Transcript of Investing in our workforce: cadetships vs apprenticeships

17 November 2020

Vocational Voices: Season 5, Episode 3

Investing in our workforce: cadetships vs apprenticeships

Ian Curry (00:04)
We're now using language that further segments. We talk about higher apprenticeships and I get that it's a marketing term. My view is that it's another apprenticeship, but the outcome of it is for a different qualification.

Dr Peter Hurley (00:18)
Even using the word higher level, I don't think is a fair term necessarily. Just those ones that require more development and more structured development. They're the things that we think we should be targeting with this program.

Steve Davis (00:31)
Hello and welcome to Vocational Voices, the official podcast of the National Centre for Vocational Education Research or NCVER for short. I'm Steve Davis, and today we're discussing the topic Where to for apprenticeships and traineeships. Our vocational voices today are Simon Walker, Managing Director NCVER, Simon.

Simon Walker (00:52)
Hello, Steve.

Steve Davis (00:53)
Dr Peter Hurley, Education Policy Fellow, Mitchell Institute. Hello, Peter.

Dr Peter Hurley (00:57)
Hello.

Steve Davis (00:58)
And Ian Curry, National Coordinator - Skills, Training and Apprenticeships, the Australian Manufacturing Workers Union or AMWU. Good morning, Ian.

Ian Curry (01:07)
Good morning.

Steve Davis (01:07)
This podcast actually follows on from a recent episode, which was entitled Traditional trade apprenticeships: still a trusted brand? And if you haven't listened to that episode, it might provide some useful background if you go back and have a listen to that first. So I'll assume that's done. So let's dive straight into our discussion about some new options for apprenticeships and traineeships by turning to you first Peter, because you recently co-authored a report for the Mitchell Institute entitled Averting an Escalating Labour Market Crisis for Young People in Australia: A Proposed National Job Cadet Program. Can we start perhaps by elaborating on that crisis in the job market? How do you quantify it, Peter?

Dr Peter Hurley (01:52)
I think there's a lot of crisis at the moment with coronavirus and economic downturn disproportionately effect the employment of young people. And there's many ways of measuring this, but one way of measuring it or quantifying it is through what's known as NEET. So NEET stands than Not in Employment, Education or Training, and it's a term used by education researchers and groups like the OECD and the NCVER to identify youth disengagement. It's essentially the number of young people who are unemployed plus the number of young people not in the labour force. Now, there's a lot of focus on this NEET because it's the red flag of school-to-work transitions. So being NEET for more than six months at a young age is associated with many problems in later life, such as long term unemployment, under employment and higher incidences of health issues, and welfare dependence.

Dr Peter Hurley (02:41)
Now, why that's such a big issue at the moment is if you look back at the 1990's recession, the number of young people who were NEET shot up very quickly, and it took about eight years to return to pre-recession levels. And with the global financial crisis, the GFC, even though it wasn't a recession and relatively mild, the number of young people who are NEET went up and never really returned to pre GFC level. So it's just one other thing. I think it's just important to put this into a wider context. Employment outcomes of young people have been deteriorating even before coronavirus and two reports by the Australian Treasury and the Productivity Commission showed it's getting harder for young people to get a foothold into those better paid, highly skilled jobs that will set them up for the future. So what we have is a confluence of factors that require a response on two levels. The first is to increase the number of jobs available to young people. And the second is we need better pathways into those higher paying jobs and growing industries that have been increasingly out of reach.

Steve Davis (03:34)
Ian, can I just turn to you, because from your perspective at the AMWU and especially if you look at the average age of members, do you see there is a youth crisis as far as entering the market of being in the workforce?

Ian Curry (03:50)
Well, I think there certainly is, and I think there are some issues associated with the way we've structured employment for young people, the expectations of young people to turn up with "work-ready skills" in inverted commas, a term I despise. But the notion of sitting back and waiting for someone to provide you with a person who has all of the skills and knowledge and the ability to apply that in the job that you're advertising is unrealistic. The jobs that used to be there that provided a foothold into the employment market for young people are disappearing. They're being automated out or the expectation of employers, in terms of who gets those jobs, is too high. So the hospitality jobs, the fast food jobs, there's a range of those traditional entry-level pathways for people and we've made it too hard. We've made the cost of getting the skills and knowledge for entry level jobs much higher, and we've targeted the cost to either the taxpayer or to the individual.

