How much could apprentices save your business?

With the National Minimum Wage rising and Employer National Insurance relief narrowing, SME leaders are feeling the squeeze. But if you’re still filling entry-level roles the old-fashioned way, you could be overpaying by thousands.

For businesses looking to grow without inflating their wage bill, apprenticeships are worth a fresh look. In many cases, they offer serious cost savings and help futureproof your workforce.

The cost gap: apprentice vs traditional employee

Let’s break down the numbers, A 21+ apprentice in Year 1 costs £14.7k in 2025 whereas a full time employee will cost in the region of £26.6k. That’s a £11.9k saving per head and apprentices under 25 are exempt from Employer National Insurance, unlocking even more savings.

A UK manufacturing firm with 40 staff, including 8 apprentices (mixed ages and stages), remodelled their workforce using apprenticeships. They saved a total of £35,699 across 8 hires, achieving a 12:1 ROI.

“Apprenticeships helped us build the future workforce and save over £35,000 this fiscal year. It’s smart hiring — not just cheaper, but better. Honestly, the ROI is staggering.” — CEO, UK Manufacturing Business

Why it works

• Government funding often covers a portion of training costs
• Employer NI is waived for under-25s
• You build skills in-house, aligned to your processes and culture
• Retention can be stronger when people grow with the business

• Apprentices are paid a lower legal minimum wage during their training

This isn’t just a short-term win, it’s a long-term workforce development strategy.

Not sure apprentices fit your model?

They’re not a fix for everything. But if you need more capacity, want to tackle rising costs, or can’t afford full headcount growth, they’re a strong option.

And if apprenticeships aren’t quite right for your business, there are other levers to pull:

• Digitisation – automate routine work to free up your team

• Outsourcing – buy in specialist support where you don’t need a full-time role

• Offshoring – extend your team globally without inflating UK payroll

Each of these can unlock efficiency, flexibility and value, when done well.

Smart hiring isn’t just about people, it’s about pounds

If your business has big plans in 2025 but your budget hasn’t kept up, now’s the time to rethink how you hire, build and structure your team.

There’s no one-size-fits-all solution. But with the right approach, you can get more value from every penny spent and stay on track for growth.

Conal Scholes, People Director