Once considered to be a lesser qualification than a university degree, apprenticeships are making a comeback. Not just because employers are understanding the vocational and societal benefit apprenticeships can offer, but also because they are becoming a vital tool in easing the skills crisis.

At some point apprenticeships fell out of favour. But around five years ago in a bid to revitalise vocational training in the UK the government introduced an apprenticeship levy and redefined the requirements of an apprenticeship.

The government-commissioned Richards Review, published in 2012, recommended a new regime for apprenticeships, defining what an apprentice should be able to do and know at the end of their apprenticeship.

For the accountancy profession, the Richards reforms were relatively straightforward to adopt given that the profession has a 100-year history of training on the job, and it offers a clear pathway to a professional qualification that places great emphasis on workplace-readiness and professional behaviours. ICAEW qualifications are also reviewed annually to adapt to new employer requirements, such as digital and analytical skills, as the economy evolves.

Accountancy apprenticeships offer different levels from AAT all the way to level 7, meaning that candidates can start at any age, from school leaver to graduate and beyond. And because apprentices are earning and training at the same time, they are open to people from all backgrounds, genders or ethnicities.

They are certainly popular in accountancy. In 2021, 71% of ACA students who started training did so as apprentices, says Alex Collins, Senior Business Development Manager at ICAEW. During the academic year 2020/21 – 39% of all apprentices in the highest-level apprenticeship (level 7) across all industries were in accountancy, according to official data.

In fact, their popularity is on the rise. New research by Grant Thornton UK LLP shows that the mid-market is increasingly making use of apprenticeships at all levels. Out of the 601 respondents to Grant Thornton’s latest Business Outlook Tracker survey, all but one business said that they currently use apprenticeships to train their people. This is a rise on its 2018 study, which showed 86% of mid-market respondents using apprenticeships. 

With job vacancies and resignations at record highs, the attractiveness of apprenticeship in the mid-market is set to grow in 2022. Most respondents to the GT study said more of their employees will be trained via apprenticeships this year than in 2021.

Justin Rix is Head of People Advisory at Grant Thornton, where around 20% of the firm’s UK workforce use apprenticeships: “We’re seeing clients taking an increasingly strategic use of apprenticeships to address issues such as improving diversity in the workforce, achieving sustainable recruitment and replacing traditional graduate programmes with highly desirable qualifications.”

It’s not just the mid-market businesses either. Big Four firm EY hires upwards of 170 apprentices each year. Justine Campbell, EY’s UK and Ireland Managing Partner for Talent, says: “We are committed to investing in and nurturing early talent at EY, and apprenticeships provide a great way for us to do this.”

Transferable skills

EY has also expanded its range of apprenticeship opportunities beyond the traditional accountancy routes, to include future growth areas such as digital innovation, technology and risk compliance.

Campbell says: “Apprenticeships can give students valuable on- and off-the-job learning, development of industry-specific and transferable skills. And for businesses, they can provide access to a diverse talent pool and help even more people get the skills that are in demand.”

The key to making apprenticeships work in an industry is the relationship between employers, training providers and professional bodies to ensure that employers are gaining people with the skills they need, and apprentices are advancing in their training, skills and knowledge.

“We have close relationships with our employers, from the big professional service firms like Haines Watts, PwC and Grant Thornton all the way down to very small employers, industry and public sector employers, and reflect what they want. We consult with them regularly,” ICAEW’s Collins says.

The skills shortages of qualified accountants already existed before the pandemic, but two years of intermittent lockdown exacerbated the skills gap at firms and accountancy departments. Business leaders are increasingly realising that if you hire apprentices, within a year or two, they have part-qualified employees with skills, knowledge and culture tailored to their organisation.

Rix says: “Employers particularly value the flexibility of apprenticeships and the ability to tailor courses for specific development requirements. High priority areas of digital skills, finance function talent attraction and upskilling, data analysis through to degree level, or management qualifications to retain top talent – all bring new skills into the business and are applicable to every organisation.”

Haines Watts, whose focus is on owner-managed businesses, currently has around 16 apprentices in its West Midlands region, and 106 trainees on apprenticeships across the entire firm.

Baljit Kaur, HR Senior Adviser at Haines Watts in the West Midlands, says: “For us apprenticeships certainly contribute towards easing the skills pressure. We’re committed to training not just for the duration of the training contract, but well beyond. Once qualified, we want our trainees to stay with us. It’s part of our retention strategy and apprenticeships are a great way to succession plan in any business.”

Socially mobile

Employers are seeing other benefits to apprenticeships beyond the obvious bespoke training. According to GT’s research, half of the business leaders surveyed said that apprenticeships had improved social mobility and employee well-being in their business.

Apprenticeships at Haines Watts offer a dedicated talent coach to help trainees with the soft skills training. Once qualified, the firm continues to forge a clear career path for progression through initiatives such as its Managers Skills programme.

Hannah Murphy is a prime example of the Haines Watts’ approach. Murphy joined the firm as an 18-year-old AAT apprentice and 12 years later she has become Audit and Accounts Manager for its Birmingham office.

Examples like this should ease concerns for employers worried that they will invest huge sums of money in individuals who will then leave. Staff will invariably change jobs, but firms and accountancy departments can mitigate this risk by ensuring visible career progression opportunities within their organisations.

Lily Montgomery, Partner at accountancy firm HW Fisher, says “Apprenticeships are definitely helping to ease the skills pressure facing firms, however it is the firm that has to first understand the level of staffing requirements.”

The apprenticeship levy, a tax paid by employers with an annual pay bill of more than £3m, has significantly boosted the popularity of apprenticeships. Also, smaller employers benefit from the levy to fund the lion’s share of their own apprenticeship schemes.

This is borne out in GT’s research, which found that half of those surveyed said that the apprenticeship levy had been a motivating factor in the increased use.

Committed

Montgomery says: “There’s a lot of commitment from employers in regards to time off and study support, though the levy makes this a more attractive way of recruiting new trainees. The result is worthwhile once trainees qualify in both their exams and the apprenticeship.”

Although trainees see the value in subject content, it can sometimes be difficult engaging them in the apprenticeship side of the programme and encouraging them to undertake the expected work, Montgomery adds.

Unless organisations already have established apprenticeship schemes in place, implementing one now won’t resolve the current skills shortage. Even when hiring levels stabilise, given the cyclical nature of the economy, creating an apprenticeship scheme could future-proof your business because a future skills crisis could be just around the corner.

National Apprenticeship Week – the 15th annual week-long celebration of apprenticeships – takes place 7-13 February 2022.

To find out how your organisation can offer ACA training on an apprenticeship programme with the help of the apprenticeship levy, visit ICAEW’s dedicated hub, or register your interest and a member of our team will be in touch.