Apprenticeships in a small business

Employment

Essentials Apprenticeships in a small business.

EEASB02/10/JULY2019

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DISCLAIMER While all reasonable efforts have been made, the publisher makes no warranties that this information is accurate and up-to-date and will not be responsible for any errors or omissions in the information nor any consequences of any errors or omissions. Professional advice should be sought where appropriate.

Apprenticeships in a small business Find out what is involved in taking on an apprentice, including how to find a scheme and how much to pay apprentices.

To help you get started, we’ve put together the following guide to some of the sources of help and information available to small businesses.

Apprenticeships enable young people and adult learners to train in a real job and gain a recognised qualification while earning a wage. Apprentices usually work at least 30 hours a week and must be paid at least the appropriate National Minimum Wage (NMW) rate for apprentices (which varies according to their age).

Government funding for training apprentices is available throughout the UK, and, depending on location, employers can also apply for separate grants or employer recruitment incentives if they take on an apprentice.

Most apprenticeships are delivered as partnerships between employers and training organisations and have a set structure and course content, which usually takes between one and four years to complete. However, additional content can be added to the apprenticeship to meet employers’ specific needs.

An apprenticeship comprises several qualifications, including a competency element such as an NVQ qualification (or an SVQ in Scotland), a technical element such as a BTEC qualification, and a functional skills element covering literacy and numeracy.

Apprenticeships in England are available at several levels, including intermediate, higher and degree levels, and cover over 1,500 job roles in more than 170 industries.

In Wales, apprenticeships are available at three levels (foundation, apprenticeship and higher). In Scotland, the equivalent programme is the Modern Apprenticeships scheme, while in Northern Ireland, employers can take on apprentices under the ApprenticeshipsNI programme.

This guide provides an overview of apprenticeships for small business and describes the benefits to business and apprentices. It outlines the different types of apprenticeship, how to recruit an apprentice and what support and funding is available to employers.

Benefits of taking on an apprentice Apprenticeships are popular with our small business owners and it becomes a cost effective way of recruiting new staff, whilst enabling businesses to address skills shortages and improve productivity. Apprenticeships are reported to bring a variety of business benefits:

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• According to the British Chambers of Commerce, business owners usually employ an apprentice to improve the skills available within their firm.

• The Department for Education has reported that the average person completing their apprenticeship increases business productivity by over £200 a week.

• Employers that offer apprenticeships report that they help with the longer-term development of the business.

Always take advice • IMPORTANT: As an employer and you decide to take on an apprentice you must ensure you have an apprenticeship employment terms and conditions and signed by both parties.

Otherwise you will be legally obliged to pay the national minimum wage rate, rather than the apprenticeship rate.

• Also, the way in which apprentices can be dismissed is different to normal employees, so you may need to make sure that you have a term in your contract that enables you to dismiss them for poor performance. We encourage Forum of Private Business members to call our membership helpline on 01565 626001 before taking on an apprentice to discuss the options available. If you are not a member of our organisation you can also find out more information on same number, 01565 626001.

• There are also other steps to follow, such as ensuring the young person is mentored by an appropriate employee and that a training programme is in place, to enable both parties to get the most out of the placement.

• If there are no performance indicators included in an apprentices contract before they start, then small firms can get into difficulties if an apprentice does not perform.

• As a member of the Forum of Private Business our members’ helpline will be able to help and advise you prior to taking on an apprentice. Our team of advisers will be able to help you to create a contract of employment and to ensure you are aware of any other requirements beforehand.

Where are apprenticeship vacancies advertised?

Apprenticeship vacancies are advertised in different ways across the UK: England The Institute for Apprenticeships is an independent public body sponsored by the Department for Education. It works with employers to help them define and develop high-quality apprenticeships, and provides advice about how to approach the process of recruiting and taking on an apprentice.

Training organisations promote apprenticeship vacancies on behalf of employers and support them in finding apprentices through Apprenticeship Vacancies. Employers must register with the system in order to track vacancies. Go to www.sfacontactforms.azurewebsites.net to register.

