Apprentices and trainees 2020: impacts of COVID-19 on training activity

About

This report presents data trends in apprentice and trainee training activity in 2020 as compared with 2019, to provide insights into the impacts of the COVID-19 pandemic. The analysis focuses on monthly counts of contract commencements, suspensions, cancellations and withdrawals, and completions.

Summary

About the research

The COVID-19 pandemic caused widespread disruption to economic and educational activity in Australia during 2020, due largely to the restrictions imposed on businesses and individuals to mitigate the health impacts of COVID-19. Given the heavy emphasis on workplace-based training in apprenticeships and traineeships, the impacts on apprentices and trainees in 2020 were significant.

This research report explores trends in the number of apprentice and trainee commencements, suspensions, cancellations and withdrawals, and completions over the course of 2020, to provide insights into the consequences of the pandemic for this segment of the vocational education and training (VET) sector.

Key messages

• Compared with the same period in 2019, the number of contract commencements showed marked declines in April and May 2020, coinciding with the imposition of national restrictions designed to slow the spread of the pandemic. Commencement numbers were turbulent in the middle of the year as states and territories faced stark differences in restrictions. In the latter months of the year, commencement numbers recovered dramatically, driven strongly by the Boosting Apprenticeship Commencements wage subsidy scheme, which was announced as part of the 2020−21 federal Budget.
• The number of contracts suspended over the course of 2020 was also a dramatic marker of the impacts of the pandemic on apprentices and trainees. Increases of more than 650% relative to 2019 were seen in March and April of 2020, with almost 300% in May of 2020.
• Declines were seen in the number of contract cancellations and withdrawals, as well as in the number of contract completions, from April 2020. These declines were less pronounced and less sensitive to the dynamics of the pandemic over the course of the year than the changes seen for commencements and suspensions.
• The industries that experienced some of the most substantial disruption to contract commencements in 2020 included Administrative and support services; Transport, postal and warehousing; and Information, media and telecommunications. The industries that experienced the most prominent increases in contract suspensions in the first half of 2020 included Arts and recreation services; Accommodation and food services; Transport, postal and warehousing; Retail trade; and Agriculture, forestry and fishing.
• Medium and large employers generally experienced more prominent disruption to commencements and suspensions than micro and small employers.

Executive summary

The COVID-19 pandemic caused significant economic disruption in Australia during 2020, including to businesses, education and training, and individuals. This report focuses on the impacts on apprentices and trainees, by exploring data trends in monthly training activity in 2020, by comparison with training activity prior to the onset of the pandemic in 2019. The analysis investigates monthly trends in contract commencements, suspensions, cancellations and withdrawals, and completions, as well as quarterly impacts by industry, by attributes of the apprentice/trainee, including age and gender, and by attributes of the training contract, including workplace remoteness and employer type.

Importantly, this report focuses on data trends over the course of 2020 only. At the time of writing, the COVID-19 pandemic is having ongoing impacts in Australia well into 2021, which are not considered in this report.

Following the national restrictions introduced in March 2020, the first indications in the data of disruption to apprentices and trainees were dramatic increases in contract suspensions. The number of suspensions increased by more than 650% in March and April 2020, and by almost 300% in May 2020 compared with the same period in 2019. By September 2020, the number of contracts put on suspension was approximately 10% lower than it had been in September 2019.

The second prominent indication of disruption to training activity was a marked decline in new contract commencements in April and May 2020. Commencements, which have historically been sensitive to changing economic conditions (for example, Hurley 2020; Karmel & Misko 2009), were turbulent between June and September 2020, a period during which different states and territories had vastly different levels of restrictions on business and personal activities. Commencements rebounded strongly in October 2020, however, with the introduction of the Australian Government’s Boosting Apprenticeship Commencements wage subsidy program, along with a number of state and territory government initiatives, and remained above 2019 levels in November and December.

Whereas contract suspensions and contract commencements were highly responsive to the dynamics of the pandemic in Australia, including to the outbreak in Victoria in the latter half of 2020, the impacts on contract cancellations and withdrawals, and contract completions were steady and less pronounced. For both metrics, the prominent impacts became noticeable in April 2020 as declines on 2019 levels. In the case of cancellations and withdrawals, this is likely attributable to a combination of government support measures, which kept apprentices and trainees in jobs, and a hesitation on the part of apprentices and trainees to seek other employment opportunities, given the poor employment outlook during most of 2020.

In the case of completions, declines on 2019 levels are likely due to a combination of factors. Independent of the COVID-19 pandemic, declines in the number of contract commencements in recent years has exerted flow-on effects on the number of contract completions, particularly for contracts in trade occupations, which typically take around four years to complete. In terms of the proximal impacts of the pandemic, delays in apprentices and trainees progressing with their training due to restrictions on attending work are likely also contributing to delays in completions. This is consistent with the dramatic increases in contract suspensions. The decline in completions in 2020 is not associated with an increase in attrition at this stage, as cancellations and withdrawals − the key indicator of attrition − have not increased relative to 2019. The monthly number of cancellations and withdrawals had largely returned to 2019 levels by October 2020, whereas declines in contract completions persisted throughout 2020.

The report also explores quarterly data trends according to the main industry of the employer. Industries with prominent increases in suspensions in the March and June quarters of 2020, by comparison with 2019, were Arts and recreation services; Accommodation and food services; Transport, postal and warehousing; Retail trade; and Agriculture, forestry and fishing. Many of these were increases of 500% or greater by comparison with the same period in 2019. Some industries continued to experience increases in suspensions in the September and December quarters of 2020, including Information, media and telecommunications; Professional, scientific & technical services; and Accommodation & food services.

The industries experiencing the most substantial disruption to commencements in the June quarter of 2020 were Administrative and support services[1] (down almost 70%); Transport, postal and warehousing (down almost 65%); and Information, media and telecommunications (down almost 60%).

Other industries experienced minimal disruption to commencement numbers in 2020, including Agriculture, forestry and fishing; Rental, hiring and real estate services; and Health care and social assistance.

Following the analysis on industry trends, the report finishes by examining the impacts of the pandemic on selected characteristics of the apprentice/trainee and the training contract. Impacts to commencements and suspensions in the first half of 2020 tended to be more pronounced for females than for males; for contracts in non-trade occupations than for contracts in trade occupations; and for contracts with medium (20−199 employees) and large (more than 199 employees) employers than for contracts with micro (0−4 employees) and small (5−20 employees) employers.

Footnotes

1. Administrative and support services includes services mainly engaged in performing routine support activities for the day-to-day operations of other businesses or organisations. The services provided by group training organisations are included in this industry division