Apprentice Pay and Conditions - A research report for for TUC/unionlearn

Apprentice Pay and Conditions

A research report for TUC/Unionlearn

Submitted: February 2011

from Incomes Data Services Final Report

TUC/UNIONLEARN Apprentice Report – IDS

This report has been produced by Incomes Data Services (IDS) on behalf of TUC/Unionlearn and with support from CWU, UCATT and Usdaw.

This report was researched and written by: Adam Elston Laura James

Incomes Data Services Finsbury Tower 103-105 Bunhill Row London EC1Y 8LZ Telephone: 0845 077 2911 Facsimile: 0845 310 5517 E-mail: ids@incomesdata.co.uk Website: www.incomesdata.co.uk Copyright © Incomes Data Services 2011

TUC/UNIONLEARN Apprentice Report – IDS

Contents List of tables ............................................................................................................................................ 4 List of charts ............................................................................................................................................ 6 1. Executive summary ............................................................................................................................. 7 A. Apprenticeship subjects offered ................................................................................................. 8 B. Pay levels, bonuses and benefits .............................................................................................. 10 C. Training and hours .................................................................................................................... 11 D. Completion and retention rates ............................................................................................... 11 E. Employers’ attitudes ................................................................................................................. 14 2. Profile of survey respondents ........................................................................................................... 17 3. Pay levels ........................................................................................................................................... 23 3.1 Salaries by industry sector .......................................................................................................... 27 3.2 Salaries by year/stage and broad apprenticeship type .............................................................. 29 3.3 Salaries by gender ....................................................................................................................... 37 3.4 Salaries by region ........................................................................................................................ 41 3.5 Salaries by company size............................................................................................................. 43 3.6 Bonuses ....................................................................................................................................... 46 3.7 Benefits ....................................................................................................................................... 47 4. Training, working hours and retention ............................................................................................. 49 5. Completion and Retention rates ....................................................................................................... 55 6. Employers’ attitudes ......................................................................................................................... 58 7. Telephone interviews........................................................................................................................ 73 8. Survey methodology ......................................................................................................................... 82 Appendix ........................................................................................................................................... 85

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TUC/UNIONLEARN Apprentice Report – IDS

List of tables Table 1: Less commonly provided apprenticeship subjects (4 or fewer responses.) ............................. 9 Table 2: Numbers of apprentices employed......................................................................................... 18 Table 3: Subject areas offered as apprenticeships ............................................................................... 21 Table 4: All year/stage apprenticeship salaries 2010 ........................................................................... 23 Table 5: All year average salary levels and average fully qualified rates by industry sector ................ 27 Table 6: Average salary levels by year and broad apprenticeship subject area ................................... 29 Table 7: All year/stage salaries by specific subject area ....................................................................... 32 Table 8: Average year/stage salaries by specific apprenticeship area ................................................. 34 Table 9: All salaries by subject area ...................................................................................................... 37 Table 10: Average all year/stage salary by specific apprenticeship subject and % of female apprentices ........................................................................................................................................... 39 Table 11: Average salary by region/year/stage of apprenticeship ....................................................... 42 Table 12: Average fully-qualified rate by region................................................................................... 43 Table 13: All sector all year/stage salary by number of employees ..................................................... 43 Table 14: All year/stage salary by number of employees – private sector........................................... 44 Table 15: Average private sector salaries by year/stage of apprenticeship ......................................... 44 Table 16: Apprenticeship bonus payments - cash ................................................................................ 47 Table 17: Apprenticeship bonus payments - % of salary ...................................................................... 47 Table 18: Apprentice benefits received ................................................................................................ 48 Table 19: All sector/all subject summary of apprenticeship hours and training .................................. 49 Table 20: Average (weekly) hours and training by broad apprenticeship subject ............................... 50 Table 21: Weekly hours and training by specific apprenticeship subject ............................................. 51 Table 22: Average (weekly) hours and training by industry sector ...................................................... 53 Table 23: Average proportion of apprentices completing training and remaining after 1, 3 and 5 years .............................................................................................................................................................. 55

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TUC/UNIONLEARN Apprentice Report – IDS

Table 24: Average proportion of apprentices completing training and remaining after 1, 3 and 5 years by broad apprenticeship subject .......................................................................................................... 56 Table 25: Average proportion of apprentices completing training and remaining after 1, 3 and 5 years by specific apprenticeship subject ........................................................................................................ 57

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TUC/UNIONLEARN Apprentice Report – IDS

List of charts Chart 1: Apprenticeship subjects offered ............................................................................................... 8 Chart 2: Average proportion of apprentices remaining after 1, 3 and 5 years by broad apprenticeship subject and average salary.................................................................................................................... 13 Chart 3: Proportion of responses by type of organisation ................................................................... 17 Chart 4: Number of apprentices by total number of employees ......................................................... 18 Chart 5: Responses to the question ‘In how many different subjects/areas do you offer apprenticeships?’ .................................................................................................................................. 19 Chart 6: Profile of survey respondents by region ................................................................................. 19 Chart 7: Survey respondents industry sector ....................................................................................... 20 Chart 8: Broad breakdown of apprenticeship subject areas ................................................................ 22 Chart 9: Distribution of all year/stage apprentice salaries ................................................................... 24 Chart 10: Average salary levels in private and public sector employers .............................................. 25 Chart 11: Percentage differential between year/stage of broad apprenticeship type and year 1 ...... 31 Chart 12: Differential between fully-qualified rate and year/stage 1 and proportion of female apprentices by specific subject ............................................................................................................. 36 Chart 13: Average all salaries and percentage of female apprentices per subject area ...................... 38 Chart 14: Average all year/stage salary by specific apprenticeship subject and % of female apprentices ........................................................................................................................................... 40 Chart 15: Average proportion of apprentices completing training and remaining after 1, 3 and 5 years .............................................................................................................................................................. 55

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TUC/UNIONLEARN Apprentice Report – IDS

1. Executive summary This report looks in detail at the pay and employment conditions of UK apprentices. The research was commissioned by TUC/Unionlearn and carried out by Incomes Data Services (IDS) in the autumn and winter of 2010. It included a literature review, a large-scale electronic survey and telephone interviews with employers.

The report’s findings are largely based on the results of an online survey sent out to over 7,000 UK employers, which achieved 289 usable responses. IDS also carried out 10 telephone interviews with employers who, in the survey, had signalled their willingness to be contacted for the research. The telephone interviews provide context for the quantitative findings of the survey.

With the Government spending review recently announcing funding for an extra 75,000 apprenticeship places in the coming months and a growing awareness among business of the benefits of investing in training, apprentices and apprenticeships appear to be more than ever on the agenda.

For this reason, TUC/Unionlearn commissioned IDS with the task of conducting research, primarily to find out what apprentices in UK industry were actually being paid, but also to look at other factors, including employers’ attitudes on apprenticeships as well as further quantitative information on training, fully-qualified rates and benefits.

Key summary findings from the research are presented in the following sections under the following headings: A. Apprenticeship subjects offered B. Pay levels C. Training and hours D. Completion and retention rates E. Employers’ attitudes

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TUC/UNIONLEARN Apprentice Report – IDS

A. Apprenticeship subjects offered Employers were asked to list the specific apprenticeship subjects they offered. The chart below shows those subjects with more than four responses. Engineering and Business Administration were the most common subjects making up 17.6 per cent and 17.4 per cent of the total respectively. There were also representations from some of the less traditional apprenticeship subject areas including Customer Service, Housing and Health and Social Care.

Chart 1: Apprenticeship subjects offered

Apprenticeship subjects offered 80 70 60 50 40 30 20 10 0

67

66

26

21

13

13

11

10

9

8

7

7

7

6

5

5

5

5

5

A large number of less common apprenticeships, some offered in only a single instance, are not shown in the chart but are listed in table 1. A total of 69 different apprenticeship subjects were found to be offered by respondents to the online survey.

A note about the analysis Analysis throughout the report is carried out in most cases by ‘broad apprenticeship subject’ and by specific apprenticeship subject. The broad subject list is based on the National Apprenticeship Service category definitions, defined as follows: Agriculture, Horticulture and Animal Care Arts, Media and Publishing 8

TUC/UNIONLEARN Apprentice Report – IDS

Business, Administration and Law Construction, Planning and the Built Environment Education and Training Engineering and Manufacturing Technologies Health, Public Services and Care Information and Communication Technology Leisure, Travel and Tourism Retail and Commercial Enterprise Analysis by specific apprenticeship subject is based on the title of the specific apprenticeship.

Table 1: Less commonly provided apprenticeship subjects (4 or fewer responses.)

Apprenticeship subject Children's Care Learning and Development IT Services and Development Property Services Building Services Engineering Technicians IT & TELECOMS ProfAL Management Metals Industry Arts and Entertainment, Cultural Heritage, Information and Library Services Contact Centres Design Emergency Fire Service Operations Engineering Construction Gas Industry Insurance Meat and Poultry Processing Personnel Pharmacy Technicians Process Technology Retail Youth Work

No. Apprenticeship subject 4 Cleaning and Support Service Industry Communications Technologies 4 (Telecoms) 4 Dental Nursing

No. 1 1 1

3 Environmental Conservation 3 Events Extractive and Mineral Processing 3 Occupations 3 Fencing

1 1

2 Furniture Industry 2 Game and Wildlife Management 2 Industrial Applications Learning and Development (Direct 2 Training & Support) 2 Logistics Operations Management 2 Marketing and Communications 2 MES Plumbing 2 Polymer Processing and Signmaking 2 Public Services 2 Sales and Telesales 2 Set Crafts 2 Storage and Warehousing 2 Teaching Assistants

1 1 1

1 1

1 1 1 1 1 1 1 1 1 1 9

TUC/UNIONLEARN Apprentice Report – IDS

Apprenticeship subject Active Leisure and Learning Advice and Guidance Advising on Financial Products Arboriculture Bakery

No. Apprenticeship subject Travel and Tourism Services Leisure 1 and Business 1 Vehicle Fitting 1 Vehicle Parts Operations 1 Water Industry 1

No. 1 1 1 1

Further detail is shown in chapter 3, ‘Profile of survey respondents’.

B. Pay levels, bonuses and benefits Salary levels ranged considerably by apprenticeship subject area and year/stage of apprenticeship. Across all subject areas and year/stage of apprenticeship, the average gross salary was £12,634.

Salaries and gender There was found to be a higher concentration of female apprentices in the lower-paying sectors. In the highest paying apprenticeship subject, Extractive and Mineral Processing Occupations, the average salary was £17,609 and there were no female apprentices recorded. In the lowest-paying subjects recorded, females made up a far greater proportion of the total, as the chart on page 36 indicates.

Salaries by size of organisation Analysis of pay by company size shows that there is a correlation between size of employer as measured by number of employees, and apprenticeship pay. Average all year/all stage salaries in the private sector range from £12,235 in the smallest firms, to £14,059 in the largest organisations, a difference of 15 per cent. However, salaries in the smallest private sector firms are only 3 per cent below the all sector/all year average annual salary of £12,634.

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TUC/UNIONLEARN Apprentice Report – IDS

Bonuses and benefits A minority of organisations (14.5 per cent) said that apprentices received bonus payments.

Of those providing a cash amount, bonuses were worth an average of £2,039 a year and for those organisations providing bonus data as a percentage of salary, average payments were worth 15.3 per cent.

Of the benefits apprentices received, most popular was a bike scheme, provided by 29 employers. Pension provision was the second most popularly offered benefit – with 28 employers, or 13.3 per cent, saying that apprentices were entitled to a pension. 19 employers, or 9 per cent of the total, said that apprentices received the same benefits as fully-qualified staff.

