Admin hurdles deterring SMEs from hiring apprentices, study finds

Last year, the UK Government announced reforms for hiring apprentices — aiming to deliver 50,000 more apprenticeships for young people, backed by £725m in funding.

However, a study by Employment Hero suggests that Government funding alone isn’t enough for SMEs to take on apprentices, and that administrative red tape is deterring many businesses from hiring.

Despite the rise in apprenticeship hiring and the benefits SMEs can get from apprenticeships, the complicated system is proving to be a significant barrier, and it’s going to need more than financial support for SMEs to take the first step in recruiting. 

What are the Government’s reforms for apprenticeships?

Over the last year, the UK Government has announced new plans to support apprenticeship hiring for businesses across the country.

As part of its “fast track” apprenticeships reforms announced in February 2025, these changes include updates to training and development for new short courses, as well as cutting approval time from 18 months to as little as three months.

Other schemes and support initiatives have been introduced since then, including the hospitality apprenticeship scheme, designed to match young people with local hospitality employers. The Government also announced during its 2025 Autumn Budget that it would offer free apprenticeship training for SMEs in 2026, meaning that costs for apprentices under 25 would be fully funded.

Work and Pensions Secretary Pat McFadden said: “Britain’s future depends on getting more young people into good jobs with real prospects. These reforms will slash bureaucracy so we can train people faster in the industries where they’re needed most.”

Complex processes are blocking SMEs from hiring apprenticeships

Despite promises that these reforms would make hiring apprentices easier for both young jobseekers and businesses, the reality is proving to be complicated.

Apprenticeship hires were up by 7.7% in the 2025/26 academic year, and as a study by Employment Hero reveals, 73% of SME leaders are willing to hire apprentices and take advantage of the Government’s support.

However, the same survey found that the Government’s administrative system has become a barrier for apprenticeship hiring. Specifically, statistics show that 43% of SMEs say navigating the apprenticeship system is too complicated, which has threatened to deter them from hiring.

“There is clearly an appetite from SMEs to give apprentices a key role in driving their business forward.” Kevin Fitzgerald, UK Managing Director at Employment Hero, said. 

“This has to be matched by the Government to improve and remove the unnecessary red tape that might hold SMEs back from the productivity gains on offer with the apprenticeship scheme.”

In a letter to McFadden, independent charity Edge Foundation has called on the Government to “take decisive action to help more SMEs recruit apprentices”.

“SMEs are the backbone of our economy and are often where young people get their first experience of work. Yet despite their vital role, their participation in apprenticeships has declined markedly,” the letter reads. 

“Without stronger support for SMEs, we risk losing these vital entry-level pathways that build skills, confidence, and careers for the next generation.”

How can SMEs hire without the hurdles?

While the complicated system may be dissuading SMEs from taking on apprentices, this doesn’t mean that hiring them is completely off the table.

Instead, businesses should assign a dedicated person to oversee the process. Specifically delegating the responsibility to manage contracts, learning plans, and reporting can make it a lot less intimidating. 

If you are concerned about cost, flexible apprenticeship models — such as part-time or shared apprenticeships — can help mitigate this. As apprenticeship wages are set to increase from April 2026, this approach can be especially useful for smaller businesses looking to bring in talent without stretching their budget.

Moreover, starting with interns or trainees on a learning plan similar to an apprenticeship can also be a good stepping stone. As long as interns are over 16, not in full-time education, and not enrolled in another funded apprenticeship, you can transition them into a full apprenticeship programme. This not only saves time when searching for suitable apprenticeship candidates in your recruitment process, but also lets you continue benefiting from the skills your intern already brings.

All it takes is the right approach. That way, SMEs can still tap into skilled young individuals and benefit from the productivity gains apprenticeships can offer, without drowning in paperwork.