The Rise in National Minimum Wage: What Does it Mean for Businesses Running Apprenticeship Schemes?

Following on from the recent increase in the national minimum wage, Sussex Business Times got into contact with Kelly Ball, Managing Director of Positive Outcomes – a provider of work-based training and apprenticeships – who explains what this means for businesses that run apprenticeship schemes

On October 1^st, the national minimum wage for apprentices under the age of 19 – or over 19 but in the first year of their apprenticeship – rose to £3.40 per hour. The new rate will see apprentices take home nearly £200 extra per annum.

There has already been a surge in demand for apprenticeships throughout 2016, which has no doubt been helped by last year’s wage increase. This saw the national minimum wage rise from £2.73 to £3.30 per hour for apprentices and was the largest real-term rise in hourly rates since 2007.

The government, which has pledged to create 3,000,000 more apprenticeships by 2020, believes that the rise in rates will further incentivise young people to consider an apprenticeship as a career option. The increase enhances the value of apprenticeships, highlighting the commitment from businesses to develop young and dynamic workers.

A rise in minimum wage also serves to broaden the appeal of apprenticeships, which in turn heightens the demand. The benefit to businesses offering apprenticeships is that they are likely to attract more applications, as more and more young people consider an apprenticeship as a viable option, which gives businesses a greater pool of talent to call upon.

A structured and well-planned apprenticeship programme allows employers to train apprentices and embed skills that fit the specific requirements of their business – which, in turn, makes them invaluable to the future growth of the business.

The employer has the opportunity to nurture and develop the apprentice in line with the skills that the business needs. Businesses should see apprentices as a malleable resource who they can instil their company’s ethos, training and high standards into.

This could be an excellent way to get your apprenticeship scheme off the ground. But if you’re serious about taking on an apprentice, I would advise that you talk to the experts here at Positive Outcomes. We have a team of Engagement Officers who will get to know you, your business and understand how we can tailor our service to meet your needs. Hiring an apprentice is a great way to increase productivity and growth.

Apprenticeships are a great way for businesses to invest in their future and ensure they maintain an experienced workforce. Apprentices learn on the job, benefiting from the knowledge and business practices of the existing team, while learning industry-specific skills. Hiring an apprentice is a great way for a business to promote growth.

A report by the Federation of Small Businesses (FSB) earlier this year found that apprenticeship opportunities in two-thirds (67 per cent) of small businesses leads to longer-term employment. The report highlights that SMEs are providing apprentices with a reliable pathway to stable and suitable full-time employment.

But it’s not only apprentices who are benefiting from this, it’s also employers who are gaining valuable additions to their workforce. When you bring an apprentice into your team, you will be introducing a wealth of enthusiasm, endeavour and fresh ideas. Businesses should be embracing the chance to enrich their workforce.

We do a lot of work with Sussex-based businesses wanting to recruit apprentices. Here are my top three tips on how to grow your business through an apprenticeship:

• The Grow Your Own Approach – Make sure you have a clear journey for your apprentice. This is a great way to make sure your apprentice develops into the employee you want them to be. But to do this you must have the end in mind, and work backwards. What role do you want them doing when they have completed their apprenticeship with you? And therefore what do they need from you to get there?

• Innovation sessions – Apprentices are full of ideas and enthusiasm, capitalise on this. We all know for businesses to thrive that innovation is key, include your apprentices in brainstorming sessions, or ‘future plans’ meetings, tap into the energy that your apprentice will bring.

• Productivity Reviews – Young adults are quick at tackling tasks, particularly when it comes to all things digital. They were brought up on social media, apps etc. It’s second nature to them. Apprentices are also quick learners and are willing to learn. They don’t come with bad habits inherited from previous roles, more often than not this will be their first role.

For more information on apprenticeships and the work that Positive Outcomes do, please visit http://www.positiveoutcomes.org.uk/ or call 0800 488 0488 to find out more.