How can apprenticeships benefit UK businesses?

Are apprenticeships good for the economy?

Apprentices can offer significant value for the businesses they join and to the wider UK economy. In fact, research widely states that for every £1 that is spent on apprenticeships, the national economy gains £21. This is high in comparison to other expenditure/returns on investment in the innovation, research and technology sectors range from around £4 – £7 per £1 spent.⁴ More specific research on leadership apprenticeships have shown they are instrumental in boosting business revenues by an impressive £106.1 million. On average, each apprentice contributed an additional £20,900 to their employer’s revenue annually.⁵

How can apprenticeships benefit employers?

The benefits of apprenticeships go wider than narrowing the skills shortage and driving productivity. A recent report by the Learning and Work Institute⁶ shared that 99% of employers recognize the benefits of offering apprenticeships. Within Lloyds Banking Group we see first-hand how apprenticeships are a smart investment. They infuse fresh perspectives, up-to-date knowledge, and a strong work ethic, bridging the skills gap and ensuring a well-trained, motivated and loyal workforce.

We are able to attract people from different backgrounds to start an apprenticeship as they know they will be given the structured development to be successful in a new career. In 2024, our apprenticeship enabled us to focus on diversity with 25% of external hires coming from a Black, Asian or Minority Ethnic heritage and 47% being women.⁷

Apprenticeships can be used in a variety of ways. This article has focused on the benefits for school leavers but we also see people changing their careers through apprenticeships and provide deeper skills in their existing roles to further their careers.

Apprenticeships vs university

Apprenticeships are increasingly seen as an attractive alternative to university, offering the ability to "earn while you learn" and avoid student debt. In 2023, 430,000 students expressed an interest in apprenticeship opportunities via UCAS – a 180% increase since 2021.⁸

The debate of the past few years has sought to compare apprenticeships with a traditional university education – to place one style of learning against another and perhaps drawing us into picking a winner. Increasingly we’ve seen that the UK needs to value both systems to provide diverse pathways for our young people who will leave school in increasing numbers across this decade and need diversity of learning environments to be able to thrive and find their place in society.    

Though we see hundreds of colleagues achieve their aspirations through apprenticeships, every story is unique and important to the individual and their families, every apprenticeship is an opportunity for our colleagues at whatever age or stage in their career to test themselves and aspire to become their best. In doing so they become the role models that aspire others in our organisation to look forward, keep developing and helps us embed a learning culture.

Whilst role models like Jess can help inspire the next generation of school leavers, there is still some work to be done to provide the insights needed for parents to guide their teenagers through their post school options. Where most teenagers cite their parents as a key influencer in their decision making, parents don’t feel equipped to support them through finding and applying for apprenticeships. Earlier this year, we took the opportunity to record a video podcast recorded with early careers experts from different industries who also have experience as parents of teenagers navigating through career options.

Supply v Demand

Whilst apprenticeships are seen as an attractive alternative to apprenticeships, the availability of opportunities is not meeting the demand with UCAS reporting that three in five students (61%) reported not pursuing apprenticeships due to a lack of opportunities in their preferred location. Additionally, one in three (35%) cited a lack of roles in their desired career as a barrier. In the 2023/2024 academic year, there was a slight increase in under 19s starting an apprenticeship¹⁰ but there's more to be done to increase the number of opportunities.

Lloyds Banking Group has been working with smaller businesses to encourage apprenticeship opportunities through levy transfer activity. Businesses can pledge up to 50% of their levy funding to smaller businesses to fund the apprenticeship delivery. To date, we have extended our support to over 1,750 apprentices in smaller organisations through our levy transfer activity.

Our impact is vast, from enhancing digital skills in schools to empower teachers with technology for better learning outcomes, to developing mechatronics skills. We would encourage all businesses to discover the benefits of apprenticeships in enhancing their teams and driving innovation and growth.

Originally published February 2023