UK Businesses could gain additional £18bn revenue from apprenticeships

  • Report reveals 5 million consumers would prefer to do business with apprentice employers
     
  • Almost one in three consumers in Yorkshire and the Humber would pay a price-premium for services or products that champion apprentices 
     
  • National Apprenticeship Week starts today with events across Yorkshire and Humberside
     

Consumers in Yorkshire and Humberside prefer to do business with businesses employing apprentices, a new report from the Centre for Economics and Business Research (CEBR) has revealed.

The Benefits of Apprenticeships to Businesses study finds that offering apprenticeships were perceived by two thirds of consumers in Yorkshire and Humberside as contributing to society and providing opportunities for young people. 5 million consumers nationally say there are more likely to make a purchase from an apprentice employer.

Almost one in three (29%) consumers from Yorkshire and Humberside say they would go as far as even paying more for goods and services offered by companies that employ apprentices. Aggregated across key sectors in the economy, this price-premium would equate to an additional £18 billion a year in consumer spending nationally.

The report, launched to mark the start of National Apprenticeship Week 2015, is part of a national drive to promote the benefits of apprenticeships. Events taking place across Yorkshire and The Humber will celebrate the success of apprenticeships that have been transformed over recent years so they are more responsive to the needs of employers and learners.

The week will also see the launch of a new mentoring service for small businesses interested in taking on apprentices and will be launched by small business champion Jason Holt CBE.

Today’s research also highlights a number of other financial benefits firms employing apprentices in Yorkshire and The Humber can enjoy, such as increased long-term productivity. Nationally a typical apprentice delivers productivity gains of over £10,000 per annum, rising to almost double that in the construction and planning, and engineering and manufacturing sectors.

Moreover, the research demonstrates that even before an apprentice is fully qualified, many businesses in Yorkshire and Humberside will see economic benefits of offering apprenticeships. The figures show that while training, each apprentice in the region is estimated to deliver an average positive net gain of £1,547 to their employers.

Business Secretary Vince Cable said:

“In launching National Apprenticeship Week we are celebrating the 2.1 million apprenticeship starts since 2010 and the positive impact they are having on businesses around the country. 

“The benefits of apprenticeships are clear - they make a vital contribution to the economy, boost business productivity and give people the skills they need to get on in the world of work. 

“As this research shows, there has been an important shift in the attitudes towards apprenticeships with businesses, consumers, and young people recognising the significant opportunities they can offer.”

Skills Minister Nick Boles said:

“This research is further proof that apprenticeships deliver for businesses as well as providing life changing opportunities for young people. 

“National Apprenticeship Week gives us the opportunity to raise the profile of apprenticeships and traineeships, and to celebrate the important role they play in our economy. I encourage people of all ages and employers of all shapes and sizes to find out more about apprenticeships and how they can deliver for them.” 

The Cebr report examines the benefits that apprentices offer businesses both while they are training and long after they have completed their apprenticeships:

• 29% of consumers said that they would be more likely to pay more for goods and services offered by businesses employing apprentices, with the most popular services to pay a premium on being a plumbers’ visit, a meal or a haircut.

• People in Yorkshire and The Humber are prepared to pay between 0.8% and 2.5% extra as a price premium – the aggregate gain in consumer spending if these premiums are realised is £18bn per annum nationally

• The benefit to a Yorkshire and Humberside employer of hiring an apprentice is the value of the economic output produced by an apprentice, plus any subsidies received, less wage and training costs. This equates to an average of £1,547 per annum for the average apprentice in Yorkshire and The Humber.

• Nationally, productivity gains from employing an apprentice long-term average at £214 per week, ranging from £83 in the retail sector and £114 in health, public services and care, up to £401 in construction and planning, and £414 per in engineering and manufacturing.

Scott Corfe, co-author of the report The Benefits of Apprenticeships to Businesses, said:

“Previous Cebr research has demonstrated the impact of apprenticeships to the economy and the country as a whole, but this report proves that hiring apprentices has a hugely positive impact on employers themselves. Not only do apprentices contribute to the productivity of a company from day one, but consumers are more likely to switch to brands and firms that employ apprentices.” 

As part of National Apprenticeship Week, employers in Yorkshire and The Humber are being encouraged to share their reasons for employing apprentices on social media, with #100reasonswhy.

To find out more about National Apprenticeship Week, search for apprenticeships on www.gov.uk.

For more information, please contact 0800 051 9575, or email:
Lucy Baird (lucy.baird@shackletonpr.co.uk)

Danielle Stott (danielle.stott@shackletonpr.co.uk)

Claudia Dalton (claudia.dalton@shackletonpr.co.uk) 

Notes for Editors 

All figures relating to consumers’ attitudes to apprenticeships are from a bespoke survey commissioned by Cebr to YouGov Plc. Total sample size was 2,177 adults, Fieldwork was undertaken between 18th - 19th February 2015. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+). All monetary figures quoted calculated by Cebr – contact 020 7324 2850 for further information. 

The Skills Funding Agency

The Skills Funding Agency is a partner organisation of the Department for Business, Innovation and Skills (BIS).  Its job is to fund and promote adult further education (FE) and skills training in England, including traineeships and apprenticeships, in a way which supports economic growth.  The Agency delivers £4.1 billion of skills training through contracts with over 1,000 colleges, private training organisations and employers, with a highly effective supply chain that means FE meets local need in the most cost-effective way. Within the Skills Funding Agency, there are two customer-facing services: the National Careers Service, which provides impartial careers information, advice and guidance online, by telephone or face-to-face and the National Apprenticeship Service, which is responsible for increasing the number of traineeship and apprenticeship opportunities. 

The National Apprenticeship Service supports the delivery of apprenticeships and traineeships in England. It offers free impartial advice and support to employers looking to recruit for the first time or expand their programme.  This includes simplifying the process of recruiting an apprentice or trainee through the support of employer focused teams and Find an apprenticeship and Find a traineeship recruitment sites on GOV.UK where employers can advertise their vacancies and potential apprentices or trainees can apply.

Call 08000 150 600 or search for apprenticeships on www.gov.uk to find out more. 

Traineeships were introduced in August 2013 and are available for 16-24 year olds. Traineeships are an education and training programme with work experience focused on giving young people the skills and experience they need to be able to compete for Apprenticeships or other jobs. At the core of traineeships are work preparation training, English and Maths (for those without GCSE A*-C standard) and a high quality work experience placement. Traineeships are a stepping stone to future success for young people, businesses and the wider economy. 

There has never been a better time to employ an apprentice, or start an apprenticeship.  Visit greatbusiness.gov.uk/apprenticeships if you’re an employer or apprenticeships.gov.uk if you want to find out more about becoming an apprentice or call 08000 150 600. Businesses can also access all the support and advice they need at greatbusiness.gov.uk