Attracting and retaining a talented workforce is essential for any business, but for the tech industry this is a particularly pertinent issue; currently, the demand for tech and digital professionals far outstrips supply.
Research from The Open University estimates that at present, the UK has approximately 600,000 digital technology vacancies; a shortfall reportedly costing the UK economy a massive £63 billion a year.
Unsurprisingly, the COVID-19 pandemic has played its part; Tech Nation suggests that vacancies within the tech sector rose by over a third between June and August 2020. To put this into some sort of perspective, over the same three months, this level of demand was only exceeded by the health care sector.
The pandemic has forced tech businesses to scale in order to meet our needs as we have become more and more reliant on technology and digital services. In turn, questions have been asked about how the tech sector can attract, retain and nurture the teams needed to meet such a significant shortfall. These questions have never been more relevant than now.
Many tech SMEs are turning to apprenticeship schemes in answer to the problem. These schemes play a crucial role in identifying and training new employees; particularly those at the start of their tech career, equipping them with the skills they need to excel within their field of interest. Apprenticeship schemes do not only hold merit for young or new staff. They can also be of use in upskilling existing team members and building loyalty within a workforce.
What is an Apprentice?
To qualify as an apprentice, you must be at least 16 years of age and not in full-time education. As such, Apprenticeship Schemes are primarily designed for young people that are looking to gain skills and experience in a particular industry or type of job. However, they can equally be used by professionals wishing to retrain or upskill.
An apprenticeship scheme doesn’t have a particular blueprint; not all are the same. They can last a finite length of time depending upon the organisation running it and the nature of the scheme itself. The ‘qualification’ one receives at the end can vary in gravitas. Some provide the equivalent of an A-Level, while others can leave alumni of the scheme with the equivalent of a Masters Degree.
Importantly, these are not internships. Apprenticeships are a paid role, funded by the UK Government and the employer. They are typically a hybrid of ‘on the job’ training alongside mentoring and coaching from an experienced and seasoned professional. Apprentice positions also provide an individual with paid time off to study. It is this element of the program which facilitates the apprentice receiving a formal qualification at the close of the scheme.
Tech apprenticeship schemes address the shortfall.
Within the tech sector, apprenticeship schemes are particularly useful, as they address the aforementioned shortfall of experienced professionals available to hire. These programs require careful planning and considerable resource, but once up and running, an apprenticeship scheme allows a tech SME to overcome the hurdles of a highly competitive job market.
In addition, a well-run apprenticeship scheme allows a business to shape their workforce of the future. The program can dictate the nature and focus of the training received, with the view to retaining the graduates within the business after the close of the scheme. This intention solves one considerable problem for tech SMEs. Many tech firms use a particular tech stack or coding language, so while a seasoned professional may come with a host of qualifications or years of experience, they may not be well versed in the particular technologies that individual enterprise relies upon. A tailored apprenticeship scheme solves this issue entirely.
Tech apprenticeship schemes upskill.
Tech apprenticeship schemes are not just for those at the start of a career. Equally, they can be used to train existing team members in a new area or improve their skills in an existing line of work.
The tech and IT industries evolve at a huge rate. Skillsets must mirror if professionals are to keep up with industry trends and new technologies. It is unlikely that an employee hired as a graduate ten years ago will have the necessary qualifications or job experiences for the digital technologies shaping the tech landscape in 2021. In this scenario, a tech apprenticeship would allow these individuals to undergo formal training to develop and learn these emerging trends.
Tech apprenticeships are also useful for more senior employees as the retirement age increases. These more experienced employees are pivotal to a business and add significant value. A seasoned employee has a depth of organisational awareness and a base theoretical knowledge that cannot be underestimated. Client relationships are a great example. These long-standing professional relationships may be crucial for an organisation to retain custom and keep big account contracts.
An investment in ongoing learning for senior team members by a business enables the acquisition of new skills whilst fine-tuning established ones.
Tech apprenticeships build brand loyalty.
Tech apprenticeship schemes are a brilliant opportunity for a brand to establish a bank of loyal and motivated employees. Whether a young person just starting out, or an established employee wishing to learn and grow, research has shown that graduates from an apprenticeship program tend to be more loyal. In a study of over 550 firms offering apprenticeships, the majority reported that apprentices stay longer than other hires. A third of those asked also asserted that those who have passed through an apprenticeship program appear to be more committed to the business than their non-scheme colleagues. Furthermore, government research has shown that three-quarters of UK employers say that improved productivity, a better quality of product or service, and higher staff morale were all effects of hiring apprentices.
Employee turnover is expensive for an organisation. Quite apart from the financial costs involved in the hiring process, losing a colleague that you have invested time and money in is costly. When you factor in the lost productivity from a role left unstaffed, the lost organisational knowledge, and the loss in morale within the remaining team, apprenticeship schemes can be a useful and cost-effective way of demonstrating an investment in employees that can be rewarded through greater contribution.
Tech apprenticeships help a business evolve.
An effective apprenticeship scheme can help a tech SME to remold and grow over time. Yet again, we can look to the pandemic as an example of this. COVID -19 has forced brands to regroup and reassess how they may stay relevant and solvent during this time. What may once have been your best-selling product, may suddenly become your least required.
Sudden changes to consumer and business behaviours have had harsh consequences for those organisations unable or unwilling to adapt to the changing tides. By enabling existing staff members to train in new specialisms, a tech SME can ensure that their workforce are equipped with the relevant skills and knowledge, both as time passes and trading conditions change.
The financial considerations.
For tech SMEs considering hiring an apprentice, there are a number of financial aid solutions.
British businesses must only pay 5% towards the cost of training and assessing their apprentices. The remaining 95% is paid for by the government. The employer is responsible for agreeing on a payment schedule with the chosen training provider and then they pay that outfit directly.
UK businesses are also able to claim up to £2000 as an incentive payment if they hire an apprentice that starts their role between August 2020 and the end of March 2021. This is a part of the government financial support scheme launched as a result of the pandemic in an effort to get more people back into employment.
Looking back a few years, back in 2017, the government launched the Apprenticeship Levy; an additional tax on UK employers with a wage bill in excess of £3 million. Employers that hit this figure are now required to pay 0.5% of their payroll each month as a levy tax. This figure can then be reinvested back into their workforce in the form of apprenticeship training. This initiative was designed to encourage large firms to create or improve apprenticeship schemes and is particularly pertinent for tech SMEs.
Additionally, since 2019 employers that pay the levy and have unspent funds have the option of transferring up to 25% of the annual levy contribution to another employer. Known as an apprenticeship levy transfer, this process means UK-based tech SMEs could receive support for their apprenticeship schemes from another business, typically a partner, a company in their supply chain, a charity, or a local firm.
Tech Apprenticeships in 2021.
The pandemic has left a gaping hole in the job market. Mass redundancies particularly among young people have readdressed the need to open up new career options. Apprenticeship schemes go a huge way in addressing this, and so will remain highly topical into 2021.
Data from late 2020, shows that 11% of people aged between 16 and 24 lost their job as a result of the pandemic; a number which makes them twice as likely to suffer this fate when compared to older workers. Apprenticeships will be a vital mechanism for these young people, enabling a return to full-time work and offering them a secure framework in which to learn, develop and pursue new job opportunities.
In summary, tech apprenticeships allow greater control over staff training. They build a loyal and motivated workforce and allow businesses to better navigate the highly competitive job market. With this in mind, tech apprenticeship schemes are an option worth considering for established businesses who are confident they have the resources and knowledge required to implement a successful scheme.