When people think about apprenticeships, they often picture entry-level talent starting their careers. But apprenticeships can be much more than a recruitment route. For UK employers, they can be a way to develop skills, improve productivity, support retention and build the workforce your organisation needs for the future.

The question for many employers is simple: do apprenticeships deliver a worthwhile return on investment (ROI)?

The answer will depend on your organisation, the apprenticeship programme and how effectively the apprentice can apply their learning in the workplace. But there are several measurable factors you can use to understand the potential return.

Key takeaways: the business case for apprenticeships

• 96% of employers reported at least one benefit from offering and training apprentices.
• 77% of employers said apprenticeships improved productivity.
• 75% of employers said apprenticeships helped improve staff retention.
• 66% of employers said apprenticeships brought new ideas to their organisation.
• 64% of employers said apprenticeships improved their ability to attract good staff.
• The government estimates an average £2,500 to £18,000 yearly gain in output per apprentice during their training.

These figures come from government research and provide an indication of the benefits employers report; they aren't a guaranteed return for every organisation.

What is apprenticeship ROI for a business?

Return on investment compares the value you gain from an apprenticeship with the costs associated with employing and training the apprentice.

A simple way to calculate it is:

ROI = (Financial benefits − total costs) ÷ total costs × 100

Your total costs could include:

• Apprentice salary and employer on-costs
• Any training or assessment costs your organisation has to contribute
• Manager and mentor time
• Equipment, software or other resources
• Recruitment and onboarding costs

Your financial benefits could include:

• Productive work completed by the apprentice
• Reduced recruitment costs
• Reduced spending on external training or hiring
• Increased productivity as the apprentice develops
• Improved retention and the cost of vacancies avoided
• Revenue or efficiency gains from projects delivered by the apprentice

A worked example

Imagine a business employs an apprentice on a salary of £24,000 a year. For simplicity, assume the employer's total employment cost is £27,000 once employer on-costs are included.

The employer also estimates that the apprentice contributes:

• £12,000 of productive value during their first six months as they learn the role
• £20,000 during the following six months as their productivity increases
• £5,000 in avoided recruitment or external training costs

That gives an estimated first-year benefit of £37,000.

If the employer's total first-year cost is £30,000 after taking account of any applicable training funding, its estimated net benefit would be £7,000.

Using the formula:

(£37,000 − £30,000) ÷ £30,000 × 100 = 23.3% ROI

This is an illustrative example, not a benchmark or guaranteed return. The figures an employer uses should reflect its own salary costs, funding position, role and estimate of the apprentice's contribution over time.

There is also evidence of a wider financial benefit. Government apprenticeship guidance reports an estimated £2,500 to £18,000 yearly gain in output per apprentice during their training. It says apprentice output usually surpasses associated costs and that the gain is likely to increase after completion if the apprentice remains with the employer, as apprenticeship costs fall away and productivity increases.

What drives the ROI of an apprenticeship?

The financial return isn't simply about paying an apprentice less than an experienced employee. A successful apprenticeship can generate value through recruitment, productivity, skills development, retention and progression.

Recruitment

What does it mean?

Apprenticeships give employers another route into the talent market, allowing you to recruit people based on their potential and develop them within the organisation.

How does it drive ROI?

Recruiting and replacing employees can be expensive. Developing talent internally can reduce your reliance on repeated external recruitment, particularly for roles where skilled candidates are difficult to find.

Apprenticeships can also widen your recruitment pool and help you develop people with the specific skills your organisation needs.

Metrics to track:

• Cost per hire
• Time to fill vacancies
• Apprentice recruitment and onboarding costs
• Retention after 12, 24 and 36 months
• Percentage of apprentices progressing into permanent or more senior roles

Government research found that 64% of employers said apprenticeships improved their ability to attract good staff. Among employers with apprentices who had completed their apprenticeship, 67% of those who recruited apprentices as new staff said apprenticeships improved their ability to attract good staff.

Bridging skills gaps

What does it mean?