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Alternatively, employers who would like to take on an apprentice, but who cannot commit to the time that is required for the completion of a full apprenticeship, can use an apprenticeship training agency; the agency will source and employ the apprentice, and organise their training. The employer acts as a ‘host’ employer and pays the agency a fee for the apprentice’s services.

Go to www.gov.uk/government/publications/apprenticeship-training-agencies for more information.

Wales Careers Wales provides a free online apprenticeship-matching service, which enables employers to view and shortlist applicants, send out interview invitations, and accept or reject applicants online. Go to www.careerswales.com/employers for more information and to register for the online service.

Scotland Modern Apprenticeship vacancies in Scotland are advertised via the Apprenticeships in Scotland service. It is run as a web-based social enterprise by young people, with the support of professional careers advisers, and provides a niche youth jobs board specialising in advertising apprenticeship opportunities. Go to www.apprenticeshipsinscotland.com for more information.

Employers registering on the website can advertise an apprenticeship opportunity for up to 30 days for fees starting from £100 (excluding VAT). Go to www.apprenticeshipsinscotland.com/ recruit-an-apprentice/info to view the full range of fees for different advertising services provided

by Apprenticeships in Scotland, and to register an apprenticeship opportunity.

Northern Ireland Employers in Northern Ireland can submit apprenticeship vacancies online free of charge through the Employers Online NI portal (www.employersonlineni.com), which is run by the Department for Communities. Vacancies are automatically advertised throughout the Job Centre network and via www.jobcentreonline.com/JCOLFront/Home.aspx.

“Almost 9 out of every 10 apprenticeship employer hoping to achieve business benefits tell us that apprenticeships deliver – including 75% reporting that it has helped their business improve the quality of their product or service.” Gov.uk

What support and funding is available?

Since 6th April 2017, all employers in the UK with an annual wage bill of more than £3 million must pay the Apprenticeship Levy. While smaller firms do not have to pay the levy, they can still access apprenticeship funding. However, support and funding for apprenticeships varies across the UK: England A new model for apprenticeship funding in England came into force in 2017. Under this model, the Department for Education paid 90% of the costs of training an apprentice for employers who do not pay the levy. For new apprenticeships starting on or after 1 April 2019, this funding has increased to 95%. For more information, go to www.gov.uk/government/publications/ apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work.

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Employers with fewer than 50 members of staff do not have to pay anything to train an apprentice aged 16 to 18. Employers that take on an apprentice aged 16 to 18, or aged 19 to 24 if they have been in care, will also receive a grant for each apprentice.

Go to www.gov.uk/government/publications/apprenticeship-funding for more information.

Wales The Apprenticeship Employer Incentive Programme provides funding for employers to recruit apprentices aged 16 to 19. Grants of up to £3,500 per learner are awarded to employers who are taking on their first apprentice or who have not recruited an apprentice within the last 30 months.

The full payment is made to the employer after an apprentice has been employed for eight months. Employers can apply for a maximum of three grants.

Go to www.businesswales.gov.wales/skillsgateway/employing-apprentice for more information.

Scotland Skills Development Scotland (SDS) makes contributions to Modern Apprenticeship training costs of Scottish apprentices aged 16-24. In some sectors, it will also contribute to training costs where the apprentice is 25 or over.

Graduate apprenticeships are fully funded by SDS Additional funding incentives available in Scotland include: • Adopt an Apprentice, which provides a payment of £2,000 (or £5,000 for firms in the oil and gas industry) that take on a modern apprentice who has been made redundant by another firm.

• Scotland’s Employer Recruitment Incentive, which provides up to £4,000 to employers who recruit a young person who has faced significant barriers to employment.

Go to www.apprenticeships.scot/for-employers/introduction-to-scottish-apprenticeships/ how-are-they-funded for more information.

Northern Ireland In Northern Ireland, funding is available for training apprentices, covering the full training cost for apprentices aged 24 or under, and 50% of the training costs for apprentices aged 25 or over who are following specified training frameworks.

Employer incentives ranging from £250 to £1,500 are also available for employers when their apprentice completes the apprenticeship programme..

