The Institute of the Motor Industry (IMI), says the latest version of its Return On Investment, ROI, Calculator shows apprentices make financial sense – even after factoring in the Apprenticeship Levy and full supervision costs.
The free online tool provides an easy way to see how quickly different levels of apprentice can deliver a return on investment in their recruitment and training.
Taking into account the need for increased supervision by a mentor technician, it shows that a Level 3 automotive maintenance and repair apprentice can deliver up to 175% return on investment within the three-year apprenticeship, and in some cases exceed 200% ROI.
Steve Nash, CEO of the IMI believes this underlines the importance of investing in apprentices to tackle the well-documented skills shortage. “There has been much reported about the drop in take-up of apprentices since the new Standards model and Apprenticeship Levy were introduced. We believe a key reason for this is a lack of understanding about the value that the investment in apprentices can return. Some firms, facing the upfront funding of apprentices, may feel that the cost can’t be justified. But our ROI Calculator proves the contrary and we urge all employers to use the online tool to estimate the net benefit they could achieve.”
As of April 2019, small and medium enterprises (SME’s), with a payroll of less than £3 million are only liable for 5% of training costs, reduced from 10%. There are also some firms that are exempt from the 5% contribution.
“Some businesses may not feel an apprenticeship is the right route for them, but our figures show there can be a return on investment if they do”, concluded Steve Nash. “While there is initially a settling in period, like any new member of staff, and then the on-the-job training, our ROI Calculator illustrates the increase in productive capacity during the apprenticeship and how the apprentice can become a net productive for the business around the end of the second year.”