Australian apprenticeships: Facts, fiction and future

Apprenticeships are the oldest and most resilient form of post-school education and training in Australia. Today, new apprenticeships account for around 15% of all vocational education and training students.

The apprenticeship system has undergone a renaissance in the past decade in Australia. At the time of writing this report, there were over 275 000 new apprenticeships in Australia in June 2000 (NCVER 2000b), with the numbers of apprentices and trainees having risen from only 136 000 in 1995. By December 2000, the total had risen to approximately 295 000. But this is only the 'tip of the iceberg'. There are almost 1.5 million people (12% of the working-age population) in Australia today who possess a skilled vocational qualification, most of which were gained through the apprenticeship system at one time or another. To put this in perspective, there are also 1.5 million Australians of working age who have a bachelor degree from a university. Thus apprenticeship and skilled vocational qualifications and university bachelor degrees are by far the most common credentials in the Australian workforce.

The National Centre for Vocational Education Research (NCVER) has prepared this report because, despite the popularity of apprenticeships, very little comprehensive analysis of the system has ever been undertaken. The last extensive national review of apprenticeships was by the Committee of Inquiry into Labour Market Programs in 1984 (Kirby 1985), which led to the establishment of traineeships to complement apprenticeships. There has been surprisingly little research into the contribution of the apprenticeship system to Australia's skills base. There is much confusion and misunderstanding about apprenticeships in contemporary Australia, even amongst those who work most closely with the system.

This extent of misunderstanding about apprenticeships is typified by a media headline in December 2000 which proclaimed 'dramatic fall in teenagers undertaking new apprenticeships'. This was said at a time when more than 100 000 teenagers are in the system - an all-time record number - when the proportion of all teenagers in new apprenticeships has been growing strongly, not declining, to reach 7.5% in 2000, and when nearly 45% of all teenagers in full-time employment today are in a new apprenticeship - the highest rate of coverage ever.

Until 1998 the term 'apprenticeships' referred to the traditional trade apprenticeship fields, with traineeships being a separate category of entry-level training. In the last two years at a national level, the term 'new apprenticeships' is used as a generic term to include both traineeships and apprenticeships. At a State and Territory level however, the term 'new apprenticeships' is not widely used. This report focusses upon apprenticeships and traineeships. Where the term 'new apprenticeships' is used, it is inclusive of both these categories of entry-level training.

However, it is disturbing that such an important part of our education and training system is so poorly understood. Perhaps this is not surprising however, given the wide-ranging and quite fundamental changes that have occurred in the past 15 years, especially in the past six or seven years.

This report is an attempt to rectify this misunderstanding.

The origins of apprenticeships in Australia

The origins and the development of apprenticeships since the early days of the Australian colonies through to the present day are examined in detail in the report. Apprenticeships in Australia had their origins in an apprenticeship system 'inherited' from Britain. The first 150 years saw the apprenticeship system spread throughout the colonies and (from 1901), the States and Territories of Australia, and across various skilled trades occupations. Originally, an indenture was undertaken with employers and apprentices receiving instruction on the job; formal off-the-job training (typically for one day per week for three years) became universal in apprenticeships in the post-Second World War period. Fully on-the-job apprentice training virtually disappeared until 1994.

Apprenticeship numbers grew to reach 100 000 by the end of the 1960s. Apprentice numbers grew sharply to over 130 000 in 1974 in response to the establishment of the first universal government subsidy scheme to encourage employers to take on more apprentices. Apprenticeship numbers fluctuated in response to economic cycles and peaked at just under 150 000 in 1982.

Establishing traineeships

In response to growing concerns about rapid rises in youth unemployment in Australia, the government established the national Committee of Inquiry into Labour Market Programs in 1984. The inquiry found that the apprenticeship system had hardly changed for decades, with apprenticeships being restricted to a narrow range of occupations in the skilled trades, certainly mainly for young males. Traineeships were recommended to complement the apprenticeship system by introducing apprenticeship-style training to a much wider range of occupations and to a broader group of young Australians, especially young females (Kirby 1985).

Traineeships began slowly but apprenticeship numbers grew rapidly in the late 1980s to reach a peak of 161 000 in 1990. This number, together with just less than 12 000 traineeships, made 1990 the highest year on record for the system - with over 172 000 in total. The numbers of apprentices and trainees crashed in the early 1990s following a major recession to a low of 131 000 in 1994. Since then the growth has been extraordinary.