C. Training and hours On average, contracted apprenticeship hours were 36.8 per week, actual hours worked were 34.3 hours with 7.3 hours spent in off-the-job training. The data presented for each of these categories is unmatched – that is, not every company that provided data for the questions on hours and training provided data for each response.

A breakdown of contracted working hours by apprenticeship subject area shows greater variance and reveals that, on average, contracted working hours ranged from a maximum 39.3 hours per week in Arts, Media and Publishing, down to an average of 35.3 hours per week in Retail and Commercial Enterprise.

D. Completion and retention rates An average of some 92.6 per cent of apprentices completed their apprenticeship, with not much difference between private (92.8 per cent) and public sector (92.3 per cent) completion rates. Retention rates however appeared to be better in the private than the public sector. The survey also requested information on the proportion of apprentices remaining one, three and five years after completion. By broad apprenticeship subject, retention rates after one year ranged from 94.8 per cent in Engineering and Manufacturing Technologies down to 28.6 per cent in Agriculture, Horticulture and Animal Care. Three years post-training the equivalent retention rates ranged from 89.5 per cent in Engineering 11

TUC/UNIONLEARN Apprentice Report – IDS

and Manufacturing Technologies to 17.7 per cent in Agriculture, Horticulture and Animal Care.

An alternative view of retention rates by average apprenticeship salary is shown in the graph on the following page. The graph shows that those subjects that appear to have the highest average levels of apprenticeship salaries, also appear to have the highest average retention rates, post-training. This is true of the two highest-paying subject areas, Engineering and Manufacturing Technologies and Education and Training but the trend is less noticeable in other subject areas, for example, Business Administration and Law.

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TUC/UNIONLEARN Apprentice Report – IDS

16,000

100.0

14,000 80.0 12,000 10,000

60.0

8,000 40.0

6,000 4,000

20.0

Average % remaining one yr after completion Average % remaining three yrs after completion Average % remaining five yrs after completion Average salary

2,000 0.0

13,831

12,014

Engineering and Manufacturing Technologies

Retail and Commercial Enterprise

11,662

11,360

11,030

10,807

10,309

0

Construction, Information and Health, Public Agriculture, Business, Planning and Communication Services and Horticulture Administration the Built Technology Care and Animal Care and Law Environment

Chart 2: Average proportion of apprentices remaining after 1, 3 and 5 years by broad apprenticeship subject and average salary

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TUC/UNIONLEARN Apprentice Report – IDS

E. Employers’ attitudes The questionnaire asked employers to provide a response to a number of statements.

Possible responses were: Strongly agree Agree Disagree Strongly disagree N/A Please see chapter 8 for further details.

The following headings were provided under the question ‘Why do you employ apprentices?’

•

To train the work force of the future 98 per cent of employers agreed with this.

•

To give young people a chance to learn a skill 96.9 per cent of employers agreed with this.

•

We can train them in our way of doing things 95 per cent of employers agreed with this.

•

It’s the best way to learn 88.8 per cent agreed with this.

•

They provide value for money 85 per cent of employers agreed with this.

•

Makes us more attractive as a company to potential recruits 81.4 per cent of employers agreed with this.

•

We need younger workers in an ageing workforce 79.6 per cent of employers agreed with this.

•

Difficult to recruit staff with required skills 54.9 per cent of employers agreed with this.

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TUC/UNIONLEARN Apprentice Report – IDS

•

Because we receive funding to do so 32.9 per cent of employers agreed with this.

•

Provides us with free/cheap trial of staff 5.6 per cent agreed with this.

Organisations not employing apprentices The survey was also received by organisations that did not employ apprentices. There was an opportunity for employers to provide reasons for not employing apprentices and these are highlighted in the tables below. The categories provided in response to the question ‘If you do not employ apprentices, why not?’ were: •

No vacancies/not taking on new staff 48.9 per cent of employers agreed with this.

•

We prefer to train in house 42.2 per cent agreed with this.

•

We prefer to recruit fully trained staff 40.9 per cent agreed with this.

•

No apprenticeships available for our business specialism 34.9 per cent agreed with this.

•

Not required/relevant in our business 34.1 per cent agreed with this.

•

Lack of external funding/grants 34.1 per cent of employers agreed with this.

•

Lack of resources/facilities 29.6 per cent agreed with this.

•

Do not know how to go about employing apprentices 27.3 per cent of employers agreed with this.

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TUC/UNIONLEARN Apprentice Report – IDS

•

Too difficult to administer 25 per cent of employers agreed with this.

•

The job does not require a high level of skill 13.2 per cent of employers agreed with this.

•

It is not our decision/head office decision 2.2 per cent agreed with this.

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TUC/UNIONLEARN Apprentice Report – IDS

2. Profile of survey respondents Links to the online IDS/TUC Unionlearn Apprentice Survey were sent out in September 2010 to over 7,000 UK employers. A total of 289 organisations responded to the survey giving a return rate of around 4 per cent. Of these returns, some 235 employers, or 81 per cent of the total, said that they employed apprentices. Some 16 per cent of the remainder said that they did not employ apprentices and provided reasons why they did not, and the remaining companies, around 2.4 per cent, did not provide a response.

Of the organisations that responded to the questionnaire, 54 per cent were private sector employers, 43 per cent were public sector employers and the remaining 3 per cent were Apprenticeship Training Agencies.

Chart 3: Proportion of responses by type of organisation

3%

Private sector employer Public sector employer

43% 54%

Apprenticeship Training Agency

Responses to the questionnaire were received from all parts of the UK with a fairly even spread across regions, as shown in the chart on page 16. Highest response rates were from organisations that specified multiple regions. Wales, Northern Ireland and Scotland were under-represented, with 2 per cent, 1 per cent 4 per cent of the returns respectively from these regions.

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TUC/UNIONLEARN Apprentice Report – IDS

Of those companies responding, the average number of apprentices employed was 51, though this ranged considerably, from a minimum of one apprentice, to 1,500, as table 2 highlights.

Table 2: Numbers of apprentices employed

Minimum 1

Lower quartile 3

Upper quartile 39

Median 10

Maximum 1,500

Average 51

Analysis highlights that size of organisation as measured by number of employees has a correlation with numbers of apprentices employed, as shown in the chart below.

Chart 4: Average number of apprentices by total number of employees 250 203.8 200 Number of apprentices

150 100 46.9

50 3.5

7.6

15.7

50.8

19.8

0

Total number of employees

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TUC/UNIONLEARN Apprentice Report – IDS

Chart 5: Responses to the question ‘In how many different subjects/areas do you offer apprenticeships?’

5 to 6 5%

4 to 5 3%

6+ 9% 1 to 2 2 to 3

3 to 4 8%

3 to 4 4 to 5

1 to 2 58%

2 to 3 17%

5 to 6 6+

Chart 6: Profile of survey respondents by region Yorkshire and The Humber 8% West Midlands 6% Wales 2%

All regions 18% East Midlands 3%

South West 10%

East of England 6% London 8%

South East 15%

North West 10% Scotland 4%

North East 9%

Northern Ireland 1%

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TUC/UNIONLEARN Apprentice Report – IDS

Responses were from a variety of UK industry sectors, as shown in chart 7. The chart includes only those sectors where three or more employers returned data. A total of 24 further sectors responded, ranging from business services to the voluntary sector though these have been excluded from the chart.

Chart 7: Survey respondents industry sector

45 40

39

35 30 25 20 15

29 23

23

21 16

15

10 5

13

12 8

7

7

7

6

5

4

4

4

4

3

3

0

The questionnaire asked employers to specify which subject areas were currently provided to apprentices. A total of 69 different apprenticeship subjects were found to be offered by employers ranging from Accountancy to the Water Industry. Subject areas with significant returns are shown in table 3 below

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TUC/UNIONLEARN Apprentice Report – IDS

Table 3: Subject areas offered as apprenticeships

Apprenticeship subject Engineering Business Administration Health and Social Care Customer Service Accountancy Electrical & Electronic Servicing Construction IT User Vehicle Maintenance and Repair Other Engineering Technology Horticulture Hospitality and Catering Electrotechnical Amenity Horticulture Automotive Industry Creative Apprenticeship Electricity Industry Housing Laboratory Technicians (Generic) Children's Care Learning and Development IT Services and Development Property Services

No. of apprenticeships offered 67 66 26 21 13 13 11 10 9 8 7 7 7 6 5 5 5 5 5 5 4 4 4

A broad breakdown of apprenticeship subject is shown in chart 8. The majority of subjects were in Engineering and Manufacturing Technologies, comprising 38 per cent of the total.

There were also significant proportions in Business, Administration and Law (22 per cent) and Health, Public Services and Care.

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TUC/UNIONLEARN Apprentice Report – IDS

Chart 8: Broad breakdown of apprenticeship subject areas Agriculture, Horticulture and Animal Care Information and 4% Communication Retail and Technology Commercial 5% Enterprise 10%

Arts, Media and Publishing 2%

Business, Administration and Law 22%

Health, Public Services and Care 13%

Construction, Planning and the Built Environment 5% Engineering and Manufacturing Technologies 38%

Education and Training 1%

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TUC/UNIONLEARN Apprentice Report – IDS

3. Pay levels This section covers apprentice pay levels. Employers were asked to provide actual gross basic annual rates for apprentices and the data was provided by year/stage of apprenticeship as well as by type of apprenticeship.

Response rates by year/stage of apprenticeship •

Year/stage 1 - 320

•

Year/stage 2 - 225

•

Year/stage 3 -168

•

Year/stage 4 - 121

•

Year/stage 5 - 36

For each apprenticeship subject, employers were also asked to provide the equivalent fullyqualified rate and a total of 181 organisations responded.

The average annual salary for apprentices (not including fully-qualified rate) across all subject areas and years of study was £12,634. More detail on the range of apprenticeship salaries on offer is shown in table 4 below.

Table 4: All year/stage apprenticeship salaries 2010

No. All 889 years

Minimum Lower Lower Median Upper Upper Maximum Average £pa decile quartile £pa quartile decile £pa £pa £pa £pa £pa £pa 4,560

5,735

10,000

12,334

15,259

18,577

35,194

12,634

An overview of the distribution of apprenticeship salaries is shown in the chart below. It shows that the majority of salaries were in the £10,001-£15,000 band, at some 45.7 per cent.

Some 6.7 per cent were in the lowest band of £0-£5,000.

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TUC/UNIONLEARN Apprentice Report – IDS

Chart 9: Distribution of all year/stage apprentice salaries 50.0

45.7

45.0 40.0 35.0 30.0 25.0

21.4

20.9

20.0 Percentage of salaries

15.0 10.0

6.7

5.0 .0

4.8 .2

.2

Average pay by type of employer Analysis by type of employer shows that private sector employers paid on average £13,351 per year, compared to £11,433 paid by public sector employers, a difference of some 17 per cent.

A more detailed breakdown is shown in chart 10 which lists average salaries by year/stage of apprenticeship as well as the respective fully-qualified rates. As the chart highlights, private sector employers pay higher salary levels at all stages of apprenticeship although the difference is most pronounced at the fully-qualified rate with a 22.5 per cent gap between the private and public sector.

Anecdotal information, based on telephone interviews, appears to suggest that public sector employers pay less because they may be more likely to follow National Apprenticeship Service guidelines and recommendations. It is also the case that private sector employers, on the whole, offer longer apprenticeships providing a median of four-year apprenticeships compared to the public sector where the equivalent median is two years.

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TUC/UNIONLEARN Apprentice Report – IDS

In order to understand the perhaps surprising pay differential between private and public sector apprenticeships, it is also worth noting that the growth in public sector apprenticeships in recent years has been largely in subjects such as Business Administration and Health, Public Services and Care. These apprenticeship frameworks typically attract lower pay and are of a shorter duration than the types of craft apprenticeship which were once traditionally associated with local authorities.

