11 April 2023 – New research has shown that retention among apprentices is very high, with 93% staying in the same company after they have qualified.
The UK is suffering from a shortage of skilled labour, which has a big impact on many small businesses. Not being able to get the right staff for the job impacts revenue and prevents growth.
And once businesses have employees with the right skills, the next challenge is to retain them. New research by Multiverse, a tech startup, has now shown that 93% of trainees stay at their company after they have qualified.
The report shows that trainee programmes could be one answer to closing the skills gap and giving small businesses the staff they need to thrive.
Investing In Apprentices Could Boost Revenue
Many small businesses shy away from taking on apprentices due to the cost involved. And according to research by Vodafone, 51% of small and medium enterprises (SMEs) have stopped their trainee programmes due to the cost-of-living crisis.
However, Multiverse has calculated that apprentices have brought in £550m in revenue for their employers. This includes cost-savings as well as activities that generate income.
This would suggest that the initial investment is worth the while, given the boost in revenue that can be achieved by employing trainees.
Combined with the fact that 93% of trainees stay on at their company after qualifying, the case to invest in an apprenticeship programme is compelling.
This means that not only will small businesses have staff with the right skills, they are also less likely to lose them. High staff turnover can be costly, as new employees need to be hired and trained, all of which has costs attached to it.
But according to Multiverse’s report, apprenticeships can also increase the diversity in the workforce. With 65% of trainees coming from Black, Asian or multiple ethnicity backgrounds.
In comparison, seven in ten university students are white. Trainees are also more likely to come from deprived areas than graduates. Multiverse’s data shows that 37% of trainees come from the 30% most deprived neighbourhoods.
22% of participants in apprenticeship programmes are disabled or have additional learning needs. In universities, it’s only 16%.
[Apprenticeship] programmes are giving firms the opportunity to boost revenue, productivity, diversity, and fill essential skills gaps that will meet their needs today and in the future.Euan Blair, CEO of Multiverse
The powerful evidence given in the report should encourage small businesses to invest in apprenticeship programmes rather than cancelling them.
Fewer Companies Ask For Undergraduate Degrees
In the past, a university degree was a sure way to get a job. But more recently, demands for a degree in job adverts have fallen.
According to research by the Institute of Student Employment (ISE), in 2021, 57% of companies requested a minimum of a 2:1 level degree in job adverts. A year later, in 2022, only 47% did so.
This seems to show that the importance of a university degree for employment is getting less, giving people who went through a trainee programme to qualify a bigger chance on the job market.
With apprenticeship certificates people can now also earn more than university undergraduates. Multiverse’s report shows that a trainee can earn an annual salary between £26,000 and £30,000.
The typical starting salary for an undergraduate student is £25,000. A sign that a university degree is no longer seen as more valuable than a work-based qualification.
Because most university students also graduate with a sizeable debt, the route of an apprenticeship is even more appealing. As trainees earn while they learn and generally don’t qualify with any debt.
The number of trainees in employment after qualification is also higher, with 96%, compared to 87% for graduates.
Support For Apprenticeships From The Government
According to Vodafone’s research 44% of SMEs don’t know about financial support schemes that they could profit from to help them set up a trainee programme in their company.
Through the apprenticeship levy, the Government provides funding for businesses to set up their own apprenticeship programmes. With the funding, small businesses only have to pay 5% of the cost, the rest is covered by the Government.
The levy is paid by large businesses, who have an annual pay bill of over £3 million. These companies pay 0.5% on their annual pay bill.
Every business, big or small, who wants to set up their own programme, can access the funding. The funds provided by the Government scheme need to be spent within 24 months.
According to the Government, the scheme has helped to increase the number of apprenticeships in the UK. Since April 2017, when the scheme was introduced, 312,900 trainees have started their training (figures from the Government website published in April 2019).
Given the lack of skilled workers and a labour shortage, taking on trainees could solve the problem for many small businesses. And with the funding available from the Government, the financial impact is much less than many small firms think.