National Apprenticeship Week: Building resilience and delivering growth in a recession – the business case for investing in apprenticeships

As we continue to battle economic uncertainties fuelled by the cost-of-living crisis and a recession, it is more important than ever for businesses to create resilience. This includes having a highly skilled, diverse, and loyal workforce.

This National Apprenticeship Week, Nichola Hay explains how an effective yet underrated tool to achieve business resilience is introducing professional apprenticeship programmes. Apprenticeships can boost staff satisfaction, help recruit and foster skilled talent, and prepare the business to bounce back from external challenges.

While it may be the start of a new year, the economic landscape facing UK business leaders in 2023 is far from the fresh start many would have hoped for. In fact, many of last year’s economic woes – labour shortages, declining GDP growth, and rapidly rising costs – all appear set to worsen.

To overcome these challenges, businesses must consider new strategies for increasing business resilience and creating growth opportunities.

One of the key drivers for delivering this will be creating and maintaining a highly skilled, productive workforce to support the business through the immediate economic storm and ensure it comes out the other side in a strong position to rebuild.

While often overlooked, this is where professional apprenticeship programmes and the UK’s Apprenticeship Levy can have a major impact. Since the launch of the Levy five years ago, we have seen some business leaders use it to unlock new skills and talent in their workforce, but equally we have seen a lot of uncertainty in the business community on whether these programmes are a worthy investment.

This National Apprenticeship Week, it is worth taking the time to dispel these assumptions and share how professional apprenticeship programmes can help address several of the critical challenges facing business in 2023.

Filling critical skills gaps

With unemployment rates at historic lows of 3.7 per cent and job vacancies still abundant, last year’s drought of talent will continue to frustrate employers’ attempts to expand or fill critical skills gaps and labour shortages in their workforce. This presents an additional threat to staff retention rates as many employees, pushed by the cost-of-living crisis, will be increasingly tempted to leverage labour shortages to secure a pay rise in the open labour market.

Many employers, who are also facing rising operational costs, will not be in a position to offer further pay bumps. As a result, they run the risk of losing staff to larger competitors – creating further unfillable vacancies and delivering a significant blow to productivity.

While the wider business community can often fail to grasp the full potential of apprenticeship programmes – often associating it exclusively with school and college leavers – apprenticeship programmes can offer on-the-job development to professionals at all levels of a business, for workers of all ages. They can be an incredibly method to help bridge the gap where external recruitment has stalled, or internal applications are lacking.

For instance, if a business is lacking staff in middle management, rather than searching for talent externally in a historically tight labour market – paying inflated salaries/recruiter fees and potentially settling for someone less skilled than desired – an apprenticeship programme allows existing staff to retrain for promotion.

Boosting staff retention

As well as helping to address the issue of existing vacancies, the right apprenticeship programme can also help to prevent future loss of staff. Offering enhanced learning and development opportunities has the benefit of demonstrating to employees the value that the business places on their personal and professional development – an investment that will help increase staff retention rates.

An apprenticeship programme that can provide a pathway to promotion or equip staff with new skills can strengthen the business’s credentials as a supportive and engaged employer. Additionally, case studies sharing the stories of candidates who have successfully completed apprenticeships can be a useful marketing tool to help with an external recruitment drive.

Those not in a financial position to offer salary rises should, therefore, consider how enhanced learning and development programmes could be crucial artillery to turn the tide in the ‘war for talent’. It is worth recalling that the so-called ‘Great Resignation’ was not driven primarily by salary considerations, but an overwhelming desire among workers leaving the pandemic to find a more purpose-led employer that respected their needs and comforts.

Creating efficiencies and delivering opportunities for growth

It is widely recognised that business growth is often dependent on being ahead of the curve and ensuring your business in a position to seize on new opportunities for expansion. A highly skilled workforce is essential fuel to delivering this growth.

For instance, if the business invests in an apprenticeship programme to fill a critical lack of digital and/or green skills amongst the existing workforce, it increases the chances that new opportunities to expand/improve the business offering will be identified and seized.

Similarly, the productivity gain of upskilling staff in digital skills can help to create efficiency gains for the business, increasing capacity and helping to deliver stronger profit margins.

How do deliver the right apprenticeship programme for your business

When setting out to incorporate apprenticeship programmes into your business, there are a few key things to consider from the outset. It is critical that business and HR leaders take the time to secure all relevant data on the current state of the workforce. This will prove helpful both for assessing the areas where action is most needed and for future benchmarking purposes.

For SMEs in particular – many of whom may not have the financial capacity for an entire L&D department – finding the right training provider to help design the most effective apprenticeship programme is essential. These experts can help identify where support is most needed in the business and design a programme best suited to address this concern.

Final Thoughts

An economic downturn can lead many businesses to struggle to justify new investment, with rising operating costs and diminished demand significantly jeopardizing profitability. However, unlike the 2008 financial crash, the present recession is predicted to be a “long but shallow”.

As such, it is critical businesses maintain a strong position to seize opportunities for growth as the economy recovers. This is partly why we are seeing a growing trend of ‘labour hoarding’ instead of mass redundancies associated with a typical recession.

While an apprenticeship programme will not be the solution to all the issues business leaders will face in the year ahead, a well-developed programme designed with your specific workforce and business priorities in mind, is an effective method of alleviating pressure and ensuring your organisation is in a position most conducive to long term stability.

By Nichola Hays, Director of Apprenticeship Strategy and Policy at BPP