Apprenticeships enable businesses to develop their workforce, ensuring they build skills, as well as knowledge, which are aligned with business goals.
However, due to misconceptions around funding, many small businesses are unaware that there are affordable options available to them that would minimise the cost of enrolling employees on apprenticeships.
To learn more ahead of National Apprenticeships Week, join our LinkedIn Live event next Wednesday, 12 February, at 12pm, where Steve Horrell, apprenticeship success manager, will explain why apprenticeships may be more cost-effective than you think, and we’ll speak to a small business about how it secured its apprenticeship funding.
Is government funding available for small businesses?
Although they don’t pay into the Apprenticeship Levy, Horrell says small businesses do still have access to government-funded apprenticeships through the “co-investment model”.
Through this model, small employers (those with a payroll of sub-£3m) can access apprenticeship training 95% subsidised by government.
Taking the example of the Level 3 International Freight Forwarding Specialist apprenticeship, Horrell explains that the upper limit for the upper funding band is £9,000, meaning that a small business would only need to contribute £450.
This payment can also be spread over the duration of the apprenticeship, making it more manageable for the employer.
Many employers can’t believe the amount of government funding available, Horrell adds, “they think it's too good to be true”.
What is the Apprenticeship Levy?
Horrell says that large employers in England will be most familiar with Apprenticeships training options given that they need to pay into the Apprenticeship Levy, a tax on businesses with a payroll exceeding £3m annually.
These employers must pay 0.5% of their payroll into the Levy, which can only be spent on apprenticeship training. If these funds aren’t spent within 24 months of payment, they expire.
For many large employers, the Levy pot remains consistent due to the continuous inflow of new funds, with the money going unused.
Is other government funding for apprenticeships available?
While it's important to note that staff of all ages can undertake an apprenticeship, providing they’re an appropriate skills match for the programme, Horrell also highlights that businesses receive additional financial incentives for hiring apprentices aged 18 or under.
Not only is the training free for this age group but employers receive two payments of £500 when the apprentice has been in active learning for three months and twelve months, respectively. The apprentice “more than pays for itself”.
For more information about apprenticeships funding rules, you can access government information here.
How can small businesses benefit from apprenticeships?
Apprenticeships enable small businesses to invest in training staff, while reaping immediate benefits, as employees apply new skills in real-time and ‘on-the-job’.
Horrell says that businesses shouldn’t fear hidden costs and complexities – providing employers partner with reputable training provider and submit staff with relevant skills for their chosen programme – the process should not be complicated.
He adds that many small businesses enrol multiple apprentices after a promising first learner starts.
Do apprentices take time off work?
Horrell highlights one of the most significant misconceptions about apprenticeships: that employers must “release apprentices for six hours a week to attend college or complete online learning."
In reality, “off-the-job” training can be integrated into the apprentice's work schedule, covering tasks that support the company and stretch their skillset within the parameters of the training.
This approach ensures that apprentices continue to add value to the business while learning.
Do I need to pay apprentices differently?
Another myth worth busting, Horrell adds that many employers falsely believe that hiring an apprentice necessitates a wage adjustment, but this isn’t the case.
The terms of the contract between the learner and the employer remain the same when a learner starts an apprenticeship.
Employers can pay apprentices the standard wage for their role and experience level, without any additional financial burden
Are there apprenticeships for freight forwarders?
Horrell says that there’s a significant knowledge gap among the freight forwarding community about the training opportunities available, adding that many “have no idea” about apprenticeships in the sector.
The Level 3 International Freight Forwarding Specialist, provided by the Chartered Institute’s apprenticeship wing, IOEx, is an example of one of the many programmes available to upskill industry entrants and help them progress.
He adds that a dedicated freight forwarding apprenticeship like this would benefit retention, given that many freight forwarders get “stuck at a certain level of competency”, then leave the industry in search of an “equivalent, office-based role” with less regulatory pressure.
He highlights the opportunities for apprentices to tailor the programme to their own career aspirations, with dedicated pathways for air, ocean or road freight.
The Chartered Institute’s LinkedIn Live event, ‘Developing supply chain experts: How apprenticeships can elevate your team’ will be held at 12pm on Wednesday (12 February).
Hear directly from Matthew Grimshaw, logistics coordinator at Valmet, technology supplier for the pulp, paper and energy industries, and Lisa Harris, apprenticeships lead at global sieving & filtration specialists Russell Finex, about how the International Freight Forwarding Specialist apprenticeship has boosted business success.
You can register here.
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