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Apprentices deliver RoI, says research

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Companies that recruit apprentices can see a return on investment (RoI) as soon as year two of the apprenticeship programme, according to new figures from The Electrotechnical Skills Partnership. 

Using scenarios based on low, medium and high charge-out rates for unskilled and skilled work, the overall net costs and benefits of apprentice recruitment have been projected. 

At the lowest rates, an apprentice delivers a net benefit of around £11,400 over the four years and starts to make a return in year three of the apprenticeship. At higher charge-out rates, the apprentice begins to pay for themselves in year two and by the end of year four has created a net total benefit of just over £34,000 at medium charge out rates and £56,700 at high rates.

Research specialist Pye Tait Consulting carried out the RoI analysis on behalf of TESP, after speaking to 20 companies of different sizes and specialisms. Each company was asked about the weekly wages of apprentices over the course of the apprenticeship, as well as additional costs for course fees, travel, equipment, in-house training and the time spent by supervisors and other skilled staff for mentoring and support.

The calculations take into account the weekly costs of an apprentice and supervision, the percentage of time spent on supervision and the increasing amount of time the apprentice spends completing the work of a qualified electrician. 

With 95% of training costs in England now funded by the government for apprentices of all ages, these new figures provide a strong case for employers to consider apprentices as a means of bringing new skills into the business. 

For smaller companies in particular, who often struggle with the resource for managing the apprenticeship and initial impact of productivity, TESP believes these projected returns demonstrate that, with the support of a quality training provider, an apprenticeship will eventually pay off.  

“Although it is a commitment, which can be daunting to small businesses in particular, investing the time and resource into apprenticeships will ultimately drive business growth,” said Ruth Devine, managing director of SJD Electrical and chair of TESP. “As a small business owner, I have experienced first-hand that, over time, apprenticeships increase capacity and strengthen the business culture.

“A strong relationship with a quality local FE college or training provider is vital however. Industry organisations such as the TESP partners are also happy to help and give advice. When I first started at SJD, I found the supportive network of fellow ECA members invaluable to navigate some of the challenges of managing apprentices and providers; it’s always good to benefit from others’ experience.”

Apprentice training providers JTL and Focus Training also welcomed the release of the RoI figures to support their employer recruitment efforts.

“The report is really helpful to us as a training provider, we’ve never been under any illusion about the value of apprentices, but the analysis will help us to convince employers of the tangible benefit to taking on an apprentice,” commented Liam Sammon, JTL’s director of Learning and Innovation.

Bernard Collins, curriculum and quality director at Focus Training Group, added: “It is great to see evidence that having an apprentice not only delivers an individual who fits in with the companies’ ethos and work ethic, but also provides an appreciable financial return, even after making allowances for support and expenses.”

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