UK SMEs Cut Apprenticeships as Economic Pressures Mount

Event summary

  • 25% of surveyed SMEs do not employ any apprentices, with 84% citing labor costs as the biggest pressure on pricing.
  • Under 19 apprenticeship starts in the UK have fallen to their lowest level in 5 years.
  • The true cost of employing an engineering apprentice exceeds £157,000 over a three-year program.
  • 60% of respondents cited lack of technical qualifications as a recruitment challenge.
  • Survey respondents employ 10,000 people and generate £1.9 billion in economic output.

The big picture

The UK's SMEs, which make up over 99% of all businesses and 95% of the manufacturing and engineering sector, are facing severe economic pressures. The combination of rising labor costs, energy prices, and raw material expenses is forcing many to reconsider their investment in apprenticeships, potentially exacerbating the country's skills shortage. The OECD's downgraded growth forecasts due to geopolitical tensions further complicate the outlook for these critical businesses.

What we're watching

Cost Pressures
How rising labor costs will affect SMEs' ability to sustain apprenticeship programs.
Government Incentives
Whether recent government financial incentives will be enough to offset economic pressures.
Skills Gap
The pace at which the UK's skills gap will widen if apprenticeship programs decline further.