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Crunchers Accountants

Crunchers Accountants

Apprenticeships – are they an opportunity?

Archive for January, 2015

Apprenticeships – are they an opportunity?

In just five years the number of apprenticeships has risen by 73% to 851,000 in 2014 and the number could rise dramatically with David Cameron announcing another 3 million if re-elected.

In this edition we explore some of the opportunities and pitfalls of apprenticeships and argue they are big opportunity for small business but only as a long term investment.

First, though let us start with the basics:
  • Apprentices must be aged over 16 and combine a job with training for a qualification – from GCSE to degree level.
  • The employer needs to provide at least 16 hours work a week and pay minimum wage which starts at £2.73 for 16-18 year olds and rises to £6.50 for over 21 year olds.  There is no upper age limit for apprentices.
  • Other pay and conditions such as sick pay, holidays, dismissal procedures etc, must match other employees.
  • Employers sign up to an agreement with the apprentice including details of the work, the training, the pay and the qualifications.
  • The apprenticeship is then delivered in partnership with a training provider.  The apprentice spends regular time away from work studying with the training provider.
  • The length of apprenticeships varies from 6 months to 4 years.
  • A £1,500 grant is available to support small employers.
The attractions for business are easy to see – apprenticeships are a source of cheaper labour and a workforce that trains on the job.  Clearly, if they can be made to work, the employer ends up with a skilled worker at a relatively low cost.  At the early stages of a business the step up in overheads that new employees entail are of a scale that the stability of the business can be endangered.  Hiring already skilled staff is likely to be more expensive and may be set in their ‘way of doing things’.

In addition many employers report deep satisfaction from mentoring someone and use the positive social impact they are having through the apprenticeship to strengthen job satisfaction within the workforce and even in their marketing.

We will now explore some of the pitfalls:

1.  Seeing the apprentice as a source of cheap labour.  Small business owners can be very busy, they can be pushed for cash, cheap labour can seem like any easy solution.  If people were robots it really would be a case of ‘problem solved’ but of course we are talking about human beings.  The employer / employee relationship only works if it works for both parties and apprenticeships will come as rounded human beings with all of their own aspirations and foibles.  We believe that starting from the point of view that the apprentice will get you out of a tight hole without requiring much from you is a recipe for disaster.

2.  Not having time.  The apprenticeship will take time to set up and the apprentice themselves will need to be trained from the basics upwards. Their work will need to be checked.  They will need to be managed, given feedback and kept engaged.  It can take months for their productivity to increase to a level where you have less work to do.  We need to recognize whether we have the time for an apprentice because if we don’t we may never see them the reach a level of productivity that makes a difference to us.

3.  Not having systems in place.  One thing that will allow an apprentice to get to a point where they are being productive quickly is having the systems in place that allow them to learn quickly.  We need to take the processes and experience we have stored in our heads and make that accessible to everyone otherwise we will find everything returning to us.   At a very basic level we will need to think about where they will work, what tools they need, the essentials of employment administration like payroll, contracts, health and safety.

4. Disliking management.  Many small business owners are in business to get away from a ‘management’ environment where performance is managed.  Many of us have little experience or natural aptitude for people management.  There is no avoiding the management and mentoring role in taking on an apprentice.  We need to embrace this role and learn the skills if required.

5.  Ignoring the partnership with the training partner.  It has to be understood that the apprenticeship is a partnership of three bodies – the employer, the apprentice and the training provider.  Part of the apprentice’s motivation is to get trained and we need to know that the training provider will do their part as well as us providing our part.  Otherwise we risk the apprentice losing motivation and leaving.  We also need to make sure that the training the apprentice is getting at college is tailored enough for the work we are going to be giving them.

6.  Making too many allowances.  There can be a tendency with apprentices to ignore poor attitude or poor performance because we feel we aren’t paying much or because they are ‘only young’.  Much more than big business, small businesses simply don’t have resources to waste and therefore we need to know as soon as possible when an apprenticeship is not going to work and cut our losses.  We recommend trial days during the recruitment process, a trial period to the employment and being clear on when the experiment has failed.  Ultimately apprentices are also getting experience in the world of work and we help no-one by sheltering them from the realities of having a job.

When viewed together it is clear that what is required is a long-term perspective because just getting ready to becoming an employer of apprentices requires investment.  In our opinion it works best as a strategic choice.  We cannot hope to be good at every skill in business, the skill of having apprenticeships and making them work , may be one that we choose to develop.  The benefits are fairly clear to see, but we risk ending with nothing to show for our efforts if we ignore the resources we need  to bring to the process.

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