Modest economic growth over the past four years has resulted in an unprecedented shortage of skills within the UK, leaving thousands of vacancies unfilled. Can apprenticeship schemes ‘up-skill’ the nation’s entry-level?

Wading through the “me-tooism” of national anything week can be a chore. Many businesses have been identifying, training, and eventually employing young talent through work experience and graduate trainee schemes for decades, but with the governmental push and week-long attention to the cause, a lot of growing and mid-sized businesses have been shouting about what may just be a box-ticking exercise in corporate responsibility.

To that effect, a recent City & Guilds survey of 150 employers revealed that over 90 per cent thought the three million apprenticeships target was arbitrary, while 84 per cent want it to be linked to sectors experiencing the biggest skills shortages.  One of the employers surveyed, Anthony Impey, CEO and founder of Optimity and vice chair of the Apprenticeship Stakeholder Board, said: “Apprenticeships are not CSR, they are a great way of widening the talent pool and make good business sense.”

The number of apprentices in England in the 2014/15 period increased by 14 per cent since the previous year. This largely owes to the government’s big push on apprenticeships – with the aim of delivering three million more in this Parliament.

A new apprenticeship levy is on the way for large businesses, but this won’t apply to growing businesses any time soon.

The benefit

According to government research, while in training, each apprentice results in a positive net gain to employers of £1,670 per annum. Additionally, 25 per cent of consumers are prepared to pay more for products and services offered by businesses employing apprentices. 

In short, apprenticeships have a compelling business case. Opus Energy, which employs over 700 people between its Northampton and Oxford-based offices, claims their apprenticeship scheme has led to a low employee turnover of 7 to 8 per cent. HR director, Annamarie Petsis Jones, also cited the benefits for apprentices: “There are also big paybacks for the apprentices themselves, including early skills development, no university debt, and avoiding the difficulties of not being able to get a job without experience.”

The skills shortage

“Skills shortage vacancies” make up nearly a quarter of all permanent job openings. According to the UK Commission for Employment and Skills (UKCES), the number of positions left vacant because employers are unable to find workers with the skills or knowledge to fill them has risen by 130 per cent since 2011. The financial services sector saw the sharpest rise in skills shortages, from ten per cent in 2013 to 21 per cent in 2015.

As an answer to this business concern, every year, businesses are encouraged to look at their apprenticeship model and improve the way they currently do things. With the government’s continued promotion of apprenticeship as an alternative to university, how can these schemes build local talent to bridge the skills gap?

Sophie Adelman, UK general manager at career marketplace firm, Hired, suggests that other industries take the tech sector’s lead in its home-grown approach to building talent beyond degrees. “Skills-based training opportunities like boot camps and apprenticeships are now levelling the playing field – offering candidates the chance to develop skills they might have traditionally only found through tertiary education,” she said.

“The same should be true for every sector. For employers to truly find and secure top talent, they need to evolve past the historical emphasis on degree-only hires, and instead focus on the individuals and the skills they bring – no matter how or where these skills were gained.”

Earn to learn

A CIPD study showed that 58.8 per cent of UK graduates are in traditionally “non-graduate jobs”, suggesting that the skill sets of the workforce and the requirements of employers currently don’t align. While the UK has witnessed exceptionally strong job creation in the past few years, creating jobs at a faster rate than any other EU country, roughly two million workers are found to be under-utilised, possessing skills and experience that are not being used in their current role. This gives legs to apprenticeship schemes where businesses can invest in a future talent pool, and raw talent can earn to learn.