Apprenticeships vs graduate schemes, the pros and cons of both

Many sectors are reporting increased challenges in attracting, engaging and retaining employees. This trend extends to early careers recruitment, traditionally an area populated with high numbers of interested and motivated candidates hungry for their first full-time role, but now often occupied with college leavers and graduates looking for something extra as an offering.

The 'something extra' is being delivered via new structured apprenticeships. The scope and popularity of these schemes is driven by a range of factors from socio-economic to Government policy and industry demands. They present an appealing alternative to many candidates who are not so keen to go down traditional and often costly education paths.

In this blog, we'll examine the drivers behind this change in more depth, the benefits of adopting an apprentice scheme approach, how graduate training schemes compare and the pros and cons of both.

So let's start at the beginning.

Previously apprenticeships were viewed as purely vocational routes into work, predominantly skills-based and offering guided on-the-job training to candidates with less conventional qualifications. On the other hand, graduate schemes appealed to newly qualified candidates from degree courses and expanded their knowledge over 1-2 years through guided placements and development opportunities. Fast track to 2023, and we see apprenticeships offered from entry level 2 (at GCSE level) to entry levels 6 & 7, the equivalent of undergraduate or master's level, delivered across diverse subject areas. It is worth examining the differences between graduate schemes and the remodelled apprenticeships in more detail.

‍The graduate scheme route‍

Typically offered by larger companies and designed for recent graduates who are looking to build skills and gain experience in a particular industry or sector. A scheme may last anything from 1 to 2 years and involve a combination of on-the-job training and classroom-based learning.

There are still a large number of organisations offering graduate schemes. According to HighFliers Research, which conducts an annual survey of the graduate job market in the UK, in 2022, there were 391 graduate schemes being offered by the UK's leading employers. This represented a 3.3% increase from the previous year.

However many of these schemes now incorporate degree level apprenticeships alongside the traditional graduate route. Undergraduates can join an organisation post school or college and in return for payment of their tuition fees and a basic salary gain valuable work experience alongside their studies.

This fast-tracks their understanding of the company as well as developing their knowledge in a specific area via their degree course. As part of the arrangement they commit to work in the organisation for a minimum period of time on completion of their degree course.

The apprenticeship route

‍With the incentive of Government funding many employers have started to explore apprenticeships as an alternative to traditional graduate training schemes. Apprenticeships typically involve on-the-job training and learning, where an individual works alongside experienced professionals in a particular industry. Traditionally the schemes were often focussed on specific trades and technical fields, such as construction, engineering, and manufacturing, and were typically targeted towards individuals who are just starting out in their careers or who are looking to switch to a new career path. This on-the-job training was often supported by further education courses. The newer models of apprenticeship have education and training as a core element running alongside the practical hands-on experience of work with a broader range of subject areas‍

‍According to the UK Government's latest statistics, in the 2020/2021 academic year, 18-24 year olds accounted for 50.2% of all apprenticeship starts in England. This represents a total of 164,900 apprenticeship starts by 18-24 year olds, out of a total of 328,100 apprenticeship starts across all age groups. It's worth noting that the number and percentage of apprenticeship starts by age group can vary from year to year. Governments are working hard to attract more candidates into apprenticeships as part of changing economic conditions and employer demands.

The scope of apprenticeships has broadened in recent years with Intermediate Apprenticeships offered from level 2 (equivalent to GCSE standard) through to Higher Apprenticeships, Levels 4 & 5 (these are equivalent to the first year of an undergraduate degree or a foundation degree. And at the highest level there are the previously mentioned degree apprenticeships (Level 6 & 7) equivalent to an undergraduate or masters degree.

Why do apprenticeships make sense for organisations?

Improving diversity and inclusion - Apprenticeship schemes may attract a more diverse range of applicants from several candidate pipelines rather than focussing on individuals from one academic discipline.

Wider candidate appeal - Candidates who may not have considered training due to costs or other socio-economic factors can see an accessible route to education and skills whilst still earning a salary.

‍Identifying and resolving skills gaps - Post pandemic many industries and sectors are facing skills gaps, where there are not enough qualified workers to fill open positions. Apprenticeships offer a way to address these gaps by providing targeted training and development for individuals to gain the skills and experience needed for specific jobs.

