It’s fair to say we’re unsure, but it seems a significant reason is many employers see less value in the apprenticeship model

The Fair Work Commission is active in supporting research to inform its decision making on matters such as minimum award wages and conditions. Among research studies the Commissions has released this year is Factors affecting apprenticeships and traineeships (71 pages plus reference lists).  The report comes in two parts. Part 1 considers supply-side factors that affect commencement and completion of apprenticeships and traineeships. Part 2 gets to grips with demand-side factors. But don’t let the economics lingo turn you away.

Employers are more reluctant to take on apprentices

In plain language, supply-side factors include the effects on commencement of completions of things like personal characteristics of apprentices and trainees, whether they see good job prospects at the end of their training period, wages, and the impact of their working conditions, and the value of their training experience.

We’ve long debated all these factors, regulated conditions and training closely, provided support to apprentices via mentoring schemes. But what if our focus has missed the mark?

Written by Tom Karmel, former Managing Director of the NCVER, Part 2 finds the apprenticeship and traineeship system is under pressure not due to a shortage of potential apprentices and trainees, but due to the reluctance of employers to take them on. The report puts it in the simplest terms: ‘if employers offered more positions the numbers of apprentices and trainees would be larger.’

So what’s deflating employer demand? We’re not entirely sure, but it’s an important question for the future of the apprenticeship model. The Fair Work Commission report airs some ideas. The VET system, policy makers and employer bodies need to seek out possible responses.

Disincentives outweigh the positives

The report’s analysis suggests deflated demand followed government decisions in 2012 to limit employer access to government subsidies that defray the cost of employing apprentices and trainees. There’s also likely to be some effect on hiring decisions flowing from increased apprentice wages following the Full Work Commission’s 2013 Modern Awards Decision Review. But these are bit players.

Fowler suggest employers are ‘becoming increasingly less enamoured with the apprenticeship and traineeship model, independent of government policy changes.’ It seems they sense less value in the model than they once did, though its patchy across occupations.

The disincentives for employers include ‘that the apprenticeship model involves a substantial financial commitment from employers’, and the ‘highest costs to employers are for supervision.’ Post-training employment rates for apprentices are a good indicator of employer motivation and Fowler suggests the ground is slippery Down Under, referring to research that shows:

‘… the proportion of apprentices continuing in employment in the training firm is considerably higher in Germany than in Australia, perhaps suggesting that the German firms’ commitment to training is rather higher than their Australian counterparts.’

You can access other Fair Work Commission research reports here. The Commission’s website also lists research projects underway or planned ­– one piece of future research described there, and likely to be of interest to the VET sector, is an analysis of the youth labour market.