Return on Investment

The Value of Apprenticeships

The Hospitality Industry

For the Hospitality sector the study found that;

• Apprentices are relatively productive during their training
• The average cost of training is around £4,200
• The Apprenticeship is often completed within a year
• Employer’s costs are recouped quickly

 

The Social Care Industry

The study identified that in the Social Care sector;

• Level 2 costs can be as high as £4,300, and if training continues to Level 3 the total net cost is around £7,700,
• The payback period can be around four years,
• But there is much variability in the sector.

 

The Retail Industry

For the Retail sector the study recognised that training;

• Completed within a year with training mainly on-the-job,
• Training costs relatively low at £2,300, and that
• Employers’ costs are recouped quickly.

 

The Business Administration Industry

Within the Business Administration sector;

• Training costs vary because of the varying durations of training
• The cost of training to Level 2 is around £1,100 and around £3,500 to £3,900 at Level 3 depending upon the duration of the training, so
• The payback period for a Level 3 Apprenticeship which takes three years to complete is around one year.

 

The Construction Industry 

The study showed that within the Construction sector;

• Employers train to meet their own skill needs and those of their sub-contractors,
• Training tends to be highly structured and relatively costly compared to other sectors: £22,000 although there is variability between employers, and
• Employers’ costs are recouped two years after completing the Apprenticeship.

 

The Computing Industry

For the Information Technology sector the study identified that;

• The largely workplace-based nature of training means productivity is relatively high,
• Therefore there are comparatively low costs to employers, so
• Employers’ costs are recouped in a short space of time – on average around six months.

 

Benefits to Employers

The study showed that the costs of training are quickly recouped upon completion of the Apprenticeships.

Other benefits include;

• Retention within the company,
• Understanding of company values, and
• Progression to become managers and supervisors.

 

Conclusions

The study concluded that;

• The costs of Apprenticeship training is recouped relatively quickly,
• Recruiting from the external labour market is seen as more expensive because of recruitment and induction costs,
• Supply in the external labour market is limited,
• Apprentices provide a pool of skilled people to select from for future promotion,
• Apprentices are seen as loyal, more likely to stay with the company and steeped in company values, and
• Apprentices bring new ideas into organisations.

 

Click here| for more information on the results of the IER research.