It is also interesting to note that apprenticeships in the NHS should be covered by the “Agenda for Change” Annex U agreement which entitles apprentices to the entry level rate of pay for the job. Anecdotal evidence would suggest that many NHS trusts are circumventing the Annex U agreement and paying the apprentice rate of the National Minimum Wage instead.

Chart 10: Average salary levels in private and public sector employers 25,000 21,158 20,000

17,583

18,642

14,840

15,000 12,218

Salary £pa 10,000

5,000

Private sector

10,003

11,975

14,322

16,671

17,897

17,266

Year 5

Fully-qualified rate

Public sector

8,900

0 Year 1

Year 2

Year 3

Year 4

Benchmarking pay When organisations were asked for more detail about how they benchmark their apprenticeship salary levels, one employer, paying at the apprenticeship minimum wage responded:

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TUC/UNIONLEARN Apprentice Report – IDS

Public sector, North East We use national guidance to set our rates. We pay at £95 per week, also some of our partnership organisations are paying the same. And we look at local information and other organisations who are running apprentices and that’s what they’re doing at this level of apprenticeship.

One private sector employer said:

Private sector engineering firm, South East We didn’t look at competitors – there’s not a lot of other people around that we can benchmark ourselves against. We knew what we were obliged to pay in terms of National Minimum Wage.

We wanted apprentices to think that they are valued – it’s not just a case of getting cheap labour so we pay over National Minimum Wage.

Another employer responded:

Public sector, North We use the NAS guidelines for the minimum rate but where an apprentice is competent in the role they then receive the salary associated with that job. Apprentices are evaluated every quarter so it could happen that they are on the rate for the job within three months...What we wanted was to make sure that apprentices were valued and that they weren’t used as cheap labour. It’s also a retention tool as well, the possibility of a great salary is an incentive to keep apprentices on the program and working hard.

It is clear that employers interviewed for the research were aware of the apprenticeship National Minimum Wage and there was a diversity of opinion on whether it was fair. One employer commented:

Private sector engineering firm, London I think that’s too low, but then again I think we pay too much and the apprentices don’t appreciate what they’re getting.

Another employer commented:

Private sector research firm, North West Ours is way above the minimum wage. I think it’s so little when you think these people could go to other places and get paid much more than that. I think it should be higher.

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TUC/UNIONLEARN Apprentice Report – IDS

But one public sector employer, paying £95 per week said,

Public sector, North East It’s probably about right for the people that we’re getting and the training and the opportunities that they’re getting totally outweigh any financial considerations…This scheme has given the opportunity for them to get an excellent CV, so the money isn’t high but they’re getting skills. It would be lovely to pay significantly more but the reality is that it’s just impossible.

3.1 Salaries by industry sector A more detailed overview of apprenticeship salary levels on offer is available from an analysis of industry sector. The following table (5) lists all year average salary levels by industry and shows that rates on offer range from a high of £18,240 in Transport: Shipping & ports to an average of £10,443 in Education, a difference of just under 75 per cent. An analysis of fully-qualified apprentice rates by industry sector is also provided in the table and shows a similar picture, with fully-qualified salaries ranging from £26,645 in Food, drink and tobacco to £15,469 in health.

Table 5: All year average salary levels and average fully qualified rates by industry sector

Local government Other manufacturing Energy & water Health Engineering and Manufacturing Technologies: Vehicles & components Care services & Health, Public Services and Care Food, drink & tobacco Engineering and Manufacturing Technologies: General

All year average salary Average fullylevels qualified rates £pa No. £pa No. 10,684 106 17,130 125 12,697 12,275 11,014

108 97 72

20,077 22,560 15,469

115 90 85

13,825

54

20,080

70

10,848

46

15,839

65

17,810

44

26,645

45

13,339

43

20,618

45 27

TUC/UNIONLEARN Apprentice Report – IDS

Chemicals, pharmaceuticals & oil Education Engineering and Manufacturing Technologies: Aerospace & defence Telecommunications Engineering and Manufacturing Technologies: Electronics Culture Engineering and Manufacturing Technologies Construction, Planning and the Built Environment Retail and Commercial Enterprise Financial services Public sector Transport: Shipping & ports Mining & quarrying Fire & police Construction, Planning and the Built Environment Paper & packaging Leisure Transport: Road & distribution Pharmaceutical services Central government Storage Business services Property

All year average salary levels £pa

Average fullyqualified rates £pa

No.

No.

15,371 10,443

34 36

24,292 17,289

40 35

10,925 15,428

32 23

24,538 19,823

25 25

11,398

18

19,750 22,000

20 20

16,549

12

27,031

15

13,108

11

10,738

45

17,029 19,333 22,305

15 15 10

18,240 12,684 12,089

10 7 13

24,000 18,326 13,189

10 10 5

13,223 17,765

8 4

16,111 24,503 9,420

5 5 5

25,500

5

18,152

5

13,287 17,320 14,077 10,627

13 10 4 4

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TUC/UNIONLEARN Apprentice Report – IDS

3.2 Salaries by year/stage and broad apprenticeship type Further research was carried out looking at salaries by broad apprenticeship subject area and the results are shown in table 6. It should be noted that the yearly rates are unmatched so an employer providing data for year 1 may not also have provided information for years 25. Nevertheless, the data allows a comparison of progression rates within apprenticeship areas.

Table 6: Average salary levels by year and broad apprenticeship subject area

Agriculture, Horticulture and Animal Care Arts, Media and Publishing* Business, Administration and Law Construction, Planning and the Built Environment Education and Training* Engineering and Manufacturing Technologies Health, Public Services and Care Information and Communication Technology Leisure, Travel and Tourism* Retail and Commercial Enterprise All sectors *Low sample

Year 1 Average £pa

Year 2 Average £pa

Year 3 Average £pa

Year 4 Average £pa

Year 5 Average £pa

FQRATE Average £pa

9,207

11,939

13,623

19,917

9,247

10,000

10,000

19,797

8,244

12,019

14,483

14,957

14,771

16,236

8,804

10,913

13,535

16,124

11,800

22,403

10,386

12,500

14,000

15,444

10,276

12,460

14,993

17,663

19,048

22,255

8,993

11,464

13,681

16,640

16,878

15,959

8,880

11,734

16,636

20,362

5,720

6,265

9,420

9,905 9,453

12,156 12,125

14,631 14,710

16,310

16,345 9,420

16,858 17,413

19,900 18,393

16,081 19,862

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An analysis based on the same unmatched data, shows the percentage differential per year, with year 1 taken as the base. The results are displayed in chart 11 and highlight, for each apprenticeship subject, the differential each year as well as the fully-qualified rate. As the chart shows, category Construction, planning and the built environment had the largest differential with a 154 per cent variance between the year 1 rate and the fully-qualified equivalent. At the other end of the spectrum, Business, Administration and Law, and Retail and Commercial Enterprise, had the narrowest differentials of 96.9 and 62.4 per cent respectively.

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180.0

154.5

160.0 140.0 120.0 100.0

116.3

116.6

114.1 96.9

80.0

62.4

60.0 40.0

Year 2

20.0

Year 3

0.0

Year 4 Year 5 Fully-qualified rate

Chart 11: Percentage differential between year/stage of broad apprenticeship type and year 1

1

* low sample

1

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A detailed table highlighting all salaries by specific subject area is shown below. Average salaries range from £17,609 in Extractive Mineral Processing Operations down to £8,364 for IT Users a difference of over 210 per cent between the highest- and lowest-paying subject areas.

Table 7: All year/stage salaries by specific subject area

Extractive and Mineral Processing Occupations Water Industry Emergency Fire Service Operations Management IT & TELECOMS ProfAL Metals Industry Engineering Electrotechnical Electricity Industry Automotive Industry Gas Industry Vehicle Maintenance and Repair Electrical & Electronic Servicing Laboratory Technicians (Generic) Accountancy Housing Construction IT Services and

Lower quartile £pa

Upper quartile £pa

Median £pa

Average £pa

No. of salaries

14,674 13,930

18,343 15,920

22,012 17,910

17,609 15,930

5 5

12,312 14,000

15,281 15,000

18,249 16,000

15,253 13,822

6 5

12,152

14,582

17,012

15,038

5

11,336 11,027

14,405 14,000

18,495 16,676

15,391 14,304

25 257

10,698

13,774

16,300

14,216

21

9,880

13,624

17,175

13,376

16

11,000 11,000

13,500 13,500

17,000 17,000

13,411 14,167

9 6

11,108

13,392

16,953

13,767

24

10,084

13,111

16,134

13,278

45

10,100 6,672 10,654 10,800

13,100 13,059 13,059 12,600

17,000 14,599 14,915 15,718

13,010 11,466 12,393 12,968

11 18 12 26

10,000

12,470

14,359

13,055

11 32

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Development Customer Service Hospitality and Catering Amenity Horticulture Furniture Industry Polymer Processing and Signmaking Process Technology Property Services Other Horticulture Engineering Technology Business Administration Design Health and Social Care Building Services Engineering Technicians Personnel IT User All salaries

Lower quartile £pa

Upper quartile £pa

Median £pa

Average £pa

No. of salaries

6,875

11,990

13,930

11,268

33

10,000

11,830

13,286

11,270

13

5,720

11,562

15,000

11,012

7

10,899

11,336

11,877

11,573

5

10,899

11,336

11,877

11,573

5

7,280

10,941

13,772

10,549

8

8,900 8,700 9,100

10,800 10,505 10,500

11,000 13,559 12,370

9,682 10,913 11,064

9 5 13

9,000

10,070

11,310

10,802

22

5,605 6,500

9,925 9,925

12,764 13,250

9,961 10,270

100 6

5,460

9,767

11,000

8,924

29

7,020 9,100 5,422 10,000

9,735 9,100 8,819 12,334

11,562 10,100 10,500 15,259

9,245 9,780 8,364 12,634

6 5 10

A more refined analysis by specific apprenticeship subject and year/stage of study is shown in table 8. As the table shows, year/stage 1 salaries ranged from £12,704 in management, down to £7,213 in property services. Salaries in the table are unmatched, i.e. not every employer was able to provide information for each consecutive year although the salaries year-on-year do provide an indication of progression.

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Table 8: Average year/stage salaries by specific apprenticeship area

Management* Electricity Industry Engineering Metals Industry Electrical & Electronic Servicing Hospitality and Catering IT Services and Development Horticulture Laboratory Technicians (Generic)* Electrotechnical Construction Vehicle Maintenance and Repair Engineering Technology Amenity Horticulture Accountancy Customer Service Automotive Industry Housing Health and Social Care

Year 5 Average £pa

Fullyqualified rate Average £pa

Year 1 Average £pa 12,704

Year 2 Average £pa

Year 3 Average £pa

Year 4 Average £pa

12,558

12,464

14,789

14,074

10,642

12,795

15,171

17,800

10,591

13,802

17,187

20,331

23,911

10,487

11,740

14,528

16,717

23,331

10,403

11,850

10,188

12,168

9,950

11,161

13,164

19,742

9,651

12,179

14,840

22,969

9,624

12,020

15,116

18,134

22,699

9,604

11,761

14,899

16,731

22,635

9,428

13,128

16,454

19,373

23,575

9,179

10,762

12,558

23,204 19,492

22,438

16,947

19,146

8,881 8,845

12,917

8,746

11,521

17,453 14,225

15,738

16,113

8,425 8,356

12,249

8,235

10,104

12,835 34

TUC/UNIONLEARN Apprentice Report – IDS

Year 1 Average £pa

Year 2 Average £pa

Year 3 Average £pa

8,016

11,976

14,620

IT User

7,230

11,011

Property Services*

7,213

10,300

Business Administration

Year 4 Average £pa

Year 5 Average £pa

15,368

Creative Apprenticeship All salaries *Low sample

Fullyqualified rate Average £pa

19,063 9,453

12,125

14,710

17,413

18,393

19,862

Chart 12, below, provides a further indication of progression arrangements by showing the differential between year/stage 1 and fully-qualified rate. The chart shows that fullyqualified rates were highest in Vehicle Maintenance and Repair and Laboratory Technicians (Generic) and lowest in Customer Services, IT Services and Development and Health and Social Care. These findings are charted against the average percentage of female apprentices per subject area and appear to highlight that female apprentices make up a disproportionate number of apprenticeships in the lower-paying subject areas, when measured by fully-qualified rate. Apprenticeship pay and gender is explored further in the following section.

