Employing an electrical apprentice can produce a positive return from year three of the apprenticeship, according to new figures published by The Electrotechnical Skills Partnership (TESP). For those charging apprentices out at higher rates, positive returns can be gained as soon as the first year.
Funded by National Electrotechnical Training (NET) and carried out by Pye Tait, this latest research updates the 2019 calculations from TESP that explored the return on investment (RoI) that can be made from electrical apprenticeships.
Using scenarios based on differing charge-out rates for unskilled and skilled work, following detailed interviews with 101 employers of all sizes across England, the overall net costs and benefits of apprentice recruitment were projected.
For low and medium charge out rates, an apprentice will make money for the company by year three; at higher charge rates they show positive returns in the first year. By year four, apprentices provide positive returns to the business at all charge out rates of between £12,024 and £27,469.
The rates at which apprentices are charged out plays a major factor in the total return realised over four years. At the medium rate, the four-year net benefit is £26,580 (£34,076 in 2019) and the higher rate is £51,292 (£56,756 in 2019). There has been a significant drop in value for those charging out at lower rates, with the overall benefit now just £97 compared to over £11,000 in 2019.
The calculations take into account the weekly costs of an apprentice and supervision, the percentage of time spent on supervision and the increasing amount of time the apprentice spends completing the work of a qualified electrician.
Some key changes between 2019 and 2025 that have had an impact on these figures include:
- The weekly cost of an apprentice as percentage of a skilled electrician’s wage has increased in year three to 58.8% (up from 50% in 2019) and for year four to 63.6% (up from 55%).
- The percentage of supervisor time spent on monitoring/training is significantly down across all four years.
- Medium and larger firms are charging out apprentices for a greater proportion of time.
When asked about future apprenticeship intentions, 44% intend to recruit similar numbers, but 39%, mostly small or micro businesses, plan to recruit fewer.
With apprentice charge out rates having such a clear impact on determining RoI, NET is now funding further research into how employers set these rates and more granular detail on the work apprentices undertake, to see what support or guidance might be developed for businesses.
TESP believes the RoI findings, teamed with employers’ future intentions, highlight the importance of ongoing apprenticeship recruitment. “Even in a challenging environment for businesses we have a positive message here that investing in apprentices makes economic sense and we should continue to promote the benefits of apprenticeship recruitment,” said Ruth Devine MBE, TESP Chair.
“We’re aware from other TESP surveys that business uncertainty and apprentice costs are barriers to apprentice employment. So now, more than ever, we need to find ways to encourage all employers, particularly small businesses, to support more apprenticeships. It's important to recognise that the benefits of quality apprenticeships go far beyond financial metrics and the ongoing return that is made post-apprenticeship completion.”
“Smaller firms employ and train 80% of electrical apprentices, and so indications that some are contemplating reducing recruitment is clearly a cause for concern,” said Andrew Eldred, Deputy Chief Executive Officer at the ECA. “Apprentices are crucial for the future, and electrical employers can still make a positive net return on this investment. Nevertheless, other, more immediate factors – not least wavering economic confidence and sharply increasing business costs – are putting investment in future skills into question. Aside from badly needed reforms to the skills system – as set out by ECA in our recently launched Blueprint for Electrification – Government and industry therefore need to work together urgently to encourage more businesses, and especially smaller ones, to put their faith in the next generation.”
“The JIB welcomes this important research, which shows that investing in apprentices still makes sound business sense even in challenging times,” said Jay Parmar, Chief Executive of the JIB. “We are calling for Government and clients to actively reward companies that invest in skills through fairer procurement and targeted incentives. Backing apprentices today is essential to securing a stronger, safer, and more sustainable industry tomorrow.”
“The electrical industry has a proud and strong history of apprenticeship training - it’s vital we continue this tradition in order to maintain the skilled pipeline of competent, qualified electricians, ready to meet the UK’s future growth, energy and public safety demands,” said Jason Poulter, National Officer for Construction at Unite the Union. “Unite looks forward to working in partnership with TESP to maintain and improve quality apprenticeships and training standards, so employers can recruit apprentices with confidence.”
To view the full research, visit www.the-esp.org.uk/lmi