Several government campaigns have targeted the post pandemic ‘missing million’. This group are predominantly aged 50 to 64 and are thought to have left the workforce as a consequence of the pandemic either through ill health or opting for early retirement. Encouraging these individuals back to work through retraining has become a key political target for 2023.

Delivering cost efficiencies - Recruiters often face the need to deliver more candidates with less budget so apprenticeships can be a cost-effective way for employers to attract, recruit and train new talent. In addition apprentices can be paid lower wages than more experienced workers, and employers can take advantage of a range of Government funding and tax breaks to support their apprenticeship programs.

Government support - Many governments around the world have introduced policies and initiatives to support the growth of apprenticeships. For example, in the UK, the Government has introduced a series of incentives to encourage employers to invest in apprenticeship programs, while in Germany, the dual vocational training system is a cornerstone of the country's economic success.

Fulfilling the need for vocational training - There has been a growing recognition of the value of vocational training and practical skills, particularly in industries such as construction, engineering,and manufacturing. Apprenticeships offer a way to provide this type of training and development, and help to close the gap between education and the workforce.

Why do apprenticeships make sense for candidates?

Achieving career success without the expense‍

Apprenticeships provide an alternative path to traditional higher education, which can be expensive and may not always lead to direct job opportunities. Apprenticeships offer a way for individuals to gain practical, hands-on experience and earn a wage while they learn.

Fast track career - Apprenticeships can provide a quick route to career progression in a specific role. Employee development is focussed and measured as part of the training scheme.

Alternative routes to qualifications - Candidates who did not enjoy the traditional academic route to qualifications may find the bite-size approach of apprenticeship training an appealing alternative.

Opportunity to retrain or upskill - Encouraging candidates to retrain or upskill from other sectors provides a paid route to improved employability and accreditation.

Removing barriers to education funding - For those who would have previously considered education as too costly, apprenticeships offer a funded solution to attaining qualifications.

What strategies have been employed by the Government to increase apprenticeship appeal?

A series of Government interventions has increased the appeal of apprenticeships to employers and candidates alike.

The Apprenticeship Levy - The Apprenticeship Levy was introduced in April 2017 which requires all UK employers with an annual pay bill of over £3 million to pay a levy of 0.5% of their pay bill into a digital account. Employers can then use this funding to pay for apprenticeship training and assessment.

Government funding for small businesses - The UK Government provides additional funding for small businesses to support apprenticeship training, with up to 100% of the cost of training and assessment covered for small businesses with fewer than 50 employees who take on apprentices aged 16 to 18.

Additional incentives for employers - The Government provides additional incentives for employers who take on apprentices, including a £1,000 incentive for hiring apprentices aged 16 to 18, and a £2,000 incentive for hiring apprentices aged 19 and over who have previously been in care or who have an Education, Health and Care plan.

Quality of apprenticeships - The Government is also investing in improving the quality of apprenticeship training, with a focus on ensuring that apprenticeships provide high-quality training and lead to meaningful careers for apprentices.

Apprenticeship standards - The Government is working with employers to develop new apprenticeship standards that meet the needs of employers and apprentices, with a focus on developing standards that are relevant, rigorous, and flexible.

T-Level qualifications - New T-Level qualifications, are being introduced by the Government these are technical qualifications designed to provide young people with the knowledge and skills needed to enter skilled employment, further education, or apprenticeships.

What do apprenticeships offer that graduate schemes can’t?

Delivering on candidate expectations - Many millennials and members of Generation Z are in search of alternative paths to traditional university education, and apprenticeships offer opportunities to gain valuable work experience while also learning new skills without the need to take on debt.

Improved diversity - Graduate recruitment schemes can be limited in terms of the diversity of candidates they attract, as they may focus on recruiting from a select group of universities or academic disciplines. Conversely apprenticeships can offer something for everyone regardless of their academic status.

Reduced costs - Apprenticeships attract a range of funding opportunities for employers taking the pressure off training and recruitment budgets. Graduate recruitment schemes on the other hand can be expensive and generally do not qualify for Government funding.

Emphasis on practical skills - Graduate recruitment schemes may focus too heavily on academic achievements, without taking into account candidates' practical skills and experience. Apprenticeships focus on developing skills backed by qualifications.