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160.0 140.0 120.0 100.0 80.0 60.0 % of female apprentices

80.9

25.0

51.7

10.0

69.3

60.9

25.0

5.7

3.4

19.3

1.7

10.0

0.0

0.0

18.0

20.0

15.7

40.0

Differential between yr 1 and FQrate

Chart 12: Differential between fully-qualified rate and year/stage 1 and proportion of female apprentices by specific subject

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3.3 Salaries by gender The following table shows a breakdown of all apprenticeship salaries by apprentice subject area. As the table highlights, salaries ranged from a maximum of £13,831 in the Engineering and Manufacturing Technologies category down to £7,135 in Leisure, Travel and Tourism.

Table 9: All salaries by subject area

Apprenticeship subject area Engineering and Manufacturing Technologies Education and Training Retail and Commercial Enterprise Construction, Planning and the Built Environment Information and Communication Technology Health, Public Services and Care Agriculture, Horticulture and Animal Care Business, Administration and Law Arts, Media and Publishing* Leisure, Travel and Tourism* All subjects *Low sample

Average £pa 13,831 12,184 12,014 11,662 11,360 11,030 10,807 10,309 9,548 7,135 12,634

This same data is presented in Chart 13 below, along with data on the percentage of female apprentices per subject area. The chart shows that in the two lowest-paying sectors, Arts, Media and Publishing and Leisure, Travel and Tourism, the proportion of female apprentices was highest. In the third recorded lowest-paying sector, Business, Administration and Law, females made up some 68.6 per cent of the apprentice workforce, compared to 6.3 per cent and 40 per cent in the two highest paying sectors, Engineering and Manufacturing Technologies, and Education and Training, respectively.

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Chart 13: Average all salaries and percentage of female apprentices per subject area 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0

90.0 68.6

66.7 40.0 44.4 6.3

42.9 19.4 19.4

12.5

100.0 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0

Average all salary % female apprentices

A similar analysis by specific apprentice subject is shown in table 10 and chart 14 below.

Data, based on those apprentice subjects providing 5 or more returns is shown in the table below.

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Table 10: Average all year/stage salary by specific apprenticeship subject and % of female apprentices

Specific apprenticeship subject Extractive and Mineral Processing Occupations Water Industry Metals Industry Emergency Fire Service Operations IT & TELECOMS ProfAL Engineering Electro-technical Gas Industry Management Vehicle Maintenance and Repair Automotive Industry Electricity Industry Electrical & Electronic Servicing IT Services and Development Laboratory Technicians (Generic) Construction Housing Furniture Industry Polymer Processing and Signmaking Accountancy Hospitality and Catering Customer Service Horticulture Amenity Horticulture Other Engineering Technology Process Technology Design Business Administration Personnel Property Services Building Services Engineering Technicians Health and Social Care IT User All

Average salary ÂŁpa

% of female apprentices 17,609 15,930 15,391

0.0 0.0 1.7

15,253 15,038 14,304 14,216 14,167 13,822

30.0 5.0 3.4 0.0 5.0 90.0

13,767 13,411 13,376

15.7 4.0 10.0

13,278 13,055

19.3 25.0

13,010 12,968 12,393 11,573

18.0 10.0 32.0 0.0

11,573 11,466 11,270 11,268 11,064 11,012 10,913 10,802 10,549 10,270 9,961 9,780 9,682

0.0 60.9 40.0 51.7 25.0 0.0 50.0 5.7 15.0 5.0 69.3 80.0 30.0

9,245 8,924 8,364 12,634

30.0 80.9 23.0 39

TUC/UNIONLEARN Apprentice Report – IDS

20,000

100.0

18,000

90.0

16,000

80.0

14,000

70.0

12,000

60.0

10,000

50.0

8,000

40.0

6,000

30.0

4,000

20.0

2,000

10.0

0

0.0

Chart 14: Average all year/stage salary by specific apprenticeship subject and % of female apprentices

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3.4 Salaries by region A detailed picture (based on regions with three or more returns) is shown in table 11 on the following page which displays salaries by year/stage of apprenticeship by region. As the table shows, year/stage 1 salaries were highest in London, at £11,770 and lowest in the North East at £7,563. By year/stage 5, average salaries were highest in the North West worth some £20,231, compared to £14,880 in the North East.

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Table 11: Average salary by region/year/stage of apprenticeship

East Midlands East of England London Multiple regions North East North West Scotland South East South West Wales West Midlands Yorkshire and The Humber All

Average year/stage 1 £pa

No.

Average year/stage 2 £pa No.

Average year/stage 3 £pa

Average year/stage 4 £pa

No.

Average year/stage 5 £pa No.

No.

8,455

16

7,930

12

13,279

3

9,166 11,770

15 14

9,415 11,715

7 12

11,282 12,930

7 8

14,604

6

16,898

6

10,951

60

12,981

44

15,441

33

18,571

21

18,989

4

7,563

32

9,756

23

10,975

14

12,947

12

14,880

5

9,813 10,849

42 20

13,453 13,346

32 20

16,445 15,967

27 16

19,570 18,730

22 14

20,231 17,184

7 5

8,615

56

12,845

23

15,833

14

17,917

7

8,907 8,505

21 5

11,380 10,667

15 5

13,321 13,229

14 5

15,480 16,185

7 5

9,734

18

13,409

14

16,010

9

18,573

7

19,900

3

7,882 9,453

15

11,461 12,125

12

13,329 14,710

12

15,569 17,413

11

18,393

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A regional breakdown by fully-qualified rate shows that average salaries were highest in Wales at £24,690, more than 52 per cent higher than the £16,194 available in the South East.

Table 12: Average fully-qualified rate by region

Region Wales North West Scotland North East London Yorkshire and The Humber Multiple regions West Midlands South West East of England South East All

Average £pa

24,690 21,826 20,947 20,344 19,730 19,523 19,325 18,738 18,652 17,126 16,194 19,862

No. 5 26 19 19 16 11 35 11 11 6 16

3.5 Salaries by company size Further analysis of pay by company size shows that there does not appear to be a correlation between size of employer as measured by number of employees, and apprenticeship pay. All year/all stage salaries in all sectors, range from £13,145 in the smallest companies with between 1 and 250 employees, to £12,580 in the largest firms, employing over 10,000 staff.

This is shown in table 13 below. This may appear to be counter-intuitive but is explained by the fact that many large employers, such as the NHS and local authorities are in the public sector where apprentice salaries, as shown in table 3.2, are lower.

Table 13: All sector all year/stage salary by number of employees

Number of employees 1-250 251-500 501-1,000 1,001-2,500 2,501-5000 5,001-10,000 10,000+ All

All year/stage average salary £pa No. 13,145 140 11,993 166 12,588 127 11,564 111 13,964 121 12,683 101 12,580 123 12,634 43

TUC/UNIONLEARN Apprentice Report – IDS

A different picture therefore emerges from an analysis of private sector companies only, as shown in table 14 with salaries ranging from £12,235 in the smallest firms, to £14,059 in the largest organisations.

Table 14: All year/stage salary by number of employees – private sector

Number of employees 1-250 251-500 501-1,000 1,001-2,500 2,501-5000 5,001-10,000 10,000+ All

All year/stage average salary £pa No. 12,235 91 12,258 125 13,139 100 13,241 73 15,458 77 14,640 27 14,059 49 13,351

Further detail, showing a breakdown of average private sector apprentice salaries by year/stage and by size of organisation is shown in table 15.

Table 15: Average private sector salaries by year/stage of apprenticeship

Size of organisation Year 1 Year 2 Year 3 Year 4 Year 5

1-250 251-500 Average Average £pa £pa 8,793 9,197 11,587 10,882 14,428 13,303 16,415 15,954 14,791 19,602

5011,000 Average £pa 9,452 12,117 14,618 17,780 17,144

1,0012,500 Average £pa 9,878 12,152 14,878 16,342 21,791

2,5015000 Average £pa 12,040 14,219 17,368 20,469 17,802

5,00110,000 10,000+ Average Average £pa £pa 10,380 11,604 13,713 13,043 15,964 15,736 18,754 19,203 19,900 16,000

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Benchmarking apprentice rates In telephone interviews, employers were asked ‘Do you benchmark apprentice pay against competitors in your region/sector? How do you benchmark apprentice rates?’ A selection of the responses are provided below.

Public sector, North East employing 11 apprentices From national guidance, we pay at £95 per week, also partnership organisations are paying the same. And we look at local information and other organisations who are running apprenticeships and that’s what they’re doing at this level of apprenticeship so we do the same.’

Private sector engineering firm, South East employing 2 apprentices Last year was the first time in 25 years that we’ve taken on apprentices so it was trial and error.

We didn’t look at competitors – there’s not a lot of other people around that we can benchmark ourselves against. We knew what we were obliged to pay in terms of the National Minimum Wage. We wanted apprentices to think that they are valued – it’s not just a case of getting cheap labour so we pay over National Minimum Wage. We looked at full-time rate and what we roughly think the training period is going to be and work backwards from there.

Public sector, North, employing 260 apprentices We use the National Apprenticeship Service guidelines for the minimum rate but where an apprentice is competent in the role they then receive the salary associated with that job.

Apprentices are evaluated every quarter so it could happen that they are on the rate for the job within three months. If they are not quite up to standard they will still get an increment benchmarked against full time staff. What we wanted was to make sure that apprentices were valued and that they weren’t used as cheap labour. It’s also a retention tool as well, the possibility of a great salary is an incentive to keep apprentices on the program and working hard.

Private sector research firm, North West, employing 1 apprentice What we did was look at the rate for fully qualified role and work out a proportion. Each year the rate increases until after four years the apprentice will be on the fully-qualified rate.

Employers were asked about the National Minimum Wage for apprentices, whether they used it and if not, why?

Private sector transport firm, Northern Ireland employing 2 apprentices

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I don’t know much about the NMW, we set our own rates based on fairness. We don’t need, as an organisation to pay the minimum. That isn’t to say we don’t manage costs but we wouldn’t want to be paying as little as we can get away with.

Private sector engineering firm, London I think it’s too low, but then again I think we pay too much and they don’t appreciate what they’re getting. The company is a family run business and this is the way they like to do it.

Private sector research firm, North West employing 1 apprentice Ours is way above the minimum wage. I think it’s so little when you think these people could go to other places and get paid much more than that. I think it should be higher.

Public sector, North employing 260 apprentices It doesn’t affect us, because we pay £95 per week to start with. The National Minimum Wage is good for all those who are paid less than that but I think it really needs to be higher.

Public sector, North East employing 11 apprentices The National Minimum Wage for apprentices is probably about right for the people that we’re getting and the training. The opportunities that they’re getting totally outweigh any financial considerations. We’ve got people who’ve been applying for positions in the health service for years and got knocked back and end up working in retail shops. This scheme has given the opportunity for them to get an excellent CV, so the money isn’t high but they’re getting skills. It would be lovely to pay significantly more but the reality is that it’s just impossible.

