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The government has introduced a range of incentives to encourage employers to take on and train up younger workers. We look at what’s available.
Last updated: 01 Feb 2021 7 min read
The economic impact of Covid-19 has been particularly severe on young people. The under-25s are over-represented in sectors such as hospitality and leisure, which have been hit hardest by coronavirus and the resultant lockdowns: research suggests younger workers have been more likely to be placed on furlough or made redundant, and the unemployment rate among those aged between 16 and 24 has risen far more sharply than across the rest of the UK working population since the start of 2020.
This situation has resulted in a decline in the availability of training and apprenticeship opportunities for young people, says Joseph Hedley, assistant director for sales business development at Northumbria University. “At the moment, Covid is having significant impacts on apprentices with companies forced into furloughing or making staff redundant,” he explains. “Going forward, employers are unlikely to be recruiting apprentices in the numbers we have seen recently, meaning there will be fewer apprenticeship vacancies available for young people to access and more competition for the fewer opportunities.”
The UK government, as well as the devolved administrations, have made significant efforts to support and subsidise training for young people in a bid to address the rising unemployment rate, and to close the skills gaps faced by employers in many parts of the economy.
Clare Phizacklea, managing director of Busy Bees Education and Training, says: “Although the skills gap for some sectors has closed, largely due to lack of vacancies, key employment sectors such as in health, social care, IT, and business services have been much less affected than other areas of the economy and still have high numbers of hard-to-fill vacancies.”
So what assistance is available for employers who are considering taking on younger or less skilled workers?
Announced by chancellor of the exchequer Rishi Sunak in July last year, this programme is aimed at helping young people – those aged between 16 and 24 – find work. It is open to those receiving Universal Credit and provides a subsidy for employers in England, Scotland and Wales who take on young workers for six-month placements.
“It gives us a chance to embed these young people into our culture and train them up to a point where they can really contribute to the business” Luke Tobin, managing director and founder, Digital Ethos
Luke Tobin, managing director and founder of marketing agency Digital Ethos, says: “We’ve needed to look at trainees and apprenticeships for a while but Covid-19 put that on the back-burner – so the Kickstart Scheme has been a breath of fresh air. In the creative industries, you need real-world experience – and for people coming out of university, it is very difficult to break into the industry if they don’t get that experience.”
Tobin plans to take on six new members of staff: “Some will go into the campaign teams and others into office admin. Under the scheme, 25 hours a week are paid for by the government for the first six months, and there is a training and equipment fee of £1,000.
“We will make up the difference in salary to 40 hours a week – but this is a really substantial contribution from the government. It gives us a chance to embed these young people into our culture and train them up to a point where they can really contribute to the business.”
The Kickstart Scheme is currently open for placements that start before the end of December 2021.
In England, says Phizacklea, the government has extended the apprenticeship incentive payment scheme. She explains: “Employers can claim up to £2,000 for their new recruit, up until 30 April 2021 [although the individual must start by 31 March]. This is in addition to the £1,000 employers already receive for hiring apprentices who are 16 – 18 years old, or between 19 and 24 and with a local authority education, health and care plan.”
Phizacklea adds: “You aren’t limited to just a single apprentice as a business can take on several, so this funding can be a really cost-effective way to help businesses develop and grow their workforces.”
Wales is offering similar incentives to employers: the Apprenticeship Programme in Wales is funded by the Welsh government, with support from the European Social Fund. A spokesman adds: “Businesses in Wales can begin the journey of hiring an apprentice through speaking to an Employment Engagement Adviser, who will talk them through the different apprenticeship routes and levels available.”
Meanwhile, in Scotland, the devolved administration announced a new Apprenticeship Employer Grant in December. This provides £5,000 for employers who take on or upskill an apprentice aged under 25, with £3,500 available for those aged 25 or over.
And in Northern Ireland, the local government is offering incentives worth up to £3,000 for employers to recruit new apprentices up to 31 March, while any apprentices who are brought back off furlough before this date will also entitle businesses to further payments.
Employers in England can now apply for a £1,000 cash boost to help them take on new trainees. The government defines traineeships as programmes of education and training that help young people get the skills and experience they need to get an apprenticeship or a job, with placements lasting between six weeks and 12 months.
This £1,000 cash incentive – which is currently available until 21 July 2021 – is intended to help businesses with the cost of providing a high-quality work placement, including those incurred providing facilities, uniforms or helping with travel costs. Businesses will receive the cash bonus for every trainee they take on up to a maximum of 10 trainees, and they can claim the cash incentive for all work placements that have been completed since 1 September 2020. More information is available at GOV.UK.
In recognition of the rising unemployment levels caused by the pandemic, the UK government has recently set up a service which matches apprentices who have been made redundant with potential employers. Full details can be found at GOV.UK.
Businesses could also consider degree apprenticeships, which help to train younger workers up for more skilled roles. Hedley says: “Degree apprenticeships provide employees with practical and relevant skills and knowledge that can be applied immediately in the workplace. They involve part-time study, alongside continued work within the business.”
Employers can benefit, he adds, from enhancing existing employees’ knowledge and skills so they can progress to more senior roles. “This can save the risks and costs of recruitment.”
The Prince’s Trust, the charity that supports employment and entrepreneurial opportunities for young people, has a Get Hired scheme that businesses can take part in. Get Hired is a low-cost recruitment platform aimed at “forward-thinking” businesses looking to hire employees from a wide range of backgrounds.
The Prince’s Trust also runs a mentoring scheme that gives business owners and entrepreneurs the opportunity to work with a young person who is making a start in self-employment. The Business Mentor scheme typically runs for at least two years and requires a commitment of around five hours a month. The Trust says that mentors can play a vital role in helping young entrepreneurs develop their ideas, find new networks and grow their businesses.
The UK government has also announced that National Apprenticeship Week will take place this year between 8 and 14 February, with the theme of ‘Build for the future’. However, ministers have said that events during the week will largely take place online due to the pandemic.
Keep your eye on the National Apprenticeship Service website for upcoming information on useful events to attend.
Strategy and Planning