Apprenticeships guide for business owners to help you navigate the world of apprenticeships.

Apprenticeships offer the chance to earn as you learn, developing and learning skills in a role. This is gained by a mixture of learning on the job (and in the workplace), formal training with a local provider and of course the experience gained in the role itself. Here’s our apprenticeships guide for business owners looking to start a scheme.

Apprenticeships have been shown to bring benefits to both employers and employees. According to the National Apprenticeship Service:

  • 86% of employers say apprenticeships helped them to develop skills relevant to their organisation.
  • 78% say apprenticeships improve productivity.
  • They have also been shown to improve employee satisfaction, reduce staff turnover and reduce recruitment costs.

How apprenticeships work

Apprentices are required to spend at least 20% of their time off the job on training (this varies however depending on the requirements of the apprentice, for example, if they need additional training in English and maths). This is decided by the apprentice and the employer.

In addition, on-the-job training allows the apprentice to develop skills for the role whilst supported by a mentor.

Who can apply for an apprenticeship?

Anyone over the age of 16 and not in full-time education. They can be new recruits or current employees who want to develop and progress on the job. The apprenticeship must last for at least 12 months.

Types of apprenticeship

There are currently over 750 apprenticeship standards to choose from – which is perfect for businesses who want to find someone to bring in a new area of expertise.

The Apprenticeship Levy

In April 2017 the government introduced the Apprenticeship Levy which requires all employers with a salary bill of more than £3 million per year to pay into the fund. Those with a wage bill of less than £3m are not required to pay into the fund but benefit from at least 95% of the training and assessment costs paid for. Employers in this bracket are asked to pay a 5% contribution towards the cost (which is paid directly to the provider).

Employer obligations

Firstly, the employer must have a genuine job available with a contract that is long enough for the apprentice to complete their apprenticeship. The employer is responsible for paying the apprentice’s wages and ensuring they have selected and engaged a training provider.

The first step for the employer is to find the training provider (see the government’s list of registered providers). A total price needs to be agreed on for the cost of the training and the assessment. For an apprenticeship standard, this also has to include the cost of the end-point assessment which must be agreed upon with a provider selected from the government’s list.

Documents to have in place include:

  • An apprenticeship agreement.
  • A commitment statement signed by the apprentice, the employer and the provider.
  • For levy-paying employers, a contract for services with the main provider.

Levy-paying employers also need to:

  • Ensure the apprenticeship is in place for at least one year.
  • Pay the apprentice the correct wage for their age, for the time they are at work, in off the job training and doing further study.

Apprenticeship costs

Non-levy paying employers pay 5% towards the cost of training and assessing an apprentice. The government will pay the rest up to the funding band maximum. The training provider is paid directly and a payment schedule is agreed upon.

If you employ fewer than 50 employees then the government will pay 100% of the costs of apprenticeship training.

Employers with a wage bill of more than £3 million are required to pay the apprenticeship levy. Funds are managed using the apprenticeship service and can be spent on training and assessing apprentices.

The government will apply a 10% top-up to the funds in the account.

If are not enough funds, the employer pays 5% of the outstanding balance and the government will pay the rest. This is up to the funding band maximum allocated to each specific apprenticeship.

Funding and support available for apprenticeships 

Read our guide to accessing funding.

Employers will receive £3,000 for new apprentices of any age who join their organisation .

  • You can apply for incentive payments for these apprentices until January 2022.

The incentive payment is in addition to the £1,000 employers already receive for hiring an apprentice:

  • aged 16 to 18 years old
  • under 25 with an education, health and care plan or who has been in the care of their local authority

For apprentices aged:

  • 16 to 24, you’ll receive £2,000
  • 25 and over, you’ll receive £1,500

The payment is in addition to the existing £1,000 you’ll already get for taking on an apprentice who is:

  • aged 16 to 18 years old
  • under 25 and has an education, health and care plan or has been in the care of their local authority

Find out more here.

Where next?

The government has an online service to help getting started and manage the process.

You can also visit the government’s apprenticeship site as a source of information. You can download our free apprenticeships checklist

You may also like:

How much does it cost to hire an apprentice? 

10 things SMEs should know about apprenticeships 

Outsourcing HR: what you need to know