Apprenticeships combine structured training with practical experience, allowing employees to develop knowledge and skills while applying them in the workplace.

This can be particularly valuable in areas where technology, regulation or working practices are changing quickly.

How does it drive ROI?

Developing skills internally can reduce the need to recruit externally for every new capability. It can also allow you to shape learning around the needs of the organisation and apply new knowledge directly to real business challenges.

Metrics to track:

• Skills gaps identified and addressed
• Completion and achievement rates
• New skills applied in the workplace
• Productivity before and after training
• Internal progression into skilled or specialist roles

Skills development was the most commonly reported benefit in the government's employer survey, with 86% of employers saying apprenticeships helped them develop skills relevant to their organisation's needs.

Innovation and productivity

What does it mean?

Apprentices bring their learning into the workplace, where they can combine new knowledge with the experience of colleagues and the needs of the organisation.

How does it drive ROI?

As apprentices become more competent, they can contribute increasingly valuable work. They may also identify opportunities to improve processes, use technology differently or solve problems in new ways.

Metrics to track:

• Output or revenue generated
• Time taken to complete key tasks
• Errors or rework
• Process improvements delivered
• New ideas or projects implemented

77% of employers reported improved productivity, while 66% said apprentices had brought new ideas to their organisation.

Leadership and progression

What does it mean?

An apprenticeship doesn't have to end when an employee completes their qualification. It can form part of a longer-term development pathway.

Higher-level apprenticeships can also support employees moving into more specialist, management or leadership positions.

How does it drive ROI?

Developing future leaders internally can help organisations retain organisational knowledge and reduce their reliance on external recruitment for senior positions.

Metrics to track:

• Apprentice progression after completion
• Internal promotion rates
• Number of leadership or specialist vacancies filled internally
• Retention of former apprentices
• Succession-plan coverage

Government research found that employers commonly use apprenticeships to support workforce development, with 39% of employers offering higher and degree apprenticeships saying they did so to offer progression as part of their workforce development strategy.

Reputation and employee experience

What does it mean?

Investing in apprenticeships demonstrates a commitment to learning and development while giving employees a structured opportunity to build their careers.

How does it drive ROI?

A strong learning and development offer can contribute to your employee value proposition, helping you attract and retain talent. It can also support your wider workforce and social value objectives.

Metrics to track:

• Employee engagement
• Retention
• Recruitment applications
• Internal progression
• Employee participation in learning and development

Government research found that 64% of employers said apprenticeships improved their image in their sector.

Financial benefits

What does it mean?

Apprenticeships involve costs, but employers may be eligible for government funding towards training and assessment. The amount depends on factors including whether you pay the Apprenticeship Levy, the apprentice's age and the apprenticeship programme.

How does it drive ROI?

The funding available can reduce the direct cost of training, while the apprentice's increasing contribution can generate value for the business during the programme.

The financial calculation should therefore consider the whole employment cost, not just the training fee.

Metrics to track:

• Training and assessment costs
• Levy funds used
• Employer co-investment
• Salary and employment costs
• Productive output
• Net benefit over the programme

Costs and funding at a glance

There are three main areas employers should consider when calculating the cost of an apprenticeship: salary, training and employer time.

From April 2026, the National Minimum Wage apprentice rate is £8 per hour for apprentices aged under 19 and apprentices aged 19 or over in the first year of their apprenticeship. Once an apprentice aged 19 or over has completed their first year, they become entitled to the National Minimum Wage or National Living Wage rate for their age.

The actual cost of training varies by apprenticeship standard and its funding band. Employers should therefore check the funding available for the specific programme rather than relying on a generic “typical” training fee.

How does the Apprenticeship Levy affect ROI?

Employers and connected companies with a total annual pay bill of more than £3 million are liable for the Apprenticeship Levy. For 2026/27, the levy is charged at 0.5% of the annual pay bill, with a £15,000 annual allowance.

Levy-paying employers can use funds in their Apprenticeship Service account to pay for eligible apprenticeship training and assessment.