Ian Curry (04:53)
So I think we need a much more structured way of allowing people into work without the expectation that they're going to be rocket scientists on day one. There are less jobs around that are suited to people who have perhaps lower levels of skills and knowledge on entry. But we still have to provide a vehicle and traineeships, apprenticeships, and cadetships are probably a good place to start for that. So the expectation is you turn up on day one ready to go. And I don't think we can sustain that as a population. And we constrain. We'll end up with a gap in our capability as older workers retire. And we haven't provided the pathways through to those higher skilled jobs and jobs increasingly now are higher skilled in some senses, except for those that are being automated out, whether its less skills required. So we've got some quandaries, but what we need to do is have a national conversation about how you resolve those things.

Steve Davis (05:55)
And also to set the foundation for this conversation. Peter, if I can just bring you back in to elaborate on that concept of a national job cadet program. What is it and how might it work?

Dr Peter Hurley (06:08)
I think what Ian was saying there is completely right. Things like education, they're intermediary spaces, temporary spaces that we've set up for people to transition and gain the skills that they need to work in, particularly to work in occupations. So a cadetship combines formal training with practical work experience and includes some form of paid employment. So like apprenticeships and traineeships, the cadetship program would be young people, mostly young people, but not exclusively, would train, study and earn an income. But our proposed cadetships that we were talking about are aimed at for those jobs that are more often associated with diploma or bachelor degree qualifications. And it focuses on areas of study such as business, IT and engineering, but just slightly different from traditional trades. Now, we propose this model because there's a lot of evidence that says combining theory and training embedded in a real life work environment generally leads to better employment outcomes for young people.

Dr Peter Hurley (07:03)
So we propose two streams in our model. The first more closely resembles a traditional apprenticeship or traineeship and draws on the relevant training provisions in industrial rewards. So, this is for more unskilled and non-tertiary qualified people. And the second stream, more for recent graduates or those who already have some work experience but may need some further support or training to enter the labor market. Now, I think there's considerable scope to adapt this program or a cadetship program, depending upon input from various stakeholders, union, business, government, and so on, employers. The important point is to combine education with a formal employment contract in jobs that require high levels of skill.

Simon Walker (07:40)
Having read Peter's report, and he's just mentioned there, the two streams in particular, the stream one in his report, which refers to a more traditional approach under a contract of training. We did publish a report on higher apprenticeships last year, which analysed some of these things and what came up, which I'm interested to hear Peter's views on this, is that in fact, there are already 300 qualifications that are out in the system at a diploma level and above, and many in those industry areas, in fact, it's across 50 training packages, but virtually no demand outside of two qualifications. One is the diploma of childcare. And one is the diploma of leadership and management.

Simon Walker (08:24)
They take up 85% of what is a very small number of enrolments in those contracts of training. So if you like the pathway exists now, but there's virtually no take-up. So our observation was a lack of awareness on behalf of employers in particular, but you do have to remember that these things were established in the first place, primarily in jurisdictions, based on industry demand, or at least perceived industry demand. So there's a bit of a paradox here where we do have product or pathways, but they're not being utilised. And I'd be interested to hear Peter's views on that.

Ian Curry (09:00)
Just before we go to Peter, perhaps. I agree, there are plenty of qualifications available. It could be these sorts of programs. But there are also some that are specifically designed to be these programs. So manufacturing technology cadetships have been around since 2005, 2006. And I think one of the weaknesses, perhaps one of the other weaknesses, in what exists currently is that the industrial arrangements are not there to facilitate people in the employment side of that. Now, the manufacturing technology cadetships have employment arrangements embedded in industrial awards. So the industry parties, unions, employers, and this was an Ai Group initiative, a program back in 2005 I think, to drive the creation of engineering and manufacturing technology cadetships that had employment arrangements and in an extraordinarily quick period of time for an industrial relations negotiation within months, the arrangements had been knocked together.

Ian Curry (09:59)
So we have them. What we don't have is the marketing arm and the educative arm that would allow employers to become the sort of informed and demanding consumer of these products. So we do these things as pilot programs, and then we let them sit. We let them decay, but they sit there to this day. They're available and additional models, of course, are on the way through. But the notion of a cadetship program as a national initiative is certainly an attractive one, as long as it does combine, not so much what Peter said about theory and practice, but an integration of formal learning with the ability to consolidate your skills in employment. That's the critical pieces for us. We don't separate theory and practice when we write training packages.

Dr Peter Hurley (10:43)
I agree that there's a whole large infrastructure within the education system that's available for use. I don't have a direct answer to why there hasn't been so much of an uptake on this, but I think there perhaps needs to be some encouragement on both employers and also for young people themselves. One of the things I found when I was looking at this was just, if you look at say the larger term trends, is that we've got a relatively... There are more young people in particular who are using the tertiary, the post-secondary education systems over the past 40 years. More people are finishing high school and more people are going to university. And in Australia, I think we have a relatively robust apprenticeship and traineeship system.

