Small businesses miss out on apprenticeships benefits due to red tape fear

Small businesses are missing out on the benefits of creating apprenticeships, such as increases in productivity and the development of talent, according to new research.

Only 19% of small firms with a turnover of less than 5 million are likely to take on an apprentice, the Job Creation Survey by Barclays has found, which compares to an average of 41% amongst other-sized businesses.

It was published in a recent CEBR report that organisations taking on an apprentice would typically gain a productivity boost in the region of 214 per week. But smaller businesses are struggling to act on this, with the Barclays survey revealing that only 12% of the smallest firms are planning to increase the recruitment of apprentices, compared to an average of 19% of other business sizes.

When asked in a previous survey from Barclays, more than half (52%) of SMEs said they would not take on additional apprentices due to the time factors in setting a scheme up and the additional support they expected a young person to need.

Most specifically, 39% of micro companies - those with just 5 to 9 employees - felt that this administrative red tape was a restrictive barrier in taking on an apprentice.

However, more encouraging was the finding that 76% of SMEs would want to take part in a scheme that helped set up apprenticeships for young people.

Such a scheme is LifeSkills: Bridges into Work, which aims to support smaller businesses to overcome the barriers in taking on apprentices. This is a new programme designed to support 10,000 young people into work through helping small businesses to access grants, find applicants and train young people ahead of the role.

Chief executive of Barclays Retail and Business Banking is Ashok Vaswani, who said it is encouraging to see companies like Barclays taking on more apprentices in 2013, but as smaller business account for around half of the UK's GDP, more work should be done to ensure they see the benefits of apprenticeships.

He added: "The success of our own programme has encouraged us to double the number of apprentices we take on to 2,000, and to launch a new programme aimed at helping other businesses to reap the same rewards."

Copyright Press Association 2013