Apprenticeship Scheme VS Kickstart Scheme
With the New Year comes more budget clarity for those business owners who need to take on someone new but, until now, didn’t know if they could afford it. Experts at the Bank of England have suggested unemployment may reach 2.6 million by the middle of 2021 – a terrifying prospect for all of us. In an effort to stunt this development, the government have announced 2 new hire incentives to persuade more businesses to bring on someone new, and I’m here to make the clear comparisons that you need.
The Kickstart Scheme
In early July 2020, Rishi Sunak announced the ‘Kickstart Scheme’ to provide a financial incentive to encourage employers to employ young people. It’s any business owners’ dream: the Government pays the wages, national insurance and pension contributions; you get £1,500 per new employee; you don’t have to do any of the advertising for the vacancy. Who wouldn’t want that?
A lot of the business owners who originally got excited at the prospect are struggling with just how difficult they’re making it. Yes, the government does pay the wage contributions, but only for 25 hours p/w and only for 6 months. That means that if you wanted to employ the new starter for the whole working week, you would have to top up their pay with your own funds. This, however, can be solved with the cash incentive given with the scheme, as long as you bear in mind the other costs you may encounter. In order to be eligible for this scheme, you must be aged between 16-24 and deemed at risk of long-term unemployment. This means that the majority of people eligible for this scheme are school leavers who have never had a job before, so you must take the time to train them in house before they become productive. This means that, using the £1,500, you must take into account: support, training, uniforms, setup costs and equipment on top of any extra hours you want to employ the Kickstarter for. This will still, however, be far more cost-effective than taking on a new, full-time hire at minimum wage.
Since this scheme only covers you for 6 months, it’s recommended that the employee progresses and stays in the business. Anyone who has taken on a new starter will know, it’s not easy for most people to ‘hit the ground running’ and so a lot of time will be invested in getting the new employee used to how the business works. This level of business knowledge is something that purely comes with experience, and so the Kickstarter would certainly be an asset worth retaining.
Other factors to take into consideration are:
- The job must be a new position, not displacing or replacing a previous role.
- The role will only be subsidised for 6 months.
- The job can only be advertised through the JobCentre.
- The job must be deemed ‘high quality’ by the JobCentre under government guidance.
- The new starter must be deemed ‘at risk of long-term unemployment’ by the JobCentre.
- The new starter must be aged 16-24.
- The new starter must be actively in receipt of Universal Credit.
- The employer must provide extensive training to support the employee’s long-term job prospects, including job search support.
In essence, if you are looking for a low cost, short-term fix for a job role that requires little onboarding then Kickstart may be an idea – though, you must be very careful to stick to their strict guidelines. If, however, these terms don’t suit you then the Government have luckily released a far more lenient option for those wanting to build a team to help their business through recovery in a high quality, cost-effective way: the Apprenticeship Guarantee Scheme.
The Apprenticeship Guarantee Scheme
With the Apprenticeship Guarantee, a lot of the queries around candidate specifications are calmed. In this scheme, the employee can be any age 16+ and they can even have a degree as long as it doesn’t overlap with the qualification being offered through the apprenticeship. As well as that, the employee will get an industry-recognised qualification that would probably make them want to stay in the business that has helped them grow as well as you gaining an experienced employee.
The downside when comparing Kickstart with the Apprenticeship Scheme, is that you must come up with the £4.15 minimum wage yourself. However, when you consider you can receive up to £4,000 for every new hire without the need for training costs (since training is included with in the apprenticeship price) it’s possible that this grant would provide a huge financial ease, hopefully making it possible for you to afford the wage. Other than that, you get a completely trained employee who can enter the business with new, fresh ideas and get the rest of the team up-to-speed with all the industry knowledge they learn in their weekly training sessions. Plus, many training providers actually offer advertising and shortlisting as part of the service, so you know you’re getting the best applicants from a huge pool of potential apprentices.
Other factors to take into consideration are:
- You interview and hire the apprentice yourself, with some providers offering advertising, shortlisting and pre-screening.
- The apprentice can have a degree-level qualification.
- The apprentice can be any age 16+.
- There are no limitations of universal credit/being deemed as at risk of long-term unemployment.
- Your apprentice can use their expert training to bring fresh perspectives and share new knowledge with colleagues.
- Research has shown that apprentices improve productivity, staff morale and customer satisfaction.
- Depending on the training provider, training can take place in the workplace so that they don’t ever have to go offsite.
In summary, the Apprenticeship Guarantee Scheme is great for those employers wanting to find someone that adds value to their team without the hassle of training them in house. However, the Kickstart Scheme is still a great opportunity for those wanting a low cost, short-term fix – especially those in a more corporate situation such as Tesco who have already pledged to offering 1000 placements. Alternatively, you could opt to take advantage of both offerings. Since you’re covered for 6 months with the Kickstart Scheme, why not put that employee onto an apprenticeship afterwards to further their industry-knowledge and have them grow further with your business? Putting an existing employee onto an apprenticeship is often highly valued by employers, since they have gotten to know the business and which areas they want to expand in and which areas they deem as weak points.
How Do I Proceed
If you are ready to take advantage of one of the cash incentives offered when employing an apprentice, get in touch with us at email@example.com or call us at 0333 090 4510.
We will firstly recruit your apprentice, filtering through the applicants to ensure you only interview the best of the best. Then we will train your apprentice, having one of our industry professionals impart their invaluable knowledge. Finally, we will support you as your business recovers, offering personalised mentoring to assist in your development.