Apprenticeship & traineeship demand and supply: Employers’ views

1. Apprenticeship & traineeship demand and supply: Employers’ views Erica Smith (University of Ballarat) and Tony Bush (Charles Sturt University)

2. The research project • This small project was commissioned in 2010 by the National Centre for Vocational Education Research as part of the NCVER’s work for DEEWR to inform apprenticeship reform. • The report is currently being considered by the Expert Panel which is advising DEEWR on apprentice reform. • NCVER was particularly interested in whether there were constraints on the number of apprentices and trainees and, if so, were they due to employers not offering enough places or to not enough potential apprentices and trainees?

3. Research questions • Why do Australian companies take on apprentices and trainees and what factors affect the number of places that they offer? • What recruitment processes do employers (including Group Training Organisations) utilise for apprentices and trainees? What is the level of interest in available places and the quality of the applicant pool? • What actions can by taken by companies, by potential applicants and by other parties to improve the quantity and quality of the applicant pool?

4. Background • There are around 400,000 apprentices and trainees in Australia, a high proportion of the labour force (3%+). • Skill shortages remain in some trades, despite the GFC. • Many long-term and short-term initiatives exist to encourage more apprentices and trainees: aimed at employers and (to a lesser extent) at would-be apprentices. • Employers recruit apprentices and trainees for a variety of reasons including corporate citizenship, wish to grow their own skilled workforce, a concern for quality, and to meet regulatory requirements.

6. Research method • 14 interviews with employers of apprentices and/or trainees; • 6 interviews with GTOs; • Participants covered a range of small/large employers, industry areas, metropolitan/regional-rural; • Trainee empoloyers were selected to cover the three types: whole-workforce recruitment, selective ‘promotion’ into traineeships, and limited recruitment for specific roles; • Two employers were local and were serviced by UB TAFE. • Most interviews were by phone. Interviews lasted 30-50 minutes. • A project reference group comprised representatives from Group Training Australia, a State Training Authority, and an academic known for apprentice research.

7. Apprentice and trainee employment • Companies and GTOs employed between 4 and 300 apprentices/trainees. The largest apprentice-employers were an electricity distribution company (200) and a heavy goods vehicle retail & repair site (32). • The largest trainee employers were a national bank (380, in an indigenous-only program) and a chicken fast food company (300 including Diploma candidates).

8. Reasons for employing apprentices and trainees • Because they had always done so; • To address immediate workforce needs; • To address future workforce needs including senior management capacity; • To lift the quality of work being done within the company, for competitiveness, for accreditation or licensing reasons; • To return something to the community, the trade or the nation (what is often described as an ‘altruistic motive’); • To provide a career path for workers; • To access extra training input from an external body (ie RTO); • To make less attractive work more attractive and/or to become an employer of choice.

9. Factors affecting numbers recruited • The strength of the economy; • The financial position of the company; • The strategic direction of the company; • The availability of suitable work for apprentices/trainees and of suitable long-term positions for them; • Financial incentives and changes in training policy had some effects.

10. Nature of apprentices and trainees • Some employers preferred the ‘traditional’ supply from school-leavers; others considered all ages. Apprentices were more likely to be young than trainees. • There was a wide range in the applicant pool, with some trades eg electrical attracting very high quality applicants to some employers. • Literacy and numeracy levels of apprentices/trainees varied among occupations and companies.

11. Case study of ‘GTO 3’ (regional) 2009-10 financial year Applicant details – • 1493 candidates; 455 (30%) female and 1044 (70%) male • 371 (25%) were matured aged at the time of registering i.e. 21 or older. Main industry areas nominated by applicants: • Automotive (19%) ; Electrical (15%); Building and construction (14%) • Business (15%) Type of contract nominated by applicants: • 733 said they were interested in an apprenticeship • 407 were interested in either an apprenticeship OR traineeship • 314 were interested in a traineeship Highest levels of education of applicants: • 578 (39%) had completed year 12 • 191 (13%) had completed year 11 • 611 (41%) had completed year 10 • 113 (8%) listed as ‘other’ in this field

12. How selective were employers? • Some were highly selective, eg Electrical 3 had 2000 annual applicants for 70-80 places; Construction had 260-300 applicants for 12-15 places. • Others took a high proportion of those who applied, eg Meat Processing 1 took about 200 from 500 annual applicants. • Some trainee employers eg Fast food, Retail and Retail/baking recruited all their trainees from existing workforce. Most suitable employees looking for longer-term employment were offered traineeships.

13. Nature of recruitment • Some employers had annual recruitment rounds eg Banking, Construction. Job information was available on web sites; on-line application processes were used. • Others recruited continuously all year. • GTOs recruited all year but the latter part of the year was the major recruitment time. • Some employers and GTOs had several stages to recruitment and selection process; Eg electrical 3 had four stages including a half-day assessment centre. • Some companies and all GTOs had extensive engagement with schools, attended careers events etc.

14. Quality of applicants • Those companies with the most comprehensive recruitment processes reported the highest quality of applicants’ • Ad-hoc recruiters seemed to complain most about poor quality applicants. • Some employers ‘handed on’ unsuccessful but suitable applicants to other employers in the industry. • Those recruiting from existing workforce were generally happy with the quality of recruits.

15. Effects of training provision on supply and demand • Most employers were reasonably happy with training provision although many were selective in their choices of provider. • Special arrangements were made so that training was suitable for the cohort eg Banking and Electrical 3- blocks arranged for limited time away from home. • Some indication that more flexible training arrangements (eg numbers of intake a year) might lead to an increase in numbers of apprentices. GTOs specially mentioned this.

16. Increasing the quality and quantity of the applicant pool – applicants and employers • Applicants: Present well, find out about the company, gain relevant experience at work or in hobbies, do pre-apprenticeship, have previous part-time employment if a school-leaver. • Companies and GTOs: Greater engagement with schools. SMEs could form networks for marketing and recruitment. Greater and more imaginative use of web sites. Apprentice companies could be more open to mature entrants; could change working practices to offset their greater cost.

17. Increasing the quality and quantity of the applicant pool –other parties (2) • Schools could be more proactive in promoting apprenticeships/traineeships to all students; • More pre-apprenticeships in more trades; • GTos could be funded to employ ‘above-load’ high quality apprentices; could be allowed to pay them a discounted wage; • Better pathways into apprenticeships via traineeships; • Open apprenticeships/traineeships to non-citizens.

18. The number of available places • Number of places offered was primarily driven by 1. the need for labour; and 2. the ability to adequately mentor, train and supervise apprentices/trainees. • Eg Electrical 3, Banking, Fast Food: branches had to ‘apply’ for the right to employ apprentices/trainees

19. Possible ways to increase the supply of places • The interviews with new entrants to the system suggest that there is scope to recruit more employers to the fold. • Lessen the risk of employing apprentices/trainees. eg training for supervisors, advice to companies on how to manage their work systems to accommodate more people, financial assistance to recruit ‘above load’ apprentices/trainees; • Reduce the plethora of available incentives as these seemed counter-productive in some cases; • Focus marketing to companies on the altruistic motive; • Focus on improving quality of applicants: some employers would recruit more if the quality was higher.

20. Want to know more? • Report will be on NCVER web site www.ncver.edu.au • Professor Erica Smith 03-5327 9665 or e.smith@ballarat.edu.au