12 February 2021: While the economics of the apprenticeship scheme makes it an attractive option for many employers, widespread misconceptions mean it can remain an untapped opportunity.

For both school-leavers and graduates, ICAEW apprenticeships are an opportunity to earn while they learn and gain ACA qualification while receiving tailored support throughout, while employers in England get access to subsidised ACA training for staff. However, widespread misunderstanding means business uptake of apprenticeships remains inconsistent.

A significant majority of all new ACA students in England who registered in 2020 were on apprenticeship schemes with employers. It’s an encouraging statistic, but further analysis shows that although awareness and take-up of apprenticeships in the practice market is strong, accountancy apprenticeships in industry lag behind. Conversely, the proportion of ACA students training outside of practice is at an all-time high against a backdrop of burgeoning demand for ACA-qualified staff in industry.

Since 2017, apprenticeships have been funded through the apprenticeship levy. Employers with a pay bill of more than £3m must contribute 0.5% of their total pay bill to be spent on approved apprenticeship schemes within 24 months. However, any money that isn’t used to support their apprentices goes back into the pot, meaning that large employer contributions support around half of all apprenticeships. 

Alex Collins, ICAEW Senior Business Development Manager, said the requirement for businesses to allow apprentices to spend 20% of their time doing off-the-job training was a potential sticking point for some companies. “However, the economics of the apprenticeship scheme makes it an incredibly attractive option for businesses, particularly SMEs who aren’t exposed to the levy.”

Employers with a total annual pay bill of less than £3m pay just 5% of the cost of their apprenticeship training, with the government covering the remaining 95% of the cost up to the funding band maximum.

Collins said the combination of knowledge, skills and behaviours training, coupled with apprenticeship funding and tax relief on National Insurance contributions for apprenticeships means employers in all sectors are looking to apprenticeships as the new normal for training accountancy and finance staff. 

In its most recent Skills for Jobs Whitepaper, the government said that as the economy recovers from the coronavirus pandemic, apprenticeships will be more important than ever to help businesses to recruit the right people and develop the skills they need to respond to conditions and grow. In the 2019/20 academic year there were 19,630 apprenticeship starts in the Accounting and Finance sector. 

Sharon Spice, Director of Global Student Recruitment at ICAEW, also believes that a step-change in how apprenticeships are perceived is still needed. “Some students, and those who guide them, are still concerned that degrees are preferred by all employers, but the reality is that more employers are offering apprenticeships alongside graduate programmes because they bring diverse thinking to the business.

“I would encourage all businesses who are not offering apprenticeships, and all students who are undecided about the learning path they want to take, to at least find out about apprenticeships, so at least they are making an informed decision, they might be pleasantly surprised,” Spice added.

Sophie Parkhouse, Technical and Training Partner at accountancy firm Albert Goodman, which currently employs 35 ACA apprentices, said having the flexibility to combine the ACA qualification with softer skills training as part of the apprenticeship scheme helped to produce more well-rounded individuals. “You can tailor the training to meet individuals’ requirements. The apprenticeship gives trainees additional skills that are particularly needed in the current environment, particularly in the light of growing automation.” 

A survey conducted of 16–24-year-olds by skills-based platform Apprentice Nation published to coincide with this week’s National Apprenticeship Week, found that the higher education landscape may be shifting. A third (34%) say that apprenticeships are the best option to kickstart a career, and a growing number (37%) said they would be more likely to consider an apprenticeship due to COVID-19 or have already undertaken one. 

• Find more information about how ACA apprenticeships could benefit your business here or speak with your local ICAEW training contact.