In the ever-evolving trades industry, one of the most pressing challenges businesses face is finding and retaining skilled talent. Training apprentices comes with significant financial costs, and losing an apprentice after investing in their training can lead to substantial financial losses.

The Financial Dilemma in Hiring New Apprentices

As seasoned professionals retire and the demand for skilled workers continues to rise, the industry faces what tradespeople are beginning to describe as a financial apprentice dilemma. How do we attract fresh talent, provide them the training they need, and ensure they remain committed to the trade long-term? The trick to improving retention is providing competitive compensation, fostering a positive work environment, and ensuring you offer clear career pathways.

According to the 2023 Skills Priority List Key Findings Report, All occupations in the Construction Trades Workers category are in persistent shortage.

Trade business owners often run the risk of investing time and money into apprentices, only for them to leave once they’re qualified and become competition. The solution is to learn how to retain good staff. Here are tips on improving retention in your trade business.

How to improve retention in your trade business

Improving retention ensures that the investment you make in apprenticeships pays off. 

Here are some strategies to help keep apprentices committed to your business:

1. Competitive compensation

Ensure that the wages and benefits you offer are competitive within the industry. Fair compensation not only helps to attract apprentices but also plays a crucial role in retaining them. Apprentices who feel fairly compensated are likelier to stay with your company than look for opportunities elsewhere.

According to the Housing Industry Association (HIA), the average wage for a first-year apprentice in Australia is around $14.61 per hour.

Competitive compensation is a critical factor in both attracting and retaining apprentices. Fair pay is the baseline, but offering additional perks can make a company stand out (bonuses for completing training milestones, tuition assistance for further education, health and wellness programs, and benefits that support work-life balance, such as flexible working hours or additional time off). These perks are highly attractive to apprentices, and they also show that the company values its employees as individuals, not just as workers.

2. Clear career pathways

Providing clear opportunities for career advancement is a powerful motivator for staying in a company. When apprentices see a clear path from their current position to more senior roles within the company, they are more likely to stay long-term. 

Career pathways to consider:

• Senior positions (foreman/supervisor, project manager, trainer, consultant, etc.)
• Additional training
• Specialisations
• Certifications
• Potential partnerships within the business as incentives

3. Positive work environment

A supportive and inclusive work culture significantly impacts retention. Regular feedback, recognition for hard work, and creating a sense of belonging can make apprentices feel valued. Creating a positive environment where apprentices feel part of a team encourages loyalty and long-term commitment. 

Here are some tips on how to create a more positive work environment:

• Encourage open communication
• Recognize and reward achievements
• Promote work-life balance
• Provide growth opportunities
• Encourage team collaboration
• Support employee well-being
• Lead by example
• Create a fun atmosphere

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The financial costs of hiring an apprentice

While hiring an apprentice is a great way to invest in your business's future, it also comes with its own direct and indirect costs that businesses must carefully manage:

Direct costs

• Wages: Apprentices start at a lower wage, which increases annually. In Australia, for example, a first-year apprentice earns around $14.61 per hour (business.gov.au). Throughout a four-year apprenticeship, wages can range from $30,000 to $45,000 per year.
• Superannuation: Employers must contribute to superannuation, typically around 10.5% of the apprentice’s earnings, adding to the overall cost ​(business.gov.au).
• WorkCover Insurance: Mandatory insurance to cover work-related injuries, with premiums based on wages and industry risk​ (HIA).
• Training and Development
• Tools and Equipment
• Recruitment Costs

Indirect costs

• Lost productivity
• Increased supervision and mentorship
• Workplace safety and compliance
• Potential for errors and rework
• Administrative overheads

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Costs of not retaining apprentices

The real financial loss occurs when businesses cannot retain their apprentices after completing their training. Here are the key risks:

1. Loss of investment in training

Training an apprentice to completion can cost employers around $97,000​ (HIA). If an apprentice leaves, this investment, along with the time and effort spent by mentors, is lost.

2. Impact on productivity

Losing a trained apprentice creates a skills gap, affecting productivity. Finding and training a replacement takes time, during which projects may be delayed.

3. Risk of competition

A trained apprentice who leaves might start their own business, becoming a direct competitor. This is particularly risky in trades where customer relationships and local reputation are crucial.

4. Impact on team morale

The departure of a valued apprentice can negatively impact team morale, especially if they leave due to dissatisfaction. This can lead to further turnover, compounding the problem.

Hiring apprentices is a smart move for any trade business, but keeping them on board after investing in their training is crucial. By focusing on retention, you can really get the most out of your investment and avoid the headache - and costs - of losing a skilled apprentice.

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