Apprenticeships: SMEs' Competitive Power Move

Entrepreneur

3 days ago

Start-ups and small businesses are the lifeblood of the UK economy, creating over 60% of private sector jobs and representing more than 90% of all employers.
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But many of these businesses have overlooked one very effective, affordable growth strategy - apprenticeships. Despite their immense proven value, apprenticeships are largely underused by small and scaling businesses. Why? Because too many founders view them as complex, expensive or simply a luxury they can't afford. That perception couldn't be further from the truth.
Apprenticeships are misunderstood - and that's the real barrier
The biggest issue isn't the apprenticeship model itself but lack of awareness. Many SMEs are simply oblivious to how apprenticeship funding works or how it can be so accessible. For example, although it's true that non-levy-paying employers contribute a very small portion of the cost of training, large corporates such as Co-op are actively redistributing their unused levy funds to support SMEs through a process called 'levy transfer'. This means SMEs can have 100% government-funded training - they just need to know how to tap into it. Despite this, only four per cent of employers spend their full levy, and there's an estimated £1bn in unused funds that could be powering SME growth across the UK.
Complexity is a myth
At Pathway CTM, we've worked with thousands of young people and connected them directly to apprenticeship opportunities -not just with major corporates but with ambitious SMEs too. We're now running SME recruitment events, launching our "Live Local, Work Local" campaign and partnering with councils and training providers to simplify the process. SMEs don't have to do it alone. They can be linked with levy-sharing partners to access local talent pipelines and integrate training providers into their hiring process. It should be straightforward - and it can be.
You can recruit talent without losing agility
There's a common misconception that apprenticeships slow things down, but this view is outdated. New legislation now allows some apprenticeships to be completed in as little as eight months. That means businesses can scale quickly while investing in talent that grows with them. Businesses should think strategically and align apprenticeships with their operational needs. For example, they can opt for shorter-term programmes when needed or consider hiring two or more apprentices at once so they can support each other, reducing the strain on management and increasing training efficiency.
Some roles are a natural fit for apprenticeships
Professional services roles - accounting, business admin, marketing - are all well-suited for apprenticeship programmes. That's why firms like PwC and KPMG hire thousands of apprentices each year. But this isn't just a strategy for the Big Four. At Pathway CTM, we've personally hired through the business admin route, which is ideal for many entry-level positions in startups. Our partner, Oomph Wellness, hired two apprentices who later became team managers. Another great story is that of Gemma Churcher, who joined Oakwood Worldwide via an apprenticeship and transformed their finance systems. Stories like these aren't exceptions – they're the norm when apprenticeships are done the right way.
The ROI goes far beyond cost savings
Yes, apprenticeships can save firms a lot of money - especially when hiring under-25s, who are exempt from National Insurance. But far more importantly, they provide a reliable, long-term talent pipeline. Apprentices are often less likely to job-hop compared to graduates, as they are more loyal. They bring fresh ideas, digital fluency and a drive to prove themselves.
Avoiding common pitfalls
The biggest mistake founders make? Not planning for the 20 per cent off-the-job training time. It's key to set expectations early, support line managers and build this training time into your business rhythm. Done right, this structure enhances - rather than hinders - productivity.
Apprenticeships are the future of work
As the skills gap widens and recruitment costs climb, apprenticeships offer a strategic solution. They're not just a nice-to-have – they're a growth strategy hiding in plain sight. For SMEs who are willing to rethink talent, embrace flexibility and tap into the support systems available, the return is enormous. For businesses trying to survive in the current economic climate, the question shouldn't be "why apprenticeships?" - it should be "why not?".