Public sector, South East employing 2 apprentices Personally I think it’s too low and organisationally I think it’s OK, we pay slightly higher than and would always choose to do so.

3.6 Bonuses A total of 22 organisations said that apprentices received bonus payments. Of those providing a cash amount, bonuses were worth an average of £2,039 and, those for those organisations providing bonus data as a percentage of salary, average payments were worth 15.3 per cent. Further information on bonus payments is shown in tables 16 and 17 below.

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TUC/UNIONLEARN Apprentice Report – IDS

Table 16: Apprenticeship bonus payments - cash

Lower quartile Median £pa £pa 800

Average Upper quartile £pa £pa No. 980 2,625 2,039

8

Table 17: Apprenticeship bonus payments - % of salary

Lower quartile Median £pa £pa 5.0

Average Upper quartile £pa £pa 5.2 8.0

15.3

No.

14

3.7 Benefits Employers were asked whether they provided benefits to their apprentices and a total of 158 responded. Of those, 99, or 62 per cent, said that they did provide benefits to apprentices and the remainder said that they did not. The average number of benefits provided to apprentices by a company was two and the most popular number of separate benefits received by apprentices was one, provided by 51.1 per cent of companies.

Of the benefits apprentices received, most popular was a bike scheme, provided by 29 employers, or 13.7 per cent of the total benefits provided. Pension provision was the second most popular provided benefit – with 28 employers, or 13.3 per cent, saying that apprentices received this benefit. 19 employers, or 9 per cent of the total, said that apprentices received the same benefits as full-time staff. A number of employers provided unique benefits such as, for example, driving lessons, profit sharing, health club and, at one employer, free tea and coffee and one piece of fresh fruit per day. Further information on benefits received is provided in table 18.

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TUC/UNIONLEARN Apprentice Report – IDS

Table 18: Apprentice benefits received

Benefit Bike Scheme Pension Scheme Full benefits Healthcare Travel Support Discount scheme Childcare Vouchers Life assurance Lunch Company sick pay Employee assistance programme Staff discount Subsidised canteen Tool allowance Flexible benefits Holidays Share plan Uniform

No. 29 28 19 16 13 10 7 7 6 5

% of benefits provided 13.7 13.3 9.0 7.6 6.2 4.7 3.3 3.3 2.8 2.4

5 5 4 4 3 3 3 3

2.4 2.4 1.9 1.9 1.4 1.4 1.4 1.4

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4. Training, working hours and retention This chapter covers apprenticeship hours and training. Employers were asked to provide details on contracted/actual and on- and off-the-job training. Further information was requested on paid and unpaid time off for training.

The survey asked a number of questions on training arrangements and contracted working hours. Analysis of the responses, presented in table 19 below shows that on average, contracted apprenticeship hours were 36.8 per week, actual hours worked were 34.3 hours with 7.3 hours spent off-the-job training. The data presented here is unmatched – that is, not every company that provided data for the questions on training provided data for each response.

Table 19: All sector/all subject summary of apprenticeship hours and training

Hours off Paid time Contracted the job Total time off for hours Actual hours training training training 36.8 34.3 7.3 7.7 7.3 A breakdown of contracted working hours by apprenticeship subject area shows greater variance however and reveals that, on average, contracted working hours ranged from an average 39.3 hours per week in Arts, Media and Publishing, down to an average of 35.3 hours per week in Retail and Commercial Enterprise.

A response to the question, ‘On average, how many hours do apprentices actually work per week?’ reveals a slightly different picture with the highest number of average hours per week recorded in Engineering and Manufacturing Technologies at 36.5 hours, compared to 31.9 in Health, Public Services and Care. There was greater variation in hours spent off the job training with a maximum of 8.8 hours per week in Engineering and Manufacturing Technologies compared to 5.2 hours per week in Retail and Commercial Enterprise.

Further information on working hours and training is shown in table 20 below.

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Table 20: Average (weekly) hours and training by broad apprenticeship subject

Hours spent off-the jobtraining

Total hours spent training

Total paid hours off for training

Broad apprenticeship Contracted Actual subject hours hours Agriculture, Horticulture and Animal Care 36.7 33.1 6.3 6.3 6.3 Arts, Media and Publishing 39.3 32.0 7.1 7.1 7.1 Business, Administration and Law 35.9 32.0 6.0 6.2 6.2 Construction, Planning and the Built Environment 36.7 35.5 8.1 8.1 8.1 Engineering and Manufacturing Technologies 37.7 36.5 8.8 9.5 8.7 Health, Public Services and Care 36.4 31.9 6.7 7.1 7.1 Information and Communication Technology 36.9 33.8 6.0 6.0 6.0 Retail and Commercial Enterprise 35.3 33.5 5.2 5.7 4.7 *This survey was taken in the month before the National Minimum Wage was extended to cover off-the-job-training for apprentices According to the survey, three firms, two manufacturers and a membership organisation, said that they did not pay their apprentices for the 8, 8 and 4 hours off per week respectively that their apprentices spent weekly on training.

Training by specific apprenticeship subject A more nuanced picture is provided by an analysis of specific apprenticeship subject – though not every subject is covered as responses with less than three returns were not used.

As table 21 shows, average contracted hours ranged from 40.0 hours per week in Electro50

TUC/UNIONLEARN Apprentice Report – IDS

technical down to 34.8 hours per week in Accountancy. Actual hours worked were 39.3 hours per week in Metals Industry down to 31 in Accountancy. Average total time spent training ranged from a maximum of 10.4 hours per week in Metals Industry down to 4.9 hours in Hospitality and Catering.

Table 21: Weekly hours and training by specific apprenticeship subject

Specific Hours spent Total hours Total paid apprenticeship Contracted Actual off-the job- spent hours off for subject hours hours training training training Engineering 37.4 36.2 8.7 10.1 8.7 Business Administration 36.3 32.2 5.9 6.2 6.2 Health and Social Care 36.2 31.0 6.1 6.8 6.8 Electrical & Electronic Servicing 36.9 35.1 8.3 8.3 8.3 Construction 39.2 37.8 9.2 9.2 9.2 Metals Industry 38.2 39.3 10.4 10.4 10.4 Customer Service 36.4 33.8 5.2 6.6 5.2 IT User 36.9 32.7 5.8 5.8 5.8 Horticulture 36.6 31.8 7.0 7.0 7.0 Accountancy 34.8 31.0 5.9 5.9 5.9 Electricity Industry 38.6 36.8 10.3 10.3 8.8 Hospitality and Catering 36.8 33.1 4.9 4.9 4.9 Amenity Horticulture 37.0 34.7 6.5 6.5 6.5 Creative Apprenticeship 39.0 31.7 7.1 7.1 7.1 Electrotechnical 40.0 37.2 6.8 6.8 6.8 Housing 36.0 33.0 5.2 5.2 5.2 IT Services and Development 37.2 36.2 5.8 5.8 5.8 An alternative perspective on training and hours is presented in table 22 below which highlights average contracted/actual and training hours per week by industry sector.

Because different apprenticeship areas have different contracts and training requirements, the responses are based on number of apprenticeships within a company, rather than 51

TUC/UNIONLEARN Apprentice Report – IDS

individual companies. Industry sectors with fewer than 3 returns have been excluded from the analysis. According to the table the maximum average contracted hours per week was 40 hours, reported in both Culture. Average hours in Energy & Water were 39.0 and at the other end of the range, contracted hours were lowest in Chemicals, pharmaceuticals & oil, Public Sector and Business Services reported at 33.3, 35.3 and 35 contracted hours per week respectively.

Highest average actual hours worked per week, at 40.3 were in Engineering and Manufacturing Technologies: Construction, Planning and the Built Environment and Education reported the lowest, at 30.4.

Industry sector responses to the question on average total time training shows that apprentice time spent training ranged from as high as 13 hours per week in Telecommunications down to just 4 hours in Business Services and Retail and Commercial.

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Table 22: Average (weekly) hours and training by industry sector

Business services Care services & Health, Public Services and Care Chemicals, pharmaceuticals & oil Culture Education Energy & water Engineering and Manufacturing Technologies Construction, Planning and the Built Environment Engineering and Manufacturing Technologies: Electronics Engineering and Manufacturing Technologies: General Engineering and Manufacturing Technologies: Vehicles

No.

Average hours off the job training

No.

Average total time training

No.

Average hours paid time off

4

3.0

4

3.0

4

3.0

4

34.0

16

6.4

16

6.4

16

6.4

16

4 4 11 12

33.3 33.0 30.4 37.7

4 4 11 12

7.5 7.0 7.2 8.1

4 4 11 12

9.5 7.0 7.9 8.1

4 4 11 12

7.5 7.0 7.2 8.1

4 4 11 12

38.0

3

40.3

3

10.0

3

10.0

3

10.0

3

37.1

4

31.9

4

7.8

4

7.8

4

7.8

4

37.3

4

35.5

4

12.5

4

12.5

4

12.5

4

38.3

6

37.0

6

8.0

6

8.0

6

8.0

6

Industry sector

Contracted hours average

No.

Actual hours average

35.0

4

35.0

35.6

16

33.3 40.0 37.0 39.0

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& components Food, drink & tobacco Health Local government Other manufacturing Public sector Retail and Commercial Enterprise Telecommunications

No.

Average hours off the job training

No.

Average total time training

No.

Average hours paid time off

6

11.1

6

11.1

6

11.1

6

33.0

19

6.1

19

6.9

19

6.6

19

26

32.1

24

6.2

27

6.2

27

6.2

27

38.4

17

37.4

17

8.4

17

8.4

17

8.4

17

35.3

19

32.2

19

6.5

19

6.5

19

6.5

19

37.8

4

36.0

4

3.8

4

3.8

4

3.8

4

36.0

4

36.0

4

13.0

4

13.0

4

13.0

4

Industry sector

Contracted hours average

No.

Actual hours average

37.6

6

38.6

37.4

19

36.2

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5. Completion and Retention rates The questionnaire asked employers a number of questions on training completion rates and retention rates. According to the responses, an average of some 92.6 per cent of apprentices completed their apprenticeship, with not much difference between private (92.8 per cent) and public sector (92.3 per cent) completion rates. Retention rates however appeared to be better in the private than the public sector, as table 23 demonstrates.

Table 23: Average proportion of apprentices completing training and remaining after 1, 3 and 5 years

Private sector Public sector

Average proportion completing training No.

Average proportion remaining one year after completion No.

Average proportion remaining three years after completion No.

Average proportion remaining five years after completion No.

92.8

156

95.5

141

91.0

119

88.0

104

92.3

122

73.7

92

64.1

63

59.8

52

A graphical representation of the same data is presented in chart 15 below.

Chart 15: Average proportion of apprentices completing training and remaining after 1, 3 and 5 years

120.0 100.0

92.8 92.3

80.0

95.5

91.0

88.0

73.7 64.1

60.0

59.8 Private sector

40.0

Public sector

20.0 0.0 Average proportion completing training

Average Average proportion proportion remaining one year remaining three after completion years after completion

Average proportion remaining five years after completion

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A different perspective is provided on an analysis of broad apprenticeship subject, as shown in table 24. The table shows that training completion rates ranged from 100 per cent in Education and Training down to 80 per cent in Arts, Media and Publishing. Engineering and Manufacturing Technologies had the highest post-training completion rates ranging from 94.8 per cent after one year, 89.5 per cent after three years and 86.0 per cent remaining five years after training.

