Apprentices – the missed opportunity?

More and more businesses in the region are hiring apprentices and the government is keen to encourage uptake even further.

But as Somerset based Chartered Accountant and Tax Adviser Robert Stone explains, many businesses still feel they don’t receive enough information regarding apprenticeships.

Get involved

According to the government, 502,500 young people started an apprenticeship in the 2011/2012 academic year.

And Skills Minister Matthew Hancock recently commented: “…my message to employers is simple: apprenticeships make good business sense. I urge all employers to get involved.”

Yet, according to Robert Stone the majority of the UK’s small and medium sized businesses are unaware of how to recruit an apprentice, let alone where to obtain information about apprenticeships and are in the dark about the grants that are available to employers who take on apprentices.

“Just 10 per cent of the UK’s SMEs currently employ an apprentice, despite the fact that 99% of this country’s businesses are SMEs,” comments Robert.

Harnessing new talent

Apprentices are a way of harnessing new talent and have been proven to increase productivity, as well as being a cost effective form of labour: the current national minimum wage for apprentices being £2.65 per hour for all apprentices under 19 and apprentices aged 19 or over in the first year of their apprenticeship.

Robert comments further:”The government are offering a number of financial incentives to businesses to encourage more of them to take on apprentices.

“For example, it has now been made easier for SMEs to access the Apprenticeship Grant for Employers (AGE), which is a single payment of £1,500 for businesses employing an apprentice aged 16-24.

“An employer can claim up to ten grants as long as they can commit to the total number of apprentices at the start of the agreement.”

National Apprenticeship service

Companies with up to 1,000 employees are eligible for the grant and the National Apprenticeship Service will give grants to up to 40,000 employers who recruit an apprentice.

Under the apprenticeship framework the £1,500 grant is in addition to an apprentice’s training costs, which are already paid in full for young people aged 16-18, with 50% paid for 19-24 year olds.

To be eligible for the grant a business must not have employed an apprentice before or who have not been able to offer an apprenticeship within 12 months of previously employing an apprentice.

Source an apprentice

There is plenty of support too, for businesses looking for apprentices. Apprenticeship Training Agencies (ATAs) can help employers source apprentices and can themselves act as a host employer, which means they take responsibility for not only finding an apprentice, but also the wages, tax, NI and administration/performance management.

This is ideal for businesses who are worried about whether they can afford an apprentice.

Further information about apprenticeships can be found on www.apprenticeships.org.uk (National Apprenticeship Service)