Small and medium-sized businesses across the UK are signalling strong intent to hire young people through the Government’s expanded apprenticeship schemes, but new research suggests administrative complexity could significantly limit uptake.
A survey of SME leaders by Employment Hero found that 73% plan to make use of new apprenticeship support measures announced in last year’s Autumn Budget. However, 43% said the Government’s application and administration system is too complex, raising concerns that bureaucracy could undermine the policy’s impact on youth employment.
The findings arrive against a challenging backdrop for the UK labour market. Official data shows 872,000 young people are currently not in education, employment, or training — the highest figure in more than a decade. Apprenticeships are widely viewed as one of the most effective routes back into work, particularly for school leavers and early-career entrants without university degrees.
Employers appear convinced of the model’s business value. According to the research, 78% of companies that have hired apprentices report improved productivity, reinforcing the argument that apprenticeships are not simply a social intervention, but an operational one. For the UK’s estimated 5.7 million SMEs, the combination of wage support and skills development has the potential to ease persistent hiring pressures.
Yet the survey suggests that policy design, rather than employer appetite, may be the limiting factor. While financial incentives were welcomed, respondents highlighted difficulties navigating eligibility rules, funding bands, and compliance requirements. For smaller organisations without dedicated HR teams, these hurdles can delay or deter hiring decisions altogether.
The research also points to a broader shift in how vocational pathways are perceived within UK businesses. A clear majority of SME leaders now hold positive views of apprenticeships as a long-term talent strategy. Nearly half — 46% — said they value apprenticeships and university degrees equally, while 37% said they now place greater value on vocational routes. Only 11% continue to view apprenticeships as less valuable than academic qualifications.
That change in perception reflects wider labour market pressures. Skills shortages across technology, engineering, construction, and professional services have forced employers to reconsider traditional graduate-only pipelines. Apprenticeships, which combine paid work with formal training, are increasingly seen as a way to build job-ready skills aligned directly to business needs.
Kevin Fitzgerald, UK Managing Director at Employment Hero, said the data showed a clear willingness among smaller businesses to play a role in tackling youth unemployment, but warned that complexity could blunt the impact of reform.
“73% of SMEs want to embrace the Government’s apprenticeship push. That’s great news and highlights that the apprenticeship reform has the potential to help solve the youth employment challenge that currently exists in the UK economy,” Fitzgerald said.
“There is clearly an appetite from SMEs to give apprentices a key role in driving their businesses forward. This has to be matched by the Government to improve access and remove the unnecessary red tape that might hold SMEs back from the productivity gains on offer with the apprenticeship scheme.”
The Government has positioned apprenticeship reform as a cornerstone of its post-Budget employment strategy, aimed at boosting skills, productivity, and workforce participation. However, the research suggests that without further simplification, the schemes risk being underused by the very businesses they are designed to support.
As SMEs continue to shoulder much of the responsibility for job creation in the UK economy, the balance between accountability and accessibility may determine whether apprenticeship reform translates into real employment outcomes for young people — or stalls at the application stage.
You must be logged in to post a comment.