There has never been a better time to take on an apprentice. According to the government, 502,500 young people started an apprenticeship in the 2011/2012 academic year. Skills Minister Matthew Hancock said: “…my message to employers is simple: apprenticeships make good business sense. I urge all employers to get involved.”
Yet, according to Robert Stone, a Chartered Accountant and Tax Adviser in Ilminster, 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,” said Robert.
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.
“The government are offering a number of financial incentives to businesses to encourage more of them to take on apprentices,” said Robert Stone. “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.”
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.
“Another inducement offered by the government to employers taking on young people is a Youth Contract Wage Incentive. This is available to businesses employing someone aged between 18-24 for 16 hours or more each week in a job lasting more than 26 weeks. Employers can claim £1,137.50 for part time work 16-29 hours a week, or £2,275 for full time work of 30 hours and above per week,” said Robert Stone. “In addition, small businesses with less than 50 employees who are concerned about their cash-flow can get an early payment to help cover some of the initial costs of employing someone new.”
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