The Employer Costs of Apprenticeship Training in England, Germany, and Austria: Results from a matched employer study 

New research reveals that employers in England face substantially higher costs of training apprentices compared with their counterparts in Germany and Austria. If the employer costs are so high, will this stand in the way of the government’s ambition to increase the number of apprentices?

The research approach  

The study, conducted by the University of Warwick Institute for Employment Research in conjunction with Dortmund Technical University (Germany) and 3s Research & Consulting (Austria), compared the costs and benefits of apprenticeship training for employers in the three countries. Funded by the Gatsby Foundation, the research focused on two occupations similar across all systems: heating, ventilation and air conditioning (HVAC) engineers and chefs.  

Using matched employer case studies – one firm per occupation in each country – the research compared the net costs to employers of training apprentices over the full duration of their programme. The employers were matched according to their number of employees, the type of service they provided, and the level of apprenticeship delivered. 

A striking cost differential

The results are revelatory. In England, employers training an HVAC apprentice faced a net cost of around £35,500 over the course of the apprenticeship. This compares with approximately £14,200 in Germany, and a net benefit of just over £9,000 in Austria. A similar pattern was observed for chef training: in England there was a net cost of more than £33,000 compared to under £5,000 in Germany and a net benefit in Austria of £2,400. These figures take into account variations in the length of training across countries. In other words, they are not simply the result of longer or shorter training programmes.  

The table below summarises the net costs. Total costs include wage and labour costs, the costs of work-place supervision and training related costs. Benefits are principally made of up the apprentice’s productive contribution to the employer. The methodology used to calculate these figures is based on the German BIBB cost-benefit approach (please see the full report for more information).  

Table 1: The net costs of training an apprentice: Time-standardised employer costs and benefits of HVAC and Chef apprenticeships (numbers in bold reveal a net benefit) 

Source: Erickson, Grollmann, Hefler, Hogarth, Lennartz and Markowitsch (2025) “Apprenticeship Costs in Germany, Austria and England: A Matched Plant Study” a report to the Gatsby Foundation.  

Wage costs drive the difference

It is wage costs (including taxes, social contributions, and other labour costs) more than anything else that explain the differences in costs. In England, apprentice HVAC engineer wage costs were on average, £27,000 a year over the 3 years of the apprenticeship. This compares with £10,182 in Germany and £18,026 in Austria. Wage differences were similarly pronounced in the case of chefs training. In England, their average wage cost each year over the training period was £30,000 compared with £14,790 in Germany and £17,671 in Austria. 

While apprentices in all three countries contribute productive output at the workplace (benefits in the table above), in England this contribution offsets a smaller proportion of total costs. Institutional factors also play a role.  In Germany and Austria employers can rely upon their Chambers to manage certain aspects of the apprenticeship. These bodies take responsibility for a range of functions including examinations and quality assurance, reducing the administrative burden (or hassle) on individual employers. However, in England, employers need sort out things for themselves to a greater degree. Though the ‘hassle costs’ are difficult to quantify, they are likely to be significant and further increase the effective cost of participation in the apprenticeship system.  

The implications for employer engagement

Employers invest in apprenticeships because they confer value on their businesses, they expect long-term results in the form of skills and workforce stability. When upfront costs are high, the risks associated with that investment also increase. The evidence suggests that in England, the cost of that investment is considerably more than in Germany and Austria. This has implications for the returns employers need to realise to make hiring apprenticeships beneficial. To put it another way, investing in apprenticeships proves to be a much riskier proposition in England than in either Germany or Austria.  

If Skills England wants to substantially increase the number of apprentices, beyond the 50,000 over the next three years, as it announced on 7 December, it will need to consider how to improve the cost benefit balance faced by employers. The experience of Germany and Austria also highlights the value of reliable, routinely collected data on employer costs. In both countries, research-based surveys provide solid estimates on the full costs and benefits of employer participation in apprenticeship training, supporting a more holistic understanding of how the skills system functions. Developing comparable data in England would strengthen the evidence base for policy and could help facilitate broader and more sustained employer engagement in the skills system.  

Read the full report here

By Emily Erickson, Research Fellow – Institute for Employment Research at the University of Warwick