In our final piece of National Apprenticeship Week, Sheila Attwood discusses upcoming changes to apprenticeships and the implications on employers.

While traditionally university was the obvious choice for many professional roles, apprenticeships are becoming increasingly popular for both young adults and those wanting to change professions during their working lifetime. Rather than being saddled with debt at the end of their studies, more and more people are looking to earn money while studying, hence a greater take up of apprenticeships in recent years, in particular higher-level apprenticeships.

With the national minimum wage rate for apprentices set to increase to £7.55 per hour in April 2025 – worth 18% on the previous rate – for those aged under 19 and those aged 19 or over in the first year of apprenticeship, it may become an even more desirable route.

This offers a great chance for organisations to draw in new talent, build a more diverse workforce and create a pool of highly skilled workers for the future.

A turning point for apprenticeships

Apprenticeship wages, as we know them, have historically been extremely low. Even after qualification, the salary levels were lower than their university-educated counterparts. This made it harder for many young people to choose and justify this route of education. However, with continuously rising tuition fees, student debt reaching record levels and often low entry-level job salaries, obtaining a university degree is becoming less appealing to many young people.

With the minimum wage rate for apprentices increasing, apprenticeships now provide a realistic alternate path to career success, with the option to gain qualifications equivalent to a master’s degree without the high costs involved of higher education. Increased wages do not only make them a more feasible route to take, but also a more accessible one. A broader demographic will be able to take advantage of apprenticeships and ensure businesses tap into a bigger talent pool.

The shift to a growth and skills levy

Businesses may soon have more flexibility in terms of how they choose to allocate funds for training and development. The government has proposed to move from its current apprenticeship levy to a ‘growth and skills levy’ to encourage employers to invest more into training younger workers and ensuring they gain the necessary skills to thrive in today’s job market.

Currently, all UK employers with a pay bill exceeding £3 million contribute 0.5% of their gross pay bill to fund apprenticeship training. The strict structure of the current apprenticeship levy, however, has drawn criticism for limiting employers’ ability to allocate money where it is most needed. By removing these obstacles, the new levy suggested would enable companies to allocate more funds to upskilling employees in the way that best suits their business needs.

This change would help give companies a more targeted approach to employee development and professional growth. Employers will have more freedom to develop apprenticeship schemes that are more tailored to their sector, guaranteeing an ongoing source of relevantly skilled workers.

What this means for employers

By investing in apprenticeships, businesses have access to young professionals who are eager to learn and develop industry-specific skills and hands-on experience. Apprentices learn about the specific business from the ground up alongside studying, unlike graduates, who often require hands-on training to bridge the gap between academic knowledge and practical skills.

A more competitive and inclusive workforce

Higher apprenticeship starting pay rates means a larger pool of candidates, allowing companies to select top-tier talent who are motivated to contribute from day one. Many young people, especially those from lower-income backgrounds, have often been unable to consider apprenticeships due to historically low pay.

However, with wage rates for apprentices rising, it opens the door for more individuals. Having the financial security to choose an apprenticeship over alternative routes ensures that businesses benefit from a workforce that reflects a range of perspectives, backgrounds, and skills.

This is also in line with the broader government plans to implement the “growth and skills levy” in place of the existing apprenticeship levy. Employers will find apprenticeship programmes an even more valuable talent management resource.

The bottom line

The approaching pay rate increase should be viewed as an investment for the future. Pay increases will help businesses draw in top talent, increase retention, and create a workforce that is skilled, driven, and ready for the demands of the current labour market. Organisations that implement apprenticeships as an important part of their employment strategy will reap the most long-term benefits as they adjust to these changes.

Employers should see this as an opportunity rather than an obstacle – one that will drive growth, innovation, and success for years to come.

 

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