Apprentices contribute over half a BILLION pounds to UK small businesses

The work of apprentices has directly resulted in more than £550m in cost-saving or revenue-generating activities for employers, according to research by tech startup Multiverse.

The report explores the benefits that apprenticeship schemes bring to the trainee. Multiverse has found that apprentices are 9% more likely to enter a full-time role after their course has finished, compared to university graduates.

The Multiverse report builds a compelling case for the hiring of apprentices. But, research comes after Vodafone Business found that 51% of businesses are cutting plans for apprentices, due to the rising cost of living impacting their budgets.

Despite the challenging economic environment, Multiverse is encouraging business owners and young people to see the mutual benefits that apprenticeships can bring.

Improved finances and greater talent retention for employer

Apprentice providers offer hands-on experience, a salary, and training to trainees. Some firms hesitate to employ a worker who may take longer to learn the tricks of the trade than fully-qualified colleagues.

Research conducted by Vodafone Business recently uncovered that, of the 60% of firms who have taken on apprentices in the past, just over half had axed their schemes because of soaring business costs, including energy and transport.

The research by Multiverse tells a different story, however. Rather than a one-sided investment by the employer, taking on apprentices can in fact be a cost-efficient business strategy.

Multiverse is a tech startup that uses smart algorithms to match businesses with apprentices. The firm ranked various metrics of success to arrive at the figure of £550m as the overall contribution that apprenticeship schemes add to UK small business.

Staff turnover was found to be dramatically reduced by the use of apprenticeships. The data shows that 93% of trainees remain at the same company once they become qualified, saving firms thousands in avoiding hiring and onboarding fees.

Multiverse apprentices also report a 50% decrease in time spent unproductively. These time-savings are equal to nearly six working weeks over one year.

Digital skills shortages are threatening the recruitment plans of UK startups, as employers struggle to find job-ready talent.

Multiverse says it works directly with business leaders to provide tailored apprenticeship programs that service a business’ unique needs. It argues that shrinking this gap will prevent an average of 8.5% of annual revenue from being lost as a result of poor data literacy.

Fewer companies asking for undergraduate degrees

Organisations appear to be catching up to the opportunities of training and upskilling an apprentice, versus hiring university graduates.

For decades, social stigma towards people who choose to enter the workforce upon leaving school, rather than gain a higher education qualification, has had an unfair influence on recruitment decisions.

A 2017 Harvard Business School study found that between 2007 and 2010, job postings listing a bachelor’s degree requirement as a condition of employment rose by 10%.

Now, the tides are shifting. Last year, the number of companies setting a 2:1 level degree as a minimum qualification in job adverts dropped below 50% for the first time, according to the Institute of Student Employers (ISE).

Younger Gen Zers – aged 16-18 – also seem awake to the change. In 2022, Multiverse received one apprentice application every 11 minutes. It says this is more applications than Oxford and Cambridge universities combined.

Euan Blair, CEO of Multiverse, describes the statistic as “proof that apprenticeships are no longer ignored; they’re highly desirable and in-demand.

“Apprenticeships are going from strength to strength as a truly outstanding alternative to university, with apprentices providing immense value to businesses.”

Of course, apprenticeships are a long-term investment. This might not be too attractive for today’s employers, many of whom have implemented a hiring freeze as a way to survive the poor economy.

Handily, government support initiatives take on a large chunk of the financial burden. Employers providing formal study for an apprentice can use the Apprenticeship Levy to apply for funding that will cover any expenses – another incentive for SME owners.

Apprenticeship certificates are more valuable than a university degree

For the apprentice, individuals stand to profit as much as employers. The analysis also found that the average Multiverse apprentice now earns between £26,000 and £30,000 a year.

That’s compared to £25,000 a year for the typical undergraduate, confirming that apprenticeship schemes can be tangibly more valuable than gaining a degree.

The results will surprise some students. Startups research recently uncovered that today’s UK graduates expect a base salary of over £5,000 more than the average starting salary.

The biggest disparity between apprentices and degree holders is in the design, creative, and performing arts industries. In this sector, mentees earn around 40% more than university graduates.

And that’s before factoring in the huge toll of student debt. Most institutions today charge £9,250 per year of study; amounting to an average debt toll of just under £28,000.

Apprentices, meanwhile, get a tuition-free route to a career and generally qualify with no debts, and start earning from day one.

The data also reveals the impact of apprenticeship programmes on the retention and future employability of apprentices. 96% of Multiverse’s early career apprentices have stayed in work or training after their apprenticeship.

Notably, the group’s employability rating exceeds those of graduates. Employment for uni leavers was just 87% in 2022.

This suggests that modern employers are wising up to the long-term benefits of hiring apprentices, as an effective method for developing motivated, skilled, and qualified workers.