North West firms step up apprentice hiring after reforms

More than a third of mid-sized businesses in the North West plan to increase apprenticeship recruitment in 2026, after a government move to remove training co-investment costs for smaller employers hiring under-25s.

Research by accountancy and advisory firm BDO found that 35% of mid-sized firms in the region expect to invest more in apprenticeships in 2026. Of those, 21% plan to increase the number of apprentices they hire and 15% plan to start hiring apprentices.

The findings follow a GBP £725 million package of apprenticeship reforms announced in December. Measures include removing the 5% co-investment rate for small and medium-sized businesses, with the state covering the full cost of apprenticeship training for eligible young people under 25.

BDO surveyed 500 leaders of UK mid-market businesses with revenues between GBP £10 million and GBP £300 million. Fieldwork took place in December 2025.

Employer response

Staci, a fulfilment and logistics provider headquartered in Blackburn, has used apprenticeships across a range of roles. It has recruited apprentices since the Apprenticeship Levy was introduced, according to HR and CI Director Amanda Harvey.

"Historically we have offered apprenticeships in roles across the business such as Management Degree Apprenticeships, Warehouse Operative, Procurement, HR, Finance, Team Leading and Business Improvement," Harvey said.

She said apprenticeships had led to permanent jobs and promotions, with some apprentices progressing to further professional qualifications funded by Staci.

"Our apprenticeships have led to permanent roles or promotions within warehouse management, HR and procurement and have often been followed by Staci funded professional qualifications. We also offer apprenticeships to existing team members to enhance their skills and try something new," Harvey said.

Scheme constraints

Employers continue to raise concerns about the structure of the Levy and the availability of training. Harvey highlighted difficulties with limited course options, programme length, and the resourcing impact of off-the-job learning time.

"We began hiring apprentices when the Apprenticeship Levy was introduced and have remained committed to developing early-career talent. However, we have encountered some practical challenges with the scheme.

"The range of apprenticeship courses available remains limited, and training programmes can be lengthy. In some cases, this makes it difficult to recruit apprentices at much less than the salaries of experienced team members, while the employer also funds the qualification and has to support and backfill off-the-job learning time.

"While the Levy was intended to encourage greater investment in skills and support long-term economic growth, its current structure can reduce the flexibility companies need to invest in the training that best supports their growth.

"Additional government support, such as salary subsidies for apprentices, could help make apprenticeships a more viable and attractive option, and reduce the risk of early-career talent being drawn towards short-term roles that offer higher immediate pay but offer no skills development.

"Despite the challenges, we are passionate about bringing more young people into the supply chain sector. Logistics workers are at the heart of the UK retail sector, yet the industry faces a growing talent gap, as misconceptions and low awareness hold young people back from exploring these careers. In reality, logistics offers vast opportunities: from people management and problem-solving to operations, data, and technology skills. With rapid career progression in a stable, essential sector, logistics is a smart choice for the next generation entering the workforce," Harvey said.

Awareness gaps

BDO also cited findings from a separate survey of 2,000 young people aged 18 to 25. In the North West, 19% said they were completely unaware of degree-level apprenticeships, while 21% said access to quality apprenticeships was a barrier.

Geography also influences apprenticeship choices. A fifth of university students or graduates in the region said they would have reconsidered going to university if they lived somewhere with more apprenticeship opportunities.

BDO data suggests mid-sized firms in the region also plan to expand overall hiring. Some 76% of North West companies said they expect to increase headcount in 2026.

Policy outlook

Angela Cross, regional managing partner at BDO in the North West, said the results showed resilience in hiring intentions despite economic conditions. She also pointed to gaps in degree-level apprenticeship provision and uneven regional distribution.

"It's encouraging to see so many mid-sized businesses, the engine of the UK economy, doubling down on their apprenticeship hiring, despite challenging economic conditions.

"Apprenticeships are by no means a new concept, but we know there is a shortage of high-quality, degree level apprenticeships. Those that do exist are often found in specific pockets of the UK making them less accessible to young people who are unable or unwilling to relocate.

"The Government's funding for apprentices under the age of 25 is a significant step forward in reforming our apprenticeship system, but it is clear from both businesses and young people that more needs to be done to spread opportunity.

"A national programme linking local businesses with local schools and colleges would be a great next step. As is increasing the promotion of apprenticeships during the UCAS clearing process, so that those who have been unsuccessful in their chosen course are offered a whole range of options, not just university," Cross said.

Staci operates nine sites across the UK. It employs more than 500 people and runs 1 million sq ft of warehousing capacity, providing multichannel logistics and fulfilment services across B2B and B2C operations.