Go to www.nibusinessinfo.co.uk/content/finances-and-funding-apprenticeships for more information.

National Minimum Wage rates for apprentices The National Minimum Wage (NMW) sets the minimum rates that must be paid by law. NMW rates vary according to the age of the worker, and there is a specific rate payable to apprentices.

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The 2019/20 NMW rate for apprentices aged 16-18, and for those aged 19 or over who are in their first year of an apprenticeship, is £3.90 per hour.

Download our Employment Essentials: A Guide to the National Minimum Wage for more information.

Go to www.gov.uk/national-minimum-wage-rates for more information about the NMW.

Apprenticeship training organisations Apprenticeship training organisations that are used by employers include independent training providers and colleges of further education that receive government funding to deliver nationally recognised qualifications for apprentices.

Training organisations are responsible for supporting employers by: • Developing apprenticeship programmes to meet both the employer’s and apprentice’s needs.

• Advising about available funding for apprenticeships.

• Assisting with recruiting an apprentice.

• Preparing training plans for apprentices.

• Managing the recruitment process and paperwork relating to apprentices’ training.

Group training associations, which are employer-led training organisations that are usually also companies limited by guarantee and often charities, provide small firms in England with access to sector-specific apprenticeships and training opportunities. They provide dedicated training facilities in specific fields, focusing on specialist apprenticeships, for example in engineering, manufacturing or construction.

Apprenticeship training organisations in England can be found using the search tool at www.findapprenticeshiptraining.sfa.bis.gov.uk.

Training organisations in Wales can be found by searching the Careers Wales work-based learning search directory at www2.careerswales.com/coursesinwales.

In Scotland, training organisations can be found through Skills Development Scotland. Go to www.apprenticeships.scot/take-on-an-apprentice/find-a-training-provider for more information.

To find a training organisation in Northern Ireland, go to www.nidirect.gov.uk/services/ apprenticeship-training-suppliers.

What are traineeships?

Traineeships are government-funded training programmes that are delivered by training providers in England and Wales in partnership with employers, who provide interview experience and work placements to enable young people to become ‘work ready’.

Traineeships are unwaged, but provide young people who need to develop their skills further before applying for apprenticeships with the opportunity to undertake training in functional skills such as maths and English, while giving them vital work experience.

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Go to www.gov.uk/government/collections/traineeships-programme and www.gov. wales/topics/educationandskills/skillsandtraining/traineeships for more information about traineeships.

The Certificate of Work Readiness is a similar scheme in Scotland www. skillsdevelopmentscotland.co.uk/our-services/certificate-of-work-readiness).

Hints and tips • Apprenticeships cover most business sectors. Trade associations, sector skills councils and

further education colleges should be contacted to obtain details of apprenticeships relevant to a particular sector.

• The ongoing cost of training and wages needs to be considered when recruiting an

apprentice.

• When employing staff aged 17 or under, it is important to check if there are any local authority

by-laws governing the employment of young people.

• Remember that apprenticeships are available for people aged 25 and over. Employers often

use apprenticeships as a means of helping their older employees to improve their existing skills and develop new ones.

Useful contacts The Institute for Apprenticeships is a non-departmental public body, sponsored by the Department for Education. It works with employers in England to help them create high-quality apprenticeships. It also publishes guidance and information for employers looking to take on an apprentice.

Website: www.instituteforapprenticeships.org Careers Wales runs the apprenticeship programme in Wales. It publishes information and guidance for employers on taking on an apprentice.

Tel: 0800 028 4844 Website: www.careerswales.com/employers Skills Development Scotland is responsible for Modern Apprenticeships in Scotland. It publishes information and guidance for employers.

Tel: (0141) 285 6000 Website: www.skillsdevelopmentscotland.co.uk In Northern Ireland, the Department for the Economy manages ApprenticeshipsNI. It provides advice and information for employers on taking on an apprentice.

Tel: 0300 200 7876 (Apprenticeships helpline) Website: www.economy-ni.gov.uk/apprenticeships-employers-guide

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