Apprenticeships are quietly becoming one of the most reliable hiring routes for UK small and medium-sized businesses (SMEs).  

While much of the labour market conversation focuses on job shortages, hiring slowdowns and wage pressure, new scheme announcements and existing data suggest apprenticeships are gaining steady momentum – especially among employers in need of practical, long-term solutions to gaps in talent. 

Government figures for the 2024/25 academic year show apprenticeship starts (i.e. those who take up training) rose by 4.1% to 353,500, up from 339,580 the previous year. Learner participation increased too, climbing by 3.4% to 761,480, while apprenticeship completions climbed by 11.3% to 198,330, signalling renewed confidence in work-based learning.

For SMEs, that growth reflects a continuing shift in mindset towards apprenticeships. No longer seen purely as youth-focused or trade-specific, they’re increasingly viewed as structured pathways for developing skills internally while spreading recruitment risk over time. 

With National Apprenticeship Week approaching, that momentum is expected to come into sharper focus as employers and training providers spotlight new schemes and success stories across the country.

Higher-Level Apprenticeships Gain Ground

One of the clearest trends is the rise of higher apprenticeships (apprenticeships that range from Level 4 to Level 7). Starts at advanced levels grew 15.1% year-on-year to 140,730, while Level 6 and 7 apprenticeships increased by 20.4% to 60,350. These now account for 17.1% of all apprenticeship starts, up from 14.8% the year before.

For smaller businesses, these higher-level programmes serve as a healthy alternative to traditional graduate recruitment, particularly when budgets are tighter or specialist skills are hard to find.

Sector demand reflects that broadening scope. The business, administration and law sector recorded the highest number of starts at 103,890, while construction, planning and the built environment and engineering and manufacturing technologies also posted increases, industries where SMEs form a significant share of employers.

Regional Momentum and New Schemes

The apprenticeship push isn’t confined to national statistics. Regional initiatives launching in 2026 are reinforcing the trend. Major employers and local authorities are expanding access through targeted programmes, including energy sector apprenticeships, media and digital training partnerships and new technical excellence colleges aimed at creating clearer vocational routes into skilled employment. 

The influx of apprenticeships reflect the wider labour-market trend of more job opportunities opening up outside of London. For SMEs based in cities and towns beyond the capital, they offer a practical way to tap into local talent without competing directly with larger employers. In fact, according to the UK Government’s Department for Education’s Skills Horizon 2025 report, 54% of SMEs are considering apprenticeships as a way to resolve skills gaps. 

Accessibility and Inclusion Improve

Learner demographics also show potential for increased levels of participation. Under-19s accounted for 21.2% of starts – a figure that could rise further as recent government reforms aim to support an additional 50,000 young people into apprenticeships, including covering the cost of apprenticeships for young people under 25 at SMEs. 

The number of learners recorded with a learning difficulty or disability also rose 6.9% year-on-year, while participation among ethnic minority learners increased 13.7%, now representing 18% of the cohort.

In response to the Government’s push to support more young people with pursuing apprenticeships, Kevin Fitzgerald, Managing Director at Employment Hero, said that while the initiative is not a “one size fits all solution” for SMEs, “providing financial support for small businesses taking on young apprentices is a landmark moment in the long-running battle against skills shortages in the UK labour market.

“This is a bold investment in the next generation of the workforce, with clear benefits for both employers and employees. As a former apprentice myself, I have seen first-hand how apprenticeships can give young workers a leg up on the career ladder, without the pressure of incurring debt.”

Not only do these shifts give employees the chance to widen the potential talent pool, they also serve as a useful means of reducing barriers to entry, particularly for candidates who may not follow conventional academic routes.

Why SMEs Are Leaning In

The appeal for smaller businesses is practical rather than ideological. Apprenticeships allow employers to shape skills from the ground up, retain institutional knowledge and build loyalty earlier in the employment cycle. Funding structures, including Apprenticeship Service Account levy support – which backed 68.8% of starts last year – also make the route more financially viable.

In a labour market where hiring remains selective and wage growth continues to pressure margins, apprenticeships provide a middle ground between expansion and caution. They enable growth without the immediate cost of experienced hires, while still building long-term capability.

A Long-Term Workforce Strategy

The steady rise in apprenticeship participation suggests employers are thinking less about quick fixes and more about workforce resilience, an increasingly important trait for SMEs navigating economic uncertainty. 

For many smaller businesses, apprenticeships are becoming not just a recruitment tool, but a strategic one – a way to develop talent, manage costs and future-proof teams in a labour market that rewards adaptability as much as experience.

With National Apprenticeship Week set to highlight both new programmes and employer participation, SMEs may find the timing an opportune moment to reassess how apprenticeships fit into their longer-term hiring and skills strategies.

Fact Box: What SMEs Need to Know for 2026

• Funding: From August 2026, the government covers 100% of training costs for apprentices under 25 at SMEs.
• The “Levy” Change: Large companies can now transfer unused funds to smaller businesses more easily via the new Growth & Skills Levy portal.
• Levels Explained:
  • Level 3: Equivalent to two A-Levels.
  • Level 4/5: Higher Apprenticeship (Foundation Degree equivalent).
  • Level 6/7: Degree Apprenticeship (Bachelor’s or Master’s equivalent).
• Wage Update: Ensure your payroll is ready for the £8.00 per hour apprentice minimum wage starting April 2026.

For businesses interested in applying for Government funding for apprenticeship training, click here for more information.