Australia needs to do more to arrest the decline in apprenticeships

The latest apprenticeship figures, released by the National Centre for Vocational Education Research (NCVER) in September, show a decline in the number of apprentices commencing and completing training. Compared with the previous 12-month period, apprenticeship and traineeship commencements between March 2014 to March 2015 decreased by 19.8%.

Over this period, apprenticeship and traineeship completions also dropped an alarming 19.4%. A report on completion and attrition rates released earlier this year predicted already low completion rates for apprentices and trainees to decline further. For apprentices and trainees commencing in 2014, completions were predicted to fall to 41.4% in trades and 57.5% in non-trades occupations.

These latest figures come on the back of a worrying pattern of apprenticeship decline in recent years. Why the decline in this crucial sector of labour force development? And what can be done to address it?

Why the decline in participation?

Apprenticeship and traineeship commencements commonly fluctuate with economic conditions. In times of economic downturn, employers may be reluctant to take on apprentices and trainees. They may also be financially unable to retain apprentices already under contract.

During the global financial crisis, training systems across Australia were faced with the dilemma of supporting an increase in “out-of-trade” apprentices who had lost employment.

Funding for Trade Training Centres, the piloting of the P-TECH model and programs promoting Science, Technology, Engineering and Mathematics (STEM) and non-traditional pathways for young women are just some of the strategies being used to promote vocational and apprenticeship pathways within schools.

But despite these strategies and investments, data on apprenticeship and traineeship take up among school-completers provides further evidence of decline. This is in contrast to increasing university participation rates, and increased numbers of young people going directly into the labour market.

Group Training Australia is among the many stakeholders that have expressed concern that young school-leavers and their families are overlooking apprenticeships and traineeships in favour of going to university. Earlier NCVER research found the likelihood of undertaking an apprenticeship is influenced by an inclination to go to university.

Why such low completion rates?

Completion rates for apprentices and trainees vary by industry and by occupation. Completions tend to be lower in occupations such as hairdressing (31% completion), construction and mining labouring (27%) and in automotive and engineering trades work (40.3%).

Completion rates are higher among health and welfare support workers (72.4%), engineering, ICT and science technicians (64%) and general clerical workers (68%).

Wages for apprentices and trainees are infamously low. However, this has not been found to be the main reason for drop-out or non-completion. Difficulties with an employer or colleagues, or wanting to change career direction, are among the most commonly cited reasons for cancelling an apprenticeship or traineeship contract.

A lack of pre-apprenticeship career advice also has an impact on completions. Apprentices entering the workforce without a solid understanding of the occupation or the requisite foundational skills are more likely to withdraw. The common anecdote here is of young cookery apprentices who arrive aspiring to be the next George Calombaris or Kylie Kwong and are disappointed to be cutting vegetables all day.

Similarly, some confusion exists within schools regarding the often rigorous mathematical requirements for some apprenticeships. Young people may be advised against taking higher-level maths because it is seen as not needed for “the vocational training kids”.

How should apprenticeship uptake be promoted?

In response to the decline in apprenticeship commencements, various governments have announced funding to boost training numbers. This has included an increase in government incentives.

The NSW government requires bidders for major infrastructure projects to demonstrate how many apprentices will be recruited. Bidders must demonstrate how they will:

… leave a lasting skills dividend for local communities.

The federal government maintains a National Skills Needs List, which identifies traditional trades experiencing skill shortage. Apprentices training in one of the listed skill-shortage areas may be eligible for government incentives. Occupations experiencing skill shortage include arborists, butchers, stonemasons and signwriters.

Recommendations from a 2010 expert panel urged government action in growing apprenticeship participation among new learner groups. Current apprenticeship demographics indicate that two-thirds of apprentices and trainees are male. Female participation is particularly low in traditional trades occupations.

When compared with university and broader Vocational Education and Training (VET) participation, apprentices are a much less ethnically diverse cohort. Only 9% of apprentices in 2014 came from a non-English speaking background. This is compared with 20% non-English speaking learners in non-apprenticeship VET. Participation among Indigenous learners and learners with a disability is also lower than for non-apprenticeship VET.

The important role apprentices play

There are currently more than 310,000 apprentices and trainees under contract in Australia. While young people aged 15-24 still dominate the ranks of apprentices and trainees, there is a growing uptake among older learners. Almost one in four (22.5%) current apprentices and trainees are aged 25-39.

Outcomes for apprentices and trainees who complete their training are generally strong. The Australia Jobs 2015 report indicates that 85.5% of apprentices and trainees are employed six months after completion. This compares with 77.6% for VET graduates generally and 68.1% for bachelor degree graduates.

At the recent International Network on Innovative Apprenticeship (INAP) conference, the then-assistant education minister (now minister), Simon Birmingham, warned:

Without a strong, consistent supply of apprentices, Australia’s economic performance would be placed at risk.

Kira Clarke has received competitive grant funding from the National Centre for Vocational Education Research.