Dr Peter Hurley (11:32)
And there's a lot of movement towards the university side of things. And there's been a big increase in the number of people undertaking university courses and you can see that in both the ABS and the Longitudinal Surveys of Australian Youth, the LSAY data. But there's kind of patchy offerings in between. And I do wonder whether Australia just doesn't have tradition so much of having pathways into occupations between the traditional trades and university. And I think that's the kind of thing that needs to be focused upon. One of the things that we think would really help with this in terms of an uptake is, I think there's a lot of goodwill out there at the moment. An employer would take on an cadet because they can invest in their future workforce, get the benefit of someone's labour and so on.

Dr Peter Hurley (12:26)
But also on the more economic level, I think an incentive would really help the uptake in this type of program. So for instance, an incentive of up to $500 per week given to the employer who takes on the cadet would be extremely attractive, I think, to many employers. And it's actually similar to what exists at the moment with the supporting apprentices and trainees’ initiatives. Never let a good crisis go to waste, I suppose. And this is an opportunity I think, to push and create a different way of looking at the pathways into these occupations.

Steve Davis (13:00)
Peter, I would just like to bring us back to a comment Ian made early on about the first day expectations of people rocking up and expecting to be CEO or at the top end of the game. Do you see that as an issue and do you see this job cadet system having a way of managing that because I'm one of these new parents that tell my girls that they should demand everything. So I'm part of this problem, perhaps. How do you see it?

Dr Peter Hurley (13:29)
Look, I think if someone rocks up they will be quickly disabused of that fantasy, but I think what's more important when it comes to say young people in jobs and so on, we've been speaking to a number of people about this and cadetships, is that actually that first kind of entrance into the workplace, there needs to be a lot more support. There's another way of looking at this. This idea of scaffolding, which happens in training and education theory around, you provide a lot of support at the start and you gradually remove that scaffolding as someone progresses and learns to stand on their own feet, I suppose, and becomes more competent. And one of the things about, say, with a cadetship I suppose, is that there probably needs to be a bit more support at that initial stage. They're not going to be skilled. And I think that's the role of the education and trainee system is to be able to provide that support for both the employer and the employee. So that they can make that transition into the workplace.

Simon Walker (14:26)
There was through a pilot scheme funded by the Australian Government, a more recent higher apprenticeship between the Ai group and Siemens Technologies and Swinburne University, which looked at, and they ended up establishing a contract of training arrangement for a higher education diploma, which they converted to a VET diploma. But leaving that alone, I asked a person in the Ai group, why did they go down the contract of training when you don't have to do that.

Simon Walker (14:58)
And what was interesting about that was, the response was that the employer actually didn't know how to go about an integrated employment and training program. So they just didn't have the wherewithal to start and know what was expected of them for something that was tightly woven between the education component and the employment. And, of course, the apprenticeship system is there on the shelf ready-made and so the framework was already there. So that's why they chose to go down the contract of training path rather than an alternative path. So I think it is a lot about the educative side, as Ian mentioned of giving employers the wherewithal and the skills to be able to develop a program for those people.

Ian Curry (15:42)
Just before I respond to that, go back to something earlier. That the expectations issue that I raised wasn't the expectations of the young person. And I agree with you that we have created expectations and I want to be a parent who creates great expectations in my children. I've got three daughters who are all smart, resourceful, ambitious, and all the rest of it. They're doing incredibly well, and they should have high expectations. I'm more worried about the expectations of employers requiring people to turn up with everything they need before they've started work. And we've created a culture where we expect the taxpayer to flood the market with work ready, economic units who can do the productive work that we want them to do and all the rest of that. So my view going forward is that we will not get the sort of encouragement and I don't think $500 a week is an incentive without the scaffolding, without all of the other things that we want.

Ian Curry (16:40)
If taxpayer money's going to go into something, it should create a public good. That's our view. And we should have a national conversation about structural arrangements that would allow us to create a culture where the expectation is that employers would provide employment-based learning opportunities, that students would engage in employment based learning opportunities, and we would create a national workforce that constituted a public good based on taxpayer investment. We've got to bring those things together, but there's not really anywhere to have those conversations. Everything's segmented, as segmented and fragmented and siloed. We do training packages over here. We do higher ed over there. We don't have a national workforce development regime, and particularly not when we're operating as if we're a federation back in 1901.

Steve Davis (17:30)
Well, luckily we have the conversation here. Peter?

