With the Apprenticeship Levy bringing staff training to the fore, companies of all sizes and sectors are investing in Apprenticeships. Apprenticeships retain high value on both an economic and individual level; they are excellent for helping businesses grow, engaging employees and nurturing the skilled workforce needed for the future.
This article examines the economic and social value of Apprenticeships in Wales, the benefits of Apprenticeships to Welsh employers, and the individual benefits to Apprentices:
Benefits to the economy
The number of Apprenticeship starts has grown dramatically over the past decade, and with an ever-changing business landscape, work-based learning is arguably more important than ever for filling skills gaps in Welsh workforces.
Annually, Apprenticeships contribute over £1 billion to the Welsh economy and represent good value for money for Welsh businesses, especially when businesses are drawing funding from the Apprenticeship Levy pot. Foundation Apprenticeships (Level 2) generate around £510 million a year and Apprenticeships (Level 3) generate £500 million to the Welsh economy (NTfW).
The return on every pound of public money invested in Apprenticeships could be as high as £28 for an Apprenticeship and £26 for a Foundation Apprenticeship, according to research from the UK Government’s Department for Business, Innovation and Skills.
When comparing the return of investment of Apprenticeships and Higher Education courses, the only degrees to generate a better return than an Apprenticeship are medicine and engineering.
Benefits to businesses
It has been well established that a highly skilled workforce is a more productive one, with Apprenticeships contributing an estimated gross productivity gain of £2.4 billion to the UK economy (CEBR).
Once Apprentices are qualified, 68% of employers recorded improvements in productivity, 87% saw a rise in staff morale and 72% reported increased product/service quality. This highlights that staff training brings a myriad of positive benefits that can make a real difference to businesses, not only with productivity but workforce happiness too.
On a weekly basis, a typical Apprenticeship completer is understood to raise business productivity to the tune of £214 per week (NTfW). The highest productivity increases can be seen in the engineering and manufacturing sector with £414 a week, and the construction and planning sector with £404 a week.
Even whilst an Apprentice is in training, many employers still benefit from economic benefits over wage and training costs, particularly those whose training is fully-funded by the Welsh Government. Apprenticeships are estimated to have resulted in a positive net gain to employers by £1,670 per Apprentice (in England), adding up to around £1.4 billion annually (CEBR).
By upskilling workforces using fully-funded Apprenticeships through the Welsh Government, businesses can also drastically reduce training costs whilst bringing in specialist skills needed to further grow and develop their business.
Employers also reported that Apprenticeships bring added gains beyond productivity, including a better sector image and staff retention: Eighty percent of companies who invested in Apprenticeships reported a significant increase in employee retention, and 92% said Apprenticeships lead to a more motivated and satisfied workforce (NTfW).
Moreover, businesses who invest in Apprenticeships are more positively perceived in the eyes of the consumer. CEBR research highlighted that households were willing to spend as much as £18 billion more per year with companies investing in Apprenticeships as well as pay a premium for their goods/services. Furthermore, one in ten consumers would be more likely to visit a shop and make a purchase if they knew a business was investing in Apprenticeships.
These businesses are also most strongly associated with supporting the local community, and a quarter of consumers associated these businesses with a friendly service. Sixty percent of consumers in Wales agreed that offering Apprenticeships is a key part of companies engaging with, and contributing to society (CEBR).
Overall, the benefits discussed above clearly demonstrate that investing in skills and developing their workforce with Apprenticeships is invaluable for businesses.
On an individual scale, Apprenticeships enable learners to develop a broader and more specialist range of skills and knowledge, and improve their career prospects all whilst learning on the job and earning a wage.
As well as benefitting from on the job training and developed skills sets, Apprentices also report other personal monetary advantages. These include financial benefits, as demonstrated in The Evaluation of Work-based Learning in Wales report. Individuals who completed an Apprenticeship can benefit from £77,000 to £117,000 in additional lifetime earnings.
Furthermore, Apprentices experience a range of benefits beyond financial gains. A Welsh Government Survey found that 86% of Apprentices agreed that their Apprenticeship increased their self-confidence, and 70% said their Apprenticeship was very relevant to their long-term goals. These figures highlight that when it comes to building a career, an Apprenticeship boosts both the personal and professional development of those that undertake work-based learning qualifications.
Adele Roberts, Customer Service Co-ordinator at DS Smith and ACT Management Apprentice, comments:
“I chose an Apprenticeship to help with my career progression. I wanted to do something more hands on rather than an academic qualification. Something that was relevant to my job and that I could help develop within my role. It’s helped build foundations to allow me to progress through the business and in my career and outside of work. It’s also given me more confidence to work on my personal development.”