What does 'apprenticeship transformation' mean for UK SMEs?

David Cameron recently announced plans to create three million apprenticeships by 2020. While the prospect of so many skilled youngsters entering the jobs market may sound like a boost for business, several industry bodies are raising concerns about the Prime Minister's ideas.

Skills shortage

One of the main goals of ‘apprenticeship transformation’ is to address the growing skills shortage faced by UK businesses.

Although the 2015 CIPD/Hays Resourcing and Talent Planning Survey found that 44% of companies plan to recruit additional staff in 2015, statements by the Federation of Small Businesses (FSB) cast doubts over the feasibility of these goals. Moreover, 84% of UK CEOs surveyed by PwC reported that finding the right staff is a ‘major concern’ in their organisations.

Many people have suggested improving and expanding apprenticeship schemes as a solution to the current crisis, so why isn't David Cameron's latest announcement being welcomed by all parties?

Quality, not quantity

Some observers think that the PM is too focused on making headlines by creating a large number of apprenticeships.

According to the new proposals, companies pitching for government contracts worth £10m or more must outline how many apprenticeship positions the contract will support. The Confederation of British Industry is concerned that this requirement could encourage businesses to create large numbers of low-paid positions instead of giving apprentices maximum return for their efforts. What’s more, if roles are created solely to win a government bid, new apprenticeships might not even reflect real demand.

Red Tape

Adam Marshall of the British Chambers of Commerce has raised concerns about the strain that apprenticeship requirements could place on SMEs. In a public statement, Mr. Marshall said:

‘‘Everyone wants to see more high quality apprenticeship places being created but adding red tape and bureaucracy to government procurement opportunities isn’t the way to make it happen.’

In Mr. Marshall's view, it is important that apprenticeships are viewed “as positively as academic qualifications” by employers. Securing this change will be extremely difficult if apprenticeships are reduced to an irritating obstacle that SMEs must navigate to compete for government contracts.

If you're a business owner who is concerned about the financial impact that hiring apprentices could have on your company, contact Dukes Bailiffs to discuss keeping your cash flows healthy.