Putting investment into perspective for SME's

Posted: Thursday, 5 March 2020 @ 12:50

What can SME’s expect from their 10% contribution to Apprenticeships?

Anne Milton, Skills Minister surprised many at last week’s AELP conference by announcing that there would be no change to the contribution to Apprenticeships by non-levy paying employers. Despite heavy campaigning by the AELP, non-levy paying employers will still have to contribute 10% of the cost of the qualification.

However, could this be a blessing in disguise for SME’s: There is much longer term speculation, suggesting that Apprenticeships will progress to a fully levied model, with all organisations large or small being levied on their wage bill.

Rolling out a training programme is an investment for any organisation and returns are often hard to measure. However there’s a wealth of evidence to suggest that organisations can really gain from investing in Apprenticeships: ·        

  • The support that they provide improves morale, and has a knock on effect in reducing turnover.
  • Chartered Managers deliver £391,443 in added value to their organisation with 67% consistently beating targets (Chartered Management Institute).
  • At the opposite end of the spectrum, there is also much to be said for recruiting a young apprentice into your business. They bring with them a fresh perspective, new energy and ideas and highly valuable, IT skills.

Training is becoming increasingly important in UK businesses as a point of differentiation. With 50,000 high street jobs being axed in the first 6 months of the year, organisations that invest heavily in staff training and customer service such as Hotel Chocolat and the seemingly unstoppable Pret A Manger are continuing to buck trends, employing more staff, expanding business operations and to deliver a rise in profits: The chocolate powerhouse has seen a 15% rise to their profits of 2018.

Under the current system, the government funds 90% of the qualification, offering employer National Insurance exemptions on Apprentices under the age of 25 and an £1000 payment, delivered in two halves, for each Apprentice employed aged 16 -18. Offsetting of this financial support against the 10% investment by the employer, there is little difference between the registration and certification fees employers used to be charged before the levy came into effect and the new funding system.

Indeed smaller organisations with less than 50 staff still received full government funding for the value of the qualification.

The 10%, whilst still a significant investment for businesses, when put into perspective against rising uncertainty and benefits delivered is worth it, making your business more productive, more competitive and ultimately more profitable.

To access government funded training please call 0808 100 1155 for more information on how an Apprenticeship programme could benefit you.