A new report has found that business apprenticeships provide around £2,500 worth of financial benefit, despite many believing hiring such staff increases costs.

The data, published by apprenticeship and skills organisation The St Martin’s Group, in partnership with City & Guilds and NCFE, spoke to 1,000 HR decision makers.

In total, 98% of apprentice employers stated that they bring “additional benefits,” with almost half (47%) saying that they help address skills shortages and 39% saying apprentices offer a cost-effective labour source.

Additionally, 40% agreed that apprentices provide value for money and a third (33%) said they improve diversity within their business.

Data from the report also emphasises upfront costs associated with onboarding apprentices can be recovered much earlier than anticipated. As well as this, apprentices bring increased benefits as they develop their skills, meaning an employer’s average net benefit will continue to grow over time.

Commenting on the research, David Marsh, Co-Chair of The St Martin’s Group and CEO of Babington, said: “Apprenticeships are an incredibly valuable career pathway, and we are encouraged that the findings of this report demonstrate the net cost benefits to employers but also the employment prospects for those who complete apprenticeships.

“While Covid-19 has brought a range of unforeseen hurdles for the sector, the past 18 months have also shown how apprentices can help improve the resilience and flexibility of businesses across the country. This includes the vital role apprenticeships can play in closing skills shortages in sectors that are crucial to economic recovery.

“We have welcomed the Government’s apprenticeship and skills initiatives in driving forward the growth in apprenticeships. However, to ensure employers and learners continue to reap the rewards, funding levels and wider support must continue, particularly for SMEs and areas of deprivation to help overcome any further barriers to participation.”

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Economic recovery in the UK can also be boosted through investment in apprenticeships, the survey revealed, suggesting that workers with apprenticeship qualifications outperformed the wider labour market in terms of unemployment.

Between 2017 and 2020, the unemployment rate amongst those with apprenticeships averaged 2.5%, while that of the wider economy averaged 4.2% and graduates average stood at 2.8%.

Additional funding has been provided by the Government to help ‘invigorate’ the apprenticeship sector as it promises to play a ‘pivotal role’ in the recovery of the job market post-Covid-19.

Jenny Taylor, UK Foundation Leader at IBM, which has benefitted from apprenticeship programmes in the past, said: “These report findings resonate strongly with our experience of apprenticeships at IBM.

“Since introducing the scheme in 2010, we have witnessed widespread benefits across the business including a solid ROI, effectively addressing skills shortages and delivering high productivity levels.

“Perhaps most importantly, we’ve found that apprentices have the ability to bring new ideas into the workplace by offering fresh, creative perspectives which help foster a real sense of innovation and community.

“Our apprentice cohort consistently goes above and beyond to meet our clients’ strategic needs and will continue to play a key role in shaping our company’s future.”