Are apprenticeships a good return on investment?

An investment in apprenticeships is an investment in your team, so they provide an excellent return on investment when aligned with business aims and L&D targets.
Research found:
of employers reported at least one major business benefit from apprenticeships.
of employers highlighted the benefit of developing relevant skills in their team
reported an improvement in productivity because of apprenticeships.

Here we explain the benefits of apprenticeships and how employers can improve return on investment from training costs.

Measuring the impact of apprenticeships

There has been research into the financial benefits of apprenticeships, considering the increase in productivity against wage and training costs. A recent report found that young hospitality apprentices provided an average net annual benefit of £2,380 to their employer whilst still in training. The same report says the rise in productivity of apprentices benefited the hospitality sector by more than £40 million in 2018.

However, an overall figure is difficult to establish because of the differences in employer business objectives, type of apprenticeship programme, and industry. Instead, Lifetime work on an employer-by-employer basis to measure and track the wider effects of apprenticeships on business.

The method includes measuring the impact of apprentices in comparison to other employees of a similar level. A large employer working with Lifetime reported that teams with apprentices achieved:

  • 20% more sales
  • 25% less labour turnover
  • 41% less quality issues
  • 28% less waste
  • 37% less team absence
  • 10% better customer feedback

Improved team retention

Another key measure of return on investment from apprenticeships is retention rates, which are significantly higher for apprentices compared to similar employees. A pub company partnered with Lifetime reported an apprentice turnover rate of 47%, significantly lower than the total employee turnover of 95%.

This is the case across all levels of apprenticeship, as a leading retailer saw three-month turnover for Deputy Managers improved by 11.5% through apprenticeships.

A recent survey found 92% of employers agree that apprenticeships lead to a more motivated and satisfied workforce. It is through these wider business benefits that return on investment can be seen.

Improving apprenticeship return on investment

Aligning apprenticeship programmes with key business aims is a way of both focusing and measuring the impact of apprenticeships on your business. Alongside this, there are financial incentives to minimise training costs and therefore improve return on investment.

Financial incentives for young apprentices

Employers will receive a £1,000 government incentive for young apprentices aged 16 to 18, which further offsets the cost of training. Companies with less than 50 employees can get training fully funded for young apprentices aged 16 to 18 and will still receive the £1,000 incentive. Find out more about incentive payments for hiring an apprentice.

Plus, employers can save up to £691 a year through no employer National Insurance contributions for 16 to 24-year-old apprentices.  Find out more about employers NI and the apprenticeship levy.

Launching an apprenticeship programme

Lifetime delivers industry-leading skills training that’s reshaping the future of business. Our expert teams work to become an extension of yours, so we can build long-lasting, trusted partnerships. Want to know more? Find out how we work with our partners to achieve success and create impact.

Want to know about the impact of your apprenticeships? By tracking your programme’s success, you can continue to grow, strengthen and execute a strategy that drives maximum ROI.

Measuring your

programme's success