Effects of Number of Apprentices on Financial Performance of Firms in the Furniture and Wood Industry of Ghana
This study examined the relationship between the number of apprentices in a firm and the financial performance of the firm, using the RPED/CSAE Ghana Manufacturing Enterprise Survey (GMES) covering the period of 1991 to 2002. The dynamic panel model estimation technique was employed to investigate the effect of the number of apprentice on gross profit per capital of firms in the furniture and wood processing industry of Ghana. The findings of the study indicate that the financial performances of firms deteriorate during the apprenticeship period, as they take up more apprentices but increase in wages of apprentices had direct significant effect on financial performance. Other dynamics of the apprentice and the master were discovered to be important variables in explaining firm’s financial performance. The average age of an apprentice in the Furniture industry was about 24 years while that of the Wood industry was about 29 years which is clearly very high. It has been suggested that firms may need incentives other than the services of the apprentice to increase their demand for apprenticeship. The incentive may include tax exemption which should be proportional to the number of apprentices engaged and a proper contract must be signed that will allow apprentices to serve the firm for a specified period after training before being released. The youth must also be advised to begin the apprenticeship process early.
Keywords: Apprenticeship, Financial performance, Dynamic panel model, Gross profit, Contract