Apprenticeships: What are the incentives for employers?

The practice of combining working and learning through apprenticeships can be traced back through history. The first formal apprenticeships were introduced by the Statute of Artificers in 1563, with apprenticeships lasting 7 years. 

In the 1960’s, apprenticeships were common. Around a third of male school-leavers became apprentices. 60 years on, this association with young people has remained, with apprenticeships being seen as pathways for teens and graduates entering the workforce.

However, the 21st century apprenticeship is aimed at all levels and ages, from new starters to long-established, existing staff. With almost 600 standards available across all sectors, from Level 2 (GCSE) to Level 7 (Masters), there’s an apprenticeship to suit everyone. Establishing a strong apprenticeship programme within your organisation is actually an effective and cost-efficient way of delivering high-quality professional development for staff, and upskilling your workforce.

If you are an employer seeking a meaningful method of professional development for your teams, this article is for you. Read on to explore the many benefits of apprenticeships for employers like you, including employee retention, company reputation, filling skills gaps, and workforce development. Plus, discover more about funding streams and government incentives that will work to your advantage.

SECTION 1: The benefits of employing apprentices

Whilst apprenticeships may not have been the first thing that sprang to mind when you began researching staff professional development options, there are a range of benefits to both employing apprentices, and offering apprenticeships to existing employees:

Apprenticeships build skills within your workforce to ensure a robust knowledge base, a healthy succession pipeline, and a culture of continuous improvement. With most of the learning happening within the workplace, programmes are tailored to your processes and organisational needs. Equipping the right people with the right skills will futureproof your organisation’s workforce pipeline.

A recent study by the Skills Funding Agency showed that 80% of employers experienced improved retention rates because of hiring apprentices, while 65% of apprentices stay with their employer after their training. Investing in apprenticeships for employees demonstrates your commitment to them, which is often reciprocated. When employees can see a future, they are more likely to stay.

The cost of recruiting and onboarding new staff is significant, particularly at management level or in sectors with skills shortages. Since the pandemic, recruiters have struggled to find quality applicants. Onboarding new apprentices, and offering apprenticeships to existing employees seeking to upskill into higher roles, reduces the need for expensive external recruitment and bridges the vacancy gaps in your teams.

Multiple options for covering the cost of your apprenticeship offering include Levy accounts, government grants, and Levy transfer collaborations. Apprenticeships are far more cost efficient when compared with standard staff recruitment and training. This is just another aspect of apprenticeships that make them a budget-friendly way to recruit, train and retain the right people.

Tailored apprenticeship training allows employees to apply their new skills and knowledge to the specific needs of your business from day one. This will increase productivity right out of the gate. Productivity levels will only continue to rise the more your apprentices learn and apply their learning. Apprentice employees develop into highly skilled staff, bringing value and efficiency to the organisation.

Apprenticeships are open to people of all ages, backgrounds, and career levels, enabling you to diversify your workforce, and increase representation of minority groups. With diversification comes new ideas, fresh perspectives, and ways of thinking, increasing the potential for innovation and creativity. Many large organisations have tapped into this, including Google, Siemens, and PwC.

Employing apprentices has a positive impact on company image. Perpetual education and learning also provides powerful success stories your marketing department can use to promote the organisation. It also aids in aligning with several of the UN’s Sustainable Development Goals, providing quality education, decent work, and opportunities for innovation supports the organisation’s triple bottom line and Corporate Social Responsibility commitments.

These are just some of the benefits of embracing apprenticeships as your staff training and development approach of choice.


The Levy

Large organisations, with a payroll of more than £3 million, pay 0.5% of their pay bill into a Levy digital account, which can then be used to fund apprenticeship training in the organisation.

This accounts for just 2% of employers. So, how does it work for the other 98%?

Smaller, non-Levy-paying employers pay just 5% of the cost of apprenticeship training, with the rest of the balance paid by the Government. For instance, a Level 3 Business Administrator apprenticeship costs £5,000. The employer pays just £250 with the government paying the remaining £4,750.

Large employers can also transfer up to 25% of their Levy funds to smaller employers, supporting them in employing apprentices. For example, Aldermore and The Access Group have recently each transferred £40,000 to Home Instead, an elderly care organisation, to support Level 3 Lead Adult Care Worker apprenticeships.

