The Value of Inclusive 
Apprenticeships

Overview

Employers must consider many costs and benefits when deciding whether to offer an apprenticeship program. Upfront costs may include apprentice wages, training and supplies, and the time investment from mentors. Benefits may include higher value work product from apprentices, reduced hiring costs, lower turnover and an increased pipeline of skilled workers. These benefits are most likely to appear when efforts are made to foster inclusion for people with disabilities and other underrepresented groups.

This resource provides tips to help employers calculate the potential value of inclusive apprenticeship, including funding opportunities. You will also find resources for creating an apprenticeship program in ways that foster inclusion for people with disabilities and other underrepresented groups.

Calculate the Return on Investment (ROI) of Inclusive Apprenticeship

What is the Return on Investment (ROI) of Inclusive Apprenticeship?

Return on investment (ROI) is a performance metric used to calculate the benefits of a program compared to its cost. The higher the ROI, the greater the benefit. Nearly all apprenticeship ROI studies show that employers who offer an apprenticeship program experience a positive ROI by increasing the productivity of their workers and enhancing the long-term value of their companies. A U.S. Department of Labor (DOL) study of American Apprenticeship Initiative (AAI) grantees found that the median return on investment was $144 for every $100 invested.

Return on Investment Formula

ROI is calculated by subtracting the costs of a program from its benefits, and then dividing that value by the costs. The result is a ratio value. For example, an ROI of 0.06 would indicate a 6% return on the apprenticeship investment.

Questions to Ask When Calculating Projected ROI

When calculating the potential ROI of an inclusive apprenticeship program, it’s important to identify broad opportunity gaps and priorities across the organization that may align. For example, your HR department may be actively seeking new ways to achieve Diversity, Equity, Inclusion, and Accessibility (DEIA) goals when sourcing talent.

Questions to ask may include:

  • How many open positions do you have? How long have these positions been open? Which positions are the hardest to fill?
  • In what ways are you increasing your workforce’s productivity as it relates to hiring practices?
  • What investments are you making to train new and/or existing employees?
  • What efforts are you making to broaden your talent pool?
  • What recovery efforts are you making to mitigate the challenges of COVID-19?
  • Is your company already using Diversity, Equity, Inclusion, and Accessibility (DEIA) strategies as part of its talent acquisition efforts? If so, do you have strategies in place to intentionally include people with disabilities?
  • If you already have an apprenticeship program, what is the ROI?
  • What apprenticeship funding opportunities do you qualify for?

Metrics for Calculating ROI

Below are some common metrics that organizations use to define measures of net profitability and success:

Turnover Costs

The need for employers to retain their current employees has never been greater. Between 2012-2022, voluntary turnover in the U.S. workforce doubled. Because organizations often do not track their cost of turnover, they may be unaware of the substantial hidden costs.

Work Institute has found that losing an employee typically costs an organization an amount roughly equivalent to 33% of that worker’s base pay. For salary workers earning the U.S. yearly median income of $48,672, the projected cost is approximately $15,000 per employee departure.

Examples of Turnover Costs:

  • Interviews
  • Job vacancy communication and advertising
  • Unemployment tax
  • Orientation and training for new hires
  • Lost institutional knowledge
  • Risk of legal action

Talent Pipeline of Skilled Workers

Finding qualified workers is one of the greatest challenges employers face. Building a reliable pipeline to talent helps future-proof your business, particularly for high-demand, hard-to-fill roles. Nearly 60% of employers using an apprenticeship program rank this benefit as more valuable than the productivity gain of the apprentice.

How Inclusive Apprenticeship Helps Build a Talent Pipeline

49.4% of employers said the accommodations they made were free to implement
49.4% of employers said the accommodations they made were free to implement

Of those that had a one-time cost, the median cost was only $300

Pandemic Recovery

The pandemic has brought many challenges to both employers and employees. Long COVID has affected millions of Americans, sometimes causing serious, long-term health issues that have forced people out of the workforce. Nearly 1 in 5 adults who have previously been infected with the coronavirus are still experiencing symptoms of Long COVID. Mental health challenges have also soared and are prompting higher attrition levels across all organizational levels. 68% of Millennials and 81% of Gen Zers have left roles for mental health reasons – and these groups will make up two thirds of the workforce by 2030.

