By Zoe Allen, Sona Circle
In the UK, the government provides a huge amount of funding and incentives for businesses to encourage them to hire apprentices. For larger businesses, this includes the apprenticeship levy scheme. If your business if not yet taking advantage of this, then read on to learn more about the funding available and how it could benefit your business.
What are apprenticeships?
Apprenticeships are paid training roles within a company that provide practical, on-the-job training for a particular trade or career. They are provided by a host business and a training provider, such as a local college, where the apprentices also learn about the trade in a classroom setting. At least 20% of the apprentice’s time will be spent with the training provider. An apprenticeship can take between one and six years to complete.
To read the UK government’s guidelines on apprenticeships schemes, click here.
Apprenticeships develop a dedicated and qualified talent pipeline, suited perfectly to your company. It gives businesses the opportunity to train employees specifically for your company and roles that you may have in the future. Take a look at this article discussing why you should hire an apprentice.
What’s more, if your business has a payroll of over £3 million, you will already be paying an apprenticeship levy which you can invest back into apprenticeships. If you are a smaller business, you are eligible to have 95% of your apprentice’s funding costs paid by the UK government. Read on to learn more.
The apprenticeship levy
In 2017, a new levy was introduced to encourage large businesses to provide high-quality apprenticeships.
If your company has a payroll of over £3 million, you will pay 0.5% of the monthly payroll (minus a levy allowance of 15,000) into a fund that can then be used to fund apprenticeship training. In addition, the UK government will add an extra 10% into this fund.
You then have 24 months to spend your levy fund on apprenticeship schemes within your business, or with partners in your supply chain (up to 25% of your fund). If you have not spent this money on apprentices after 24 months, it will be claimed by HMRC.
I, n a nutshell, if you aren’t investing the levy back into your business through training apprentices, you lose it.
It’s also worth remembering that apprentices do not have to be young, untrained, new recruits. The money can be spent on training current employees, people of any age, or on people who already have some training or higher education, including people with degrees.
To learn more, take a look at this useful page and video from the Apprenticeship Academy.
What if my company has a payroll of less than £3 million?
If you do not qualify for paying the apprenticeship levy, you are eligible for direct government funding of up to 95% of an apprentice’s training and assessment with a training provider. You will pay in 5%.
In some situations, you may also be eligible for extra funding, especially if the apprentice is from a disadvantaged background.
Would it work for you?
Training a skilled and dedicated apprentice can be an extremely affordable, effective and efficient way to train your ideal, diverse employees and can work for businesses of any size.
If you are a large business who already pays the apprenticeship levy, if you do not hire apprentices you could be losing significant amounts of money that could be reinvested into your business.
If you are a smaller business, it can cost you a very small amount to hire and train your ideal employees with the government funding 95% of training.
At Sona Circle Recruitment, we are on a mission to help more refugees and people seeking asylum in the UK access valuable training and employment to allow them to integrate into their new lives in the UK.
With refugees often being young in age and experience, arriving from a break from work, or not used to UK workplace culture, apprenticeships are an ideal way to help talented, positive and bright refugees integrate into the UK workforce. Refugees and people seeking asylum are eligible for apprenticeship funding and may even be eligible for even more, circumstance-specific funding.
If you want to learn more about why refugees can be an asset to any business, read our blog post here.