Apprenticeships make good financial sense for businesses

In spite of the skills shortages and limited opportunities for upskilling artisans, not only in the retail industry but in industry at large, many small and medium sized employers are reluctant to contract and train apprentices because they perceive that apprentices don’t pay their way and it’s costly to train them. 

Jakkie Olivier, CEO of the Retail Motor Industry Organisation (RMI), says this is definitely not the case and has the stats to prove it. Independent research carried out showed that in the automotive sector alone, employers can achieve up to a 200% return on their investment from contracting or employing an apprentice in ideal circumstances.

Olivier says historically there had been a lack of measurable apprentice performance and productivity data – essentially no access to current and reliable information which was the reason RMI, together with merSETA, first introduced the ROI Calculator which is available, free of charge to employers. 

It is a web-based, easy and user-friendly tool. “It incorporates actual employer costs including: time and level-based national minimum apprentice wages; training; level and trade testing; and ancillary costs and opportunity costs to calculate a truly reliable ROI,” he says. All data remains anonymous.


The ROI Calculator shows without doubt that when well-recruited and guided through an apprenticeship, an apprentice can pay back the investment (and more) that the employer made during the apprenticeship period.  “We need to encourage more automotive employers to recruit apprentices for the economic benefit of our sector and communities,” he says. 


The economy remains sluggish, making the forecast for job hunters rather gloomy. 

The latest Manpower Group Employment Outlook Survey indicates South African employers intend following a soft hiring strategy for the first quarter of 2020. On top of this big companies are retrenching thousands of staff who will also be looking for other work.   Growth is definitely predicted rather from the small to medium businesses that are going to drive the economy. 

“We know that eighty percent of accredited RMI business owners are in fact small to medium size business owners. If we can start migrating the informal business into the formal sector so that they become compliant and meaningful contributors to the economy, we will have a far stronger sector.  Significantly for every small and informal business or every apprentice successfully converted and absorbed into the formal sector, 5 jobs are likely to be created. Each of these newly employed people in turn, financially support another 20 people on average in the process,” he says. 


Employment and training go hand in hand. In the automotive sector the Quality Council for Trades and Occupations (QCTO) has, over time, been instrumental in encouraging the adoption of the occupational qualifications curriculum and the training of apprentices using this curriculum. The Department of Higher Education and Training (DHET) contracted the RMI to assume the role of Occupational Team Convener (OTC) for the Diesel and Automotive Motor mechanic trades using the occupational qualification delivery method at Technical Vocational Education and Training (TVET) colleges in South Africa.  The first intake of apprentices was in 2019. 


Following the DHET Director-General’s approval, recruitment for the 2020 intake commenced in 2019.  


“As an industry we have to address the automotive skills shortages, reduce unemployment and be part of real transformation. The reality is that there has been no real skills development and/or under-investment in human capital for many years in our country. Skills have been outpaced by technology and there has been a loss of businesses and profits. Improved skills will result in increased productivity. It is all about professional standards and changing of perceptions and encouraging business owners to draw in new entrants into the sector,” concludes Olivier.