In today’s rapidly evolving economic landscape, education and workforce development are pivotal drivers of social and economic growth. Yet, as governments and organisations invest in skills and training, it is crucial to understand the broader impact of these initiatives.
Social Return on Investment (SROI) offers a holistic approach to measuring not only the financial returns of skills investment but also the wider benefits to communities, individuals and the environment.
SROI reporting has the potential to transform public policy and investment decisions, ensuring that funding in education and skills generates meaningful social impact across the country.
The future of workforce development
SROI goes beyond traditional metrics of success by capturing the wider societal benefits of apprenticeships. From addressing regional inequalities to empowering underrepresented groups, this holistic framework reveals how skills training delivers returns far beyond what is captured by financial metrics alone.
The broader impact, including improved employment outcomes, increased productivity and enhanced community cohesion, is not just a bonus but the foundation for a more resilient economy.
The value of such reports lies in their ability to provide clear, data-driven insights to guide policy.
Historically, discussions around apprenticeship programmes have often been limited to completion rates and direct financial outcomes. But as recent industry reports demonstrate, apprenticeships contribute meaningfully to a range of broader strategic objectives, including closing the digital skills gap, fostering social mobility and enhancing local economies.
Data-driven foundations
The accuracy and credibility of SROI reporting hinge on a robust and transparent methodology. Using models like GIST Impact’s Skills Drivers and Outcome Impact (DOI), organisations can establish a reliable framework to quantify social value.
By using insights from people directly participating in programmes, as well as incorporating reliable sources, such as government statistics, organisations can ensure calculations are grounded in comprehensive, real-world information.
Additionally, SROI filters account for key factors such as attribution (the likelihood that benefits would occur without the programme) and deadweight (the probability that the investment would yield benefits even without the programme), which help avoid inflated valuations.
This rigorous data-backed approach ensures that SROI calculations accurately reflect both immediate and long-term impacts, from productivity gains to improved social equity.
The inclusion of data on regional, gender and ethnic diversity allows organisations to understand the specific benefits for diverse groups within society, further reinforcing the alignment of workforce programmes with national priorities.
A tool for policy transformation
Employer investment in training has declined sharply, with Skills England’s recent report noting that training expenditure is now at its lowest since 2011, and investment per employee down 19 per cent in real terms.
This trend risks undermining workforce readiness for a shifting economy, highlighting the need for targeted government intervention.
SROI offers a strategic solution by helping the treasury identify skills programmes that yield the greatest social impact, avoiding inefficiencies like deadweight loss. Using SROI metrics, the treasury could optimise the apprenticeship levy and other funding initiatives, transforming apprenticeship schemes into engines of equitable, sustainable growth.
Shifting to an SROI-focused approach would allow policymakers to align funding decisions with initiatives that support levelling up, net-zero goals and regional equality, ensuring maximum returns for both the workforce and society.
This would encourage both public and private sectors to prioritise initiatives that contribute to levelling up, achieving net-zero targets and reducing inequalities across regions, genders and ethnicities.
Call to action
With the recent budget and an upcoming multi-year spending review in the spring, there is a timely opportunity for the treasury to adopt SROI metrics more broadly. This shift could ensure a more balanced approach to public funding, recognising the social dividends generated by skills programmes and positioning apprenticeships as critical investments for social cohesion and regional development.
SROI has already gained traction through the Public Services (Social Value) Act 2012, which requires public bodies to consider social value in service contracts. Extending this principle to skills funding would help maximise the social impact of public investments.
Embedding SROI into education and skills policies could build a future-ready workforce and provide strategic direction for reversing declines in private training investment, supporting growth and resilience across the UK.
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