Broadening the occupational coverage of apprenticeships

The findings of this report show that despite the very slow implementation of traineeships in their first ten years, their introduction has had the most profound effect in transforming the Australian apprenticeship system from one entirely focussed on the skilled trades (where some 14% of Australia's jobs are located) to a system now covering hundreds of occupations across the entire labour market. The impact of these developments is that the contemporary 'new apprenticeships' system now reflects the structure of the Australian labour market in a way never before seen. This rapid transformation has only taken place since the early 1990s.

Apprenticeship reforms of the 1990s

Other key reforms have been introduced in the past decade or so. These include:

• the introduction of competency-based training and training packages across apprenticeships and traineeships
• the abolition of age restrictions in 1992 to permit people of all ages to participate in apprenticeships and traineeships
• the relaxation of the requirement for formal off-the-job training in apprenticeships and traineeships in 1994-95
• the extension of traineeships to programs leading to the equivalent of certificate III, certificate IV or diploma level qualifications in 1994-95
• the incorporation of vocational certificates and other qualifications gained from apprenticeships and traineeships into the integrated Australian Qualifications Framework from 1995, which provides a single national qualifications framework for all senior secondary, vocational and higher education credentials
• the establishment of an integrated new apprenticeship system in 1998, incorporating both apprenticeships and traineeships into a single national system, together with the introduction of new flexibilities including user choice of training providers

The changing structure of apprenticeships

The analysis in this report shows that these changes have had a profound effect on Australia's apprenticeship system. The changes together with the effects of a strong economy, have seen apprenticeship and traineeship numbers expand very rapidly from only 136 000 in 1995 to over 275 000 by June 2000.

The impact of the new flexibilities on the structure of apprenticeships and traineeships is examined in the report. Most notable is that, despite all the changes:

• over 60% of all new apprenticeships are over two years' duration
• over 120 000 new apprenticeships (almost 45%) are over three years' duration
• almost 80% of all new apprenticeships are at certificate III level or higher

There are nearly 210 000 new apprenticeships at certificate III level, by far the highest number ever. Certificate II programs are only 20% of the total, and certificate I programs have now almost disappeared entirely from the system.

Other changes examined are the growth of part-time apprenticeships and the establishment of school-based apprenticeships.

The quality of the system

This report is essentially an analysis of developments and quantitative trends in the apprenticeship system. It does not provide an evaluation of the apprenticeship system, nor does it provide an exhaustive examination of the quality of teaching, supervision, learning and training and assessment in the system.

However, some of the concerns which have been identified in recent research and reviews (especially of particular jurisdictions) are noted in the report.

Insomuch as client satisfaction (that is, employers and apprentices and trainees) is one indicator of quality, it is remarkable that nationally, the numbers of apprenticeships, traineeships and new apprenticeships have doubled since the mid-1990s, yet the levels of client satisfaction with the system are very high. Over 80% of employers who have at least one new apprentice said they were satisfied or very satisfied with the training provided. In 2000 nearly two-thirds of new apprentices who had completed a technical and further education (TAFE) qualification as part of their new apprenticeship program gave an excellent rating (that is, at least 8 out of 10) to the overall quality of the training they received. Some 94% rate the relevance of the training to their job as excellent.

Nevertheless, recent reviews of the traineeships in particular jurisdictions have identified some instances of problems, such as the lack of any training provision, the lack of training plans and inadequate arrangements for monitoring the quality of training, all of which need to be addressed in the future.

Apprenticeships for people of all ages

The decision to allow access to people of all ages has had a major impact. The system has been transformed in the past five or six years from one focussed almost exclusively on youth, to one catering for people of all ages. In 1995 only 7% of apprenticeships and traineeships were taken up by people aged 25 years or over. Today almost one-third have been taken up by people aged 25 years and over.

This report shows that, contrary to popular belief, this trend has not occurred at the expense of apprenticeship opportunities for young people.

