Nearly three quarters of construction SMEs currently employ apprentices, finds Redrow

1^st March 2019

- This is much higher than the proportion of SMEs employing apprentices across all sectors (just 65%)
- More than half (56%) of Redrow’s own apprentices aspire to own their own business in future
- However, 38% of construction SMEs not employing apprentices are prevented from doing so by lack of funding
- If each construction SME NOT employing apprentices took on just one, this could create 270,000 more places for apprentices

 

Almost three quarters of construction sector SMEs (73%) currently employ apprentices, much higher than the proportion of SMEs employing apprentices across all sectors, which stands at 65%. This is according to the latest research from Redrow which surveyed 1,000 SME businesses and 119 SMEs operating in the construction sector, as part 1 of its third annual report on skills and apprentices, launched ahead of National Apprenticeship Week: Apprenticeships and SMEs in the UK – the cycle of success.

 

Apprentices are key to Redrow’s business and account for 10% of all employees, and Redrow finds having apprentices in the business highly beneficial due to the fresh ideas they bring to the table and the way they motivate others in the workforce due to the opportunities they provide for mentorship. More than half (56%) of Redrow’s current apprentices [1] have aspirations to own their own business. Redrow believes apprentices are future business founders and owners, particularly within the construction sector, and it is vital that SMEs are able to employ and train apprentices to sustain this cycle of success.

 

However, 38% of all construction SMEs not employing apprentices at the moment, are failing to do so due to a lack of funding. Redrow argues that if some of this financial burden was alleviated construction SMEs would be able to take on even more apprentices, helping to plug the construction skills gap.

 

There are approximately 1 million construction sector SMEs operating in the UK at the moment [2] ; extrapolating Redrow’s findings, if the 27% of construction SMEs not employing apprentices at the moment took on at least one, this could create 270,000 places for apprentices.

 

Redrow has a range of recommendations for improving construction SMEs’ ability to take on apprentices including:

- Rapid clarity from Government on the implementation of the reduction in the amount non-levy paying organisations have to pay for apprenticeships from 10% to 5%. A significant 59% of construction SMEs we questioned said this policy will lead to an increase in the number of apprentices employed in their business. 
- Expansion of what levy funds can be used to pay for. Currently the following are excluded: wages, statutory licences to practise, travel and subsidiary costs, work placement programmes or the setting up of an apprenticeship programme. For SMEs at least, this should be reviewed and expanded. 
- Implementation of a discrete funding pot for non-levy paying businesses to access.

 

Karen Jones, Group HR Director at Redrow, comments: “Construction is the largest industrial sector in terms of SME numbers, with approximately 1 million operating in the UK today, and according to our findings around 73% employ at least one apprentice. In our experience, apprentices add considerable value in construction businesses and it’s an invaluable way to learn a trade or other skill. Apprentices working through the ranks in businesses today aspire to own their own business in the future. When we asked the apprentices at Redrow, 56% said they have an ambition to set up their own venture in future. We want to see even more apprentices coming up through the system and SMEs are a key part of this, but they need help. 

 

“With their entrepreneurial streak, apprentices represent the future of SMEs in this country, so it’s vital that we help construction SMEs operating in the UK to take on and train more, and that industry and educators are providing rigorous information to young people which helps direct the right people onto the right apprenticeship. With just 6% of all apprenticeship starts in construction-related areas in 2017/2018, we feel there is real opportunity to encourage more young people into careers in construction via apprenticeships and thereby safeguard the future of our economy’s lifeblood, small and medium enterprises.”

To read part one of the full report, click here 

 

[1] Redrow surveyed 144 of its own apprentices.

[2] According to the Department for Business, Energy & Industrial Strategy around one fifth of the 5.7million SME businesses in the UK operate in the construction sector: https://bit.ly/2SAFrcA