Factors affecting the provision of entry-level training by enterprises

This report has been prepared as part of the National Centre for Vocational Education and Research (NCVER) Research and Evaluation program. The report examines the key determinants of apprentice and trainee employment in small and medium-sized enterprises. The study was undertaken in response to evidence of the increasing role played by small and medium-sized firms in providing employment-based training in Australia.

The research presented in the report utilises unit record data from the four waves of the Australian Bureau of Statistics, business growth and performance surveys conducted over the period 1994-95 to 1997-98. The surveys involved national questionnaires sent to 13 000 businesses selected from the ABS business register. Only those businesses employing fewer than 200 employees were included in the scope of the sample. The surveys were designed to provide information on the growth and performance of Australia's employing businesses while identifying the economic and structural characteristics of these businesses.

Statistical analysis, using a probit regression was undertaken to model the influence of the business' variables on the propensity of the businesses to provide apprentice and trainee training.

The results from the regression analysis support many of the findings of training drivers presented in the literature review. It is likely that some of the variation in results between this and other studies can be attributed to the use of different data and research methods.

The analysis provides no evidence of a single business characteristic acting as a trigger for small and medium-size enterprises to provide apprentice and trainee training. However, employment characteristics do affect an enterprise's propensity to undertake apprentice and trainee training. Larger firms and firms with a high proportion of full-time staff are more likely to provide apprentice and trainee training than other firms. Firms that are expanding in size within the confines of their existing sites are also likely to provide apprentice and trainee training. The analysis provides evidence which supports claims by employers that more stable economic conditions and the ability to expand their enterprise increases the propensity to train trade apprentice and trainees.

The research supports the view that employment and training are inextricably linked. The analysis highlights the relationship between expanding employment, the skills-needs ratio and the provision of apprentice and trainee training.

The analysis provides support to qualitative research that found the educational background of managers and the traditions of apprentice training within an industry have considerable impact on the decision to take on an apprentice.

The most important result of the regression analysis is the support provided to the concept of a training culture. This analysis provides evidence of a significant effect of a training culture on employers' propensity to provide entry-level training.

There are a number of elements of a training culture in small and medium-sized enterprises that emerge from the analysis of the business longitudinal survey. The training experiences of enterprise decision-makers are a crucial factor influencing the decision to train apprentices and trainees. If the head of a firm has a trade qualification then the firm is highly likely to conduct apprentice and trainee training. Firms that undertake programs of formal structured training and on-the-job training for their employees are highly likely to utilise the apprentice and trainee system for entry-level training.