Untapped potential: how employers underuse apprenticeships for upskilling in England

Many businesses in England face persistent skills gaps, yet relatively few are tapping into apprenticeships as a solution. Despite government support and evident benefits, apprenticeships remain underutilised – especially for upskilling existing employees.

In this post, we’ll explore how employers across major industries are missing out on apprenticeship opportunities, backed by up-to-date data, and why embracing apprenticeships can boost growth, competitiveness, and talent retention.

The underused opportunity across industries

Employers in nearly every sector are struggling with skill shortages. A recent survey found one in seven firms (15%) have at least one employee who isn’t fully proficient, and overall skill-gaps have worsened since 2017 [1]. Yet apprenticeship uptake doesn’t match the scale of need. For example, in 2021/22 only 36 out of every 1,000 businesses in England had an apprentice start – meaning well over 90% of employers took on no apprentices that year [2]. This low adoption spans multiple industries:

Manufacturing and retail: Hard-hit by the pandemic, these sectors still have 20%+ fewer apprenticeship starts than before 2020 [3]. This is a worrying trend given they report significant skill shortages in technical and customer-facing roles.

Housing: While some housing providers have embraced apprenticeships for property maintenance and tenancy support roles, overall uptake remains limited. Given the critical workforce shortages in social housing and support services, apprenticeships represent an untapped pipeline for recruitment and upskilling.

Services and tech: Sectors like IT and digital technology have seen growth in higher-level and degree apprenticeships (Level 4–7) [4]. However, even in high-skill industries, many firms aren’t fully leveraging apprenticeships to develop talent internally, contributing to an 8.5% annual revenue loss industry-wide due to digital skill gaps [5].

Critically, billions of pounds in apprenticeship funding are going unused. Under the UK’s levy system, large employers contribute to a training fund – but if not used within two years, the funds expire. Since 2019, over £3.3 billion of employers’ apprenticeship levy funds have gone unspent and were returned to the Treasury [6].

Why the gap? One issue is perception. Many business owners still view apprenticeships as programs only for school leavers or new hires. In a 2024 employer survey, 60% said apprenticeships should primarily help young people enter work, versus only 15% who saw them as a way to develop existing staff [7].

Apprenticeships aren’t just for school leavers

It’s time to bust the myth that apprentices are all teenagers in trade roles. Today’s apprenticeship landscape is incredibly diverse, both in levels and learner age. In fact, nearly half of apprenticeship starters in 2022/23 were age 25 or over [8].

Apprenticeships now range from entry-level training to advanced programs equivalent to foundation degrees and master’s degrees [9].

What does this mean for employers? It means you can enroll existing employees – of any age or experience level – into apprenticeship schemes to gain new skills and qualifications. There is no upper age limit for apprentices [10]. Whether it’s a frontline worker training up for a supervisor role or an IT staffer learning data analytics, apprenticeships offer structured on-the-job training tailored to your industry’s needs.

The business case: benefits of apprenticeships for employers addressing skills gaps & boosting productivity

Apprenticeships let you develop skills that are in short supply by training people on exactly the competencies your business needs. From day one, you can tailor an apprentice’s training to fit specific roles. 72% of businesses report improved productivity from employing apprentices [11]. One study estimates each apprentice delivers a net productivity benefit of £2,500 up to £18,000 to their employer during training [12].

Developing loyal, high-performing employees

Apprenticeships are a powerful retention tool. Apprentices build strong ties with their company, and 85% remain in full-time employment after completing training [13]. 96% of employers report benefits from hiring apprentices, including improved staff morale and long-term retention [11].

Cost-effective training (heavily funded by government)

Large employers already finance apprenticeships through the levy, and unspent funds expire after two years. For SMEs, the government covers 95% to 100% of apprenticeship training costs [14]. Few other staff development options come this subsidised, and apprentices deliver real work as they train.

Massive benefits of energy manager apprenticeships

Energy Manager apprenticeships are one of the most strategic investments employers can make. With rising utility costs and increasing regulatory pressure to reduce carbon emissions, these apprenticeships train employees to identify inefficiencies, implement cost-saving measures, and develop sustainability strategies. Employers benefit from:

• Reduced energy consumption and operational costs
• Improved ESG performance and compliance
• Access to a workforce equipped to lead on Net Zero objectives

These apprenticeships align directly with national priorities and can unlock green funding and procurement advantages, especially in the public sector and large supply chains.

Fresh perspectives and innovation

Apprentices often approach problems with curiosity and learn the latest best practices through formal training. This culture of learning can spur innovation. Apprentices frequently help upskill their peers and identify operational improvements [15].

Making apprenticeships part of your growth strategy

For business owners focused on growth, competitiveness, and talent retention, apprenticeships should be a strategic tool in your arsenal. They enable you to grow your own talent pipeline and future-proof your workforce skills.

Key takeaways for employers:

• Review your skills gaps and identify where an apprenticeship could build capabilities.
• Check your funding: Levy-payers should use funds before expiry. SMEs may qualify for 95%-100% funding.
• Start small: Begin with one or two apprentices. Providers can help match you with candidates and manage admin.
• Embed apprenticeships into workforce planning: Build a sustainable pipeline aligned to business growth.

In a climate where growth and competitiveness depend on innovation and expertise, apprenticeships offer a cost-effective route to develop the talent that will drive your business forward. Don’t let funding go unused or your employees’ potential go untapped