The additional support for apprenticeships in yesterday’s budget may sound like welcome news but small businesses still need more effective help with the cost of employing and developing someone at the start of their career. The support on offer remains well below 10% of typical graduate employment costs and eligibility criteria very narrow, warns Angelica Solutions.
Sarah Vaughan, Founder and Director of Angelica Solutions, comments:
“Fully loaded salaries and the time experienced colleagues spend supervising and mentoring a new starter remain a substantial commitment. Moreover, minimum wages and the national living wage are all set to increase by 3.9%, which is above the inflation forecasts of 3.1% this year and 3.4% next year. How are small businesses expected to fund this? Cutting recruitment and training AI agents is looking like a far more attractive option.
“This Budget needed to make it more affordable for small businesses to recruit and develop people starting their careers. The measures announced do not go far enough to address the underlying problem: businesses are being asked to invest in tomorrow’s workforce while facing increasing pressure to make every hire pay for itself immediately.
“Every industry can make a case for special treatment, but this challenge cuts across sectors. Whether you run a restaurant, an insurance business or a consultancy, taking on someone who needs training means paying their salary while committing experienced colleagues’ time to helping them develop.
“A larger business may have the resources to recruit a cohort of graduates and wait two years for that investment to pay back. For a small business, even one additional salary is a significant commitment and the pressure for that person to contribute commercially starts much sooner.
“Having taken on a summer apprentice, I have seen that first hand. Existing apprenticeship funding and hiring grants are welcome, but eligibility can be narrow and substantial employment and supervision costs remain with the business. Someone starting their career at 25 or older still needs an opportunity to learn.
“I would like to see meaningful support towards employment costs over the first two years: 50% in year one and 25% in year two for small businesses taking on a graduate or school leaver in their first substantive job, with eligibility that recognises people enter the workforce at different ages.
“Without that support, the immediate commercial case can favour an experienced contractor or automating a task over developing someone new. Those choices may solve today’s problem, but they do not build the workforce businesses will need tomorrow.
“The consequences extend beyond recruitment, if smaller firms cannot afford to build their teams, their ability to grow, innovate and challenge established players is constrained. In insurance, that affects businesses throughout the value chain, from specialist consultancies to managing general agents and claims firms.
“Helping small businesses develop talent is an investment in future competition and consumer choice. We need an economy in which smaller firms can afford to grow, rather than one where only the largest businesses have the resources to invest for the long term.”
