Could Apprenticeships Solve the Skills Shortage?

Some of the UK’s biggest companies, from Network Rail to Citibank, are ushering in new talent and celebrating the successes of their existing apprentice cohorts. The prospect of a new wave of workers following the apprenticeship path to train and retain is a welcomed release from the bleak realities of the global skills shortage. The scarcity of skilled workers has been brewing for several years. However, the pandemic illuminated the problem in an unprecedented way.

The skills shortage has left a lasting effect on the labour market

The Great Resignation phenomenon, popularised during the Covid pandemic, saw workers assert their need for better work-life balance. More flexible work arrangements and employers that prioritise staff wellbeing became a top requirement for workers in the labour market. As a result, employees elected to resign from jobs (and industries altogether) that didn’t fit the bill. Yet, CIPD research shows that 36 percent of UK employers were struggling to fill the vacancies before the pandemic.

Lower-paying sectors, such as hospitality, and transport and storage, had already fallen victim to reduced labour supply from the EU. The pandemic only worsened the problem. These industries, as well as tourism and accommodation, were worst affected by lockdowns. In the post-pandemic world, a lot of the employees in these sectors chose not to return to their jobs.

Aside from labour woes, the lack of adequate investment in technology has left many organisations grappling with the skills gap. The glaring truth is, although we need new talent in the labour market, we’re also faced with the urgent need to upskill our existing workforce. The Government has spoken of its ambition to transition the country towards an ‘economy of higher wages, higher skills’. The only way to do this is to equip employees with the skills that are most in-demand in the economy.

Apprenticeships are an increasingly attractive educational route

According to ONS census data released in January 2023, apprenticeships are the highest qualification for 5.3 percent of England’s population. This figure has almost doubled since the 2011 census, increasing from 3 percent. Apprenticeships give workers of all ages the opportunity to gain new skills and retrain, while earning on the job. With the introduction of the Apprenticeship Levy in 2017, smaller organisations are able to offer this to their employees affordably.

SMEs can often have their apprenticeships subsided by as much as 95 percent. Only organisations with a payroll of more than £3 million pay the Apprenticeship Levy. But the Levy funds apprenticeships for all employers, and not all large employers use their funds. This means any unused contributions they’ve paid into the Levy are shared among smaller firms. So if you run an SME, an apprenticeship worth £7,000 may cost your business as little as £350.

If you run an SME, an apprenticeship worth £7,000 may cost your business as little as £350.

The opportunities that apprenticeships present to unlock untapped talent and potential is one of the reasons why we’ve partnered with Qdos. Select Level 3 and 5 management and leadership apprenticeships that Qdos offers now incorporate our award-winning STAR® Manager programme.

Foundational soft skills in crafting powerful questions that encourage employees to think differently, and creating an inclusive environment, are more important than ever. Management goes beyond technical skills. The key to engagement and retention is knowing how to get the best from your people. By focusing on these soft skills, STAR® is statistically proven to transform management capability at scale in as little as six months and improve retention rates.

Final thoughts

Apprenticeships are a key growth area in the UK. They offer a great opportunity to address the persistent skills shortage by encouraging people to gain skills in the industries that we need them the most. Apprenticeships are also a vital avenue for retraining employees, particularly to equip them with the modern management and leadership skills they need to build a strong workforce.

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We’d love to team up with strategic partners to help achieve our vision of transforming 1 million STAR® managers by 2025.

We partner with organisations all over the world, combining our unique experiences to create mutually beneficial and collaborative relationships. If you’d like to explore teaming up with us on this journey please do say hello and we’ll schedule an informal call.