New apprenticeship levy will deter firms from taking on apprentices

New apprenticeship

New apprenticeshipNew research from construction payroll provider Hudson Contract suggests that almost half (46%) of firms in the construction industry are set to feel the financial impact of new pay legislation affecting apprentices aged 25 years and over.

The survey revealed that 24% of firms in the construction sector are unaware of the impending legislation change that will see the wages of apprentices aged over 25 increase from £6.70 to the national living wage of £7.20 in April 2017.

The research also stated that 30% of those surveyed would be less likely to employ an apprentice who is aged 25 and over as a result of the financial pressure brought on by the wage rise, despite 24% stating that they see apprentices aged 25 and over as being more experienced and a further 25% stating that they consider them to be more reliable than younger apprentices.

Ian Anfield, managing director of Hudson Contract, commented: “With the construction industry one of the biggest apprenticeship employers, we wanted to gauge the opinions of our building clients across the UK who will ultimately be impacted by the new legislation.

“Despite the findings indicating that nearly half of firms will be hit financially by the legislation and around a third may potentially be deterred from employing an apprentice aged 25 and over, it was reassuring that 42% of firms will employ an apprentice based on ability, rather than age.”

81% of those surveyed said that they do employ apprentices under the age of 25, with 47% claiming that their apprentice stays with the business for up to three years after completing their apprenticeship.

A further 34% said that their apprentices stay with the company for up to five years and 14% last up to ten years – proving that apprentices are still seen as a long-term investment and vital to bolstering a talented workforce.

The full results of the survey can be viewed here.

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