Overall numbers of young people in new apprenticeships are at record levels in Australia. Today there are some 190 000 people under the age of 25 years in apprenticeships. Over 100 000 of them are teenagers. In 1995 there were only just over 70 000 teenagers and just over 50 000 young adults aged 20-24 years in the system. The proportions of all young people in apprenticeships and traineeships have also grown strongly since the mid-1990s. Some 5.7% of 15 to 19-year-olds participated in an apprenticeship or traineeship in 1995, whereas 7.5% of them are in a new apprenticeship today. The participation rate of 20 to 24-year-olds has almost doubled from 3.7% to 6.3% between 1995 and 2000.

Far from being a problem, the report demonstrates that these developments are both desirable and necessary. Australia's population is aging rapidly. Our future skill requirements as a nation cannot be properly met by simply focussing on youth as the main source for new skills.

Catering for different groups of Australians

The experiences of different groups in apprenticeships, traineeships and new apprenticeships are examined.

The report shows that it took more than 150 years for female participation in apprenticeships to reach 10%. Policies to increase female participation in trades apprenticeships and other strategies designed to increase female participation in the late 1970s, 1980s and early 1990s had little effect. Female participation rose to less than 13% by 1994. The last five years, however, have seen an enormous increase, with female participation in new apprenticeships now exceeding 30%. The findings of this report are that the experience of the past five years suggests that the only effective way to increase female participation is to ensure more new apprenticeships are available in those areas of the labour market where women work. It is argued in the report that, despite the recent progress, a continuation of female participation at levels below their share of the workforce is an unacceptable situation for Australia.

The report shows how the new apprenticeship system is now providing, or very nearly providing, reasonable access to Indigenous people and people with disabilities. However, participation by people from non-English-speaking backgrounds is much lower than it should be.

Considering completions in context

Analysis of the substantial recent growth in completions of apprenticeships, traineeships and new apprenticeships from just 33 000 in 1995 to nearly 74 000 in 2000 is contained in the report. Some problems in official statistics are considered. More importantly, the misleading conclusions that have been drawn from the misuse of crude proxy measures for completion, attrition and non-completion rates are exposed in the report.

The report shows that the conclusions drawn by some observers that noncompletions have been rising at an alarming rate in recent years are simply wrong in the context of the overall national trends.

Using appropriate methodologies, various recent studies have established that:

• apprenticeship non-completions are in the order of 23-30%
• non-completions in the shorter traineeships are higher at around 45%

The findings of the study show that apprenticeship completions are better than those for university courses and TAFE generally. This suggests that high levels of concern about apprenticeship attrition are perhaps misplaced. In a relative sense, apprenticeship completions are high.

Around three-quarters of all apprentices complete their apprenticeship, whereas only two-thirds of university undergraduate students complete their bachelor degree programs.

Traineeships are a different matter. Only 55% of people in shorter trainee-ships complete their traineeship. It is important to note that this level of completion is comparable to the retention of people in their first year in a new job. Natural job mobility is high in the labour market, including for those in a traineeship. Nevertheless, we might expect the completions from a structured training program to be at least a little higher, given both the government and employer investment that is occurring in traineeships. However, it is also important to recognise that job outcomes from both apprenticeships and traineeships are very good even amongst those not completing the full apprenticeship or traineeship (as discussed below).

The high levels of job outcomes

Most of the policy and media attention of the apprenticeship system in Australia has been focussed on the numbers entering the system, on the overall numbers in training, and on attrition levels. As a result, the excellent levels of job outcomes from apprenticeships, traineeships and new apprenticeships have almost gone unnoticed.

The report shows that, in 2000, some 93% of all new apprentices were employed in an unsubsidised job three months after completing their new apprenticeship. Further, over 90% of new apprentices who successfully completed off-the-job training in TAFE as part of their new apprenticeship in 1999 were retained in employment or had found a new job by May 2000. The rate was some 95% for apprenticeships and over 85% for traineeships.

The findings of this study show that, in terms of gaining or retaining a job, apprenticeships, traineeships and new apprenticeships perform far better than any other forms of tertiary education or training. Although the employment outcomes of all forms of tertiary education and training are good, less than three-quarters of TAFE graduates were employed in May of the following year after graduation. Only two-thirds of university graduates with a bachelor's degree or undergraduate diploma attained similar post-course employment levels.

New apprenticeships are an excellent pathway to jobs.