How Inclusive Apprenticeship Helps Pandemic Recovery

  • An inclusive apprenticeship program can attract new pools of underutilized talent and mitigate the significant worker shortages and retention challenges brought on by COVID-19. Many people with recently acquired disabilities and chronic conditions want to work but need an inclusive workforce culture to succeed in their roles.
  • Pandemic challenges have been documented to have a disproportionate effect on racial and ethnic minorities, women, and other underrepresented groups. The same workplace factors that unlock inclusivity for people with disabilities also foster inclusion for other underrepresented groups.

Company Culture

Companies are most profitable and successful when their employees feel engaged and supported. Accenture found that companies that embrace best practices for employing and supporting persons with disabilities in their workforce regularly outperform their peers. These organizations experienced 28% higher revenue, 200% higher net income, and 30% higher profit margins.

How Inclusive Apprenticeship Boosts Innovation and Employee Engagement
Job seekers prefer employers who are inclusive and 76% of employees and job seekers said a diverse workforce was important when evaluating companies and job offers.

New employees from underrepresented groups will inherently bring new, fresh perspectives and ideas. Companies with above average diversity produced 19% more revenue from innovation than companies with below average diversity.
Both apprentices and people with disabilities are less likely to be absent from work.

The absence rate for all full-time wage and salary workers is 3.2%, which is equal to approximately $3600/year in lost wages.

One study showed that those who graduated apprenticeship programs are absent 95% less than compared to non-apprentices.
Several studies indicate that people with disabilities are absent far less than their counterparts who do not identify as having a disability.

Funding Opportunities

There are several tax incentives and grants you may qualify for as an employer or intermediary that can help offset the upfront costs in an apprenticeship program investment.

How Apprenticeship Tax Incentives Can Offset Program Costs

  • National Conference of State Legislatures (NCSL) maintains a list of several states across the nation that offer a variety of tax incentives and grant funding for the employment of apprentices or the implementation of apprenticeship programs.
  • The Workforce Innovation and Opportunity Act (WIOA) is designed to help job seekers access employment, education, training, and support services to succeed in the labor market and to match employers with the skilled workers they need to compete in the global economy. Employers can take advantage of WIOA funding to support a variety of apprenticeship expenses, including classroom training, on-the-job training, and supportive services.
  • Tax incentives for hiring people with disabilities:
    • The Employer Assistance and Resource Network (EARN) has a list of federal and state tax incentives for hiring people with disabilities, which your apprenticeship program may qualify for.
    • This includes the Work Opportunity Tax Credit (WOTC) which is a Federal tax credit of up to $9,600 per apprentice. It is available to employers hiring individuals from certain targeted groups who have consistently faced significant barriers to employment.

The Apprenticeship Inclusion Models (AIM) for Youth and Adults with Disabilities also developed a policy and practice brief, “Funding Inclusive Apprenticeships: Strategies for Braiding, Blending, and Aligning Resources,” which contains specific examples of how inclusive apprenticeship programs are funded. More information is available at Apprenticeship.gov and the Federal Resources Playbook.

Making Your Apprenticeship Program Inclusive

Once you have identified how you will fund your registered apprenticeship program, it’s time to consider how you will make your program truly inclusive to reap the benefits mentioned above. Below are resources for making your apprenticeship program more inclusive, especially for people with disabilities.

Check Out Our Guide

Whether you’re ready to recruit people with disabilities to join your apprenticeship program, seeking information on best practices to launch an inclusive apprenticeship program, or simply searching for best practices to make your program more accessible, PIA’s “Designing Inclusive Apprenticeships: A Guide for Recruiting & Training Apprentices with Disabilities” provides tools to support your success. The guide is designed to help apprenticeship intermediaries and employers create more diverse, equitable, inclusive, and accessible apprenticeship programs. It includes recommendations, resources, and accessibility considerations to effectively source, engage, and support apprentices with disabilities.

Listen to Our Podcast

Join PIA and leading HR blog Workology.com on our Apprenticeship for All Podcast to explore how inclusive apprenticeship programs are increasing employment opportunities for people with disabilities.

Review Our Resource Library

Do you want to learn more about inclusive apprenticeship programs and how you can get involved? Browse our resource library for resources geared toward employers, apprenticeship intermediaries, and apprentices.