Employers’ concerns about costs and lost investments
may mean that apprentices face a barrier in finding employers willing to make an apprenticeship
commitment (CLMPC, 1990; CME-NS, 2002; ITAC, 2001). This barrier is likely caused by the notion that employers often bear the largest cost of training but are unable to reap the full benefits of these costs due to employee mobility (Gunderson, 2001). Another interviewee suggested some employers are not likely to make long-term investments in apprentices, nor do they seek to take broad training roles: “Employers want a quick solution and they fear losing the apprentice after they’ve obtained their certification”
(
). These fears are perhaps all the more evident in seasonal or cyclical industries, (Gunderson, 2001) or in industries that may be negatively affected by technological changes or global market forces (in non-compulsory trades, this may also result in cyclical and marked swings in the demand for training) ().
For many employers—particularly those in small or medium-sized companies—the costs of apprenticeship
may outweigh the benefits (Fayek et al, 2002). There is also a lack of evidence to convince employers to invest in apprenticeship (
). In particular, there is a lack of reliable research on the return on investment (ROI) of apprenticeship. While the costs of apprenticeship can be identified relatively clearly (Kunin and Associates, 2002), the benefits are more difficult to quantify. For a number of employers, therefore,
“cost concerns” may limit the hiring of apprentices (ITAC, 2001; Even et al, 2002).
The cost of supervision and the rising costs of tuition for technical training were also of concern to various respondents(). The time required by employees to train or supervise apprentices is time taken from their primary work, which represents a cost to organizations. One study estimated that the costs of apprenticeship were highest in the first year when apprentices were least productive and needed the most supervision. As a result, the study concluded that losing apprentices after the first year implied a particularly large loss for employers (R J Sparks, 2002). Nevertheless, from a policy standpoint, there is a lack of knowledge about who bears what proportion of the total costs of apprenticeship ().
In some unionized shops, collective agreements have resulted in particularly high wages for apprentices (Kunin and Associates, 2002). Generally, at least one government representative maintained that many employers associate apprenticeship with “getting saddled with organized labour” and a system of training that is over-regulated and inflexible (). Another interviewee pointed to unionized environments, where employers are restricted in taking on apprentices because of collective-agreement restrictions regarding seniority ().
For smaller employers, these cost concerns were particularly acute. One study noted that, in construction, smaller subcontractors conduct the bulk of apprenticeship training. Since these subcontractors must also compete on cost terms for contractors’ business, cost pressures constrain their ability to absorb training costs (Smith, 2003). Other studies drew similar conclusions about the particular impacts of cost on small employers in the case of machinists and auto mechanics (Kunin and Associates, 2002; CARS, 1999; R J Sparks, 2002).