It stands to reason that people who complete a training program with a substantial workplace component (that is, it is also a job) will have greater immediate access to employment than those in institutional pathways. The very high employment outcomes from new apprenticeships essentially reflect retention in employment, as new apprentices already had a job while undertaking their training. By contrast, university graduates are often seeking to enter professional or career employment for the first time. Other TAFE graduates are generally a mix of those being retained in employment or seeking new employment.

Even partial completion of a new apprenticeship provides very good job outcomes. In 2000 the proportion of people who did not complete their full new apprenticeship program but who were employed in an unsubsidised job within three months of leaving their new apprenticeship had risen to over 70%. This rate has almost doubled in the past five years.

Career starting salaries however, remain highest for university graduates who find the majority of their employment in the professional occupations which include the highest-paying jobs in the labour market. For first full-time job holders, university graduates averaged $635 per week in 1999, TAFE graduates as a whole earned $460 per week and new apprentices had a starting salary of $475 per week, on average.

The long-term career prospects from apprenticeships

The report explores available (although somewhat limited) data about the longer-term career prospects of people who have undertaken apprenticeships at some stage in the past. There is little or no information as yet available to trace the long-term outcomes for those having completed traineeships or new apprenticeships.

The findings in the report suggest that long-term job outcomes for people with apprenticeships and skilled or vocational qualifications are very good. The probability of such people having a job is 83%, almost as high as for university graduates (their probability of employment being 85%). People with other qualifications (such as diplomas or basic vocational qualifications) only have a 75% chance of having a job, and the probability of employment falls to only 64% for those with no qualifications.

People with apprenticeship or equivalent skilled vocational qualifications also enjoy much higher rates of full-time employment (90%) and self-employment (20%) than any others in the labour market, university graduates included. Apprenticeships are by far the best pathway available to full-time employment or self-employment.

Separation by people with apprenticeship and skilled trades qualifications from employment in those trades has generally been considered as a major problem of 'wastage' in Australia.

The evidence in this report suggests that the term 'wastage' is a misnomer. More often than not, people with apprentice and skilled vocational qualifications are moving to higher-skilled/higher-paying positions, quite often to an area of the labour market that relates to their original training.

Almost 45% of all the employed people with skilled vocational qualifications who are not working in the skilled trades are working in managerial, professional or associate professional occupations.

The long-term earnings potential of people with apprenticeship or skilled vocational qualifications is good, particularly because of the very high rates of full-time employment achieved by people with such qualifications. People with such qualifications and working full time earned an average of just under $44 000 per year in 1997-98. University graduates, however, are better paid with much higher proportions entering the professional jobs in the labour market. However, those with apprenticeship and equivalent skilled vocational qualifications fare better in terms of average earnings than those with basic vocational qualifications, or those with no qualifications.

Future directions

The analysis in the report suggests that there is potential for further expansion of new apprenticeships to at least 400 000 in the medium-to-long-term.

A more strategic approach to expanding the coverage of new apprenticeships across the labour market is proposed. Without precluding new apprenticeships in any occupations or in any jobs at different skill levels, it is proposed that the top priority for the future expansion of the system should be in occupations that have higher or intermediate-level skill requirements, where new apprenticeship arrangements will have the greatest benefits in terms of overall skill formation.

The report suggests that the development of new apprenticeships arrangements in the associate professional occupations should be given the highest priority. Currently new apprenticeships in these occupations account for less than 3% of all new apprenticeships, yet these occupations comprise over 10% of all jobs (of which only 0.7% were new apprenticeships in 2000). By contrast, some 12% of all the skilled trades jobs in Australia are filled by new apprentices, and these jobs are 14% of all the jobs in Australia. Hence the long-term potential exists for associate professional new apprenticeships to become almost as significant as they already are in the skilled trades. The reasons why associate professional occupations are equally suitable for widespread new apprenticeships are explored in the report. The long-term objective should be to achieve new apprenticeships coverage of 10% of all associate professional jobs in Australia.

The feasibility and efficacy of these suggestions in terms of the further roll-out of new apprenticeships into new areas will need to be tested by government in consultation with industry. The analysis in this report aims to provide a starting point for such consultations and discussions rather than a blueprint for action. Nevertheless, the analysis undertaken provides compelling evidence for such action.

The continuing special role of new apprenticeships in the skilled trades occupations is also explored in the report, along with some further discussion about why further expansion in clerical, sales and service new apprenticeships is both possible and likely.