Table 24: Average proportion of apprentices completing training and remaining after 1, 3 and 5 years by broad apprenticeship subject

Broad apprenticeship subject Agriculture, Horticulture and Animal Care Arts, Media and Publishing Business, Administration and Law Construction, Planning and the Built Environment Education and Training Engineering and Manufacturing Technologies Health, Public Services and Care Information and Communication Technology Retail and Commercial Enterprise

Average % remaining Average % one year completing after training No. completion No.

84.6

7

80.0

5

93.9

Average % remaining three years after completion No.

Average % remaining five years after completion No.

28.6

5

17.7

3

11.0

3

53

81.9

42

78.0

25

84.6

19

86.9

16

77.1

15

68.4

11

66.7

11

100.0

3

93.7

121

94.8

111

89.5 102

86.0

95

89.0

30

84.4

22

81.4

14

70.1

14

95.6

12

83.0

12

57.6

9

49.5

6

94.3

28

83.9

23

75.5

15

63.4

7

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The same analysis is also provided by specific apprenticeship subject in table 25 on the following page. Sectors with less than three responses have been excluded from the analysis.

Table 25: Average proportion of apprentices completing training and remaining after 1, 3 and 5 years by specific apprenticeship subject

Accountancy Amenity Horticulture Automotive Industry Building Services Engineering Technicians Business Administration Children's Care Learning and Development Construction Customer Service Electrical & Electronic Servicing Electricity Industry Electrotechnical Engineering Engineering Technology Health and Social Care Horticulture Hospitality and Catering Housing IT Services and Development

Remaining one year after Completing completion training % No. % No. 99.7 7 89.8 5 66.7

3

68.0

3

98.3

3

92.9

Remaining three years after completion % No.

Remaining five years after completion % No.

93.3

3

93.3

3

43

79.0

33

80.2

20

86.7

16

66.0 90.0

3 8

82.6

8

79.0

7

76.4

7

97.0

15

77.7

11

62.1

7

48.8

5

98.7

12

92.7

11

93.0

10

89.4

9

99.3 79.2 94.8

4 6 52

98.0 83.3 96.1

4 6 48

95.0 75.0 90.6

4 6 47

95.0 78.0 88.2

4 5 44

100.0

7

99.0

5

88.1 98.0

13 4

78.2 35.8

9 4

66.3

4

64.3

4

98.0 91.3

5 3

96.3 96.7

4 3

91.7 96.7

3 3

63.0

3

96.0

4

65.0

4

47.0

4

51.0

3

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IT User Laboratory Technicians (Generic) Metals Industry Property Services Vehicle Maint. and Repair

96.2

5

89.4

5

49.7

3

100.0 91.7

3 6

100.0 99.7

3 6

98.3 87.5

3 6

96.7 80.0

3 6

68.8

4

50.0

4

33.0

3

33.0

3

98.9

7

75.5

6

62.8

5

36.3

4

6. Employers’ attitudes The questionnaire sent out to employers also included an attitudinal section and the results from this, combined with information gathered during telephone interviews provides the opportunity to gauge UK industry views on apprenticeships.

A range of employer responses were gathered during telephone interviews. One public sector employer for example, when asked about their experiences in employing apprentices said: Public sector, North East employing 11 apprentices

I think it’s absolutely worthwhile and an exciting opportunity and a privilege to be involved with apprentices and it’s nice to see young people coming into the work environment…. There’s a drive nationally about getting young people into work in these sorts of schemes but I would say it does take a lot of coordination but it’s worth the effort.

Another employer in the private sector, commenting on how the apprentice scheme, in its first year, was going said: Private sector engineering firm, South East employing 2 apprentices

I don’t know if we’ve just been lucky but for us the whole process has worked really well. Having the relationship with the local college meant that we didn’t have any problems going through the recruitment process. College staff come in and meet with the apprentices. They’ve all done exceptionally well. They’ve finished their first year and got great results in their exams and at this stage we’re extremely enthusiastic about the whole scheme.

Another organisation said that funding issues were determining the type of apprentice they could take on:

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Public sector, London, employing 42 apprentices

It’s disappointing that the adult funding is not as readily available as in previous years and it would be great for us to be able to target women returners but there’s no funding available so even if there are jobs we couldn’t put them on the training. If we’re to be more flexible in the people we are employing this needs to change or we’ll end up employing one type of person, the 16-24 year olds.

On the whole, however, employers in the telephone interviews were positive about their experiences in employing apprentices. One organisation, that was offering apprenticeships again after a twenty-year break said: Private sector research firm, North West employing 1 apprentice

It’s twenty odd years since we’ve done an apprentice program. A lot of our senior management team here were apprentices themselves so they understand the benefit of it so hopefully if the first one works it will be a thing for the future.

Another employer commented: Public sector, South East employing 2 apprentices

…it’s a fantastic scheme that gives opportunities to the right people and I really hope we carry on with it. It’s a great way of filling gaps, developing people in the local community and this is extremely important. The amount of support we get from the NAS is also absolutely brilliant and they look after you the whole way, they make it easy and make it work. Employing apprentices is a no-brainer, especially in the current climate.

The survey responses provide further quantitative data on employer attitudes. It asked employers a range of questions to gauge responses on why they employ apprentices. The categories provided were: •

They provide value for money

•

To train the work force of the future

•

We can train them in our way of doing things

•

Difficult to recruit staff with required skills

•

Makes us more attractive as a company to potential recruits

•

We need younger workers in an ageing workforce 59

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•

Provides us with free cheap trial of staff

•

To give young people a chance to learn a skill

•

Because we receive funding to do so

•

It’s the best way to learn

The following charts show the employer responses:

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They provide value for money

Base: 153 A majority of employers agree, or strongly agree that apprentices provide value for money. Nearly 11 per cent disagree.

To train the workforce of the future

Base: 164 Nearly all employers who answered this question either agreed, or agreed strongly that by employing apprentices they were training the workforce of the future. No employers strongly disagreed with this statement

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We can train them in our way of doing things Base: 161 Nearly 100 per cent of employers said that one of the benefits of employing apprentices is that they can train them in the organisation’s way of doing things. No employers strongly disagreed with this.

Difficult to recruit staff with required skills Base: 162 Opinion here was divided with around 55 per cent agreeing or agreeing strongly that it was difficult to recruit staff with the required skills. Around 41 per cent said that they disagreed with this.

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Makes us more attractive as a company to potential recruits Base: 161 Just over 81 per cent of organisations agreed or strongly agreed that offering apprenticeships made them more attractive as an employer.

We need younger workers in an ageing workforce

Base: 162 Over 80 per cent agreed or agreed strongly that they required younger workers in an ageing workforce.

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Provides us with free/cheap trial of staff Base: 160 Around 5 per cent of employers agreed or agreed strongly that they took on apprentices to be provided with a free/cheap trial of staff. 91 per cent of employers disagreed with this.

To give young people a chance to learn a skill Base: 163

Some 97 per cent of employers agreed or agreed strongly that apprenticeships offered young people the chance to learn a skill.

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Because we receive funding to do so

Base: 161 Opinions to this response were mixed. Some 57 per cent of employers disagreed or disagreed strongly that they employed apprentices because they received funding to do so while around 33 per cent of employers said that this was the case.

It’s the best way to learn Base: 160 Around 89 per cent of employers said that they employed apprentices because it was the best way for new staff to learn.

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Organisations not employing apprentices The survey was also received by organisations that did not employ apprentices. There was an opportunity for employers to provide reasons for not employing apprentices and these are highlighted in the tables below. The categories provided were: •

Not required relevant in our business

•

We prefer to recruit fully trained staff

•

We prefer to train in house

•

The job does not require a high level of skill

•

No apprenticeships available for our business specialism

•

No vacancies not taking on new staff

•

Lack of resources/facilities

•

Do not know how to go about employing apprentices

•

Lack of external funding/grants

•

Cannot afford it/lack of funding

•

Too difficult to administer

•

It is not our decision/head office decision

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Not required/relevant in our business Base: 44 Some 34 per cent either agreed or agreed strongly that apprentices were not relevant to their business.

Almost half, however, disagreed with this statement.

We prefer to recruit fully-trained staff Base: 44 Around 43 per cent agreed, or agreed strongly with this statement.

Some 44 per cent disagreed.

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We prefer to train in-house

Base: 45 48 per cent agreed with this statement and a further 40 per cent disagreed.

The job does not require a high level of skill Base: 45 A majority, around 77 per cent, disagreed with this statement.

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No apprenticeships available for our business specialism Base: 43 Over a third of respondents agreed or agreed strongly that there were no apprenticeships available in their business specialism.

No vacancies/not taking on new staff Base: 45 Almost half the respondents to this category agreed or agreed strongly that the reason for no apprenticeships was a recruitment freeze or that there were no vacancies.

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Lack of resources/facilities Base: 44 Almost 30 per cent of respondents agreed or agreed strongly that they did not recruit apprentices because of a lack of resources. Some 53 per cent disagreed with this as a reason for not providing apprenticeships.

Do not know how to go about employing apprentices Base: 44 Some 27 per cent of employers agreed or strongly agreed that they did not provide apprenticeships because they did not know how to go about doing so.

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Lack of external funding Base: 44 Around a third of respondents agreed that a lack of funding was responsible for them not providing apprenticeships.

Too difficult to administer Base: 45 More than half of respondents disagreed that they did not employ apprentices because of administration problems. Some 27 per cent agreed that this was a reason for them not employing apprentices.

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It is not our decision (head office decision) Base: 45 The majority of respondents, around 60 per cent, disagreed with this as a reason for not employing apprentices.

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7. Telephone interviews Below are the employer responses to questions asked during telephone interviews.

7.1 Do you benchmark apprentice pay against competitors in your region/sector? How do you benchmark apprentice rates?

Public sector, North East employing 11 apprentices From national guidance, we pay at £95 per week, also partnership organisations are paying the same. And we look at local information and other organisations who are running apprenticeships and that’s what they’re doing at this level of apprenticeship.

Private sector transport firm, Northern Ireland employing 2 apprentices We use the EEF guidance and what we did was started off by looking at an entry level of the job they’re training into. So for a Year 4 apprentice they are paid a proportion of the entry level rate Public sector, London, employing 42 apprentices We have a policy of paying London living wage regardless of what level of employment. Apprentices are on the lowest rate of this which is around £14,000.

Private sector research firm, North West employing 1 apprentice What we did was look at the rate for fully qualified role and work out a proportion. Each year the rate increases until after four years the apprentice will be on the fully-qualified rate.

7.2 Do you advertise apprentice rates? If so, where?

Public sector, North East employing 11 apprentices This is the first cohort we’ve had and we went through NHS and local press. We didn’t use the national apprenticeship clearing house – we were advised not to – we were told the data stays on for a long time, it takes a long time to get and by the time it does go on we were told we’d be getting calls months and weeks later. That’s what we were advised but I understand there’s a requirement to do that now.

Private sector engineering firm, South East employing 2 apprentices We didn’t used to advertise salaries initially. We worked with one of our local colleges so we advertised in the local paper and the college advertised via the internet. In our advert we put the college as the contact point.

Private sector transport firm, Northern Ireland employing 2 apprentices The local ETC advertises under an umbrella advert for apprentices and they have thousands of replies for the whole area. They then write to the apprentices and tell them who’s offering apprentices and 73

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then the apprentices go through a battery of tests and then we received about 45 applications for our considerations.

Private sector engineering firm, London Yes, flyers in local schools, colleges/ government website.

Public sector, London, employing 42 apprentices Council website, recruitment days at local job centres, leaflets at local schools, libraries, leisure centres etc.

Public sector, North employing 260 apprentices We do. Advertising varies. All our vacancies go on the NAS database, plus the Connexions get connected website, plus Sector 1, a Government website, also jobcentre plus, and a council website.

We advertise the salary scale and make it clear that transition from the apprentice rate is possible.

