May and June 2020 saw the release of a couple of papers focussed on apprenticeships during COVID and as we, hopefully, move beyond the pandemic.
The first of the papers, published by the National Australian Apprenticeship Association (NAAA)
entitled ‘Apprenticeships and the Recovery’, “explores both the impact the looming recession will have on the apprenticeship market and the role apprenticeships can play in the recovery process.”
In the second paper, entitled ‘The impact of the coronavirus on apprentices and trainees’ and authored by the Mitchell Institute’s Peter Hurley, the Institute “wanted to understand the impact of the coronavirus on apprentices and trainees.” So, they looked at previous recessions to see what history can tell us about what to expect, and that may not be too pretty.
What the NAAA paper says
Despite the initiatives instituted by Governments NAAA reported that;
“At the time of writing at least 4.7% of apprentices and trainees have been suspended or cancelled since March 1st, mainly during the implementation of the social distancing arrangements prior to the stimulus announcements.”
However, by April 2020 they found “commencement levels were down 58% on prior years.”
They examine a range of scenarios for the recovery process from COVID. One is a relatively rapid ‘snap-back’, the second involves a ‘second wave’ of COVID infection and the third sees a sustained and ‘deep global recession’ each of which have progressively greater and negative effects on the supply of apprentices and trainees.
In terms of ways forward, they recommend improving real time data reporting on the employment status of apprentices and trainees so that data lags are avoided and a true picture can be gained of what is happening rather than ‘closing the gate after the horse has bolted’ in terms of taking corrective actions.
Other initiatives they propose include a radical reform of the Australian Apprentice Incentive Program, creating a national pre-apprenticeship and traineeship microcredential program and offering a national program of post-apprenticeship microcredentials to support the reskilling and upskilling of existing workers.
In addition, they suggest creating “an Apprenticeship labour market program that provides a $500 per week wage subsidy for the first year of a new entrant trade apprenticeship or Traineeship.”
They point out that there is a clear need to do what is necessary to “stabilise the apprenticeship market supply and support mechanisms for ANPs [Apprenticeship Network Providers], GTOs [Group Training Organisations] and RTOs [Registered Training Organisations]”, and “keep the flow of apprenticeship commencements comparatively strong during the economic disruption and avoid future skills shortages as a result.”
And the Mitchell Institute?
Well, they estimate that new apprenticeships/traineeships will decline by 30% within two years, equating to approximately 130,000 fewer new apprentices and trainees from the start of the pandemic to June 2023. Not good, and in addition:
“Currently enrolled apprentices/trainees are forecast to decline by approximately 20%, falling to their lowest level in 2023 where it is forecasted there will 50,000 fewer apprentices/trainees ‘in training’.”
They point out that previous recessions where the unemployment rate increases by 5% has a greatly amplified negative effect on apprenticeship commencements, with commencement numbers down by 30%. This has the most dramatic effect on school leavers, potentially leading to disengagement from work and study with longer term consequences if not addressed.
They suggest several ways of reducing the impact, including “increasing employer incentives and wage subsidies to make it easier for employers to keep current apprentices and trainees or bring on new ones” and “establishing innovative labour market programs that provide apprentices and trainees with work in their occupation while the economy recovers.”
Finally, they propose “integrating new apprentices and trainees into public spending projects to grow the number of opportunities available.”