How do apprenticeship schemes work for employers?

What is an apprenticeship?

An apprenticeship is a formal, paid job that combines academic study with hands-on work experience. Around 80% of an apprentices’ time is spent on the job, whilst the remaining 20% of working hours must be spent in off-the-job training. Apprentices earn a salary and pay no tuition fees.

How do apprenticeships work for employers in the UK?

In England, apprentices are hired and treated as regular staff members who divide their time between work and training. Employers pay their wages and the government covers the cost of their training.

Choosing an apprenticeship programme: The first step as an employer is to identify skills gaps and find apprenticeship standards that align to your needs. Apprenticeship standards are designed by employers, for employers, and focus on the skills that the businesses need most.

Find a skills partner: Once you have identified which skills your organisation will benefit from most, you search for an apprenticeship training provider that aligns to those needs.

Explore funding options: All businesses are eligible for government funding for the training of apprenticeships. If your business has an annual payroll over £3m, you already pay the growth and skills levy and will be able to fund apprenticeship training through the levy.

Even if your payroll is under £3m, you will only have to pay 5% of the training cost, with the government covering the remainder of the bill.

Talk to our experts for a free funding consultation

Hire new staff or upskill existing employees: It’s a common misconception that apprenticeships are only for hiring new talent. You can also enroll existing team members to support them with a career change, or with upskilling in their current role. Especially with the growth of AI, AI reskilling is more important in businesses. 

Funded apprenticeship training can even be suitable for more senior members of staff, through recent schemes like the AI leadership apprenticeship units, which are designed to help business leaders learn critical AI skills.

How apprenticeship funding works

Apprenticeships in England are funded through the growth and skills levy (formerly the apprenticeships levy).

How much your business pays depends on the size of your payroll.

Businesses with a payroll in excess of £3 million must pay a levy of 0.5% on their total payroll. These funds are used to pay for apprenticeship training, with the government adding up to a 10% top-up to fund accounts in some instances.

Non-levy paying employers must have an annual payroll bill of less than £3 million. They pay 5% of the agreed training and assessment costs, with the government covering the rest.

Who can you hire as an apprentice

If you're a business operating in the UK, you can hire anybody as an apprentice who is 16 or older in England, Scotland, Wales, or Northern Ireland. They must not be in full-time education and candidates must have the right to work in the country.

What are employers responsible for?

As an employer, you must provide apprentices with a genuine job that pays the minimum wage for their apprenticeship standard. You are responsible for providing them with paid work on the job and paid off-the-job training, although this is usually delivered through a training partner like QA. 

• Employers have to offer waged contracts of at least 30 hours a week and pay at least the National Minimum Wage or the National Living Wage, depending on the age of the apprentice.
• Apprentices need to spend 80% of their time on the job and 20% of their paid working hours doing off-the-job training.
• Larger employers have to pay an apprenticeship levy to cover training and assessment costs, while smaller businesses pay less.

Benefits of apprenticeships to employers

The benefits of apprenticeships to employers in the UK include:

• Levy funding and reduced training costs
• Higher retention rates for trained staff
• Increased productivity and a high return on investment
• Increased social impact for your organisation

Where to get started

There are plenty of places you can get started as a business if you want to hire apprentices. Training providers like QA can always point you in the right direction. These allow you to outsource some of your training elements to reduce the burden on your business.