Public sector, South East employing 2 apprentices We advertise via NAS and direct that to our website so with the local authorities in this area we have a joint recruitment website and all of our jobs go on there. We also advertise in the job centre and Connexions. We advertise the pay rates.

7.3 Is there a dedicated person/team to manage apprentices? What are the particular difficulties in managing apprentices?

Public sector, North East employing 11 apprentices Yes, there’s a steering group that manages it.

Private sector engineering firm, South East employing 2 apprentices It’s just part of the general hr function. Now that they are here they are very much part of the workshop and the reporting lines within the workshop. Now that they are here I have less to do with them than I did in the recruitment process.

Private sector transport firm, Northern Ireland employing 2 apprentices Not really a dedicated resource but we are partnering with our local engineering training council so there is a three way agreement in place between us, the apprentice and the training provider. It works in that our contract is to provide employment and an opportunity, not that we will train you.

The ETC then provide an individual training plan which includes formal study towards an HND. Then the apprentice has to attend college, training courses etc and in the first years there’s probably more off the job training and the balance will shift in the third and fourth year.

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Private sector engineering firm, London The HR team is split and each HR advisor has their own area of the business and they will look after whomever is in their part of the business and there is also a dedicated training manager who looks after them on a daily basis.

Private sector healthcare firm, South East employing 4 apprentices We’re not quite that big, 250 staff already together so we have a small HR department that deals with all that sort of thing.

7.4 Where do you access information on changes in legislation relating to employment of apprentices, including on apprentice NMW? Private sector engineering firm, South East employing 2 apprentices We probably don’t keep up to date because although they’re going to college and they’re training – they’ve got permanent terms and conditions. Apprenticeship is a term rather than an employment condition. We didn’t tie their contract in with any rules such as if you don’t pass your course you can’t stay in the job. But I have to say the college is very good and if there are things we need to know then they will keep us up to date with that.

Private sector transport firm, Northern Ireland employing 2 apprentices We just keep up to date generally and a lot comes through from the local college. We have strong links with the college.

Public sector, London, employing 42 apprentices Mainly from apprentice website, representative from the NAS comes out and sees us regularly and we meet regularly – there is a formal conference event.

Public sector, North employing 260 apprentices Through the NAS and we get regular newsfeeds regarding changes etc. And we’ve always got our ear to the ground and so if for example if there is a change in minimum working hours we would get that information from NAS and we would disseminate to our partner organisations.

Public sector, South East employing 2 apprentices Mainly through close links with local colleges. Also through regular contact with NAS. They are absolutely brilliant. You’re given a name and I can ring any time and she contacts me every two three months to see how things are going. You need that support to make sure you’re doing things as you should be.

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7.6 How many applicants (on average) do you get per apprentice vacancy advertised?

Public sector, North East employing 11 apprentices We had a limit of 50 applications per vacancy and each one hit 50 within a week.

Private sector engineering firm, South East employing 2 apprentices We didn’t do the first sifting the college did that. We had about 10-12 applications and took 2 apprentices. We were quite pleased because we’d tried through a different route to recruit and had nothing. So this was a really good response and it was great the college did the first round of sifting so the people were generally interested rather than applying because their parents told them to. So it was very useful. We used to try and recruit through the Engineering Construction Industry Training Board – we had to pay a levy to them every year and one of the things they could offer was an apprenticeship whereby if someone successfully goes through the course we get money back. But although I know they advertised they didn’t really get a response. I think because their area wasn’t that relevant the apprentice had to spend the first year solely in the training school. So the location played a part – it wasn’t really practical.

Private sector engineering firm, London Around 30/40 applications per year (we’ve got 10 in total) and that was for one position.

Public sector, London, employing 42 apprentices Around 20 applicants per position, but then 8 we recently advertised we had 400.

Public sector, North employing 260 apprentices It varies depending on location – we have some hotspots and it depends on the links we’ve got with the referral agency. But we have a talent pool of about 350 young people so when a vacancy arises we notify the talent pool and from within that we can get between 3-30 applications depending on the job. The talent pool requires online application and then they get to hear about employability sessions, vacancies, other career events.

Private sector healthcare firm, South East employing 4 apprentices Not as great demand as we expected, around 4 per each vacancy.

7.7 What would make you offer more apprenticeships?

Public sector, North East employing 11 apprentices If we had the funding to offer more we would. The funding we’ve received enabled this project. More funding would be a big incentive for us to continue offering apprenticeships 76

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Private sector transport firm, Northern Ireland employing 2 apprentices Seeing how this works out. We chose to start with two because we have an ageing population and our apprentices are young, around 19/20. We have found previously that with one apprentice it didn’t work so we’ve gone for two to buddy them up and it seems to be working better.

One of the great things about apprentices is that you can focus on their attitudes and behaviours. It’s quite easy to find capability in the labour market but getting the right attitude can be more difficult and if you bring an apprentice in then you can make these something they can aspire to and train them in that direction, you can shape them and this helps build a cohesive culture.

If we take more it depends on headcount and resource planning. We do have another craft department and they have an ageing population and we may look at introducing a couple of apprentices there.

Private sector engineering firm, London We’ve got an ageing workforce and a lot of them work past retirement. This causes problems because we don’t have the spaces to put the apprentices in. We don’t have tools and workstations to accommodate additional headcounts. And it takes a long time to get apprentices up to speed.

Public sector, North employing 260 apprentices Guess what? More funding! The situation is quite bleak and we’re facing restructuring, redundancies and that’s going to have a huge impact on the apprenticeship offering. The number of vacancies that we would have had due to turnover will be less because of redeployment. But we know that we have to be innovative about it so where we’re working with partners for whom this is not so bleak we can find ways to place young people.

It’s difficult because for us an employer, because we’re such a large employer, where there are pots of funding we’re not eligible for it because we’re too big and we’re constantly looking for more funding to support the apprenticeship agenda. It’s something we’re really keen to do but we’re hampered because of our size. It’s frustrating, the efforts are there and the skills, but we can’t do it.

Private sector healthcare firm, South East employing 4 apprentices We’re thinking of running another batch of apprentices, broadly running one group of four per year.

It is proving to be very successful, the apprentices like it, the staff like it. It enables us to have a continuous supply of well-trained staff who can choose to stay with us.

Private sector research firm, North West employing 1 apprentics We’d like to offer more. It’s going well and it’s something we would do again. I’m trying to push to do one every year. It’s addressing the fact that the skills that we’re looking for are dying out. A lot of people are coming up for retirement so we need to address this.

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Public sector, South East employing 2 apprentices They have to be where there is a vacancy; it would be nice if we could have them as extras. But I’m working to let everyone know that apprentices are an option when vacancies do come up.

7.8 Are you experiencing any skills shortages in any apprenticeship areas?

Public sector, North East employing 11 apprentices Our problem was actually people over-qualified. People with Masters and even PhDs were applying.

The couple of people with PhDs were overseas and there were some with Masters as well.

Private sector engineering firm, London I think we struggle to get good maths skills. Maths is not as strong in the schools as it used to be and a lot of them need extra tuition. It’s extremely high level and quite tough going so we specify that applicants need high level GCSEs Public sector, North employing 260 apprentices We have some problems in terms of work readiness. We do a lot getting people ready to apply, how to fill in application forms, prepare a CV but there is a gap in getting young people up to speed in terms of work readiness. There is a clear gap in the provision. Where we constantly have to challenge managers to recruit young people and there is that stigma to do with apprentices and we have to sell this idea, but then people might turn up who are the polar opposite of what we’ve been saying because they’ve had no idea of what to do. Whether it’s what to wear for an interview, communication – I think there’s a gap there for the schools to help young people be more ready for the workplace.

7.9 Has the recession had an impact on your apprenticeship offerings?

Public sector, North East employing 11 apprentices It’s too early but some of the very bright candidates, we probably wouldn’t have had the chance to recruit them before – I think now more people are choosing to enter the workforce this way rather than going to university. They thought it would be better to have experience rather than degrees.

These people are between 16-21 and a good half of them have good qualifications but don’t have any direction in terms of a career and so for some of them this is also an investigative opportunity Public sector, North employing 260 apprentices We have a commitment to vulnerable groups and we make sure that carers that look after children or elderly/disabled people are supported if they want to do an apprenticeship. If they receive income support, benefits, as soon as they make the transition to an apprenticeship on 95pw then the benefit stops and that 95pw isn’t enough to support the carer to live independently and that’s when you 78

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create that cycle when they return to benefits and that’s a situation that really needs to be looked at.

Now is a crucial time to address this.

Private sector engineering firm, South East employing 2 apprentices The reason we didn’t do anything this year hadn’t anything to do with that. It was just to make sure that things were working. The recession hasn’t affected that decision.

Private sector engineering firm, London We’re considering whether to continue whether this is something that’s feasible for us to continue with. The PEO (performing engineering operations) proposal to drop funding, could cost us three thousand per apprentice. Which when you combine with salary etc, it’s not good, especially as they’re trying to encourage in the UK, it seems an odd thing to be doing. This is a blanket thing but it impacts on the health and safety aspects of engineering…It’s delivered in the college, in a safe environment. Engineering is different to say floristry, hair-dressing etc. It takes a long time to train engineers to be able to do their work safely…funding bodies don’t seem to have recognised this.

Public sector, London, employing 42 apprentices We have not been allowed to employ as many as we would like to in-house. We’re hoping that apprenticeships are the way forward and something we are going to continue to push but it might not be as many as last year. Our retention rate in 90% so this is definitely a way to get younger people into the organisation and into jobs that they might not have looked at.

It’s something we would like to have more funding for. Disappointing that the adult funding not as readily available as in previous years and it for jobs like in health and social care it would be great for us to target women returners but there’s no funding available so even if there are jobs we couldn’t put them on the training. Local colleges are charging 6k for an adult apprentice and we’re already paying 14k. (the college gets funding for the courses 16-18 fully funded – 19-24 is 50% contribution and we have to top up funding.) If we’re to be more flexibile in the people we are employing this needs to change or we’ll end up employing one type of person (16-21) Private sector healthcare firm, South East employing 4 apprentices I think I would say that I wouldn’t have started this up much more than a year ago because at a time of full employment they probably wouldn’t be very attractive.

Public sector, South East employing 2 apprentices My role is disappearing so there will be no point of contact within the organisation and this will also make it hard to push the whole ethos of apprenticeships.

7.10 Apprentices – general comments/observations Public sector, North East employing 11 apprentices 79

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I think it’s absolutely worthwhile and an exciting opportunity and a privilege to be involved with it and it’s nice to see young people coming into the work environment, it’s a refreshing way of getting people into the NHS. There’s a drive nationally about getting young people into work in these sort of schemes but I would say it does take a lot of coordination.

Private sector engineering firm, South East employing 2 apprentices Providing apprenticeships is very much driven by the age profile in the workshop at the moment.

There’s a big gap of people going into the hands on engineering in the workshop. When we recruit we’re successful in recruiting experienced people which is great but it means the age profile is high.

So with the apprentices it’s a great opportunity to bring younger blood into the workshop and know that in four or five years time when people are retiring we’ve got people in to replace them.

I don’t know if we’ve just been lucky but for us the whole process has worked really well. Having the relationship with the local college meant that we didn’t have any problems going through the recruitment process. They come in and meet with the apprentices. They’ve all done exceptionally well. They’ve finished their first year and got great results in their exams and at this stage we’re extremely enthusiastic about the whole scheme. But this is the first time. We don’t tend to look at this in other areas but if someone said they did want someone to come in and learn in an admin role we might look at doing something similar there. This experience that we’ve had would definitely not put me off doing this in other areas.

