SMEs increasingly going down the apprenticeship route to aid their future growth

With the Government aiming to fund three million new apprenticeships by 2020, and with apprenticeship participation having hit a record of 871,000 during the 2014/15 year¹, new research from the Association of Accounting Technicians (AAT) has found that many of the UK’s 5.4 million SMEs² are realising the benefits of having one or more apprentices in their workplaces.

Over the past twelve months, two in five (39%) small to medium businesses with at least ten employees, across all sectors and industries in the country, took on at least one new apprentice – a figure that drops to 16% when also taking micro-businesses³ into account. And these businesses are recognising the long-term benefits of the apprenticeship scheme – of those SME owners who have taken on apprentices in the past, nearly half (43%) – representing around 175,000 small-medium sized companies⁴ – have kept on at least half of them.

The survey of 501 business owners which have between 1-249 employees, also showed a rise in owner desire to bring apprentices into their company. One in four SME owners (25%) said they plan to take on at least one apprentice over the next 12 months – a figure that again shows a significant rise when considering those smaller businesses with at least ten employees (50%).

However, small to medium sized business owners also voiced concerns over barriers that were preventing them taking on more or any apprentices, with one in seven (14%) saying that they were unable to afford them. Nearly one in three (28%) cited the lack of need to bring apprentices in as their biggest barrier, while nearly one in five (18%) held a preference to bring in workers who are already skilled.

Commenting on the findings Mark Farrar, Chief Executive of the Association of Accounting Technicians, said: “Becoming an apprentice brings a positive impact not only to the individual, but also to businesses and the wider industry that they are employed in. They are becoming increasingly popular for companies of all shapes and sizes, and also across all sectors – not just those traditionally associated with apprenticeship schemes such as construction and engineering – but also professions including accountancy and IT.

“Yet our findings also showed that three quarters of small businesses who have less than 10 employees have never taken on an apprentice at all, and therefore are failing to realise the benefits that these individuals – many of whom are keen to learn and hungry for career success – can bring to their company.”

The survey also revealed that nearly one in four (23%) SME owners believe that the ability to hire apprentices on a part time basis would help them bring more into their business. One in five owners (19%) cited less red tape surrounding the process of hiring apprentices as a positive consideration, while one in six (17%) said that there should be local council or government initiatives in place to support businesses taking more apprentices on.

Mark Farrar added: “The attention being given to apprenticeships at present, led by regulation such as the new apprenticeship levy on businesses, the new National Living Wage and the Government’s target for 2020, is welcome. However, the message we are receiving from small businesses is that they need plenty of support and encouragement in order to play their own critical part in bringing more successful apprentices through the system. According to Department for BIS research out this week, only 19% of SMEs currently offer a formal apprenticeship scheme⁵.

“Apprentices deliver great value to the UK economy – a 2014 AAT report put the value at around £1.8 billion⁶ – and we urge small businesses to consider what role they can play within their organisations, as well as policy-makers to continue to smooth the company pathway for bringing apprentices in.”

¹ Source: Skills Funding Agency

² Source: House of Commons

³ Micro-businesses are defined as having less than ten employees, according to the EU

⁴ Of the 5.4 million SMEs in the UK, 24% are employers (Source: Parliament). 24% of 5.4 million is 1.296 million. 31% of SME owners who responded to our survey said they have taken on apprentices in the past (401,760); and of these, 43% said they have kept on at least half of them (172,757).

⁵ Source: Department for Business, Innovation and Skills, May 2016

⁶ Source: AAT, March 2014

Notes to editors

Research carried out by Opinium Research between 21^st and 28^th April 2016. 501 online interviews were conducted with owners of UK businesses with a company size of 1-249 employees. 

About AAT

• AAT (Association of Accounting Technicians) is the UK’s leading qualification and professional body for vocational accountants, with over 130,000 members around the world. We offer a range of qualifications that are open to all regardless of previous qualifications or age, such as the AAT Accounting qualification which provides a non-degree route into chartered accountancy. Students encompass a wide range from school and college leavers undertaking apprenticeships, to older people hoping to change their career or learn the skills to run their own business.
• An AAT Accountant is a qualified accounting professional with the practical and technical skills needed to support businesses with their accounting activities. Typical job roles of an AAT Accountant include: Financial Accountant, Commercial Analyst, Senior Finance Officer, Payroll Manager, VAT Accountant and Tax Supervisor. An AAT Accountant can sign off the accounts for companies up to the audit threshold, where a company does not have a turnover more than £6.5 million and its balance sheet total is not more than £3.26 million.  The majority of businesses within the UK do not meet this threshold so currently over half a million businesses trust AAT Accountants to service their accounting requirements.
• AAT awards around 90% of all vocational qualifications in accounting in the UK, and is sponsored by the professional accounting bodies CIPFA, ICAEW, CIMA, and ICAS.