Investing in your workforce and encouraging talent is one of the best ways for any business to succeed. Without the right people and skills, even the most compelling business idea may fail commercially. And when it comes to start-ups and small businesses, where the margins can be very tight, the cliché about people being your greatest asset has added significance.
That’s why apprenticeships can be hugely valuable to employers as well as workers seeking structured career paths. It’s also why the Education and Skills Funding Agency has held an annual National Apprenticeship Week for the past 13 years.
The 2020 event, which runs from 3-9 February, includes a wide range of events and activities to highlight the benefits of apprenticeship. The theme this year is ‘Look Beyond’, a phrase that resonates with Swoop’s role in raising awareness of the finance marketplace and finding the best opportunities for SMEs.
So, what do apprenticeships offer for businesses, and what part do apprenticeship schemes play in the funding landscape?
The need for human capital
Apprenticeships can fill skill gaps, attract and retain talented ‘young blood’ to scale a business, and bring fresh ideas and new energy into a company. Success in the workplace is not just a matter of hiring people with university degrees and other academic qualifications; today, as work patterns and roles change, applied learning is increasingly important.
Apprenticeships now cover far more than traditional trades such as engineering and construction. Many opportunities are opening up across professional and financial services, and of course there is a huge demand for digital skills and knowledge. The need for diversity and inclusion is also a driving force.
Funding is not just for big business
According to a key facts statement from gov.uk, the funding available for investment in England alone will exceed more than £2.5 billion this year. Moreover, the apprenticeship levy, introduced in 2017 to fund apprenticeship training, can help businesses of all sizes.
Employers with an annual wage bill of more than £3 million must pay this levy. But if you are a smaller business, below the £3 million threshold, you need only pay 5% of the cost of apprenticeship training and the Government will pay the rest. That means you can receive 95% funding, which will be paid directly to the training provider.
Businesses that employ fewer than 50 people will not have to pay the 5% contribution if an apprentice is 16-18 years old or is 19-24 and has previously been in care or has an Education, Health and Care (EHC) plan provided by a local authority.
In addition, small businesses can benefit through levy transfers. Any levy-paying employer can transfer up to 25% of its funds to other employers, thus helping smaller businesses invest in training opportunities.
The future of funding
While apprenticeship schemes can be a boon for business, and the National Apprenticeship Week is undoubtedly a worthy initiative, there have been some issues with funding. There has also been criticism of the way schemes can be exploited, with some employers creating ‘fake apprenticeships’ and misusing funds.
One thing seems clear: more funding is needed to give businesses and apprentices a better future. A survey last year by the Association of Employment and Learning Providers (AELP) underlined that levy funds are falling short for SMEs and reforms are needed. The Government has made some effort to address this and further changes are expected, not least because Brexit will require UK employers to focus on home-grown talent.
Data from the National Apprenticeship Service reveals that nine out of 10 employers say apprenticeships are good for their businesses and that they boost productivity on average by £214 per week. Apprenticeships are therefore invaluable to the national economy, and properly-funded schemes are a resource that SMEs cannot afford to ignore.
Swoop will be availing of all the benefits and actively recruits apprentices throughout the organisation.