Learning as you're earning: The alternative to a degree
Apprenticeships and on-the-job training are successful non-degree routes to a career
Thursday 30 May 2013
"Not going to university hasn't held me back," says Simon Dolan, the self-made multi-millionaire who left school at 16 with virtually no qualifications and went on to found SJD Accountancy. Dolan, author of How To Make Millions Without a Degree and a regular fixture in the Sunday Times Rich List, believes too many youngsters continue on the conveyor belt to university without reflecting on whether this is the right course.
"It's a controversial thing to say, but I actually welcome the higher fees regime because it will make people stop and think about why they are going to university and what they want to get out of it," says Dolan, who stresses he isn't against a university education. "It's just not for everybody. And when you could be graduating with debts of £50,000 and possibly a difficult job market, you need to think carefully."
Not that he recommends other school leavers follow his course and set-up their own business – at least not straight away. "I started the accountancy firm out of desperation, because I had no money, no driving licence, I was on the dole and in debt," recalls Dolan. The gamble paid off, but he recommends that would-be business moguls get some commercial experience under their belts. "Get a job somewhere, earn some money, get some experience of the real world, see what's done right and what's done wrong," advises Dolan. "It's a very good learning environment for starting your own business."
And he stresses the importance of hard work. "About 70-80 per cent of most jobs, even the apparently glamorous ones like motor racing and film, are mundane," says Dolan, who has investments in both. "Entrepreneurship is like that – you have one really creative, great idea and the next 20 years is spend building it up. England is a great place to make money as long as you roll up your sleeves, work hard and get on with it."
Indeed, while much is made of the life-term earning premium of a university education, research is starting to show that other forms of training and work experience can also pay dividends. According to the National Apprenticeship Service (NAS), graduates of modern apprentice programmes earn, on average, over £100,000 more throughout their lifetime than other employees. It's a route that is becoming increasingly popular as school leavers undertake a cost-benefit analysis of their next steps.
"There used to be something of a stigma if you didn't go to university, but that's definitely changing," says Paul Harris of All About School Leavers, which lists vacancies and provides CV and interviewing advice. "Young people are weighing up their options more carefully, while companies are looking to widen the pool of talent they recruit from."
Last year there were 500,000 people of all ages on apprenticeship programmes, about two-thirds of them under 24. Some 120,000 employers offer apprenticeships, many of them small companies, but also some household names such as McDonalds, BAe, Rolls-Royce and PwC. There are a wide range of different schemes, ranging from one year to five year programmes, but all offer the opportunity to "earn as you learn" and gain industry recognised qualifications.
It's a message that is obviously attractive, with the NAS reporting an average of 10 applicants for every vacancy, with some, particularly with larger companies, heavily oversubscribed. The minimum apprentice wage is just £2.65 an hour, but most do pay more than this, with an average of around £200 a week and some a lot more, and starting salaries for some of the professional law and accountancy firms coming in at more than £22,000.
FTSE100 travel group TUI Travel UK & Ireland says it pays "significantly above" the apprentice minimum, as well as offering commission and bonuses to its travel agency staff and an attractive benefits package. "We treat our apprentices as employees from day one and they start accruing benefits from day one," says Andy Smyth, TUI's accredited programmes development manager. At any one time, the company has around 450 people on its two-year programme with opportunities across retail, outdoor activity centres, child care, finance and payroll. Vacancies are oversubscribed and the company reports an 85 per cent retention rate over the two years. Indeed, apprentices tend to stay with the company two years longer than other new joiners, says Smyth.
What's more, the apprentices are seen as the managers of the future. "We are looking for that level of talent and ability," says Smyth, who says it's a "compelling alternative to university". "When you finish the two years, it's not the end of the journey but the beginning of a long-term career with the company."
Employers certainly seem to rate their apprentices very highly. Leading accountancy firm Grant Thornton, which has 1,000 applicants for the 60-80 places on its highly popular school leaver programme, says its apprentices are on a par with its graduate trainees. "There's no difference in performance. They have the same academic brilliance and sparky personality we look for in our graduates," says senior recruitment officer Helen Barthorpe. "And from a selfish point of view, there's an advantage because we get them for five years before they qualify and that's more time to mould and shape them."
