UK business sentiments about apprenticeships are improving as more companies realise the benefits they can deliver - but more may need to be done to help translate these positive intentions into action.
Have apprenticeships become the business world's best-kept secret? Training up young people to meet skills requirements can deliver proven benefits for companies, but despite this, there has been a feeling that this recruitment model has fallen out of favour in recent years.
Conscious of the gains that businesses could be passing up as a result of this trend, the Government has been making concerted efforts to change attitudes about apprenticeships, on both a corporate and an individual level. National media campaigns have been accompanied by legislative reforms such as the Apprenticeship Levy, a tax on the UK's largest employers designed to provide money to help fund new apprenticeships.
One year on from the April 2017 introduction of the levy, there is mounting evidence that attitudes towards apprenticeships could be changing for the better, as businesses wake up to the advantages they offer. However, it can also be argued that additional interventions may be needed to translate this positive sentiment into concrete action.
If the main goal of the Apprenticeship Levy is to raise greater awareness of the value of apprenticeships and re-engage interest in this form of hiring, then it would certainly seem that some important headway is being made.
A recent report from Grant Thornton, which surveyed 500 UK employers that qualify for the Apprenticeship Levy, indicated that half of businesses are planning to increase their recruitment of apprentices over the next five years, with 79% saying the new levy has encouraged them to hire more apprentices than they would have done otherwise.
Similarly, a poll of smaller businesses conducted by the Association of Accounting Technicians revealed that 71% of firms that have never taken on an apprentice are currently planning on doing so, with 45% saying they have already accessed available funds through the Apprenticeship Levy scheme to help train a new employee.
Meanwhile, another Grant Thornton survey polled 1,000 young people and 1,000 parents, finding that 77% and 79% respectively see apprenticeships as offering good career prospects, while 42% of young people now perceive apprenticeships and university degrees as offering the same value.
Our co-founder, Oliver Sidwell, reveals:
"The feedback we hear from young people about their apprenticeship schemes continues to amaze me. From a recent survey of 4,500 young people on apprenticeships in 2018, 98% of them would recommend their apprenticeship to a friend. What a phenomenal stat! The skills they're learning (both soft and technical), the responsibility they're given and the overall experience of their apprenticeships are highly rated in the reviews on RateMyApprenticeship.co.uk and we're proud to showcase these experiences to inspire future apprentices."
Clearly, progress is being made in terms of winning over hearts and minds on the benefits of apprenticeships; on the other hand, the hard data on apprenticeship starts since the introduction of the levy scheme paints a less positive picture.
In the first six months since the levy came into effect, total apprenticeship starts fell by 41% compared to the same period 12 months prior, while the figures for overall starts showed a 31% decline for January 2018 compared to January 2017. These figures are disappointing, and mean the government's plan of achieving an additional three million apprenticeship starts in England by 2020 is off to an underwhelming start.
Analysis from the Queen Mary University of London and The Good Schools Guide has indicated that the scale and complexity of the changes to apprenticeship rules brought about in the last year may be dissuading many firms from taking the plunge, while revealing that some sectors are faring better than others. The engineering, construction and IT industries have all increased their share of the total number of apprenticeship starts in the last year, while sectors such as agriculture, education and leisure continue to lag behind.
The government recently announced that the initial dream of three million apprenticeships by 2020 was, in hindsight, a tad ambitious.
Industry organisations have started to put forward opinions on what else needs to be done to convert the burgeoning revival of interest in apprenticeships into new starts.
Manufacturers' organisation the EEF, for example, has called for the Apprenticeship Levy to be rethought to ensure it is able to deliver on its goals. Proposed changes include better calibrating the budget for apprenticeships based on demand, increasing the lifetime of funds that employers have to spend it to at least 48 months, removing the upper funding band limit of £27,000, and expanding incentive payments for in-demand STEM apprenticeships.
The Institute of Directors, meanwhile, has echoed calls for the 24-month limit on claiming funds to be extended, as well as for the 10% cap on the amount levy payers can transfer to be increased.
Oliver Sidwell comments:
"I'm pleased that the Government has been honest as there's been such progress across UK employers. I'm delighted that skills minister Anne Milton confirmed “we won’t sacrifice that quality just to meet the target that was set” as this statement was reported in the media as 'admitting defeat'. As all stakeholders involved in this incredible apprenticeship journey in the past few years can attest, the future is looking very bright for young people."
It would appear that further work may be needed before the Apprenticeship Levy is able to provide the boost in apprenticeship numbers it was created to deliver, and to help employers make good on their newly-rediscovered drive to make this form of recruitment a central pillar of their hiring model.
However, more and more young people are jumping onto the concept that apprenticeships are a viable alternative to sixth form or university, and whilst UK businesses have suggestions to improve the structure and funding of the schemes, more and more employers are seeing the benefits of investing in early talent.
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