27 January 2020
Apprenticeship schemes in new sectors especially fraught and may put apprenticeship 'brand' at risk
Research on apprenticeships in England, the USA and Australia reveals the challenges of expansion
New research by Dr Johann Fortwengel and Professor Howard Gospel of King’s Business School with Phillip Toner of the University of Sydney, Australia, has highlighted the difficulties of expanding apprenticeship numbers, especially in industries with little historical experience of this form of training.
The team also found that successful attempts to renew apprenticeships involved efforts to synchronise government-led and employer-led initiatives, and engaged employer associations, unions and others. This kind of coordination was more likely to lead to a sustained increase in apprentice starts; simply providing funding and leaving employers and market forces to determine the types and structure of programmes available was less effective.
Professor Howard Gospel, Emeritus Professor of Management said: “Apprenticeships were a theme in the UK election; the Conservatives, Liberal Democrats and Labour all talked about investment in apprenticeships.”
“But expanding the number of apprenticeships and ensuring they are valued by employers is challenging to get right. Our research shows that while both England and Australia have delivered increases in apprentice numbers since the 1990s, that growth faltered when expansion into new industries led to doubts over quality and confusion over what apprenticeships should really deliver.”
Dr Johann Fortwengel, Senior Lecturer in International Management, adds: “These experiences are important lessons for the US, where efforts to increase apprenticeships have so far been proportionally smaller. Expansion into new areas has been on the agenda since the Obama administration, but with little real progress to date.”
The researchers tracked efforts in England, Australia and the US to revive apprenticeships as a solution to skills shortages, youth unemployment, and broader challenges like rising income inequality. Historically, these ‘Anglo-Saxon’ economies have lacked effective support for industry-wide apprenticeship training schemes. Also, compared to countries, such as Germany or Switzerland, demand has historically been limited, with a large proportion of young adults choosing the university route over an apprenticeship.
In England[i] apprenticeship starts grew by 400 per cent from 1996 to 2017, especially from the late 2000s onwards. Growth was driven by changes in the definition of apprenticeship and by the extension of apprenticeships beyond construction and engineering into non-trade specialisms, especially from the mid 2000s onwards. Expansion into the service sector has also prompted two major dips: first post 2010 in the face of doubts over standards in new non-traditional training programmes for sectors like hospitality and retail and second since the introduction of the apprenticeship levy in Spring 2017.
Howard Gospel says: “There are multiple reasons for disenchantment with the apprenticeship levy. Some employers see it as too complex, or excessively interventionist. Other commentators are concerned that it is funding already well qualified existing employees on degree and other higher qualifications. To date the initiative hasn’t delivered on some high hopes for what it might achieve.”
By comparison with England, Australia grew its number of apprenticeships relatively steadily from 60,000 in 1995 to 377,000 in 2012, with consistent employer and bipartisan political support. Extension of apprentice-type training to new service sector occupations accounted for over 80 per cent of the increase.
Publicly funded non-profit Group Training Organisations (GTOs), often linked to employer associations and unions played an important part in the growth, and were successful in recruiting smaller employers to apprentice schemes, which often lack the financial and staff resources to support their own training program. A relatively strong technical college system also helps in Australia. However, funding was cut back sharply due to escalating government expenditures and concern at declining quality, prompting a collapse in trainee led by non-trade apprenticeships.
''Support for the traditional apprenticeship model remains strong in Australia in government, and among employers and unions. It continues to be an important institution for young people seeking to enter the labour market and for older people looking for a skilled, better paid job,” says Dr Phillip Toner.
“However, the extension of this model into new occupations, mostly in the service sector such as lower-skilled hospitality, sales, security guards and clerical work has been largely unsuccessful. Employer support for extending apprenticeships to these roles was only partly founded on real labour market need, and more substantially down to generous government employment subsidies. This fact has been revealed by the sustained collapse in this type of training over the last six years following the cessation of the subsidies.’’
In the US, President Obama re-visited President Clinton’s relatively unsuccessful efforts to revive apprenticeships in the 1990s and also sought to target non-traditional sectors such as ICT and health. The policy of expanding apprenticeships has continued under President Trump, with the explicit intention of encouraging greater involvement of industry and to promote apprenticeship in new areas. However, to date, little progress has been made.
Dr Johann Fortwengel continued “between 1998 to 2017, there was a 65 per cent in apprentice starts in the US. However, as far as we can see from Department of Labor figures, extension into new sectors and occupations has been limited. Given our findings, that may be a blessing in disguise: there is an opportunity to reflect on what might work before ploughing resources into this effort.”
[i] Because of differences in apprenticeship systems and data across the jurisdictions of the UK, only England is examined here.