IMI welcomes latest youth employment drive

New government incentive could reduce automotive apprentice costs for SMEs

The Institute of the Motor Industry (IMI) has welcomed the government’s announcement of a major employment drive aimed at unlocking 200,000 new jobs and apprenticeships for young people, particularly the £2,000 incentive for small and medium-sized enterprises (SMEs) recruiting 16–24 year olds.

Nick Connor, CEO of the IMI, said: “Supporting more young people into skilled careers is vital for the future of the automotive sector. The focus on helping SMEs recruit younger workers is particularly encouraging, as around 90% of automotive businesses are SMEs, and they play a critical role in developing the next generation of technicians and specialists.

“Our analysis shows the £2,000 incentive could make a meaningful difference to employers considering taking on an apprentice. For example, for a Level 2 Autocare Technician, the overall cost to an employer would fall from around £14,391 before the recent Budget to approximately £12,560 following the new announcement, a saving of £1,831.

“Similar savings can be made for a Level 3 Motor Vehicle Service and Maintenance Technician. The employer cost would fall from around £14,541 to £12,560, which is a saving of £1,981. For many SMEs, this reduction could help make the difference when deciding whether they are able to invest in an apprentice.

“With the automotive workforce ageing and apprenticeship numbers declining in recent years, strengthening the talent pipeline is essential if the industry is to meet the skills demands of the future.

“Financial incentives are a positive step, but they must be accompanied by action to remove the barriers that currently prevent many SMEs from recruiting apprentices.  Rising employment costs and the complexity of the apprenticeship system continue to make it difficult for automotive businesses to invest in training the next generation.

“Additionally, to deliver on its ambitions for apprenticeships and tackling youth unemployment, the government must go further by removing additional barriers facing all businesses, regardless of size. For example, the seven short courses funded through the growth and skills levy, which align to the government’s industrial strategy, includes electric vehicle point instillation, however, it’s imperative that key automotive skills are represented in the future. 

“Automotive apprenticeships must remain the gold standard for developing highly skilled, safety-critical roles, and the IMI looks forward to working with government and industry partners to ensure the system enables more young people to enter the sector and build long-term careers.”