Open to all - Unlike graduate recruitment schemes apprenticeships can provide opportunities for non-graduates, who may have valuable skills and experience but lack a university degree.

Opportunities for career progression - Apprenticeships follow structured career paths whilst graduate recruitment schemes may not provide such clear career progression. This can lead to a high turnover rate among graduates who feel their careers are stagnating.

What are the potential pitfalls with apprenticeships?

There are some potential adverse impacts of running apprenticeships which should be considered and addressed when planning an apprenticeship scheme to ensure a positive candidate experience.

Limited academic qualifications - Some apprenticeships may not offer the same level of academic qualifications as traditional higher education programs, which may limit future career opportunities for some candidates.

Limited job opportunities - There may not always be permanent job opportunities available, which can be a concern for candidates who are looking for long-term career prospects.

Lower wages - Apprenticeships typically offer lower wages than more experienced workers, this can be a barrier to entry for candidates who need to support themselves or their families financially. 

Limited diversity - Whilst apprenticeships may appeal to some candidates who are not interested in traditional education routes the counter argument is that they may be seen as less prestigious or desirable than other forms of education or training which can limit diversity in certain roles.

Industry-specific focus - Apprenticeships may be more focused on specific industries or occupations, which may limit opportunities for candidates who are interested in other areas.

It's important for employers to consider these potential adverse impacts and to carefully evaluate which type of recruitment and training scheme is most appropriate for their organisation and their goals. One solution may be to combine both graduate recruitment schemes and apprenticeship schemes to create a diverse and skilled workforce.

If governments and policymakers continue to support and invest in apprenticeships, then potential negatives may be addressed and they will remain a viable and attractive option for candidates and employers alike.

What’s the adverse impact of only offering a graduate recruitment scheme?

Depending on the specific circumstances and priorities of the employer there can be adverse impacts to running graduate recruitment schemes versus apprenticeship schemes. Some potential consequences of running traditional graduate recruitment schemes can include: 

Lack of diversity - Graduate recruitment schemes can be limited in terms of the diversity of candidates they attract, as they may focus on recruiting from a select group of universities or academic disciplines.

High costs - Graduate recruitment schemes can be expensive for employers, as they may involve significant recruitment and training costs which do not qualify for Government funding.

Limited focus on practical skills - Graduate recruitment schemes may focus too heavily on academic achievements, without taking into account candidates' practical skills and experience. 

Limited opportunities for non-graduates - Graduate recruitment schemes may not provide opportunities for non-graduates, who may have valuable skills and experience but lack a university degree.

Limited opportunities for career progression - Graduate recruitment schemes may not offer clear pathways for career progression, which can lead to a high turnover rate among graduates who feel their careers are stagnating.

What are the outcomes for candidates and employers of apprenticeships?

Apprenticeships can deliver excellent outcomes for both employees and their organisations.

On-the-job training and experience - This develops the employee’s practical skills and knowledge that are directly relevant to the chosen career.

Earn while you learn - Apprentices earn a salary while they are training, which can help them support themselves and their families.

Skilled workforce - Employers can benefit from apprenticeships by developing a skilled and motivated workforce that is tailored to their specific needs.

Creativity and productivity - Apprentices can also bring fresh ideas and perspectives to an organisation, and can help to fill skills gaps and increase productivity.

Benefits for society - Apprenticeships can benefit society by helping to address skills shortages and unemployment, and by providing individuals with the training and experience they need to succeed in their chosen careers.

Social mobility - By providing opportunities for individuals from diverse backgrounds to enter and progress in the workforce apprenticeships promote social mobility

Economic benefits - Apprenticeships can benefit the economy by increasing productivity, filling skills gaps, and contributing to economic growth. They can also help to reduce youth unemployment and increase the number of skilled workers in key industries. Overall, apprenticeships can benefit a wide range of individuals and organisations, and can play an important role in supporting economic growth and social mobility.

The new apprenticeships offer employers an opportunity to address skills gaps, grow a skilled workforce, and meet diversity and inclusion targets, while also providing a cost-effective way to recruit and train new talent. As a result, apprenticeships continue to appeal to employers looking for an alternative to traditional recruitment and training methods in 2023.