Are apprenticeships a valuable investment for small businesses?

Employer, Insights

| Reading time - 4 mins

As we enter another year of economic uncertainty, 62% of small businesses report that they are experiencing higher running costs, which is impacting their bottom line. For many, this uncertainty may reduce budgets for training and recruitment, even though retaining staff and not having the right skill sets in house are also major concerns. SMEs with growth plans or skills shortages, as well as those facing all or a combination of these challenges, are looking for an affordable and valuable way to train and retain.

Over two thirds of SMEs are planning to tackle some of these challenges by upskilling their workforce through different educational routes such as apprenticeships or T levels. Although considered a long-term investment, apprenticeships offer excellent short-term benefits for SMEs, such as 95% government funding, improved business productivity and free recruitment. A report by St. Martin’s Group confirms that two of the top benefits of apprenticeships for SMEs are cost-effective labour resource and value for money.

So, how do apprenticeships help SMEs facing reduced budgets for workforce training, and are they a valuable investment?

The value of tech apprenticeships

Consider the cost of tech apprenticeships. Apprenticeship fees are set by the Department for Education and Institute for Apprenticeships & Technical Education (IoATE). The average cost for an intermediate or higher digital apprenticeship is £15,000.

This cost seems steep – but SMEs can access this apprenticeship training for only £750 thanks to government apprenticeship co-funding. With payments spread over 12 months, employers can access training for only £62.50 per month. There’re also no extra costs for signing up existing staff onto an apprenticeship, or for apprentice recruitment if you’re thinking about hiring an apprentice.

Compare this to formal digital or IT training courses that cost thousands. Apprenticeship funding support means small businesses can save a substantial 95% on industry-leading training that's created and delivered by sector experts. And apprenticeship training providers like Intequal can help you with the full apprenticeship process. From accessing funding to delivering training, an apprenticeship provider can help businesses reduce their time investment, too.

Apprenticeships build a skilled workforce that’s fit for the future

Modern apprenticeships are built by businesses for businesses. Some of the digital and IT apprenticeships delivered by Intequal have been created by tech trailblazers including Microsoft, IBM, Virgin Media and Fujitsu.

Apprenticeship training providers use these blueprints to craft new, relevant training. As every small business has unique requirements, apprenticeship projects can be tailored to work-based initiatives so that apprentices work on real projects in real time. This means teams build the skills and knowledge that are in demand by employers; boosting innovation and productivity, and eliminating the need to recruit from a costly talent pool.

The opportunity to access relevant training through apprenticeships makes up a key part of the people development strategy for many businesses. Telent, a technology and telecoms provider, works with Intequal to deliver IT and networking apprenticeships as part of their long-term workforce strategy.

“To help [existing colleagues] with their continuous professional development, we put them on an apprenticeship so they can develop their knowledge and skills,” says Seb Flint, Graduate & Apprentice Coordinator at Telent. “They get cutting edge and up-to-date training so that they don’t feel like they’re losing pace with the change and updates we see in technology. That makes them fit for the future.”

"Working with Intequal allows us to make sure we’re addressing skills shortages within tech and telecoms," Seb continues. "By growing our own talent we’re making sure we have skilled people and have grown our pool of talent to be ready for the roles that we need them to be."

High apprentice retention means high return on investment

Staff retention is one of the top benefits cited by employers who take on apprenticeships. But why is this relevant for SMEs facing reduced budgets for workforce training?

As we mentioned, apprenticeships are a cost-effective way to train existing employees. They’re also proven to aid staff retention, which is important for businesses facing economic uncertainty. Training employees already in role means less need to hire new (and in the tech sector, expensive) talent – and those upskilled team members are more likely to stay with the business, especially when an apprentice will be learning for 12-24 months depending on their apprenticeship programme.

Considering SMEs will only have to contribute up to 5% of the training costs, retaining an apprentice results in excellent return on investment. “90% of our former apprentices are still within the business,” explains Seb from Telent. “With that retention rate you get a return on investment in terms of decreased spending on talent acquisition and recruitment. To have invested in talent and them stay with you is a real financial benefit. But also, having talent stay with you for several years breeds a healthy culture and makes sure we have fantastic talent staying within the business.”

Apprenticeships are a valuable investment for small businesses

The benefits of apprenticeships seem endless, but one thing is certain. For small businesses, they are a cost-effective solution to training and retaining.

People are one of the most critical business resources in any economic state. And with a forecast of an unpredictable economy, making an apprenticeship investment is a valuable decision for SMEs.

Whether it’s upskilling one employee or building apprenticeships into a long-term workforce strategy, Intequal work with employers to help them invest in the development of their team members through apprenticeships.

Get in touch to find out how investing in apprenticeships could benefit your business.
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