Vocational Voices: Season 1, Episode 7
Attrition in the trades
Steve Davis (00:00)
Hello I'm Steve Davis. Welcome to this podcast for Australia's National Centre for Vocational Education Research.
Shortages in the trades are looming again as Australia emerges from the global financial crisis. As a result, commentators and policy makers will focus on the supply end, the training system. But what of the other end where individuals are leaving their trades? In the paper Attrition in the trades, Tom Karmel, Patrick Lim and Josie Misko from the NCVER investigate the effects such departures might be having on skill shortages and whether or not they are a significant cause.
Dr Karmel joins me now, and I'd like to begin with a question about how you approach the research, how you define the trades and the data sources you used.
Tom Karmel (00:51)
The motivation for this was the skill shortages, and everybody looks to the training side as you as you explained, as the cause of shortages. That is, we don't train enough apprentices. But obviously the other side of the question is the rate at which people leave their occupations. And so the question for us was whether there was a particular problem for the trades.
The way we approached it was to look at tradesmen and compare them with the professions. And the reason we did that is that both groups are nicely identified, that people identify with them, they both take quite long periods of formal training. And so we thought that was a reasonable comparator.
So the question for us was, do tradesmen leave at a faster rate than the professionals? The answer we found was that there's quite a bit of variation in the rate at which people leave the trades. But no, tradesmen don't leave at any faster rate than the professionals.
Steve Davis (01:47)
But, Tom, what about hairdressers?
Tom Karmel (01:49)
Hairdressers is one of the occupations we didn't really look at. That was for a simple reason that we restricted our study to males. Now, the reason we did that is that if you look at females, you do get breaks in people's careers, you get family formation occurring, so you get young women leaving and then older women coming back. You start looking at a completely different set of phenomena. Whereas what we're interested in here was the underlying attrition. And so we thought it was best to restrict the study only to males. And hence we didn't really look at hairdressers.
Steve Davis (02:24)
Now, the term attrition itself strikes me as quite a pejorative term, but in your paper it appears that attrition is not necessarily a negative outcome for either the economy nor for the individual who's left to trade. Can you talk to that?
Tom Karmel (02:40)
Attrition was certainly not meant to be pejorative. I mean, it's just meant to be a simple description of the rate at which people leave or stay in their occupation. Of course, somebody leaving a one job is somebody gaining another job. Mobility is certainly not a not a problem. We're interested in a couple of aspects. One was the extent to which people leave particular jobs, and that's important from the point of view of employers. But the other thing that's really important is the rate at which they leave occupations. That's really more important for the economy as a whole.
The other thing that we were interested in was the extent to which, from the individual's point of view, this labour mobility was a good thing. Often people talk about how important the trades are as a foundation for future careers, and what we wanted to find out was whether there was actually any evidence to show that, in fact, the trades were a good foundation for future careers.
Steve Davis (03:39)
I think you found they were, didn't you?
Tom Karmel (03:42)
We found they were and they weren't. As all economists say on one hand, one thing, on the other hand, something else. What we found is that for the trades, such as electrotechnology, there was definite evidence that they were a good foundation for getting a higher level job.
But for some of the other trades, the story is a little bit different. For example, in the food trades you do get quite a bit of mobility. And often it's quite clear that people leave their jobs to get more money, but not necessarily a higher status job. So one of the things that is driving mobility are the wages that you get in the trades relative to other occupations.
Steve Davis (04:22)
If we just turn back to the rate of attrition in the trades. I noticed in the research that you did, the actual attrition rates seem to be similar in good times and in bad times. Some of the attrition was voluntary, though, some was involuntary. And you brought up the term of job churn within a trade, which is actually higher in good times. What are the consequences of this? How does that work its way through?
Tom Karmel (04:48)
Well, the way this plays out is that from the point of view of the economy, the mobility in the trades is really quite constant over the cycle, but its composition is very different. So in good times, more individuals leave their jobs because there are other opportunities round, and in the bad times more are put off by their employers. So overall it comes out pretty much the same.
But from an employer's point of view, what you find out is in the good times, they observe that they can't keep their staff so they get this job churn. So you get them saying that there are skill shortages that are occurring in the trades. But in fact, from the occupation point of view is really no different from the other times. It's just from the point of view of the individual employer.
A very good example of this is in the food trades, where if you look at it from an occupational perspective, the mobility isn't that much different from some other occupations. But from the point of view of the employer, they see mobility all the time. And it's because people are getting dissatisfied in one job. They leave the job, they go around the corner to get a similar job, probably not any more money. So from the employer's point of view, they see this awful job churn that is a real nuisance for them. But from the point of view of the overall labor market, it doesn't really matter so much.
Steve Davis (6:10)
So I imagine your employers then will be the ones being most vocal about the struggles they're having to find staff.
Tom Karmel (06:19)
Yeah, absolutely. When the economy is buoyant and is booming, what you'll find is that the employers are complaining about the job, the skill shortages and putting pressure on governments to increase training. But it really is their perspective rather than the economy's perspective.
Steve Davis (6:38)
So out of this research, what do you think government should be doing and or training institutions in responding to what you've found?
Tom Karmel (06:47)
We’ve really come full circle. We started off doing this research of trying to look at the question about whether there were other parts to the skill shortage question, rather than just the supply of apprentices. But where we get to is that it seems that the real story is in the apprentice side. We will have shortages if we can't have enough apprentices.
Of course, that also raises the questions about the completion of the apprenticeships. The completion rates in some cases are rather low. There are two ways of improving the supply of tradesmen. One is to have more commencing apprentices. But the other thing is to actually get a greater proportion of them to complete their apprenticeships.
Steve Davis (07:27)
And also you draw our attention to the fact that people who have previously left trades might still be candidates to be worthy, considering in coming back into the system again.
Tom Karmel (07:41)
Well, that's one thing I would like to look at. That's really a question for future research. From this piece of work we really don't have any information on that. We can look at the attrition from the trades but it's very difficult to find out, of those who left, how many would be candidates to come back in the future.
Steve Davis (07:58)
With those trades where you found people did move on to bigger and better things, if you like, as they left during their career. Can you see that as being a motivating factor to attract new people to those trades at apprenticeship level to show what you can aspire to on that pathway?
Tom Karmel (08:18)
Well, yes and no. The one trade that seems a very good foundation for future careers is the electrotechnology. But that is the trade that gets paid the best in any case. So it's really part of a package that that trade is particularly attractive to young people. High wages, good opportunities for the future relative to some trades where the wages are lower and the opportunities are less after leaving that occupation.
Steve Davis (08:46)
Thanks for listening to this podcast produced by the National Centre for Vocational Education Research, to download your copy of Attrition in the trades, go to www.ncver.edu.au.