Why the role of SMEs is vital to this year’s Apprenticeship Week

It seems Government investment has paid off. This year’s Apprentice Week is making an unprecedented amount noise, with more than 1,000 events planned and 44 per cent of all UK businesses reportedly set to offer apprenticeship placements within the next five years.

The National Apprenticeship Service (NAS) cites that this year’s principal theme is “to demonstrate that Apprenticeships are great for business, personal careers and create opportunities for both employers and apprentices.”

Unsurprisingly, some the UK’s biggest enterprises have been the most vocal champions of the scheme. However, what weight Apprenticeship Week has on the wider UK economy hinges on how small and medium-sized enterprises (SMEs) embrace the scheme.

According to the British Chambers of Commerce (BCC), demand for apprenticeships now outstrips supply by a rate of 12 to one. Meanwhile, according to the Federation of Small Businesses, as of 2013 SMEs accounted for 99.9 per cent of all private sector businesses and 48.1 per cent of private sector turnover. Small businesses therefore need to play a focal role when it comes to putting young people in employment.


On March 5, the NAS and the Small Firms Enterprise Development Initiative launched Apprenticemakers, a peer-to-peer community for small businesses experienced in or looking to recruit apprentices. Small Business Apprenticeship Ambassador Jason Holt champions the website, which was founded on the back his 2012 review entitled “Making Apprenticeships More Accessible to Small and Medium-sized Enterprises”.

Early signs show that Apprenticemakers has a lot of promise, but how successfully the website performs remains to be seen.

Holt said: “Apprenticeships really deliver for small businesses, enabling them to grow their own talent by developing a motivated, skilled and qualified workforce. And for the apprentices, an Apprenticeship is a way for them to earn while they learn in a real job, gaining a real qualification and a real future.”

Further, numbers released last year by the Centre of Economic and Business Research show the average apprenticeship completer can increase business productivity by £214 per week.

The NAS also points out that apprenticeship recruitment has improved among SMEs. Their study reveals that 20 per cent of SMEs plan to take on one or more apprentices in the coming 12 months (compared t0 15 per cent last year) and 34 per cent plan on doing so in the next five years.

Unnecessary red tape

While the numbers are encouraging, they are hardly overwhelming. Business Secretary Vince Cable admitted recently that the uptake of apprentices among smaller companies had been “very low” and that the “real need is to get SMEs to offer apprenticeships and not just larger companies”.

However, last December, small business owners and SMEs associations voiced their concerns about increased red-tape for claiming back costs from the HMRC for apprenticeship training. Convolutions in the funding process only deterres small businesses from taking on and training tomorrow’s talent.

Necessary change

The BCC is urging the Chancellor, George Osborne, to make it more attractive for companies to take on apprentices; their proposals includes a further year’s extension of the Apprenticeships Grant.

The impetus must also come from small business owners. As BCC President Nora Senior rightly points out:

“Businesses, too, have a vital role to play. Their investment and their openness to taking on apprentices will determine whether the workforce of tomorrow is adequately trained up today.”

It is true SMEs have never been a major employer of apprentices – particularly in London where they are often overshadowed by multinationals. For many small business owners the pressing issues are often money and how time-intensive recruiting and training apprentices is.

Policy makers and the NAS must realise how important SMEs are in reducing the UK’s youth unemployment rate, which currently stands at an unacceptable 20 per cent. Businesses, meanwhile, need to realise the advantages apprenticeships bring to their firm and the wider UK economy. It is vital that Apprentice Week addresses both these matters.