By Karen Corry, Senior HR Consultant
As employment costs continue to rise due to wage increases and higher Employer National Insurance Contributions (NIC), many businesses are overlooking an effective and cost-efficient solution: apprenticeships. Despite their clear advantages, many companies are missing out on apprenticeship programmes that could help manage costs while developing a skilled, loyal workforce.
With this week marking Apprenticeship Week, now is an ideal time for businesses to take stock of how this employment path can serve their needs, especially as the cost of employing staff continues to rise. Apprenticeships provide a hands-on alternative to traditional graduate recruitment. They allow businesses to cultivate talent from the ground up, developing essential skills while apprentices earn a wage. In fast-evolving industries, where the demand for skilled professionals continues to outpace supply, apprenticeships offer a practical way to close the skills gap without the high costs of hiring externally.
While sectors like engineering, IT, and healthcare have embraced apprenticeships, many other industries have been slower to adopt this model. This creates a significant opportunity for businesses to build highly skilled teams, reduce recruitment costs, and address talent shortages.
Beyond cost savings, apprenticeships are an effective way to create job-ready candidates and tackle unemployment. With government reforms to the apprenticeship system on the horizon, there’s never been a better time to integrate apprenticeships into long-term talent strategies. These reforms promise to make programmes more accessible and financially viable, easing the burden of hiring experienced professionals.
Apprenticeships also offer businesses a way to manage rising employment costs. The current apprenticeship wage rate of £6.40 per hour will increase to £7.55 in April 2025, providing a cost-effective solution for developing talent while avoiding the higher expenses of traditional recruitment.
In addition, apprenticeships allow companies to build more diverse, inclusive workforces by attracting talent from schools and colleges. By customising training, offering mentorship, and providing clear career progression, businesses can foster loyalty and retain talent.
Despite this, research shows that financial services companies are missing out on this development avenue, perhaps due to outdated understandings of apprenticeships being exclusive to manual labour professions. A previous UK-wide study found that 35% of financial services organisations do not offer an apprenticeship scheme. The success of the 57% who do offer such schemes was obvious: 73% said permanent positions are usually offered upon completion and 78% said apprentices often enjoy long-term careers within their organisation.
With the UK Government planning overhauls in skills that would place new emphasis on apprenticeships, this is an area that requires attention across the economy. By investing in apprenticeships, companies can build a strong talent pipeline, reduce recruitment costs, and secure the future of their workforce.
To discuss any aspect, please get in touch with Karen Corry, Senior HR Consultant T: 028 9032 3466 E: karencorry@bakertillymm.co.uk