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Apprenticeship co-investment scheme changes set to benefit SMEs

05 Jun 2019

It’s been just over two years since the Apprenticeship Levy was first introduced, and during that time there has been several reforms. However, the most recent change is welcome news for small and medium-sized organisations, as it’s now cheaper than ever to recruit, train and assess an apprentice.

Previously, organisations who didn’t pay into the Levy (i.e. companies with an annual wage bill of less than £3m), had to contribute 10% towards apprenticeship recruitment – with the Government funding 90% through the shared Government-employer co-investment scheme.

However, recent reforms now mean that non Levy-paying organisations only have to pay a 5% contribution to fund their apprenticeship programmes. This is great news for SMEs, as they can gain all the benefits of recruiting an apprentice at half of the cost.

Take advantage of regional incentives

There are also several incentives available for SMEs around Greater Manchester who are looking to recruit an apprentice or upskill their current workforce.

Salford-based businesses may be eligible for a £3k boost to support with the costs of employing a new apprentice. You can find out if your company meets the eligibility requirements here.

Meanwhile, Wigan Council has launched the Apprenticeships for Young People (AYP) programme to help businesses create new apprenticeship vacancies and recruit learners in specific sectors – such as engineering, digital and manufacturing.

Providing your business meets the eligibility criteria, grants are available from £2000 up to £5000 depending on the length of your chosen apprenticeship programme – making it significantly cheaper for companies in the area to attract or develop talent.

Why you should recruit an apprentice

According to the Centre for Economic and Business Research, apprentices increase business productivity by £214 each week. And with 86% of UK SME’s claiming that productivity is an issue – it’s easy to see how advantageous apprenticeships are for small and medium-sized businesses.

But it’s not just productivity that will increase – recruiting an apprentice can bring a wealth of benefits.

75% of employers report that apprenticeships improved the quality of their product or service – with the majority of SMEs saying that offering apprenticeships allowed them to attract good quality staff with the right skills for the job. Apprenticeships are a great way to bridge skills gaps and futureproof your business.

By not utilising your co-investment funding, you’re missing out on a great opportunity to widen your talent pool, improve your bottom line and ensure that your business remains competitive. If you’re looking to recruit a new apprentice, you’ll also be showcasing your corporate social responsibility by employing a young, local person and helping them to take their first step on the career ladder.

Over to you

Whether you choose to recruit someone who’s fresh out of school or college, or whether you would prefer to use the funding to upskill an existing employee with a high-level programme, we can help you make the most of your apprenticeship funds.

Get in touch with our expert team today to discuss how apprenticeships could work for your business.

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