New rules that came into force this week will allow small businesses to apply for a £1,500 grant when they recruit their first apprentice.
The National Apprenticeship Service (NAS) is offering up to 40,000 Apprenticeship Grants to businesses who take on an apprentice aged 16 to 24 years old.
Companies can qualify for the scheme if they employ fewer than 250 staff.
Skills Minister John Hayes said: “In the past smaller firms have been deterred from hiring an apprentice due to perceived logistical, training and administrative costs but the new incentives of £1,500 are encouraging SMEs to give thousands of young people a great start to their working life.”
More than 270,000 16-24 year olds started an apprenticeship last year, but the Government is keen that many more young people are given the opportunity to take their first steps on the career ladder.
The £1,500 grant is in addition to the training costs of the chosen Apprenticeship framework, which are met in full for 16-18 year olds and 50% for those aged 19-24.
Employers are required to commit to employing an apprentice for a minimum of 12 months, or the time it takes for the apprentice to complete their programme.
David Way, chief executive of NAS, said there has “never been a better time” for employers to introduce Apprenticeships to their business.
The grant is part of a series of measures introduced by the government this week to toughen standards and improve quality.