The Canadian Apprenticeship Forum — Forum canadien sur l’apprentissage (CAF-FCA) recently completed a landmark study on the cost/benefit of apprenticeship training. Preliminary study findings reveal that for every dollar employers invest in an apprentice, they accrue $1.38, or a net return of $0.38. The CAF-FCA hopes that this information, together with other regional initiatives, will encourage more employers and young people to participate in apprenticeship training.

Study highlights: On average for each dollar invested in an apprentice, a benefit of $1.38 accrues to employers or a net return of $0.38; For each trade, the cost benefit results indicate that apprentices begin to generate net benefits for employers by the end of the second year or earlier; Employers feel that there are important qualitative or non-monetary benefits associated with apprenticeship training. Specifically, hiring apprentices ensure that an organization has skilled labour and a lower turnover rate; Employers believe journeypersons receive a benefit from training an apprentice.

In 2004, the CAF-FCA released a major study in which employers identified ‘cost’ as one of the perceived barriers to accessing and completing apprenticeship training in Canada . Previous studies in this area shied away from the question of benefits. Although the costs associated with apprenticeship training are generally quantifiable, the benefits are more difficult to measure. CAF-FCA’s Return on Apprenticeship Training Investment study sheds some new light on this issue because it determines for employers the true costs and benefits of apprenticeship training.

“Those in the labour movement concerned about apprenticeship and shortages of skilled workers are encouraged by the results of the study” says Allan Bruce, representative of the International Union of Operating Engineers, and Chair of the CAF-FCA Return on Training Investment Project Committee. “The benefits of hiring an apprentice have often been discussed, but only anecdotal evidence has been available up until this time. Not only do these findings provide us with actual data that substantiates what we suspected all along, they also establish the business case for hiring apprentices. This should create more opportunities for Canadian youth.”

The positive news comes at a time when much of the current workforce in the skilled trades is approaching retirement age, and there is increased demand for skilled tradespeople in many sectors and regions of the country. Furthermore, a recent CAF-FCA and Skills/Compétences Canada® (S/CC) study shows that only 18% of employers participate in apprenticeship programs . If participation in apprenticeship programs by employers and young people is not increased, Canada may not be prepared to meet demand.

Rod Eastman, representative of Dofasco Inc., and member of the CAF-FCA Cost of Apprenticeship/Return on Training Investment Project Committee agrees: “This study will play an important role in the CAF-FCA’s strategy to engage employers and encourage them to provide more apprenticeship opportunities to young people. In addition, the CAF-FCA is planning to develop a tool that employers can use to calculate their own return on apprenticeship training investment. This will help employers to make more informed decisions regarding the number of apprentices they would like to hire.”

More than 11,500 employers were contacted; 1,941 of them qualified for the study - roughly 17% of the overall total contacted. An employer was deemed to be ‘qualified’ to participate in the study if he or she currently employed an apprentice. 430 employers from across Canada were surveyed between September 2005 and February 2006. They provided information about wages, charge-out rates, training costs and qualitative measures of the benefits of apprenticeship training. The Conference Board of Canada assisted in the analysis of the data.

“The methodology is sound” states Economist Roslyn Kunin, who, along with other economists and employers in 5 locations across the country validated the study findings. “This study will play a future role in our research activities.” Employers and economists from across the country provided very favourable feedback on the study. According to them:

• The methodological approach was appropriate;
• The scope of the study far exceeds any previous research in Canada;
• Employers agreed that on average, apprentices generate a net return to their organization over the apprenticeship period.

The results of the study indicate that employers from small, medium and large-sized businesses across a variety of sectors representing industrial, construction, and service trades received a net benefit from apprenticeship training over the life of the apprenticeship. Although the cost of apprenticeship is often perceived as a major barrier, it appears that the monetary benefits generated by apprentices outweigh the training costs.

Les résultats détaillés de cette étude seront rendus publics lors de la Conférence sur l’apprentissage « L’apprentissage, champion à tout coup! » qui sera présentée à Montréal en juin 2006.

² Employer Attitudes and Perceptions of Apprenticeship Study, February 2006, CAF-FCA and Skills/Compétences Canada ®