships in areas such as software and web development roles.

According to Jonathan Mitchell, deputy director for the development of standards at the Institute for Apprenticeships, as of October 2018, over 350 occupations can be trained for via an apprenticeship, with another 150 to be added over the next year or so.

Recent changes

According to the Institute for Apprenticeships, the pre-2017 apprenticeships model was dogged by problems1. Many employers were struggling to find the skills they needed because of an oversupply of lower-level apprenticeships and an undersupply of higher-level programmes. Only just over half of apprenticeships were being completed.

The government then implemented a major overhaul. In early 2017, the Institute for Apprenticeships was established, which took responsibility for creating new ‘standards’ – requirements in terms of knowledge, skills and behaviours – for each occupation.

According to Jonathan, training providers and assessment organisations were much more influential with the creation of the previous incarnation of apprenticeships (called ‘frameworks’). But very often, they didn’t meet employers’ needs. That is why there was a rethink and the new generation of apprenticeships (called ‘standards’) are ‘employer-led’ to ensure they meet the needs of employers

The institute now co-ordinates a process where ‘trailblazer groups’, drawn from employers, design apprenticeships. These groups need to be sufficiently representative of both large and small organisations that would employ these apprentices. So someone completing an apprenticeship should be capable of hitting the ground running in an SME or a large corporation.

Apprenticeships can’t be shorter than 12 months, and apprentices must work no less than 30 hours per week, with at least 20% of their time spent on ‘off-the-job’ training. An ‘end-point assessment’ is also required, conducted by an independent, registered provider.

Employers pay apprentices’ wages just like any other employee, but SMEs, with a total wage bill of £3m or less, pay only 10% of the cost of training and assessing an apprentice. Furthermore, this will fall to 5% in April 2019, following Philip Hammond's announcement in the 2018 Budget.

The new set-up is funded by an apprenticeship levy of 0.5% of total wage bill, paid only by employers with a wage bill of over £3m per year.

Practical pointers

Jonathan says that the first steps for an SME are to find an apprenticeship standard that meets their skills requirements (there is a search facility on the institute website), and then find a training provider that offers that apprenticeship. Many training providers can manage recruitment, off-the-job training, and end-point assessment.

John Nicholson, a founder and director of IJYI, an Ipswich-based software house, has been using the apprenticeship system since the business was founded in 2014, and is now a strong proponent.

He says that while the financial incentives are very attractive, more importantly, apprenticeships offer a superior skills development process compared to a ‘study first, work later’ model.

The training IJYI’s apprentices receive is much more aligned to the workplace compared to academic colleges, because it is based around professional certifications, designed by technology companies, rather than an academic structure. He says: “Apprentices get productive more quickly, because they can start applying their academic training almost immediately in the workplace, as opposed to only starting to apply their skills on completion of a more traditional academic programme. They also tend to be very motivated, earning while they learn.”

He also shares some perspectives, gained from first-hand experience.

First, John prefers to manage the entire recruitment process. This is in preference to the more common model of having a training provider manage the initial stages of recruitment with the employer only getting involved at final interview stage. John says keeping recruitment in-house usually leads to a candidate being a better fit for the organisation, and it allows for a recruit to complete a probation period before being placed on an apprenticeship programme. This reduces the risk of placing an unsuitable candidate into an apprenticeship.

Second, he prefers off-the-job training to follow a ‘residential model’, where training takes place in blocks of a few days or even a week or two, rather than following the more common one-day-per-week model. By front-loading blocks of academic training, candidates return to the workplace with more technical knowledge, and can start applying more advanced skills in the workplace earlier. They are also more focused on their work, not their training, as there are longer breaks between training blocks.

​​​​​​​Where the opinions of third parties are offered, these may not necessarily reflect those of St. James’s Place.

1 Institute for Apprenticeships Strategic Plan 2018-2023