Vocational Voices: Season 1, Episode 3
Apprenticeships and traineeships in the downturn
Steve Davis (00:00)
Hello I'm Steve Davis. Welcome to this podcast for Australia's National Centre for Vocational Education Research.
Apprenticeships have a very long history in Australia, building on the traditions of the medieval guilds. The defining characteristic of apprenticeships is the combination of employment and training traditionally in the trades. In recent decades, however, spurred by high rates of youth unemployment, traineeships have been developed across a number of sectors.
In this podcast, I interviewed Tom Karmel, managing director of the National Centre for Vocational Education Research, about the paper, Apprenticeships and traineeships in the downturn. In this paper, Tom, along with colleague Josie Misko, explores the impact that the global financial crisis has had on this particular branch of education and training. He argues that while all facets of education and training are affected by the state of the economy, apprenticeships and traineeships are potentially more sensitive because they involve employment.
Before delving into the data, I asked Tom how he defined and distinguished between apprenticeships and traineeships for the purpose of this paper.
Tom Karmel (01:16)
Well, the simplest way of thinking about it is an apprentice is somebody in a trade and a trainee is in some other occupation.
Steve Davis (01:24)
All right. Well, Tom, if we take the whole branch of education and training as a whole that apprenticeships and traineeships are part of, did you in fact find evidence of a downturn?
Tom Karmel (01:36)
Certainly. There's a very long history of evidence of a relationship between what's going on in employment and apprentices. And we see that right back. We know that a lot of apprentices work in very cyclical industries.
Trainees we don't have the same historical base. We were looking very carefully to see what might be going on. We used a bit of theoretical reasoning to have a think about it, and then of course, we did look at the data
Steve Davis (02:07)
In looking at the data, was the impact felt evenly across all sectors or were there some exceptions?
Tom Karmel (02:14)
Certainly we've seen the impact with apprentices in the March quarter this year compared to the March quarter last year. Apprenticeship commencements are down by 20%, where there's not really much change in the trainees.
Steve Davis (02:29)
Is there something, though unexpected or unusual about this current downturn, or is it at heart, just one of those economic events that are responsible for making trades in particular cyclical in nature?
Tom Karmel (02:40)
I think that's exactly right, there's nothing particular about this downturn. We saw exactly the same sorts of patterns with the trades as what we have seen on previous downturns. So we see employment numbers go down. And this has a very direct flow on to apprentice commencements. And this is one of the issues that you don't always see in the numbers in training. It's really the commencements that get hit first.
Steve Davis (03:05)
We'll return to the commencements and completions a little later. Just looking at the numbers generally. What was the magnitude of change. What has the impact been? Are we talking issues of points of a percentage or whole percentage points or tens, 20 etc.?
Tom Karmel (03:23)
For the trades, we're talking about a decline of about 20 percentage in the numbers of commencements over the year to March.
Steve Davis (03:31)
In looking through some of the tables and the graphs that you have in the report, printing caught my eye in particular. I've noticed that printing in the last decade, in particular that industry has had a lot of technological development. Are you able or were you able to distinguish between the effects of the downturn and the effects of normal technological development impacting the number of commencements in certain trades?
Tom Karmel (03:59)
You can see the trades like printing are affected by the downturn. But really what dominates what's happened over the last ten, 15 years is the technological change. So the cycle has an impact that it really is the long term structural change that is leading to declines in the numbers of printing apprentices. You see the opposite in food apprentices where again, the cycle makes a difference, but that's against an ever increasing numbers of food apprentices.
Steve Davis (04:31)
Tom I'd like to return to the issue of commencements and completions, because we hear a lot of effort being put into completion and completion rates by government. But you do highlight a lot about commencements in the report. Can you talk to that? The distinction between the two and where you think more emphasis is needed?
Tom Karmel (04:51)
The commencements are important because that's the pipeline for the future. If we're looking at shortages in two or three or four years’ time, it's really the commencements now in the trades that matter.
For completions, of course they matter. But I argue in the paper that there's every reason to think that the completion rates are going to stay up reasonably well. And so that's not as much of a concern. I mean, the point is that in the popular press, people talk a lot about completions because they do see examples of out of trade apprentices, where you have an apprentice who's in training, who is made redundant, and that's a great tragedy for the individual. And obviously we should do, governments need to do whatever they can to minimise that.
But overall, really the numbers say that completion rates will probably be maintained, if not go up. And the reason for that is that apprentices fail to complete their apprenticeships for a whole lot of reasons, and most of them are to do with personal reasons rather than losing their job. So when times are bad, there are fewer opportunities around, and so apprentices are more likely to actually stay in the apprenticeship.
The other thing that you observe is that employers are actually rather loath to let their apprentices go without them completing their training. So we see evidence that, in effect, the rate of completion actually quickens up a bit in the downturn as employers make sure that the apprentice finishes before they have to let them go.
Steve Davis (06:28)
Tom, on this issue of completions. Did the numbers show a different reality for trainees compared to apprentices?
Tom Karmel (06:37)
What we found with the apprentices is that completion rates have held up, and employers have tried to complete apprentices rather quicker. But the completion rates for trainees have actually increased quite significantly according to our data. It does suggest that the alternative occupations that trainees can go into, that the opportunities aren't quite there and that employers are keeping their trainees on.
Steve Davis (07:07)
Did your research uncover any ideas or create a signpost towards methods or strategies that could help boost commencements? Or do we actually have to rely on the economic conditions returning to a favourable state again?
Tom Karmel (07:23)
This is a very interesting point. It seems to me that if you've got commencements declining, you can attempt to do something about it through incentives to employers to increase numbers. And this is in fact, what the government has done. But the other thing that one could always think about is different sorts of pathways completely. So for example, in Australia and the trades, we've been very loathed to think about institutional pathways. And I guess in a downturn perhaps it is time to start thinking about those types of alternative pathways.
Steve Davis (08:01)
Looking at trainees now, just for a moment. You mentioned in the report they're likely to come through the downturn in a better position than apprentices. What's that optimism based on?
Tom Karmel (08:12)
It's based on a couple of things. The first point is that trainees tend to work in occupations which aren't affected by the downturn as much as the trades. So they're in a lot of service occupations that tend to be rather more resilient. The other point is that the cost of hiring a trainee is not the same as hiring an apprentice. And in fact, in many cases, trainees are really alternative sources of labor. And so trainees will be very competitive in the labour market when times are tough. So I think there's good reason to think that the numbers will be maintained.
Steve Davis (08:52)
What would you like to see the VET sector, the government and industry do with this research? Are there any obvious gaps? Between policy and practice on one hand, and market realities on the other. There are some ideas that have risen to the surface.
Tom Karmel (09:06)
It seems to me there are a couple of things. There is the question about further incentives for employers to take on apprentices, and the government has done that. And I think perhaps drawing on possibly this work as well as other things. As I said before, I think it's important to think about alternative pathways for the trainees.
The other thing is that I think it also refocuses the way we think about the trainees, that the original idea of the traineeship was actually a time of very high youth unemployment, and the idea was to provide jobs for young people who were disadvantaged. I think that's one of the lessons that comes out of this, that when times are bad, the traineeship model is very good. When you're focusing it on that equity aspect, rather than necessarily emphasising the training part of it.
Steve Davis (09:58)
Thanks for listening to this podcast produced by the National Centre for Vocational Education Research. To download your copy of Apprenticeships and traineeships in the downturn go to www.ncver.edu.au