Apprenticeships for SMEs: How and when to hire apprentices
Posted: Tue 18th Feb 2025
In this webinar, HR consultant Katy Wade explains why small businesses should be looking to hire apprentices.
She covers eligibility requirements, funding options, legal considerations and how government schemes are actively encouraging small businesses to recruit apprentices when developing their workforces.
This session is part of Enterprise Nation's Talent Hub programme.
Topics covered in this session
Why apprenticeships are valuable tools for workforce development – not just for hiring but for upskilling existing staff
The process for recruiting apprentices, including:
assessing your ability to provide proper onboarding, training and mentorship
taking advantage of government funding and National Insurance exemptions
Katy's key points from the webinar
Understanding apprenticeships: Key facts and eligibility
Who can be an apprentice?
Apprenticeships are open to all ages, not just young people.
Businesses can hire new apprentices or train existing employees through apprenticeship programmes.
Eligibility criteria for apprentices
Must be 16 or older.
Must have the right to work in the UK and live in England (Scotland, Wales and Northern Ireland have different funding rules).
Must not be enrolled in other education programmes (for example, college, sixth form).
Apprenticeship levels and length
Apprenticeship levels range from Level 2 to Level 7:
Level 2 (GCSE equivalent) – Basic vocational skills
Level 7 (Master's degree equivalent) – Advanced professional qualifications
The length varies from 12 months to six years, and depends on the level.
Newly announced shorter apprenticeships (minimum eight months) aim to increase accessibility and reduce the barriers that stop employers from committing to hiring.
Types of apprenticeships and industry opportunities
Apprenticeships cover a wide range of industries, including:
traditional trades: carpentry, electrical engineering, plumbing
professional services: accounting, HR, marketing, software development
highly specialised fields: content production, nuclear science
Employers should check the government's website to find programmes that match their needs.
Is an apprenticeship right for your business?
Commitment and responsibilities
You need to invest significant time in order to support apprentices.
Twenty per cent of an apprentice's working week must be spent on off-the-job training (i.e. one full day per week for full-time roles).
Training must occur during normal working hours, but does not have to be classroom-based – it can include on-the-job learning, mentoring or industry projects.
Managers must be prepared to train apprentices in workplace etiquette, such as email communication, professional conduct and phone protocol.
Choosing the right apprenticeship programme
Businesses should review available apprenticeship standards on the government website to find the best fit.
Key considerations:
Does the programme match your business needs?
Can you allocate resources for training, mentoring and supervision?
Do you have growth opportunities for apprentices once their apprenticeship has ended?
Apprenticeship salaries and employment regulations
Working hours and pay rates
Apprentices must work at least 30 hours per week. (They can work fewer, but this extends the length of their apprenticeship.)
Apprenticeship minimum wage (from April 2025):
£6.40 per hour (for apprentices aged 16 to 18, or aged 19 or over and in their first year)
£7.55 per hour (for apprentices under 19 or who have completed their first year)
Employers do not pay National Insurance (NI) contributions for apprentices under 25, which does help lower payroll costs.
Legal considerations
Apprentices are employees and must have an employment contract and employment rights (including holiday pay, sick leave and workplace protections).
The contract should specify:
the requirement to complete the apprenticeship as part of their employment
what happens if the apprentice drops out of the programme
Apprenticeship funding
Funding for non-Apprenticeship Levy employers (SMEs)
SMEs (businesses with a wage bill under £3 million per year) pay only 5% of the apprenticeship training cost.
Example:
A Level 7 apprenticeship (Master's equivalent) costs £27,000.
The employer pays only £1,350 (5%), with the government covering the rest.
Other government incentives
Full funding (100%) is available for:
businesses with fewer than 50 employees hiring apprentices aged 16 to 18
apprentices aged under 24 with an education, health and care plan (EHCP).
There's a £1,000 bonus for hiring apprentices aged 16 to 18, to acknowledge the extra mentorship and training support they need.
Upcoming changes to the Apprenticeship Levy
Levy-paying businesses (large companies) contribute to the apprenticeship fund.
New changes will allow SMEs to access unused levy funds more easily.
Apprenticeship training and assessment
Functional skills
Apprentices must pass Level 1 or Level 2 Functional Skills in Maths and English unless they already hold GCSE qualifications.
Since 2024, apprentices aged 19 or over are no longer required to complete Functional Skills assessments.
Choosing a training provider
Employers must select an accredited training provider via:
the GOV.UK apprenticeship provider database (search by location and industry)
the "Rate My Apprenticeship" website for provider reviews and rankings
Research a number of different providers before choosing the best fit.
End-point assessment (EPA)
Conducted by an independent assessor (separate from the training provider).
Apprentices must demonstrate the knowledge, skills and behaviours they've learned during the programme.
The EPA may include practical assessments, interviews or presentations and written tests or project submissions.
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