For employers that don't pay the levy, the level of government funding depends on the apprentice's age and the current funding rules. From 1 August 2026, the government funds eligible apprenticeship training and assessment costs up to the funding band maximum for non-levy employers where the apprentice is aged 16 to 24 at the start of their training. For apprentices aged 25 or over, the employer contribution is generally 5% of eligible training and assessment costs up to the funding band maximum.

Funding rules can change, so employers should check the rules that apply when their apprentice starts.

How much management time does an apprentice need?

There isn't a single weekly figure that applies to every apprenticeship.

Your apprentice needs support from experienced colleagues, including opportunities to apply what they're learning, receive feedback and discuss their progress. The training provider delivers the apprenticeship training, so employers don't have to provide all the teaching themselves.

Apprentices also receive training and study time as part of their working hours. Government guidance states that apprentices should receive at least 20% of their normal working hours for training and study, although the way this is delivered can vary by apprenticeship.

The best way to estimate management time is therefore to look at the specific apprenticeship and agree responsibilities with your training provider before the programme begins.

How long does an apprenticeship take?

There isn't one standard apprenticeship length. In England, apprenticeships can take between eight months and six years, depending on the type and level of apprenticeship.

The levels broadly correspond to:

• Level 2 – GCSE level
• Level 3 – A level
• Levels 4 and 5 – higher education qualifications
• Levels 6 and 7 – degree and postgraduate level

Relevant previous experience or learning may also affect the amount of training an individual needs.

Are apprentices employees?

Yes. Apprentices are employees and have employment rights. Employers are responsible for paying the apprentice's wage and providing a contract of employment.

This is important when calculating ROI: an apprentice's salary and associated employment costs should be included in your business case.

What level of productivity can I expect from an apprentice?

Productivity will usually develop over time rather than appearing immediately.

An apprentice is learning both the occupation and your organisation's processes, so their contribution may be lower at the beginning of the programme and increase as their skills, confidence and experience develop.

Rather than using a generic productivity benchmark, establish a baseline for the role and track measures such as output, quality, time taken to complete tasks and contribution to projects.

Government research provides encouraging evidence: 77% of employers reported improved productivity as a benefit of apprenticeships. Apprenticeship Evaluation 2023: employer survey research report

Can apprenticeships improve staff retention?

They can. Apprenticeships give employees a structured opportunity to develop their skills and progress within the organisation.

In the 2023 employer survey, 75% of employers who had provided apprenticeships to existing employees said apprenticeships had helped improve staff retention. Among employers with apprentices who had completed their apprenticeship, 76% said apprenticeships had improved staff retention among those recruited as new staff.

To understand the impact in your own organisation, track retention at 12, 24 and 36 months and compare it with your wider workforce or an appropriate pre-apprenticeship baseline.

Can I use an apprenticeship to upskill an existing employee?

Yes. Apprenticeships can be used for both new and existing employees.

This can make them particularly useful when you have employees who are ready to take on additional responsibilities, move into a new specialism or develop skills that are becoming increasingly important to the organisation.

Why it's time to rethink the ROI of apprenticeships

The return on an apprenticeship isn't simply the difference between an apprentice's salary and the cost of hiring an experienced professional.

The real business case can include the skills you develop, the productivity you gain, the employees you retain, the recruitment costs you avoid and the future talent you build.

Research found that 96% of employers reported at least one benefit from offering and training apprentices, with skills development, productivity, retention and new ideas among the most commonly reported benefits.

The best way to understand your own ROI is to establish clear measures before the apprenticeship starts and track them throughout the programme.

At Kaplan, we can help you understand how apprenticeships could support your workforce strategy, from developing existing employees to bringing new talent into your organisation.

Get in touch with our expert team to discuss your apprenticeship requirements.

Want to see apprenticeship ROI in action?

Kaplan teamed up with Sharon Morgan at Lloyds Banking Group to discuss the value of apprenticeships, with a particular focus on the Data User (Level 3) apprenticeship programme.

Watch the full webinar or read our blog about how Lloyds Banking Group used Data User apprenticeships.