About the Report

Download Report

This paper addresses a paucity of information about the economic returns employers receive from Registered Apprenticeships. It reviews evidence of empirical estimates of the return on investment (ROI) of Registered Apprenticeships to employers (mainly in the United States, but also with international data from developed countries where employers may invest in apprenticeships).

The ROI is calculated by dividing the net benefit by the total cost. The paper also discusses the nuances that go into rigorous estimation of an ROI, which is not straightforward for employers. While most cost components can be identified and measured, benefits tend to be far less tangible since they involve estimates of worker and mentor productivity. Furthermore, a Registered Apprentice may bring indirect benefits to their employer that are difficult to value, such as reduced turnover, product or process innovation, improved co-worker productivity, and developing supervisory skills that may be used in the future.

The empirical estimates of the employer ROI to Registered Apprenticeships ranged widely, but the most comprehensive and rigorous estimates range from 40 to 90 percent; for each $1.00 invested, employers can expect to reap a benefit of $1.40 to $1.90. This substantial ROI for employers suggests that there is an underinvestment in this area. Increased awareness of the substantial positive returns that employers can expect from Registered Apprenticeships may result in an increase in their take-up.

Download this Summary (PDF)

Key Takeaways

• The empirical estimates of the employer ROI to Registered Apprenticeships have a wide range, but the most comprehensive and rigorous estimates range from 40 to 90 percent. In other words, for each $1.00 invested in a Registered Apprenticeship, employers can expect to reap a benefit of $1.40 to $1.90 from their investments.
• The ROI for employers is substantial, which suggests that there is an underinvestment in that type of training. Indeed, even though apprenticeships have a long history in the United States, they have not been widely adopted until recently outside of construction trades.
• To the extent that there is an increased awareness of the substantial positive returns that employers can expect from Registered Apprenticeships, an increase in their take-up may result.

Citation

Hollenbeck, K. (2024). The Return on Investment (ROI) to Employers from Registered Apprenticeships. U.S. Department of Labor, Chief Evaluation Office.

Download Report   View Study Profile

The Department of Labor’s (DOL) Chief Evaluation Office (CEO) sponsors independent evaluations and research, primarily conducted by external, third-party contractors in accordance with the Department of Labor Evaluation Policy and CEO’s research development process.