How to set up an apprenticeship scheme at your small business

By Ben Lobel on Small Business UK - Advice and Ideas for UK Small Businesses and SMEs

• An apprenticeship scheme is a combination of study and work for people over the age of 16. The scheme is intended to equip apprentices with the skills and knowledge for a specific job or industry. Businesses, irrespective of size, can recruit an apprentice.
• Start by deciding what kind of apprenticeship you want to offer, then look at your funding options, create an account and set your agreement and training templates.
• Make sure you take the legal side into consideration, such as ensuring your apprentices are paid appropriately.

If you’re looking for a boost for your small business, consider an apprenticeship scheme.

Once only the domain of big businesses, apprenticeships are now a credible option for many small businesses looking for a cost-effective way to recruit fresh talent. However, many business owners are put off by the perceived amount of administration required to get started. Is an apprenticeship scheme right for your business, and where do you begin?

What is an apprenticeship scheme?

An apprenticeship scheme is a combination of study and work for people over the age of 16. The scheme is intended to equip apprentices with the skills and knowledge for a specific job or industry. Businesses, irrespective of size, can recruit an apprentice. The duration of their apprenticeship can range from 12 months to five years, depending on their level.

According to the House of Commons, there were 761,500 people participating in an apprenticeship in England in the 2024/25 academic year, an increase on the previous academic year.

Consider the benefits

Hiring an apprentice is a long-term investment, and many organisations we work with see it as an ideal opportunity to create a workforce trained from scratch – shaping employee’s work habits from the offset and aligning them with company culture.

The National Apprenticeship Service says that the estimated gain for employers is between £2,500 and £18,000 per apprentice. Apprentice employers have also seen increased productivity in their existing workforce and apprenticeships are a great way to plug a widening skills gap in our industry.

See also: Apprenticeship grants – A guide to what assistance and funding is available from the government

Steve Hayden, managing director of Green Telecom, has seen the benefits with his business. He started as an apprentice himself and has now employed two apprentices over a three-year period: “An apprentice is an asset to a small business, they bring fresh ideas to the table and can be trained to fit in with the company.”

How to hire an apprentice

Let’s take it step-by-step.

What do you want to offer?

Decide on the level of apprenticeship you want to offer. Apprenticeships are divided into different levels so it’s important to establish which one is most suitable for your business:

• Intermediate: level 2 (GSCE)
• Advanced: level 3 (equivalent to 2 A Level passes)
• Higher: level 4,5,6 and 7 (foundation degree and above)
• Degree: level 6 and 7 (Bachelor’s or Master’s degree)

The National Apprenticeship Service has lots of useful advice on which level you should consider on its website. It’s important to note that, from January 2026, funding was removed from new level 7 apprenticeships for the over 22s. Existing apprentices and those aged 16-21 will still be funded.

Foundation apprenticeships are also available. They’re at level 2 and help people to get started in an industry, such as construction, digital, engineering and social care. Apprentices will be trained for a range of jobs within that sector, alongside ‘soft skills’ like communication and responding to feedback. The amount of training they get depends on the apprenticeship they’re doing, but they typically last for eight months.

Anyone aged 16-21 can do a foundation apprenticeship. They’re also open to people aged 22-24 if they’re:

• A care leaver
• A prisoner or on prisoner leave
• Have an education, health and care plan

Finally, apprenticeship units give employees the chance to do short and flexible courses that will give them the knowledge and skills that your small business needs. Though they’re not formal apprenticeships, they’re based on apprenticeships and are based on sectors where there are skills shortages in England, such as AI and construction. They must work for you, be over 19 and spend over half of their working hours in England.

For different parts of the UK, check out the links below:

• Apprenticeships in Scotland
• Apprenticeships in Wales
• Apprenticeships in Northern Ireland

As your apprentice will be learning on the job, a proportion of their time is taken up with training. You will need to find a training provider to work alongside to deliver your apprenticeship scheme. You can find this on the government website.

