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With the current labour shortage affecting pretty much all areas of the economy, taking on an apprentice could reap rewards for many businesses.
There are many reasons why hiring an apprentice can benefit your business, but for hard-pressed employers, with a limited budget, the financial incentives offered by the Government are a major reason to take the plunge.
Why take on an apprentice?
- Plugging the skills gap: It is obvious that if a business has a skills shortage, training an apprentice in that area will reap rewards.
- Gaining a new perspective on technology: This will allow businesses to equip their workforce with specialist skills and the latest techniques.
- Enhance reputation as an employer: Giving young or underskilled workers an opportunity in this way can only enhance a firm’s reputation and give something back to the community.
- Generating a boost in productivity: Training helps staff become more proficient, but an apprentice can also free up time for more senior staff to focus on key areas of their work.
However, perhaps the best part of apprenticeships is the financial assistance available from the Government, which will provide funding to pay for an apprentice’s training and assessment.
Where you get the funding from depends on where you are in the UK. The amount you get also depends on whether you pay the Apprenticeship Levy or not.
Who needs to pay Apprenticeship Levy?
The Apprenticeship Levy is an amount paid at a rate of 0.5 per cent of an employer’s annual pay bill.
As an employer, you have to pay Apprenticeship Levy each month if you have an annual pay bill of more than £3 million or are connected to any companies or charities, for Employment Allowance purposes, that have a combined annual pay bill of more than £3 million.
How is the funding distributed?
For those who do not pay the levy, you will have to pay five per cent towards training fees and you need to agree on a payment schedule with the training provider.
The Government will then pay the other 95 per cent up to a maximum funding band and deliver it directly to the training provider.
What else is available?
You can get £1,000 to support your apprentice in the workplace if they are one of the following:
- 16 to 18 years old
- 19 to 25 years old with an education, health and care plan
- 19 to 25 years old and they used to be in care
The training provider will present the payment over two instalments of £500 each, with the first payment after 90 days and the second after a year on the scheme.
The current National Minimum Wage rate for an apprentice is £4.81 per hour if they are aged:
- 16 to 19
- 19 or over and in their first year
If an apprentice is aged 19 or over and has completed their first year, they must be paid the National Minimum Wage or National Living Wage rate relevant to their age.
Link: Apprenticeship Funding