My view: Apprenticeships are a great investment, woefully under utilised

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By Christian Nellemann

I started my first, unofficial confectionary business aged 13, so I know first-hand how businesses tend to underestimate the value of young talent when it’s a little rough around the edges.  But right now, that talent comes cheap – if you know where to look.

The National Minimum Wage for apprentices sits at £3.50 an hour, less than half that of a typical employee. There’s a little-publicised government grant of £1000 grant for hiring 16-18 year olds, and fully funded training for businesses with under 50 employees. Combined, you have a recipe for an extremely cost-effective solution to the recruitment crisis.

I think apprenticeships are great investment, woefully under utilised. 89% of businesses who hire an apprentice find they benefit the business in some way, and yet 77% of all businesses don’t understand the laws and procedures involved.  That means there’s thousands of businesses with a lot to gain, who simply don’t know it.

The irony here is that hiring an apprentice can be just as easy, if not easier than hiring an employee. Any business with a clear vacancy in mind can be put in touch with a training provider through the Government portal, Get In Go Far. If they want, that provider can handle the whole recruitment process, so the business owner won’t have to lift a finger.

I’ve spoken to hundreds of businesses trapped in an all-too-familiar recruitment paradox, who simply haven’t considered apprenticeships as a solution. These are businesses that need new employees to expand, but who can’t make the hires until they’ve grown enough to afford it. The average small business profit was £13,000 last year. You simply can’t take on a full-time employee with such a narrow profit margin.

Small businesses are the backbone of the economy, but for reasons like this, it’s harder than ever for them to compete with larger corporations. High streets are shutting down, pubs are closing and more and more capital is being concentrated in the hands of a few wealthy businesses. I want SMEs to have that competitive edge; that means lowering their running costs. They need to learn and find innovative ways to save money without sacrificing growth. Apprenticeships are an amazing opportunity in this context, and they deserve to be better understood.

 Christian Nellemann is founder of XLN