Apprenticeship schemes deliver mutual benefit for business and young people

Steve Wilding of ABB Measurement & Analytics UK and Ireland.

At any one time there are between 12,000 and 20,000 apprenticeships offered on the government apprenticeships page at a variety of companies large and small, including BT, The National Grid, Rolls Royce and ABB. There were almost 22,000 places offered on degree apprentices in the last academic year, double the number from the previous year. Steve Wilding, Local Sales Unit Manager for ABB Measurement & Analytics UK and Ireland explains how an apprenticeship can be a great route to a rewarding career.

There’s no mistaking that the UK has a world class education system, with three UK universities featured amongst the top institutions in the world according to the Times Higher Education World University Rankings 2020. ABB has a long-standing partnership with Imperial College London, which features at number 10 in the list.

Traditionally recognised as a good route to securing a good job, university education continues to attract thousands of young people each year, with schools especially keen to get as many of their students into Higher Education as possible. This is supported by figures published by UCAS in July showed that young people in England are more likely to apply to go to university than ever. The proportion of 18-year olds applying is up 0.2 percentage points on last year (38.1%), which is about 8 percentage points higher than most other countries in Europe.

While a university education undoubtedly remains something to aspire to, the question is whether many students are getting the best information regarding all the options open to them and the varied routes to success once they leave secondary school.

What are the options for further education in the UK to meet the demand for a skilled workforce?
Much coverage has been devoted in both the national and trade press about the shortage of skilled workers available to take up jobs in key sectors including manufacturing and engineering. To help counter this, in 2017, the UK government introduced an apprenticeship levy which required all companies with a pay bill of more than £3m to set aside 0.5% for apprenticeship schemes. Employers have 24 months to use their funds once they enter their apprenticeship service account. After this point, their funds will expire, with the intention being to encourage employers to invest in high-quality training and assessment.

The creation of the levy has seen a very large growth in the number of apprenticeships and degree apprenticeships available. Although the introduction of degree apprenticeships is relatively new, large companies like BT, National Grid and ourselves at ABB have been running apprenticeship schemes for a long time. In turn, we are rewarded with loyal team members who add value to our business. Indeed, many of those that undertake apprenticeships have often progressed through the ranks to run departments and divisions within the company, myself being a good example of this

What do school children think?
An Ipsos Mori poll commissioned by the Sutton Trust, an organisation set up by Sir Peter Lampl to address the issue of social mobility in the UK, questioned 2,381 schoolchildren aged 11-16 in schools in England and Wales between February 5 and May 25 on studying and their hopes for the future.

It found that three-quarters (75%) think it is important to go to university, down from 78% last year and a high of 86% in 2013. Of the young people who said they are unlikely to go into higher education, the most common reason was that they do not like the idea or do not enjoy learning and studying (58%), followed by concerns about finance and debt (44%). An apprenticeship scheme can offer these children an alternative route to achieving their desired career success and is becoming more widely available.

A Department for Education spokesman said, “university isn’t for everyone” and the Government does not want one route to a career “to be considered better than any other”.
“That is why we are transforming technical education in this country to put it on a par with our amazing academic system,” he said.

Room for improvement
While the Government’s view of apprenticeships is encouraging, there is concern that schools are still failing to present apprenticeships as a viable and worthwhile alternative to university which can help young people develop both their skills and their confidence while also having the opportunity to earn.

I believe there are two reasons for this. Firstly, many teachers are themselves university graduates, with relatively few entering the profession from business or industrial backgrounds. Secondly, companies themselves are failing to do enough to involve themselves in schools and demonstrate the opportunities they can give.

In short, a lot more must be done to tell the wider story of apprenticeships and why it is in everyone’s interest to do more to promote them.

What is in it for companies that take on an apprentice?
Those companies that do have an established apprenticeship report several benefits. In particular, research conducted by the Centre for Economics and Business Research (Cebr) found that companies with an apprenticeship scheme in place saw productivity in the workplace improve by 76%. The research highlighted that, on average, each apprentice brings a gain in productivity of more than £10,000 per year for their employer, with figures for some sectors being even higher.

Similarly, 75 percent of companies reported that apprenticeships improved the quality of their product or service making them more competitive. Moreover, industry research claims 8 out of 10 customers prefer to buy from companies which employ apprentices. Other fringe benefits that apprenticeships contribute towards include increasing employee satisfaction and a reduction in staff turnover as apprentices prove to be loyal staff members.

Apprenticeships can also provide the opportunity to shape the workforce. There are widely reported skills gaps in some industries; in some areas up to 30% of positions remain unfilled for long periods of time. By recruiting and training apprentices, companies can develop people in a way that promotes the specific skills required both for their business and industry as a whole.

What is in it for our young apprentices?
Apprenticeships can be seen as the best of both worlds: they combine hands-on workplace training with 20% of the working week dedicated to academic training in a college or university. The current minimum wage rate for an apprentice under 19, or in their first year – regardless of age – is £3.70 per hour. Those 19 or over who have finished the first year are entitled to the national minimum wage, which from April 2019 is £6.15 for those aged 18-20, £7.70 for 21-24-year-olds, or £8.21 per hour for those aged 25 and above. The best apprenticeships pay annual salaries from £16,000 to £23,000, but competition is fierce.

A government backed hub that promotes the idea of apprenticeships to parents says, “Perceptions of apprenticeships as entry-level, trade-based, low-quality courses persist – yet this couldn’t be further from today’s reality. Changes to funding, minimum requirements and the development of occupation-focused standards have driven up the quality of apprenticeships, and employers are taking notice. While earning a wage, apprentices gain highly transferable skills and training (which could include a degree) to set them up for a wide range of career paths. Alongside this, they’ll gain hands-on experience in a real-world setting – an invaluable asset when it comes to future employment.”

Many new university graduates face the daunting challenge of trying to gain employment after university only to be told they require some form of industry experience. The benefit for those that have completed an apprenticeship is that they are years ahead in terms of experience in the workplace and report a quicker route up the career ladder accordingly.

Shaping a brighter future
There are many reasons why students choose university, and these are not always linked to career goals. Apprenticeships are no longer limited to careers in a trade. The breadth of apprenticeships available now cover many roles once open exclusively to graduates. It may take a while to change perceptions, but apprenticeship schemes will continue to thrive and deliver the workforce of the future.