Understanding the psychological contract in apprenticeships and traineeships to improve retention

Attrition in apprenticeships and traineeships is an ongoing concern for employers and government alike, with completion standing at around 50% on average. One possible explanation for this high attrition rate is that there is a mismatch between the respective expectations of apprentices/trainees and employers. This research uses the concept of the psychological contract, that is, the perceived mutual obligations between employers and employees of themselves and each other, to test this explanation.

Key messages

• Expectations in apprentice and trainee employment arrangements are similar in most respects to that of other employment relationships.

• Mismatched perceptions of the other parties’ obligations are not a major issue, but there are differences in the perceptions of the extent to which obligations are being met.

• Both parties consider the provision of training as the employers’ most important obligation, but apprentices and trainees perceive that employers do not always deliver on their training obligations. Specific discrepancies were noted in relation to apprentices and trainees wanting a specific time for training and a wider range of training methods.

• Apprentices who have completed pre-apprenticeships and apprentices and trainees employed by group training organisations have lower expectations and are relatively more satisfied.

• While a mismatch of expectations is not a key factor behind high attrition, the study suggests employers should ensure they have appropriate systems for managing apprentices and trainees across all age ranges and for communicating mutual expectations to all parties.

Tom Karmel
Managing Director, NCVER

This project examined the psychological contract in apprenticeships and traineeships in Australia. The underlying aim was to see whether the psychological contract has any effects on attrition and retention, since several pieces of previous research have suggested that mismatched expectations provide one reason for apprentices and trainees leaving their jobs. The psychological contract relating to employment comprises the unwritten expectations the parties have of each other: their perceptions of each other’s and their own obligations; the relative importance of those obligations; and the extent to which each party feels the obligations have been met.

In most jobs, the psychological contract involves only the employer and the employee, but in apprenticeships and traineeships, other parties are involved: the registered training organisation responsible for the delivery and assessment of the relevant qualification; the Australian Apprenticeships Centre, which sets up the formal contract; and in a little over one in ten cases, a group training organisation (GTO), which employs the apprentice or trainee and places him or her with a host employer.

The research team investigated the topic using three approaches. Firstly, a number of high-level interviews were carried out with individuals representing organisations with a national stake in the apprenticeship and traineeship system. Four separate surveys were then administered in two states:

• random sampling of apprentices and trainees
• random sampling of employers
• later, as a result of stakeholder requests, surveys specifically of apprentices and trainees employed by group training organisations
• group training organisations in their role as employers.

All of these surveys included previously validated scales relating to the obligations of the parties to the employment contract, as well as a purpose-constructed set of ‘training obligations’ items. During this phase, nine intensive company-based case studies were also undertaken; these involved interviews with company management, apprentices and trainees, and trainers from registered training organisations. Two of the case studies were in group training organisations and included host employer interviews. It should be noted that the research did not include those who had not completed their apprenticeships or traineeships, although employers and stakeholders commented on reasons behind previous non-completions.

The research indicated that overall there was a very high level of agreement on the obligations of the two major parties to the employment contract. In most cases these were the same obligations as exist in any employment contract, but with a much greater emphasis on training as an obligation on both sides. The provision of training was seen as the most important obligation of employers, while serious attention to learning was seen as apprentices’ and trainees’ most important obligation, second only to attendance and punctuality. The set of training obligations overall rated higher scores than the set of employment obligations.

Both parties reported that employment obligations were met to a large extent (a mean of more than 7.0 out of 10 in the survey for apprentices and trainees), with both parties believing they themselves did better than the other, as is normal in psychological contract literature. ‘Fair treatment’ and ‘resources to do the job’ were the least well-met obligations, in the view of apprentices/trainees. Pastoral care, which has been prominent in recent policy discussions, emerged as a factor in the qualitative research, but survey items relating to pastoral care were not regarded by either party as particularly important compared with other obligations.

The training-specific obligations were met better than employment obligations (a mean of 7.7 out of 10 in the survey), with ‘specific time for training’ and ‘a range of training methods’ being the least well met. There was however a statistically significant difference between employers and apprentices/trainees relating to how far employers had met the employment obligations to ‘provide adequate training’. Other literature suggests that employment rather than training issues are generally the reason for people leaving an apprenticeship or traineeship; our findings suggest that it is not possible to separate employment from training. Training is seen as the major part of the ‘deal’ of the employment relationship in apprenticeships and traineeships and therefore dissatisfaction with a job could well be related to a lack of effective training.

Older apprentices and trainees felt that their expectations were met to a lower extent than younger apprentices/trainees. This was particularly so for those over the age of 45. Trainees tended on the whole to be less satisfied than apprentices, except for trainees employed by group training organisations and retail trainees. Pre-apprentices tended to have lower expectations of both employment and training obligations, as did those employed by group training organisations. Apprentices employed by group training organisations were more satisfied that their employer had met obligations than other apprentices.

Sometimes it was difficult to establish who was responsible for ‘delivering on’ the obligations to the apprentice and trainee, and to make sure all parties did the right thing. In companies, senior managers needed to make sure supervisors and other staff were aware of, and adhered to, the obligations. In the group training organisation situation, the organisations themselves needed to work closely with host employers.

Implications emerging from the report include:

• managing expectations, for example, making the mutual obligations known early in the recruitment process and constantly reiterating them
• meeting expectations, for example, setting up systems to handle ‘hard promises’ such as fair performance appraisals and having a designated person or department to manage apprentices and trainees, as well as performance management systems, which are important for both ‘hard’ and ‘soft’ obligations
• improving satisfaction with training, by paying particular attention to the perceived deficient areas of ‘specific time for training’ and ‘a range of training methods’
• paying more attention to mature apprentices and trainees
• acknowledging the psychological contract explicitly; it then becomes much more straightforward for people to make decisions based on realistic expectations and less likely that any party will be disappointed in the outcome.

These implications are discussed in the concluding chapter and suggestions are offered by the researchers about what can be done to increase alignment of expectations.