Do Employers Earn Positive Returns to Investments in Apprenticeship? Evidence from Registered Programs under the American Apprenticeship Initiative
ETA launched the American Apprenticeship Initiative (AAI) in October 2015 and provided five-year grants to 46 grantees to expand registered apprenticeship into new sectors and to populations historically underrepresented in apprenticeships. Some AAI grantees received no-cost extensions of their periods of performance through September 2021. In April 2016, ETA commissioned an evaluation of the AAI to build evidence about the effectiveness of registered apprenticeship for apprentices and employers. The evaluation included four sub-studies (an implementation study, an outcomes study, an employer return-on-investment (ROI) study, and an assessment of a demonstration to encourage employers to adopt apprenticeship). Three reports comprised the implementation sub-study. In addition to the sub-study reports, the AAI Evaluation included five topical issue briefs.
This report presents findings of the AAI employer ROI sub-study based on a survey administered to 68 non-random employers that hired apprentices supported by an AAI grant. The survey inquired about two types of benefits: direct benefits (the value of apprentices’ productivity) and indirect benefits (the value the employer experiences beyond that increased productivity, such as reduced turnover and improvements in company culture). This report documents the costs, benefits, net benefits, and ROI estimates that AAI employers experienced by investing in apprenticeship programs. The report includes information on costs and benefits during the apprenticeship program period, as well as projections of benefits for up to 5 years after apprentices completed their apprenticeship. Of the 68 employers surveyed, 46 (68 percent) achieved a positive net return over the 5 years since the registered apprenticeship ended, counting both direct and indirect benefits. Even when using a low valuation of apprentice productivity, two-thirds of employers gained financially from their registered apprenticeship investment. During the registered apprenticeship, 60 percent of employers recouped at least 80 percent of their costs, and almost 40 percent recouped their full costs. The median return on investment is $144 for every $100 invested.