4½ Reasons for Using Apprenticeships to Tackle Skills Shortages

Job vacancy levels beat all previous records in the final months of 2015, CBI figures reveal. In a competitive market for talent, how can you make sure your company is able to hire the best people in 2016? Are apprenticeships the answer? 

The number of job vacancies reached an all-time high in the final quarter of 2015, increasing by 13,000 to reach 756,000, the highest level since records began, according the CBI's Labour Market Update for January 2016. (pdf) In addition, the number of people out of work fell to 5.1% - the lowest since early 2006.

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So while there are still people actively seeking work, the key question for employers is whether jobseekers have the right skillsets needed for the vacancies they want to fill. Often there is a mismatch at a local level and you can't find the skilled people you need.

If there are suitable candidates chances are you're in competition with other businesses for the best ones. This can drive up salaries if you need to make your offer the most attractive or drive down the quality of your workforce if you can't hire the pick of the crop.

But some forward-thinking organisations have already begun to try to tackle the crisis in their own business. One increasingly popular approach is to set up apprenticeship schemes alongside hiring qualified staff and potentially replacing graduate training programmes. This allows you to tap into an additional talent pool. The planned new reforms are likely to make apprenticeships an even more attractive proposition for employers – whether you are paying into the apprenticeship levy or not.

4½ reasons why you should consider setting up an apprenticeship scheme

 1.    You can create apprenticeships for any job

It's not just traditional industries or large organisations that are choosing the apprenticeship route nowadays. Small businesses also find it a useful way to recruit and train staff.

Apprenticeships now cover more than 170 industries and 1,500 job roles from entry to degree level. See a full list of the apprenticeship frameworks available.

2.   You get the skills you need

Apprenticeship schemes help employers ensure that they get exactly the knowledge, skills and behaviours they need while growing a talented and engaged workforce. Employers running apprenticeship schemes value them because they help them fill the skills gap1:

  • 82% of employers take on apprentices to build the skills capacity in their business
  • 75% of apprentice employers say their programme has helped cut recruitment costs – with 80% saying that apprenticeships will play a bigger part in their future recruitment strategy

The plans the government is putting in place are intended to improve the quality of apprenticeships – with employers at the heart of apprenticeship design and delivery. The stated aim of the improved scheme is to deliver fully-competent employees at the end of the programme. To read a summary of what we at The Outward Bound Trust know about the levy to date, download our four-page document here.

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3.    If you're going to be paying a levy then make the most of it

The apprenticeship levy comes into force in April 2017. If you're a business that will be paying the levy it makes sense to spend it to cover or subsidise apprenticeships with registered training providers. If employers don't use the funds in their accounts then this money will become available to other businesses.

Employers who haven't had to pay the levy can get government support for apprenticeships through the Digital Apprenticeship Service.

Full details on how the schemes will work are still being finalised but you can find out more about funding in English Apprenticeships: Our 2020 Vision.

If you want to set up an apprenticeship before April 2017 there's lots of advice and help available. You can get a guide for small and medium businesses or an Employer Toolkit for large businesses from The National Apprenticeship Service

It's also worth looking at the government information and advice for employers about Apprenticeships

4.    It makes good business sense

The facts are on your side too, according to The National Apprenticeship Service:

  • Nearly every employer that takes on an apprentice (96%) reports benefits to their business
  • The average apprenticeship increases business productivity by £214 per week, with these gains including increased profits, lower prices and better products
  • 72% of businesses report improved productivity as a result of employing an apprentice
  • 80% of employers feel that apprenticeships reduce staff turnover
  • 70% of surveyed employers said apprenticeships improved product quality and service2

4½. You'll avoid competing for skilled workers

The hardest jobs to fill are skilled trade workers. The Employer Skills Survey reported almost 210,000 skill-shortage vacancies in 2015 compared to 150,000 in 2013.

Recruiting apprentices lets you train workers with the skills you need in a way that works for your business, while avoiding paying the salaries to attract skilled workers from your competitors. But as you’ve no doubt already spotted, you’ll now have to compete for non-skilled workers – so that’s why we can only give this a half mark!

Notes:

  1. National Apprenticeship Service - A Guide to Apprenticeships for Large Employers (pdf)

  2. Apprenticeship Evaluation: survey of employers (2014)