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This paper outlines a methodology for measuring the net economic benefits to employers of replacing on-the-job training of first year apprentices with skill acquisition/project training in a dedicated Apprentice Training School. The methodology takes account of the fact that many apprentices and tradespeople are maintenance rather than process workers so their tasks vary considerable throughout the day and from day to day. Key factors considered are: the skill level of work carried out by apprentices at each stage of their apprenticeship; the speed at which they can do the work as compared to a fully qualified tradesperson; and the degree of supervision required. This methodology is currently being used in a study of electrical and mechanical engineering apprentices at Lithgow and some preliminary results of this study are reported in this paper.