Some specific occupations that should be targetted for growth are identified in the report.

Arguments relating to why the professions and many production, transport and labouring occupations are likely to be, or should be, a low priority for further expansion of new apprenticeships are made in the report.

The compelling reasons why more, not fewer adults in new apprenticeships will be needed are also explored in the report. The main finding is that the appropriate concept for Australian apprenticeships in the future is not exclusively as a school-to-work transition pathway. Apprenticeships should be a major entry-level pathway, irrespective of the age of the person, to all those occupations where an apprentice model makes sense (that is, especially jobs requiring intermediate level and higher-order skills). Issues of skills' upgrading and ongoing skilling of existing workers continuing in their current jobs would be more appropriately handled through training approaches other than apprenticeships.

Specifically, it is argued in the report:

• Apprenticeships should not apply to situations where little or no training is required to carry out jobs requiring very low levels of skill.
• As there are so few left, certificate I programs should be eliminated from the apprenticeship system.
• Notwithstanding the above, apprenticeships should be broadly based across the whole labour market and should not be restricted only to specific occupational groups such as the skilled trades.

The apprenticeship concept requires some redesign to make it more appropriate for meeting Australia's skill needs in the new century. In this context it is important that the content of apprenticeships be developed beyond competencies in the existing technical skills so that a better balance is created between these and increasing requirements for:

• underpinning theoretical and technical knowledge and understanding (noting that the Australian National Training Authority is exploring how this can be implemented)
• the full range of work skills, employability skills and generic skills beyond the technical skills that are now being identified as so important in the workplace by more and more employers

These work skills include information technology and computing skills, customer service skills, interpersonal and human relations skills, analytical skills, enterprising skills and innovation skills. It is noted that industry and government are currently in the process of exploring this issue.

The analysis in this report shows that similarities between what were once quite distinct apprenticeship and traineeship systems are now far more important than any differences that remain.

Despite the establishment of an integated new apprenticeship system in 1998, a continuing distinction between traineeships and apprenticeships still persists in some parts of the country in relation to the conditions and requirements applying to different contracts of training, and in relation to the local labelling of different contracts of training as apprenticeships or traineeships.

In substance, the main differences between contracts of training are now:

• in the occupations in which the training is occurring
• the AQF level of qualifications being sought

In the report, it is argued that the logic of continuing with an apprentice-ship/traineeship distinction now makes less sense than it used to. Putting the term 'traineeship' to rest is suggested.

Problems with the 'new' in the term new apprenticeship are also discussed, and the simple term 'apprenticeship' is suggested as the most appropriate label for contracts of training in Australia in the new century.

Conclusion

The Australian apprenticeship system is becoming a world-leading system in terms of its size, scope and coverage.

The growth in apprenticeships, traineeships and new apprenticeships has been so rapid in the last five years, that today some 2.1% of Australia's working-age population are now in a new apprenticeship.

Australia now ranks fourth in the world just behind Switzerland, Germany and Austria in terms of the relative coverage of the apprenticeship system in the workforce. The Australian system is a world leader in terms of its coverage of adult apprentices. The dual systems of Switzerland, Germany and Austria are still focussed on young people.

Countries like Finland, Norway, the Netherlands and Denmark have apprenticeship coverage of only around 1% of the working-age population. France, the United Kingdom and the United States have even lower levels of coverage of their apprenticeship systems.

In 1977, the Organisation for Economic Co-operation and Development (OECD) concluded that:

the Australian apprenticeship system has served Australia well and it should not be swept away until something better has been put in its place. (OECD 1977, p.54)

The findings of this report show that nearly 25 years later, the contemporary 'new apprenticeships' system continues to serve Australia well. New apprentices have excellent job prospects compared with other TAFE or other vocational education graduates and university graduates. Long-term career prospects and lifetime earnings potential are good, especially for those coming out of the longer and higher-level apprenticeships.

The apprenticeship system is, however, vastly different from that which existed 25 years ago. It is nearly three times larger in terms of the number of apprenticeships, it now covers all occupational areas of the labour market, and there has been a rapid transformation in recent years from a system mainly directed at young males to one covering all ages and all groups of Australians. Twenty-five years later 'something better has been put in its place'.

1 This was the figure published from the June 2000 new apprenticeships data. It has since been revised to around 280 000 with later updates.