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Government Provides Employers £1000 to Take on Trainees

Chancellor Rishi Sunak announced in his summer statement that the government would be providing £1000 for every trainee that employers will accept. With the UK economy hard hit by the COVID-19 pandemic, the government is taking measures to rebuild and ensure that jobs are protected. They also put projects in place to remedy the unemployment rate, one of which is the £1000 cash bonus to incentivize businesses who will take trainees under their wing.

In the second phase of economic recovery, the government centres on helping people get back to work. This includes gradually ending the furlough scheme, promoting “green jobs”, a job generation scheme for the youth, and the cash bonus scheme for continuous training. They also launched the “eat out to help out” project, and cut the VAT on services provided by the hospitality and tourism industries (one of the UK’s hardest-hit sectors) to encourage people’s spending, and support the workforce under this sector. Lastly, they announced a temporary stamp duty cut and raising the threshold from £125,000 to £500,000 to reinvigorate the housing market.

The government put emphasis on empowering the new workforce generation, and the unemployed (both new and long-term) through apprenticeship and training programs, and will financially assist the employers in making this happen.

Government’s rationale

The traineeship program was introduced in 2013, a pre-employment training and work placement for 16 to 24-year-olds. It provides classroom learning in maths, English, and CV writing, and includes a 90-hour program of unpaid work experience to help the youth transition into an active part of the workforce. A traineeship is not considered as a job, so employers are not required to pay trainees for placement, but they may offer transport and meal budget.

With the COVID-19 pandemic affecting a lot of industry sectors, the government pledged to expand this existing traineeship program, providing 30,000 new placements under a £111 million budget, to alleviate the unemployment rate. Scotland, Wales, and Northern Ireland will receive £21 million for similar schemes.

Young people are in the front line at risk of unemployment, according to chancellor Sunak, and this scheme aims to support them and the companies they will learn from–a worthy investment in their skills and collective future.

The government is confident in the effectiveness of traineeship programs, as 75% of the 18-24-year-olds who complete traineeships move on to study further or to a “high-quality, secure, and fulfilling” employment.

How people received the news

Experts welcome the traineeship expansion but believe that it is just one piece of the puzzle to improve employment rates. History shows that recessions are especially bad for young people, with them placed at the back of the queue for jobs due to lack of experience.

The traineeship program is an excellent way to empower the youth during this crisis, but the scheme alone wouldn’t be enough for the unemployment issue as a whole. Bold action is called for in both the labour market and in skills training.

The government has assured the people that the traineeship program expansion is just a part of a broader package to protect job security in the country. This scheme is complemented by the Kickstarter program, where the government funds the job creation and wages of young new-hires for six months.

What it means for businesses?

A lot of businesses struggle to survive amid the economic repercussions of the COVID-19 pandemic. Taking on trainees is probably at the back burner in business managers’ list of priorities, with other pressing matters at hand.

However, there are undeniable benefits traineeship programs have provided businesses, by serving as a test run that provides valuable insights on your future employees. It helps you gain a new perspective on organizational issues from the next generation of the workforce, the advantage of utilizing their tech-savvy skills at present, and having a front-row seat on witnessing the current capabilities and work ethics of the potential employees you will be hiring in the near future.

Moreover, your business gets to shape the future generation by providing them with real, meaningful work experience, that will help them accomplish more and be successful. Lastly, you gain brand advocates–your interns help spread the word about your company, whether you like it or not.

With this traineeship cash bonus, business owners who are on the fence about taking on trainees during these turbulent times can breathe easier knowing that the government has their backs in this advocacy.

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