10 Economic Benefits from Work-based Learning & Apprenticeships for SMEs

Did you know that SMEs represent 99% of all businesses in the EU? Or that statistics from the European Commission (EC) outline that in the past five years SMEs have created around 85% of new jobs and have provided two-thirds of the total private sector employment in the EU?
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The availability of skilled labour is an important prerequisite to the SMEs’ prosperity, however, there is a mismatch between the skills the labour market demands and those that the education and training system provides. In order to tackle this mismatch, the EC has identified that quality work-based learning (WBL) and apprenticeships can be an efficient way of addressing labour market imbalances.
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What is work-based learning?

​“Acquisition of knowledge and skills through ‘carrying out – and reflecting on – tasks in a vocational context, either at the workplace (such as alternance training) or in a VET (vocational education and training) institution”. 
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What is apprenticeship?

 “Systematic, long-term training alternating periods at the workplace and in an educational institution or training center. The apprentice is contractually linked to the employer and receives remuneration (wage or allowance). The employer assumes responsibility”.

In countries, where there is a well-established apprenticeship system, such as UK, Austria and Germany, SMEs contribute strongly to the training of the future workforce through their involvement in work-based learning and apprenticeship schemes. On the contrary, in countries with more school-based systems such as Slovakia, Spain, Portugal, Greece and Bulgaria, the engagement of SMEs in the supply of placements is more challenging as they lack the support systems and fail to realize both the financial and social benefits.
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Based on this need, the project - “Return on Investment of Work Based learning and apprenticeships” (project N°: 2017-1-SK01-KA202-035375) suggests the development of a return on investment (RoI) model and digital tool that will allow European SMEs to calculate and visualize how investment on WBL and apprenticeships can manifest to multiple benefits, especially economic benefits, which you can have a glimpse on below. 
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 10 Economic benefits for SMEs

1. Positive impact on the organisation’s performance
2. Reducing the cost of external recruitment and internal induction of staff into a new job/ organisation
3. Enhancing the company’s image and reputation
4. Increasing staff retention and work satisfaction
5. Providing an effective way for adequate supply of skills
6. Better employee candidate pool, leading to lower future training costs
7. Availability of skilled workers by investing in the future workforce
8. Enhancing the organisation’s profitability
9. Increasing the levels of innovation – trainees bring innovation into the experience (digital skills and open innovation)
10. Knowledge of the latest trends, i.e. young people bring fresh ideas and challenge old habits

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Conclusion

In conclusion, there are a number of key benefits of work-based learning and apprenticeships for SMEs, which are not always considered by the companies. If you are leading one of the 99% of SMEs in the EU, wouldn't you want to increase your productivity and innovation capacity? Or strengthen your brand as an employer, develop your talent in-hose and increase your retention rate? Overall, wouldn't you want to decrease your talent acquisition costs?

If every employer asks themselves these questions, it appears significantly evident how important it is to review their practices regarding work-based learning and apprenticeships and to better evaluate their future investment. However, more awareness needs to be raised about the benefits of WBL and apprenticeship among SMEs as well as support.
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“Return on Investment of Work Based learning and apprenticeships”, co-funded by the Erasmus+ programme of the European Union has developed a return on investment (RoI) model and digital tool that allows European SMEs to calculate and visualize how investment on WBL and apprenticeships can manifest to multiple benefits.