Additional financial incentives of note:

    • Employers don’t pay National Insurance contributions for apprentices aged               under 25, and earning under £4,189 per month

    • Employers get a £1,000 bonus when taking on an apprentice who is:
           - Under the age of 19
           - Aged between 19-24 with an Education, Health, and Care Plan
           - Someone who has been in care

   • Employers get a £3,000 bonus when taking on an apprentice aged 16-24 who           is a care leaver

    • Small employers with less than 50 staff pay £0 of the training costs when                  taking on an apprentice aged under 19

With an imminent election, and potential change of government, rules around the Levy and apprenticeship incentives are likely to change. However, both the main political parties are committed to increasing apprenticeship starts, so it’s likely that incentives are here to stay.



The skills shortage has affected every sector, with adult care and childcare being two of the worst hit. With an ageing workforce, particularly in the adult care sector, investing in apprenticeships to nurture and retain ‘homegrown’ talent is becoming a sustainable way to futureproof your organisation’s workforce. 

Apprenticeships introduce industry-leading skills and practices to your organisation, which can benefit both apprentices and existing employees alike. With apprenticeship standards developed by employers in the sector, apprenticeship content is designed to promote best practice across every industry.


Having an organisational culture which optimises apprenticeships to develop and nurture staff at every level, will support sustainable business growth and development. Upskilling current employees through apprenticeships to fill internal promotions and management roles not only stabilises your workforce, but it also offers real career progression opportunities to your employees.


Impact Futures Training developed an apprenticeship academy pathway for The National Fostering Group. The Academy was named LEAP (Leading Engagement through Amazing People). Committed to developing future leaders for the organisation through a structured pathway, apprenticeships at Levels 3, 5, and 7 were implemented, further enhanced with Institute of Leadership and Management Diplomas. Curriculum content was tailored to the needs of the Group and informed by their specific culture and values.


If your business is ready to embrace apprenticeships, the Impact Futures Partnerships Team will work with you to develop a Training Needs Framework, having conversations with your development teams and senior leaders. This framework will consider your organisation’s current strengths and challenges, skills gaps, and strategic direction, and will be informed by Local Market Information and our sector expertise.

Once this framework is established, we’ll map our comprehensive apprenticeship offer to it, tailoring our expert-designed curriculum and content to ensure your specific organisational needs are met. One example of this is that we can embed your induction processes into the apprenticeship programme to support seamless onboarding of new employees.

Impact Futures will support the apprentice recruitment process by:

    •  Sharing dual-branded marketing collateral, reflecting your organisation’s                unique identity

    •  Advertising on our social media platforms and through the Find an                       Apprenticeship service

    • Holding information events at your premises for existing and potential new            employees

    • Screening potential candidates for suitability and eligibility

Our recruitment support is provided at no extra charge, taking the pressure off your budget as well as your time

We are the preferred training provider for over 500 employers across England, including local authorities, NHS Trusts, multinational corporations, large organisations, and SMEs.

Here’s what you’ll gain by partnering with us:

• Collaboration with one of the largest independent training providers in England

• Full support throughout from your Client Relationship Manager

• Expert Development Coaches with real sector experience

• Comprehensive recruitment and onboarding support

• Rolling start dates to capture apprentices at the point of interest

• Full data and information transparency through our intuitive platform, Aptem,         with employer dashboards for KPI reporting

In short, we’ll be there for you through every step of the journey, ensuring that your apprenticeship scheme is as successful and beneficial as possible.


Making apprenticeships central to your workforce’s planning and development will improve employee retention, reduce skills gaps, reduce recruitment costs, broaden the diversity of your workforce, support your reputation, and ensure your staff have robust training and qualifications, with clear career progression pathways. Put simply, it’s a smart way to bolster your business.

Ready to make apprenticeships a fundamental part of your business? 

Call 01753 596 004 and talk to our team about getting started. 


Got any questions?

We’re all about making an impact, be that individuals making an impact through their day-to-day work, or by organisations making their impact on our economy.

As a national training provider, we make this impact throughout the UK, with expertise in childcare, healthcare, clinical and business skills apprenticeships.

If you have any questions, whether it be about this article or anything else, complete the form below, call us on 01753 596 004, or email us.

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