National Apprenticeship Week celebrates skills development and apprenticeship training and many SME businesses are unaware they can harness the power of apprenticeships to transform their people and their performance.
What is more, they can do this with the financial support of the Apprenticeship Levy and receive up to 95% of the training costs covered by the Government.
At a time when skills shortages and talent management are a key focus for SMEs, Tasmin Raynor, Director of Apprenticeships, The OCM examines why having apprenticeships on the training and development agenda in 2024 is well worth considering.
A recent report from the Association of Chartered Certified Accountants (ACCA) found that workforce and talent management was a pressing challenge for SMEs in 2024. 31% of businesses reported increased job vacancies for professional workers, which ACCA said calls for a renewed focus on talent acquisition, skill development, and retention strategies. Apprenticeships could offer a cost-effective solution.
Apprenticeships can help SMEs build their workforce for the future. They can ensure employees have the right skills and remain up to date, as well as bridge skills gaps. Strategically, this helps businesses grow, stay competitive and improve employee engagement by facilitating career progression. They can offer companies an innovative way to develop, train, mentor employees and bolster their recruitment and retention rates. A 2022 report from the Department of Education found that 62% of apprentices stayed working for the company that trained them after completing their apprenticeship and 76% of employers said that training existing employees as apprentices improved staff retention.
How SMEs can access apprenticeship levy funds
For employers in England, the Apprenticeship Levy has transformed the apprenticeship landscape. Launched in 2017, the Levy requires employers with a pay bill of more than £3 million yearly to invest 0.5% of their payroll into the levy. If firms pay the Levy, they will receive funds to spend on training and assessing their apprentices, and the government will add 10%.
Whilst many SMEs are under the impression that they cannot access Apprenticeship Levy funds, it is, in fact, the case that businesses who do not need to pay the levy will only pay 5% towards the cost of training and assessing an apprentice. The Government will pay the balance (95%) up to the funding band maximum. This is known as ‘co-investment’.
Employers who do not pay the Apprenticeship Levy can reserve funds up to three months in advance of the expected apprenticeship start date. Also, as of April 2023, small employers who did not pay the levy will no longer be limited to a maximum of 10 new apprenticeship starts – they will be able to recruit as many high-quality apprentices as their business needs.
Employers may also be eligible for additional funding and support depending on their apprentice’s circumstances or if they are a small employer employing fewer than fifty employees.
How SMEs access funding has also become more accessible and efficient for smaller employers. Non-levy paying employers can now reserve apprenticeship funding through a digital platform known as the Apprenticeship Service. This digital approach has simplified the process, making it easier for SMEs to now participate in apprenticeship training.
Once funding is reserved on the platform, it is allocated for a specific apprenticeship start date and is available for three months. This time-bound reservation system requires employers to plan their apprenticeship needs with a degree of precision, ensuring that funds are utilised efficiently and available to those who are ready to start apprenticeships.
By making apprenticeship funding more accessible and manageable, it is expected to encourage a wider range of employers to invest in training, thereby strengthening the talent pipeline and supporting economic growth.
Boosting coaching and mentoring skills through apprenticeships
SMEs may gain tangible long-term benefits by upskilling the workforce in areas such as coaching and mentoring using apprenticeships. This means they could use levy funding to invest in training that has the potential to bring about transformational change and only pay 5% of the training costs.
Coaching and mentoring are essential skills in today’s collaborative business environment. They enable individuals to guide and support their colleagues and foster a culture of continuous learning, mutual respect, and holistic growth. By equipping employees with coaching and mentoring skills, SMEs not only ensure they can perform their current roles more effectively, but they are prepared for leadership positions in the future.
Chris Duerden from education provider, Explore Learning in Leeds, recently completed the ‘Coaching Professional Level 5 Apprenticeship’ through professional coaching firm, The OCM. This apprenticeship includes approximately 308 guided learning hours over a 14-month programme, which can be delivered virtually.
It is aimed at employees from any role or level within an organisation as long as they have the opportunity to act as an internal coach and/or deliver coaching in support of the organisations coaching and mentoring strategy.
Chris works in learning development, and although coaching was already part of his job, he wanted to develop more formal skills and gain a professional qualification. The apprenticeship enabled him to do this whilst fitting around his work-life balance. Talking about what he enjoyed most about the apprenticeship, Chris highlighted the learning cycle.
He said: “I learned well by having a bit of theory or knowledge and then quite quickly being able to put that into practice. This is what the apprenticeship allows you to do: you read something, you get the opportunity to then jump into something practical, and everything is nudging you in the right direction. It is seamless in being able to make an impact on my development and on my job and my work.”
For Chris, one of the key benefits of the apprenticeship is career progression. He said: “I feel much stronger in my position, and I think the way the people view me in the organisation is much stronger too. From a career development perspective, the course has helped build my confidence and I could now look at jobs at a higher level in the future because of the skills I have gained, which is great.”
Chris adds: “I highly recommend doing an apprenticeship. It is well structured, and the people running the apprenticeship are there to support your end goal. Everyone is working towards helping you gain better skills.
“The whole purpose for doing the apprenticeship was to build my skills and get better at coaching, and it absolutely delivered on that.”
Apprenticeships offer an excellent opportunity for SMEs this year to invest in their workforce. At the same time, they will be able to boost employee engagement; improve retention and the talent pipeline, as well as contribute to organisational growth and success.
The OCM offers two coaching and mentoring apprenticeships. Find out more