Traditional trade apprenticeships: training activity, employer incentives and international practice

By Josie Misko Research report 12 March 2020 978 1 925717 47 1

Description

This report is the first part of a larger study aiming to investigate traditional apprenticeship practices with a view to developing policy directions for how to keep them relevant and useful. It finds that trends in commencements rise and fall in line with fluctuations in the economy. The availability of employer incentives have also affected the quantum of apprenticeships. The lessons we can learn from overseas have to do with the amount of prescription in what is expected from in-company training, integration of in-company and off-the job training, and the qualifications of teachers and workplace supervisors. There are also insights we can gain from the practice of involving competent bodies in practical assessments.

Summary

About the research

This report is the first component of a larger study investigating training practices relating to traditional trade apprenticeships, with a view to developing policy directions on how to maintain their relevance and usefulness. This first phase of the study explores data on trends in training activity and completions, provides details on the application of incentives, and highlights international apprenticeship models and practice, as identified in the relevant literature.

Despite its broad scope, this report is unable, on its own, to offer comprehensive policy guidance on sustaining relevant and useful apprenticeships, although it does provide some contextual advice pointing to the role of fluctuations in economic conditions in affecting uptake and the extent to which incentives at federal and state levels can be used to encourage uptake or completion when the economy is experiencing a downturn.

An analysis of the data on traditional apprentices shows that the demand for traditional trade apprentices has been relatively stable over the last 15 years, with changes in demand generally aligned to the prevailing economic conditions. This stability is also partly attributable to government policy settings at the federal and state and territory levels, which have supported the traditional trades through the consistent prioritisation and application of incentives and training subsidies.

Our examination of government incentives for employers of apprentices in the traditional trades indicates that despite the numerous changes to the overall apprenticeship incentives scheme they have remained relatively stable. This is primarily because the traditional trades are aligned to the skill shortages identified in the National Skills Needs List. However, the value of the base incentives for the traditional trades has, in real terms, declined since 2012.

Our research identified some important lessons that Australia could glean from the dual systems of apprenticeship operating in Germany, Switzerland, Luxembourg, Denmark and Austria. These lessons include the need for: better synchronisation of knowledge acquisition and skills development in off-the-job and on-the-job training venues; higher levels of prescription and expectations about the nature and level of the qualifications required of teachers and trainers; regular monitoring of the market for apprenticeship training positions; and industry involvement in practical assessments.

Traditional trade apprenticeships: learnings from the field, a companion to this report, describes the experience of apprentices, tradespersons, employers, trainers and apprenticeship regulators with the apprenticeship system, along with their views on the aspects of the system that should be retained and those to be discarded or modified, the aim being to use this information to identify some broad directions for action.

Simon Walker
Managing Director, NCVER

Executive summary

This report is the first component of a research study investigating the extent to which the traditional trade approach to apprenticeships still has merit or whether some changes are required to make it more relevant to current needs. In this report we present trends in commencements for the traditional trades for the period 2002 to 2018. Non-trade apprenticeships or traineeships are out of scope of this study.

We define eight groups of traditional trades: building; electrotechnology and telecommunications; engineering; food trades; motor mechanic, repairer and vehicle builder trades; other traditional trades; precision trades; and skilled animal and horticultural workers.

Changing patterns of apprenticeship uptake and completions

Over time, the training of apprentices in Australia, and internationally, has been affected by technological, regulatory and social change. However, the concept of novices (apprentices) learning from experts (skilled tradespersons) in productive work for significant periods of time continues to be well accepted.

The Australian apprenticeship system is usually viewed — and debated — as if it were a single, coherent entity. Yet, it is important to note that each state and territory has its own classifications and registers to distinguish between trade apprenticeships and non-trade apprenticeships, and traineeships. This means, for example, that a trade or a non-trade in one state may not be the same as in another state.

In 2002 there were 50 600 commencements for apprentices in the traditional trades. In 2009, at the time of the Global Financial Crisis, the numbers dipped significantly from the preceding two years, although they recovered in 2010 to around 81 000. For the following five years the numbers fluctuated between 71 000 and 76 000. Since 2016 they have stabilised at around 68 000.

Commencements in certain traditional trades (such as printing, and textile, clothing and footwear) have been slowly fading from the industrial landscape. This reflects the structural adjustment that has affected these industries, the introduction of advanced technologies (especially in the printing industry) and the movement off shore of manufacturing industries, which notably includes clothing and footwear and printing. Because there is still some activity in these trades, and other traditional trades continue to flourish, we have some reason for investigating the skills and qualifications being acquired by apprentices in traditional trades.

Apprenticeship incentives

Federal and state and territory governments are generally committed to ensuring the wellbeing of apprentices, achieved by providing them with some support (often in the form of financial allowances) to enable them to pursue and persist with their training. One incentive for apprentices is the Trade Support Loans scheme, which was established to provide assistance to eligible apprentices over the duration of their apprenticeship. A 20% discount to the loan is applied at the completion of the apprenticeship.

The bulk of government financial incentives, however, are intended for employers, and their aim is to encourage employers to take on apprentices and support them until such time as their qualification has been completed. Despite numerous changes to the employer incentives scheme over the years, the nature of the base employer incentives that apply to the traditional trades have remained relatively stable, although the value of the base incentives in real terms has declined since 2012.

What can Australia learn from systems overseas?

Although there is keen interest in Australia for learning from apprenticeship systems in other countries, it is important to recognise that systems that work in one socioeconomic and cultural environment may not be easily transported to another. While the German Dual System is often held up as an exemplar of good apprenticeship training, recently the dual systems that operate in Luxembourg, Switzerland, Austria and Denmark have also been promoted.

There are similarities between the dual system and the Australian apprenticeship system, including that both systems exist under government legislative arrangements; obligations are documented in formal training contracts between employers and apprentices; and learning is undertaken via a combination of off and on-the job training. However, some of the practices of the European systems differ markedly from those of the Australian system and include their having specific roles for competent bodies (representing relevant crafts and professions) in awarding qualifications; making decisions about which companies are eligible for taking on apprentices; and monitoring in-company training. In some Australian states and territories examinations for licensed occupations are set by external bodies representing specific occupations (for example, in the case of the capstone test for electricians), but these approaches are by no means applied consistently across the country.

In the European dual systems, the rules governing the qualifications and experience of teachers in the vocational schools and the trainers or supervisors in the company are more prescriptive than those applying in the Australian situation, where practices seem to be more flexible. Highly defined regulations on the activities taking place in the company and in the vocational school, as well as for the processes used to integrate in-company training and off-the-job learning, is a further feature of the approaches used in these dual systems. This does not occur to the same extent in Australia. In addition, the Australian system gives teachers and trainers more flexibility in making decisions on approaches to delivering and assessing the training.

Next steps

The information we have compiled in this report has the potential to provide a contextual background for a comprehensive overview of apprenticeships. On its own, it is unable to offer guidance on the desirable aspects of apprenticeships — that is, those worth retaining — and those elements of the system that need to be removed or improved. Guidance on these aspects of apprenticeships can best be obtained by listening to the key players: the apprentices, tradespersons and employers, relevant government officials, and training providers. In the second part of this study (reported in Traditional trade apprenticeships: learnings from the field) we identify the key themes from consultations with these stakeholders.

A third report, to supplement the findings of both publications, will analyse relevant data from the 2019 Apprentice and Trainee Destination and Experiences Survey in conjunction with relevant findings from the consultations. The survey has been distributed to apprentices and trainees across the nation who completed, cancelled or withdrew from their contract of training in 2018.

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