Dr Peter Hurley (17:34)
I do agree with the point that someone's not going to enter the workforce fully formed, necessarily. And maybe more so if they're doing a degree, for instance, but particularly school leavers, and it's particularly if you're looking at that higher level occupation, it's because if you look at some of this, there's some reports that have been put out. That's been identified as part of the problem. Are fewer jobs available for young people to get into what they call the jobs ladder at that higher level? Now, it's not going to be really possible for someone to be a school leaver, for instance, and graduate straight into that higher level job. And even, I think, for a lot of people who are university graduates. There is a little bit of space that they need that kind of support.

Dr Peter Hurley (18:25)
And we should really be providing that support, I think, to people because it's in everyone's interest. And I think that that is certainly part of the challenge. But as I said, I think there's two parts of this in my mind, two parts to this problem. That's, say, the size, the total size of the employment market available to young people. And also, the kind of quality of the jobs, because increasingly they're being locked out. And you can just see that in a lot of the data that's coming out.

Ian Curry (18:52)
We, for instance, advertised for a relatively modest level admin support person in our state office here in Adelaide and before applications had closed, we'd had 470 applicants for one position. So there's a lot of competition out there. Now, not every job is going to attract to those sorts of applications, but there are way more people looking for jobs. And the expectation is that you can pick from the best. And what happens to the rest is a social problem for us that we've got to address.

Steve Davis (19:26)
I just wonder whether looking at this from a community level and the way things have changed over time, and especially with the extra economic pressure of the disruption of the pandemic. If I think back to my first steps in radio at a country radio station, the appetite and the expectation was there on behalf of the employer, even though there wasn't a lot of fat on the bone, to blood us young ones, and to give us that time to learn on the job. But today that same station, that 5MU is now under a very tight national network. There is nothing, they really need someone to step in and pick up the slack in making that space to bring new people in slowly with breathing space to learn.

Dr Peter Hurley (20:12)
That's kind of, I think, the role of the education side of things, and also if you think about a apprenticeship and traineeship, there's a lot of support that's around it. In Victoria, for instance, they have support offices and so on, and we have our Acts and so on. And I think that if we're able to do this and we target it in areas that it is useful for employers, that we know areas are going to be of future growth, and we've talked about that in our report about what that might look like. And if we provide support to those employers and employees it just makes it easier for them to have that employment contract and to learn in a way that's easy for them.

Dr Peter Hurley (20:55)
So I'll give you an example. It could be, certainly, if you're looking at the training content, you would look at the cycle of someone starting a job and what they might need to do. You would embed the training and learning into their job, make the assessment tasks around things that they might do as work projects and things like that. Make it so that it is easy for both the employers and employees to have this arrangement so that they can grow. So much of education is making the conditions right for learning. And it's actually a very difficult task. And if we're able to do that, if policy makers can do that and so on, that's going to really help a lot of people.

Ian Curry (21:35)
And I agree with that, the notion that you create a learning environment and using the workplace for a learning environment's got a 6 or 700 year history. Apprenticeships and traineeships done well work well. And we create a mutual obligation on the employer and the apprentice to sign up for something that is bigger than simply getting the skills to do the job that's in front of them. So it's interesting that in unemployment and other forms of assistance that we provide to individuals, we demand a mutual obligation.

Ian Curry (22:07)
And I think a mutual obligation to train people for more than just the job at that employer is important. And that's why we have a national training system that preferences transferable, portable skills. We create a contractual arrangement where you have to meet certain tests. You have to apply certain rules. You have to have a training plan. You have to pay people correctly. You have to look after and mentor them and those things. So I think that if we rely on individual students leaving school, hopping into the VET environment, to get the skills that they think might get them a job, we're losing that mutual obligation to train using public money for a bigger picture than just the individual skills required for that job.

Simon Walker (22:50)
Just on this issue of the expectations of employers as job-ready straight out of school or straight out of university, as the case may be, one of the pilots in these higher apprenticeships one was one from Pricewaterhouse Coopers were actually traditionally had a graduate recruitment program. So they came out of university. They were employed as part of a graduate program, but they've moved into a more structured arrangement by using a higher apprenticeship model, or at least they're piloting it, which is in recognition that there is a requirement to really develop their people by having a more structured employment and post-university education program.

