Firms' motivation for training apprentices: an Australian–German comparison

By Harald Pfeifer Research report 17 August 2016 978 1 925173 58 1

Description

This paper looks at firms’ motivation for training apprentices in both Australia and Germany. The study explores how these countries compare when dealing with their respective institutional arrangements for apprenticeship training. It then analyses Australian employer's commitment to training based on changes to incentive payments in Australia.

Overall, the paper finds that institutional frameworks in Germany foster an investment model, a model which emphasises the benefits of employing apprentices after training, while in Australia some firms foster more of a production (that is, substitution for ‘regular’ workers) model of apprenticeship training, although there is a relatively strong investment motivation for trade firms in Australia.

Summary

About the research

Apprenticeships are a well-established pathway to employment across many countries, with a particularly long and enduring history in Germany and Australia. Apprenticeships are characterised by a tripartite relationship between employer, apprentice and training organisation.The available international literature suggests that the institutional framework for training in a country is an important determinant of a firm’s motivation to provide training, and it influences their willingness to bear (at least part) of the training costs.

This study investigates how firms in Germany and Australia compare when dealing with the institutional arrangements for apprenticeship training in their countries, with particular attention given to factors which may impact on their training motivation.

Key messages

  • Employers of trades’ apprentices in both Germany and Australia appear to bear substantial costs for training their apprentices.
  • Institutional frameworks in Germany foster an investment model, a model which emphasises the benefits of employing apprentices after training, while in Australia some firms adopt more of a production (that is, substitution for ‘regular’ workers) model of apprenticeship training, although there is a relatively strong investment motivation for trade firms in Australia.
  • For firms focused on the short-term costs and benefits of training, the withdrawal of some national government incentive payments in Australia has led to a weaker commitment to training, most evident in non-trade trainee places being offered.
  • By contrast, firms training in trade occupations appear to be more investment-oriented and are more inclined to continue training, or employ an apprentice after training, even with the withdrawal of incentives.

This paper does not directly address the relationship between firms’ motivation for training, the quality of the training provided and resultant completions. The author points to further needed inquiry into the existence and/or withdrawal of incentive payments on training quality and subsequent labour market outcomes for apprentices.

Dr Craig Fowler
Managing Director, NCVER

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