SMEs increasingly going down the apprenticeship route to aid their future growth
Apprentices deliver great value to the UK economy
Nearly 175,000 of the UK’s small businesses have kept on at least half of their apprentices in the longer-term
With the Government aiming to fund three million new apprenticeships by 2020, and with apprenticeship participation having hit a record of 871,000 during the 2014/15 year¹, new research from the Association of Accounting Technicians (AAT) has found that many of the UK’s 5.4 million SMEs² are realising the benefits of having one or more apprentices in their workplaces.
Over the past twelve months, two in five (39%) small to medium businesses with at least ten employees, across all sectors and industries in the country, took on at least one new apprentice – a figure that drops to 16% when also taking micro-businesses³ into account. And these businesses are recognising the long-term benefits of the apprenticeship scheme – of those SME owners who have taken on apprentices in the past, nearly half (43%) – representing around 175,000 small-medium sized companies⁴ – have kept on at least half of them.
The survey of 501 business owners which have between 1-249 employees, also showed a rise in owner desire to bring apprentices into their company. One in four SME owners (25%) said they plan to take on at least one apprentice over the next 12 months – a figure that again shows a significant rise when considering those smaller businesses with at least ten employees (50%).
However, small to medium sized business owners also voiced concerns over barriers that were preventing them taking on more or any apprentices, with one in seven (14%) saying that they were unable to afford them. Nearly one in three (28%) cited the lack of need to bring apprentices in as their biggest barrier, while nearly one in five (18%) held a preference to bring in workers who are already skilled.
Commenting on the findings Mark Farrar, Chief Executive of the Association of Accounting Technicians, said: “Becoming an apprentice brings a positive impact not only to the individual, but also to businesses and the wider industry that they are employed in. They are becoming increasingly popular for companies of all shapes and sizes, and also across all sectors – not just those traditionally associated with apprenticeship schemes such as construction and engineering – but also professions including accountancy and IT.
“Yet our findings also showed that three quarters of small businesses who have less than 10 employees have never taken on an apprentice at all, and therefore are failing to realise the benefits that these individuals – many of whom are keen to learn and hungry for career success – can bring to their company.”
The survey also revealed that nearly one in four (23%) SME owners believe that the ability to hire apprentices on a part time basis would help them bring more into their business. One in five owners (19%) cited less red tape surrounding the process of hiring apprentices as a positive consideration, while one in six (17%) said that there should be local council or government initiatives in place to support businesses taking more apprentices on.
Mark Farrar added: “The attention being given to apprenticeships at present, led by regulation such as the new apprenticeship levy on businesses, the new National Living Wage and the Government’s target for 2020, is welcome. However, the message we are receiving from small businesses is that they need plenty of support and encouragement in order to play their own critical part in bringing more successful apprentices through the system. According to Department for BIS research out this week, only 19% of SMEs currently offer a formal apprenticeship scheme⁵.
“Apprentices deliver great value to the UK economy – a 2014 AAT report put the value at around £1.8 billion⁶ – and we urge small businesses to consider what role they can play within their organisations, as well as policy-makers to continue to smooth the company pathway for bringing apprentices in.”
¹ Source: Skills Funding Agency² Source: House of Commons³ Micro-businesses are defined as having less than ten employees, according to the EU⁴ Of the 5.4 million SMEs in the UK, 24% are employers (Source: Parliament). 24% of 5.4 million is 1.296 million. 31% of SME owners who responded to our survey said they have taken on apprentices in the past (401,760); and of these, 43% said they have kept on at least half of them (172,757).⁵ Source: Department for Business, Innovation and Skills, May 2016⁶ Source: AAT, March 2014