Ian Curry (23:34)
I think we're now using language that further segments. We talk about higher apprenticeships and I get that it's a marketing term. My view is that it's another apprenticeship, but the outcome of it is for a different qualification, a different application, a different job or occupation. So an apprenticeship or a traineeship or a cadetship, they'll all have the same characteristics. They'll embed, integrate learning, and work. And it might be for a certificate two, a certificate three, a diploma or advanced diploma, whatever you make it. So whilst ever we're constantly segmenting these things for marketing purposes, we're losing the bigger picture that the best way to produce a functioning, skilled, resilient and adaptable worker is to combine learning and work. We've got a long history of it. It works well, but we're forever trying to find fast track ways of giving people skills that are directly associated with an employer's application of those skills, rather than creating more broadly skilled people. And I don't think we can do that with the sorts of deposits of training that we're currently engaged in.

Steve Davis (24:42)
Peter, with you and your co-authors as you devise this proposed a national job cadet program, what was the thinking around the choice of that term? Does the term apprenticeship have some baggage that feels awkward with the people that you're targeting, the sectors of the economy that you're targeting with this initiative or proposal?

Dr Peter Hurley (25:02)
Yeah. This paper's also with the Vice Chancellor of Victoria University and University of South Australia, Peter Dawkins and David Lloyd. And actually it was a conversation that we had about how could we impactfully term this. And there's lots of words that have kind of baggage with it, for instance, there's the thing that we use the word incentive or wage subsidy, which one is it? You know, and apparently incentive's a better term. And the same thing again, with the cadetship and apprenticeship. I think there's a real association with apprenticeships and say trades, which doesn't necessarily have to be there. And I suppose while we have used this term cadetship, but also this kind of slippage, I think with apprenticeships and traineeships, just as generally as, say, a VET course, a vocational course, I don't think there's a general awareness within the population that's one of the key features of an apprenticeship and a traineeship is a contract.

Dr Peter Hurley (25:53)
It's a contract with an employer. When we were looking at, say, the cadetship, we're not so suggesting that it only has to be a formal kind of apprenticeship, traineeship, which is essentially a three-way contract between employer and employee and, say, a third party, like a state training board or someone. We're saying you could have just a relationship between an employer and employee. And so that's one of the reasons why we've used that cadetship. But again, it's really important just to think about this in terms of those higher, even using the word higher level I don't think it's in a fair term necessarily. Just those ones that require more development and more structured development. They're the things that we think we should be targeting with this program.

Steve Davis (26:39)
In drawing this conversation to a close I'd like us to think to the future. What message do the three of you think you'd like to share with stakeholders on this journey towards exploring the concept of a national job cadet program, but this situation in general, Ian, I turn to you first.

Ian Curry (27:02)
Well, I guess I always start things with three questions. So what problem are you trying to solve, and whose interests, and where are we parking the risk? So for me, if the purpose of such a program is the production of skilled and adaptable workers that go on to employment and the economy, then how do we go about that? In whose interests are we doing that? If it's public funding, what's the public good that's created? What's the return to the taxpayer for that? If it's all about training, we'll fail. If it has purpose, then there's a good chance that we could build a conversation that gets us there. So I think a sense of purpose is absolutely number one. We've got to be doing this for the right reason and the word vocational means of or pertaining to a job or occupation or profession, and the training should result in someone who is fit for a job, an occupation or profession. So sense of purpose is number one, for me, always.

Steve Davis (27:55)
Simon?

Simon Walker (27:56)
Yeah, I think making it clear, and hopefully for employers in particular, to come to their own views, that there is actually a mutual benefit in developing their own staff. And there is an ultimate business return for that investment. And many companies adopt that principle because they know it works for them. And if you look for example, at the new high tech world and those global companies, it's all about people. It's not about technology. And I think the more we get into this brave new world, the power of people and their development is going to be what carries us through not other things.

Steve Davis (28:39)
And Peter, the final word to you.

Dr Peter Hurley (28:41)
Well, I think there's a lot of focus on the moment that this idea of job-ready, and you can see it in the Australian Government's university policy, it's the job-ready kind of approach. But I think when we look at, say, what's job ready, there's often a focus on what we teach and that's absolutely important, but I think we lose track of how we teach it and the environment of the learning experience. It's actually absolutely vital to the success of an employment program. And it's particularly if you want to make someone job-ready. I think focusing on, say, the pathways and enabling those pathways to actually exist meaningfully is really important. And also to help. I think there has been a deterioration in employment outcomes for young people, and it's really important for us to find a way to change that and alter that course.

Steve Davis (29:27)
Thank you very much. Thank you, all of you, for this conversation. Vocational Voices is produced by NCVER on behalf of the Australian Government and state and territory governments with funding provided through the Australian Government Department of Education, Skills and Employment. For further information, please visit ncver.edu.au.