Discover everything you need to know below — from key insights to helpful tips that make a difference.
Measuring Return on Investment (ROI) for Apprenticeships
A great way to raise the profile of apprenticeships and ensure you’re getting value for money is to measure your Return on Investment (ROI).
Investing in staff development makes employees more likely to stay, especially important in light of trends like ‘The Great Resignation’. By tracking ROI, you can demonstrate the strategic value apprenticeships bring to your business.
What to Measure
The focus areas will vary depending on your objectives, but most employers measure ROI across three key areas:
- Employee retention
- Employee progression and succession planning
- Productivity
You may also wish to track softer outcomes such as employee engagement or morale.
How to Measure Your Return on Investment
- Collect baseline data.
- For employee retention, use turnover rates in relevant roles.
- For progression, track the ratio of internal to external hires for target roles.
- Productivity will vary by role. For example:
- Sales Assistants: revenue per week.
- Procurement: number of employees managing £1m of spend.
- Measure periodically. Reassess at the midway point, at programme completion, and 12 months post-completion.
- Convert change into cash terms.For instance, improved retention reduces recruitment and training costs.
- Calculate ROI.Include all programme costs—levy spend and internal costs such as management time or mentoring. Then calculate:ROI = (Cash Benefits – Total Cost) / Total Cost × 100%
- Capture soft benefits.These may align with wider business goals, such as improved morale, inclusion, or social mobility. Use surveys or case studies to capture this.
- Communicate the benefits.Boards respond well to data. Presenting ROI in financial terms can help increase buy-in and encourage uptake in other departments.
- Refine your programme.Use the insights to identify gaps or new opportunities. If one area of the business is underperforming in retention, targeted apprenticeships could be a strategic solution.
Look Back and Reflect
The Apprenticeship Levy has been active since 2017. Many employers now have several years of data available, making it the perfect time to review your apprenticeship impact retrospectively and optimise your strategy going forward.