The journey to economic recovery from the COVID-19 pandemic in the U.K. is going to be a long one. In July, Chancellor Rishi Sunak announced that a critical element within his strategy for protecting and jumpstarting the economy was a “Plan for Jobs.” The whole plan will cost £1.6 billion.
One of the major programmes within the Plan for Jobs is further incentivising businesses to hire more apprentices. Here’s what you need to know about the programme and if it’s something your business should take advantage of.
The Basics of the Incentive Payments
Funded apprentices are divided into two categories based on age bands. Employers will receive £2,000 for all apprentices hired between the ages of 16 and 25. For apprentices between 16 and 18, these new incentive payments are on top of the existing incentive payments of £1,000 already offered. So employers will actually receive a total of £3,000 for all apprentices aged 16 to 18 if they are hired in the next six months. If the apprentice is 25 years old or over, the employer will receive £1,500.
These provisions took effect on August 1 and run through to the end of January 2021 for every new apprentice they taken on. There is no limit to the number of apprentices an employer can recruit during this time and still benefit from the increased incentive.
What is an Apprentice?
Apprenticeships offer individuals a way to get both real work experience and education. As a bonus, they still earn a salary. All employers must pay apprentices at least the national minimum apprenticeship wage, although they typically pay much more. While they are working, apprentices get to glean from experienced professionals who share their years of skills and knowledge. They also get to put these skills into action. Here at the Homeserve Foundation, we aim to make apprenticeships easy by supporting employers through the sometimes difficult and confusing process of training and employing an apprentice.
Creating an Apprenticeship That Qualifies for Funding
There are also no restrictions on the types of businesses that can get the funding for apprenticeships. Employers of all sizes and industries have been urged by the Chancellor to take advantage of the programme.
The apprenticeships must follow certain criteria for the employers to qualify for the payments. First of all, the apprentice must be a new employee. The apprentice must also spend the majority of their time—80% to be exact—at work. This works out to at least 30 hours a week. The other 20% of an apprentice’s time should be spent on their apprenticeship training.
The apprentices must have the right to work in England and spend at least half of their working hours physically at their employer’s office on English soil. However, if the apprenticeship is for the armed forces or the position involves significant travel, exceptions about this rule can be made. An apprenticeship must also last for at least 12 months.
The training that an employer would like their apprentice to complete is completely up to the employer. Some employers may want an apprentice to have largely the same responsibilities over the course of the apprenticeship. Other employers may choose to have their apprentice perform whatever tasks need to be done on a given day. This is an effective way to train an individual on multiple aspects of a business. Once the apprenticeship is over, the individual may be qualified to take on several different positions at the business.
The Benefits of Having an Apprentice
All that being said, the apprentices themselves (i.e. the younger generation in the U.K.) are far from the only people who can benefit from the funded apprenticeships. The money is a great incentive for an employer, but there are plenty of other benefits to hiring an apprentice. Employers should see a significant return on investment.
An apprenticeship not only helps employers find talented individuals, but it also helps businesses retain those individuals as part of their staff in the long-run. This was one of the Chancellor’s talking points in his Summer Statement speech when he said that 91% of apprentices either stay in their line of work or continue training. This is advantageous for both the employer and the apprentice.
Ideally, when a business hires an apprentice, there should be a clear path to upskilling. Since apprentices are generally younger, creating positions for them also helps a business stay up-to-date. If a business is looking for fresh perspective and new ways to appeal to consumers, an apprenticeship could be exactly what they need.
Although incentive payments will only be made for the next four months, the hope is that they will have a significant positive impact on the economy for longer. An apprentice has a vested interest in helping the business they are working for grow. Because of this, employers should be thinking about how an apprentice can benefit them in the long-term, not just the immediate future.
Even with the uncertainty of COVID-19, incentive payments will help businesses stay strong and continue to cultivate new talent. Funding will encourage growth that lasts long-term.
How to Set Your Apprenticeship Up for Success
COVID-19 has forced many businesses to become more flexible if they wish to survive. You might never have had an apprentice, but it could be exactly what your business needs. If you’re an employer that could use support as you navigate the world of apprenticeships, reach out to us here at the HomeServe Foundation. We are here to help companies cultivate strong apprenticeships in 2020 and beyond. Our website gives you access to multiple tools and support materials. Our free membership enables you to access ongoing support and learn from industry experts.
If, after reading this you’re still on the fence about getting an apprentice, we can help you understand the benefits of hiring one and help you choose the best candidate for the position. Start a conversation with us today!
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