4 Return on Investment – Skilled Trades

From a monetary perspective, it is very beneficial to complete a trades program.  Return on investment (ROI) is used as a metric to assess the profitability of an investment.  ROI attempts to directly evaluate the amount of benefit on a particular investment, in relation to its costs.  A positive ROI commonly shows that a proposed venture will be profitable.

Apprentices spend the majority of their time on the job (approximately 80% according to Provincial / Territorial Trades Training Authorities) over a usual 4-year period.  During the active hands-on learning component, trade apprentices are paid a wage while accumulating training hours.  A sample net cash flow calculation has been generally outlined for a 4-year Industrial Electrician in British Columbia.

Therefore, over the 4-year apprenticeship training period, a skilled trades apprentice is not as likely to have accumulated debt or required upfront support compared to an individual that has entered a traditional university program.  Note that the above sample net cash flow calculation has not included any income benefits, such as Employment Insurance (EI), available to trade apprentices.  These additional grants and subsidies will be discussed further in Chapter 5 – Funding Opportunities for Apprentices.

As a certified journeyperson, an individual’s average wage upon completion will be higher than the maximum level of apprentice.  Any further increase in salary or wages will improve the ROI, which will already have been improved as the costs associated with basic technical training are over.  Therefore, attainment of a skilled trades qualification or Red Seal Endorsement makes a significant difference on how much one can earn and save towards financial independence.

An Excel template has been provided for you to determine an estimated net cash flow for a specified trade.