Any suggestion that this is cheap labour for employers is resolutely rejected. "Once an employer understands what they have to commit to support their apprentice, any ideas about cheap labour go out of the window," says Jaine Bolton, chief operating officer at NAS. "There has to be time off for college, training in the workplace and mentoring from others in the workplace." According to Bolton, around 75 per cent of apprentices successfully complete their apprenticeship and 85 per cent who complete their programme are in employment, numbers that compare well with higher education dropout rates and postgraduate employment.
For some industries, apprentices are seen as a vital strategic resource. The oil and gas industry, for example, takes the recruitment and training of apprentices very seriously as it grapples with a long-running skills shortage. Opito, the oil and gas skills body, runs a highly-rated apprenticeship programme, that has brought 1,360 young people into the oil and gas sector in the last decade. The qualification completion rate is a best-in-class rate of 93 per cent and 100 per cent find employment on completion.
This can be a fantastic springboard for the future. "This is a very well paid industry and probably one of the few around where you could confidently say you will have a career for life," says Opito MD Larraine Boorman. "Anyone with North Sea experience is seen as a very valuable asset because we are on the frontline of technology and competency and our people are an extremely attractive commodity all around the world."
This is echoed by Matt Corbin, managing director of the UK subsea business of leading oil and gas contractor Aker Solutions, which is actively recruiting 25 apprentices. Aker's first cohort of apprentices has just graduated from its Subsea Apprentice Designer Programme, qualifying with an HNC in Mechanical Engineering. "This has left the participants with an enviable set of qualifications and roles in our business, commanding highly competitive salaries and benefits," says Corbin.
Against a backdrop of high university fees and a sluggish economy, more young people will be examining the merits of apprenticeships, school leaver programmes and new business opportunities. In the process, they may not only kickstart their own careers but also bring fresh new talent and energy to the UK economy.
Case study: 'I've no regrets about not going to university'
Christopher Hill, 18, recently started a five-year School Leaver Programme at leading accountancy firm BDO.
"A lot of people my age think going to university is the normal thing to do next, but I'm very career-focused and like being busy and getting on with things. This programme gives you a career with a reputable firm, a well-sought-after professional qualification and five years of work experience. By the time my friends have finished university I will have almost qualified, so I feel it gives you a head start in your career. The application process is quite demanding. There's an initial application and then online psychometric testing. Following that I was invited in to the office to have an interview with a manager, do a presentation and have a final interview with a partner. I was 17 then and even though I'd done some practice interviews with teachers at school, it was still fairly nerve-wracking. You really need to make sure you've researched about the firm and the scheme you're applying for.
Every week is different. You're put on different jobs, checking draft accounts, setting up working papers for an audit, getting explanations from clients and testing financial statements. You're definitely in at the deep end and have to talk confidently with the clients and ask them for information and explanations. BDO has a very supportive culture, so although it's a steep learning curve, it's very enjoyable and you're meeting lots of new people. The worst part is probably the hours, because some days you may not get home until 10 or 11pm and then you still have to be up at 7am, but not every week is like that.
It's a really good alternative to university, but you do need to be prepared to work hard – this isn't an easier route. I've no regrets about not going to university and I know this will open a lot of doors."
Case study: 'You get a lot of support'
Mark Woollard, 19, joined leading tax and advisory firm Grant Thornton's Accelerate programme last year.
"I heard about the programme at school, but applied too late, so I got a place at university to study finance and accounting as a back-up. I did A-levels in maths, economics and ICT, but I didn't want to go to university just because everyone does it. When the apprenticeship reopened the next year I reapplied and got in. This suits me and I'm really loving it. They give you a lot of responsibility from the beginning. I get sent to clients all over the place, meeting finance directors and lots of different people in different companies. It's a big adjustment and I was a bit nervous at the start, but you get a lot of support. The clients take me seriously and I've never had a client comment on my age. I'd 100 per cent recommend it."
Case study: 'This has been the best start I could've hoped for'
Scott Stage, 22, was named Opito Apprentice of the Year for his work on the North Sea oil and gas industry's four-year apprenticeship programme.
"My brother had previously taken part in the apprenticeship and is now working in the industry, so I know from his experience that if you work hard and take the opportunities it gives you, coming through this scheme successfully means you are very highly regarded in the industry – it opens a lot of doors. The scheme is hugely popular and I applied several times before being lucky enough to get a place, but it has absolutely been worth persevering. My ultimate career aim is to be an offshore installation manager, and while it might be quite a few years off, this has absolutely been the best start I could have hoped for in my career."
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