The Institute of the Motor Industry launches a new Apprentice ROI Calculator to use as a free online tool. This is used by automotive businesses to see how quickly different levels of apprentice can deliver a return on investment.
Data shows that a level 3 automotive maintenance and repair apprentice can deliver up to 175% ROI within a 3 year apprenticeship. This can also exceed up to 200% ROI.
Steve Nash, CEO of the IMI, said “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.”
“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. 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.”
The government introduced the Apprenticeship Levy, a tax of 0.5% on an employer’s annual payroll, applicable for firms with a payroll of more than £3 million. As of April 2019, small and medium enterprises (SME’s), with a payroll of less than £3 million, and therefore not subject to the levy, are only liable for 5% of the training costs (reduced from 10%). There are also some firms that are exempt from the 5% contribution.
Huge skill shortages is a huge problem in the industry, the IMI believes it is vital to remove any barriers to investing in apprentices.
For more information, head over to the IMI website.