Private sector transport firm, Northern Ireland employing 2 apprentices It is too soon for us to say but if this works we will certainly expand. The two apprentices we have are of a very high standard, very solid GCSEs in all the right subjects. They have a good work ethic and appear very committed and very enthusiastic to date.

Private sector engineering firm, London It’s a fantastic scheme and they do really well out of it. Retention rates are extremely high. We don’t tend to lose any of our apprentices.

Private sector research firm, North West employing 1 apprentice This is the first year. It was something we’d wanted to do for a couple of years but it takes time to set up and you need head-count for it. Plus we can see that some of the skills we wanted were dying out in the market in this region. It’s twenty odd years since we’ve done an apprentice program. A lot of our senior management team here were apprentices themselves so they understand the benefit of it so hopefully if the first one works it will be a thing for the future.

Public sector, South East employing 2 apprentices For me, it’s a fantastic scheme that gives opportunities to the right people and I really hope this council carries on with it. It’s a great way of filling gaps, developing people in the local community 80

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and this is extremely important. The amount of support we get from the NAS is also absolutely brilliant and they look after you the whole way, they make it easy and make it work. Employing apprentices is a no-brainer, especially in the current climate.

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8. Survey methodology The methodology for this project comprised three strands: (i) an on-line quantitative survey sent to a sample of UK employers (ii) a qualitative component consisting of a series of ten telephone interviews to explore in more depth employers’ views on the subject areas addressed by this research and (iii) a literature review of existing research on apprenticeship pay and employment issues.

Online survey The survey was designed in SurveyMonkey2. This is a web-based survey tool, which is extremely user-friendly and also provides easy access to the survey.

In terms of the survey design, discussions were held with TUC/Unionlearn about how best to capture the relevant data. The survey was finalised in mid-September 2010 and sent out to over 7,000 UK employers. This sample was derived from IDS in-house databases and a link to the survey was also sent out to TUC/Unionlearn industry contacts. To encourage participation contributing organisations will be presented with summary findings of the results.

One of the challenges in designing the questionnaire was to ensure as much information as possible was gathered, particularly where employers provide more than one apprenticeship.

It was decided that employers would be asked to first list up to four apprenticeship subject that they provide and then provide relevant pay and employment data for each subject.

Therefore one company could provide up to 20 separate salary rates. In total, from the 289 responses, a total of 235 companies provided 1,074 separate apprentice salary rates, including fully-qualified rates. As well as pay data there were also qualitative attitudinal questions on ‘Why do you employ apprentices?’ and ‘If you do not employ apprentices – why not? The responses to these sections can be found in chapter 6.

The survey comprised 36 questions over five subject areas. A copy of the questionnaire can be found in Appendix 1.

2

www.surveymonkey.com

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SurveyMonkey allows for a respondent’s answers to be entered directly into a database.

Once the survey was closed the database was imported into SPSS (originally ‘Statistical Package for the Social Sciences’), cleaned and then analysed.

In summary, some 289 organisations responded with data for the survey. Some 54 companies said that they did not employ apprentices and provided reasons why.

Telephone interviews The qualitative element of the research took the form of semi-structured telephone interviews with 10 employers who had indicated in the survey that they would be happy to be contacted. The interviews lasted between 15 and 30 minutes and were taped.

Questions asked were:

1. Do you benchmark apprentice pay against competitors in your region/sector? How do you benchmark apprentice rates?

2. Is there a formula for setting apprenticeship pay, e.g. proportion of qualified rate?

3. Do you use apprentice NMW? If not, why?

4. Is there any trade union involvement on setting apprentice rates?

5. Does apprentice pay vary by location?

6. Do you advertise apprentice rates? If so, where?

7. Is there a dedicated person/team to manage apprentices? What are the particular difficulties in managing apprentices?

8. Are you affected by the apprentice NMW? 9. Where do you access information on changes in legislation relating to employment of apprentices, including on apprentice NMW? 10. Do you feel that the apprentice NMW is currently set at the appropriate level?

11. How many applicants (on average) do you get per apprentice vacancy advertised?

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12. What would make you offer more apprenticeships?

13. Do you advertise your pay rates when you advertise apprentice vacancies? If not, at what point does the apprentice find out what he/she will be paid?

14. Are you experiencing any skills shortages in any apprenticeship areas?

15. Has the recession had an impact on your apprenticeship offerings?

16. What further comments/reflections do you have on employing apprentices?

Literature review IDS drew on existing external research (such as Fong B and Phelps A, Apprenticeship Pay: 2007 Survey of Earnings by Sector, BMRB Social Research for Department of Innovation and Skills, 2007 and Ullman A and Deakin G, Apprenticeship Pay: A Survey of Earnings by Sector, BMRB Social Research for Department of Education and Skills, 2005) as well as our own publications (IDS HR Studies 912 Apprenticeships and the annual Pay and Conditions in Engineering) to provide an overview of existing material and to identify issues and inform survey design and semi-structured interview questions.

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Appendix

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1. Company details 1. Contact details Name Job Title Company Name Address Phone number Email

2. Do you require your information to be used anonymously? j k l m n

Yes

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No - it doesn't matter

3. Region c d e f g

North East

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Scotland

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Wales

c d e f g

Northern Ireland

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North West

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Yorkshire and The Humber

c d e f g

East Midlands

c d e f g

West Midlands

c d e f g

East of England

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London

c d e f g

South East

c d e f g

South West

c d e f g

All regions

4. Are you: j k l m n

An Apprenticeship Training Agency?

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A public sector employer?

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A private sector employer?

5. Number of employees

6. Industry sector: 6 Other (please specify)

7. Do you employ apprentices? j k l m n

Yes

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No

2. Apprenticeships - pay 1. How many apprentices do you currently employ?

2. Are your apprentices employed: j k l m n

Directly by you

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Through a training agency

Other (please specify)

3. In how many different subjects/areas do you currently offer apprenticeships?

The following questions refer to the subjects and areas in which you offer apprenticeships.

We have provided fields below for up to 4 apprenticeship subjects. If you provide more than 4 we would be grateful if you could input up to 4 in the following questions and list the remaining in the box provided below.

4. In which subjects/areas do you currently offer apprenticeships?

Apprenticeship subject/area Apprenticeship 1

6

Apprenticeship 2

6

Apprenticeship 3

6

Apprenticeship 4

6

Other apprenticeships offered (E.g. Apprenticeship 5 - Metals, Apprenticeship 6 - Youth Work etc)

PLEASE NOTE: Once you have provided a response to question 4 it would be helpful if you could maintain consistency throughout the rest of the survey, e.g., if 'Apprenticeship 1' is 'Retail and Commercial Enterprise' it should remain so for the rest of the responses for 'Apprenticeship 1'

5. How long does each apprenticeship last?

Apprenticeship 1 Apprenticeship 2 Apprenticeship 3 Apprenticeship 4

6. On average what proportion (%) of apprentices complete their training with you Apprenticeship 1 Apprenticeship 2 Apprenticeship 3 Apprenticeship 4

7. On average what proportion (%) of apprentices remain employed with you ONE year after completion?

Apprenticeship 1 Apprenticeship 2 Apprenticeship 3 Apprenticeship 4

8. On average what proportion (%) of apprentices remain employed with you THREE years after completion?

Apprenticeship 1 Apprenticeship 2 Apprenticeship 3 Apprenticeship 4

9. On average what proportion (%) of apprentices remain employed with you FIVE years after completion?

Apprenticeship 1 Apprenticeship 2 Apprenticeship 3 Apprenticeship 4

10. For each apprenticeship you offer, what is the approximate percentage of female apprentices? % of female apprentices Apprenticeship 1

6

Apprenticeship 2

6

Apprenticeship 3

6

Apprenticeship 4

6

The following questions refer to the average pay rates of the various types of apprentices that you employ.

11. On average, what is the YEAR/STAGE 1 basic annual rate for apprentices (Gross ÂŁpa) Apprenticeship 1 Apprenticeship 2 Apprenticeship 3 Apprenticeship 4

12. On average, what is the YEAR/STAGE 2 basic annual rate for apprentices (Gross ÂŁpa) Apprenticeship 1 Apprenticeship 2 Apprenticeship 3 Apprenticeship 4

13. On average, what is the YEAR/STAGE 3 basic annual rate for apprentices (Gross £pa) Apprenticeship 1 Apprenticeship 2 Apprenticeship 3 Apprenticeship 4

14. On average, what is the YEAR/STAGE 4 basic annual rate for apprentices (Gross £pa) Apprenticeship 1 Apprenticeship 2 Apprenticeship 3 Apprenticeship 4

15. On average, what is the YEAR/STAGE 5 basic annual rate for apprentices (Gross £pa) Apprenticeship 1 Apprenticeship 2 Apprenticeship 3 Apprenticeship 4

16. What is the average fully-qualified annual rate for apprentices?

Apprenticeship 1 Apprenticeship 2 Apprenticeship 3 Apprenticeship 4

3. Apprentices - hours and training 1. On average, how many hours are apprentices CONTRACTED to work per week?

Apprenticeship 1 Apprenticeship 2 Apprenticeship 3 Apprenticeship 4

2. On average, how many hours do apprentices ACTUALLY work per week?

Apprenticeship 1 Apprenticeship 2 Apprenticeship 3 Apprenticeship 4

3. On average, how many hours per week do your apprentices spend on 'off the job' training?

Apprenticeship 1 Apprenticeship 2 Apprenticeship 3 Apprenticeship 4

4. Do you pay apprentices for time off for training? j k l m n

Yes

j k l m n

No

5. How many hours off for training per week do you provide apprentices (total paid and unpaid)?

Apprenticeship 1 Apprenticeship 2 Apprenticeship 3 Apprenticeship 4

6. How many PAID hours off for training per week do you provide apprentices?

Apprenticeship 1 Apprenticeship 2 Apprenticeship 3 Apprenticeship 4

7. How many UNPAID hours off for training per week do you provide apprentices?

Apprenticeship 1 Apprenticeship 2 Apprenticeship 3 Apprenticeship 4

8. Do you make deductions for any of the following? c d e f g

Uniform

c d e f g

Travel

c d e f g

Tools

Other (please specify)

4. Apprenticeships bonuses and benefits 1. Do apprentices receive a bonus? j k l m n

Yes

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No

2. If apprentices receive a bonus - how much do they receive ÂŁ per year % per year Other

3. Do apprentices receive any company benefits (e.g. travel card, luncheon vouchers, company car, bike scheme etc.)? c d e f g

Yes

c d e f g

No

Please list benefits receieved

5. Employer attitudes 1. Why do you employ apprentices?

They provide value for money To train the workforce of the future We can train them in our way of doing things Difficult to recruit staff with required skills Makes us more attractive as a company to potential

Strongly agree

Agree

Disagree

Strongly disagree

N/A

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recruits We need younger workers in an ageing workforce Provides us with free/cheap trial of staff To give young people a chance to learn a skill Because we receive funding to do so It's the best way to learn

2. Thank you for your responses. Would you be willing to be contacted by IDS for a short, anonymous telephone interview to discuss apprenticeships in greater depth? j k l m n

Yes

j k l m n

No

If yes, please provide telephone number

6. No apprenticeships 1. If you do not employ apprentices: Why not?

Strongly agree

Agree

Disagree

Strongly disagree

N/A

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We prefer to train in-house

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The job does not require a

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Too difficult to administer

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It is not our decision (head

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Not required/relevant in our business We prefer to recruit fullytrained staff

high level of skill No apprenticeships available for our business specialism No vacancies/not taking on new staff

about employing apprentices Lack of external funding/grants Cannot afford it/lack of funding

office decision)

7. Thank you 1. Thank you for completing the survey. Would you like a copy of the summary findings? j k l m n

Yes

j k l m n

No

2. If yes, please provide your email address