Check what funding is available

If you don’t pay the apprenticeship levy, the government will pay 100% of the cost (up to the funding band maximum) on the training of an apprentice if they are:

• 16-24 years old
• Aged 15 (if the apprentice’s 16th birthday is between the last Friday of June and August 31)

For all other apprentices, it’ll be a 5% cost from you, with the rest covered by the government. From October 1, 2026, you could be eligible to receive a hiring payment of up to £2,000 when hiring apprentices aged 16-24. 

Your local council may well offer extra local support. Check their website for any further details.

Create an account to fund and recruit apprentices

Create an account on the government website to advertise apprenticeships and give access permissions to relevant people inside and outside your organisation. Use it to add details about your company, your PAYE scheme and your apprentices.

Recruitment

The government’s apprenticeships service provides a portal in which to advertise vacancies to its massive database and this is the best place to advertise your vacancy. You can also use the traditional advertising channels, such as job boards and LinkedIn. We have found the best way to recruit apprentices is through assessment days. Through a series of tasks, set throughout the day, you can observe the candidates in a relaxed environment prior to a formal interview.

Make an apprenticeship agreement

The apprenticeship agreement details the skill, trade or occupation that the apprentice will be training for; the name of the apprenticeship they’re working towards; the start and end dates of the apprenticeships; and the amount of training you’ll give them. Either write your own or use an apprenticeship agreement template.

On top of that’ you need to sign a training plan with your apprentice. Again, mock this up yourself or use a template. It must include:

• The planned content and schedule for training
• What is expected and what is offered by the employer, training provider and the apprentice
• How to handle queries and complaints

If you want to reduce training time because the apprentice already has relevant training or experience, you must agree this with the training provider and the apprentice in the initial stages.

This will not only ensure your apprentice gets the most from their experience, but that you are training someone to match the exact needs of your small business.

Legal issues to consider

As an employer, it is your responsibility to draw up an apprenticeship agreement between your business and your employee.

There are other factors you also need to remember:

– You must pay your apprentice no less than the Apprenticeship National Minimum Wage. For the 2026/27 tax year, apprentices are entitled to the Apprentice Rate if they’re either:

• Under 19
• Aged 19 and over and in their first year of apprenticeship

Apprentices are entitled to the Minimum Wage for their age if they are both:

• Aged over 19
• Have completed the first year of their apprenticeship

However, many businesses choose to pay a higher wage than this.

– The minimum duration of apprenticeships is 30 hours a week as far as the government is concerned. Apprentices working under 30 hours per week will still be considered apprentices, but their training will be over a longer period.

– You must ensure that all apprentices receive the same benefits as your other employees.

Remember that even if you’ve only taken on apprentices, you’ll still need employers’ liability insurance. Read more at Employers’ liability insurance – what is it and do you need it?

FAQ

What is an apprenticeship scheme?

An apprenticeship scheme is a combination of study and work for people over the age of 16. The scheme is intended to equip apprentices with the skills and knowledge for a specific job or industry. Businesses, irrespective of size, can recruit an apprentice.

How do I start an apprenticeship scheme?

Start by deciding what kind of apprenticeship you want to offer, then look at your funding options, create an account and set your agreement and training templates.

Crissi Williams is CEO of the Institute of Telecommunications Professionals.

Further reading on apprenticeships

Why hiring apprentices benefits SMEs – Here, Angela Middleton, founder and CEO of MiddletonMurray, highlights the benefits that apprenticeships can bring to your business

Over third of businesses struggling to fill jobs – Small Business UK – There are now 1.3m job vacancies in the UK, the same number as there are unemployed workers, leaving businesses with holes in the workforce

Euan Blair firm to train 5,000 SME apprentices free – Small Business UK

– Multiverse, founded by Euan Blair (son of ex-Prime Minister Tony), aims to train over 5,000 apprentices in SMEs – here’s how to get involved

The post How to set up an apprenticeship scheme at your small business appeared first on Small Business UK.