Chapter 1. Boosting employer engagement in apprenticeships: Synthesis findings

Apprenticeships have been identified as an effective mechanism for smoothing the transition for young people between school and the world of work. While apprenticeships and work-based learning opportunities have demonstrable benefits for young people and employers, many countries face a number of barriers to broadening their availability. This chapter synthesises findings across nine case studies on best practices to increase the engagement of employers in the design, development and delivery of apprenticeship programmes at the local level.

  

Apprenticeship programmes can better connect young people to jobs

Relatively high youth unemployment and falling youth participation in education and training opportunities have been a persistent trend across a number of OECD countries since the global financial crisis. About 73.3 million people aged 15-29 and one in five (20.4%) of all young people in the European Union are unemployed and seeking work (OECD, 2016). This trend has a strong regional dimension, with youth unemployment rates over 40% in southern European countries such as Greece, Spain and Italy.

There are also worrying trends of declining participation rates in the labour market and increased numbers of young people not in employment, education and training (NEETs). The global youth labour force participation rate declined by 11.6% between 1991 and 2014, while the adult labour force participation rate declined by 1% over the same period. The youth labour force fell by 29.9 million despite an overall increase in the total youth population of 185 million over this period, indicating that increasing numbers of young people are no longer employed nor seeking work. Similarly, although global NEET rates have declined slightly from their peak of 13.1% during the financial crisis, they remain stubbornly high at 12.4% (ILO, 2015).

These trends are typically magnified for young people with disabilities or social disadvantages, who have more limited access to education and training opportunities. Youth disengagement from the labour market is a particularly worrying issue because early labour market experiences can affect the nature and duration of employment throughout the entire working life. Young people who disengage with the labour market early in their careers tend to find it harder to find stable, long-term and good quality employment in the future (OECD, 2010).

Figure 1.1. Youth unemployment, 2007, 2015

Source: OECD (2016) Youth unemployment rate (indicator).

The limited integration of young people in the labour market is occurring at the same time as employers report an inability to find suitable labour with the appropriate skills and experience. Globally, 34% of employers were unable to fill positions due to a lack of available talent (Aring, 2012). Over a third of European employers report having difficulty filling vacant positions due to a shortage of applicants with the right skills and abilities (CEDEFOP, 2015a). This remains despite consistent increases in the number of young people who complete compulsory secondary education (Eurostat, 2014). This points to mismatch between the skills developed through the education system and the skills expected by employers.

In this context, apprenticeships and work-based training opportunities are increasingly recognised as a useful mechanism to better connect the education system with the labour market. Apprenticeships are programmes provided to young people that involve work-based training, often linked to off-the-job vocational education, in order to impart both job-specific and general skills to aspiring workers.

Box 1.1. What do we mean by the term “apprenticeships”?

The International Labor Organization (ILO) defines apprenticeships as a form of “systematic long-term training for a recognised occupation that takes place substantially within an undertaking or under an independent craftsman and should be governed by a written contract… and be subject to established standards”. (ILO, 2012a).

Given growing interest in apprenticeship programmes and broader work-based learning as a key success factor in school-to-work transitions, it is worth noting that the term “apprenticeship” is increasingly used to describe a range of programmes that might be alternatively referred to as “traineeships”, “internships”, “learnerships” and “work placements”, depending on the country context. As noted by the G20, “apprenticeships are a combination of on-the-job training and school-based education. In the G20 countries, there is not a single standardised model of apprenticeships, but rather multiple and varied approaches to offer young people a combination of training and work experience” (G20, 2012). The common feature of all programmes is a focus on work-based training, but they may differ in terms of their specific legal nature and requirements.

Apprenticeships in modern industrialised economies typically combine work-based training with off-the-job training through a standardised written contract that is regulated by government actors. These programmes usually result in a formal certification or qualification. The nature of apprenticeships necessarily differ based on the institutional and structural features of the local, regional, national and supra-national vocational education and training system.

Throughout this report, we will refer to apprenticeships that occur both during and following compulsory secondary education. The case studies depict employment programmes that are regulated by law and based on an oral or written apprenticeship contract, where apprentices were provided with compensatory payment and standard social protection coverage.

Source: G20 (2012), Key elements of quality apprenticeships, G20 Task Force on Employment; ILO (2012a), “Overview of apprenticeship systems and issues”.

A diverse body of research indicates that completing an apprenticeship can improve overall labour market outcomes for young people. Young people with apprenticeship experience tend to have higher average rates of employment than the national average (ILO, 2014). They also tend to have below average repeated periods of unemployment than students who have graduated from a more school-based system. The successful completion of apprenticeship can ease the path into employment for young people, even if they do not find employment with the firm that provided the training place (Quintini and Manfredi, 2009). Apprenticeship graduates can earn up to 15-20% more than graduates from compulsory education (CEDEFOP, 2011). Those who complete work-based training are also more likely to find adequate employment in comparison to those who completed full-time vocational education (Bertschy et al., 2009; Parey, 2009).

More broadly, the work-based training component of apprenticeships provides young people with the chance to develop job-ready “soft” or generic skills that are as relevant as technical vocational competences. Skills like problem solving, conflict management and entrepreneurship are more effectively developed in workplaces than in off-the-job situations like classrooms or simulated work environments (OECD, 2010; Brewer, 2013).

Apprenticeships also have broader benefits for the larger economy. Figures from the British National Audit Office (2012) suggest that the net present value to the economy for every GBP 1 of government spending invested in apprenticeships was estimated to be between GBP 16 and GBP 21. Other research has found that increased incidence of apprenticeships is negatively correlated with youth unemployment and rates of NEETs (ILO, 2014). Cross-country evidence show that countries with high relative shares of young people in vocational education, including Germany, Denmark and Australia, tend to have among the lowest rates of youth unemployment across OECD countries (ILO, 2014; OECD, 2016). Similarly, countries with higher shares of apprentices had better performance among youth in the labour market during the financial crisis of 2008-2009 (European Commission, 2013). In Italy, young people on an apprenticeship scheme enjoy greater employment stability than fixed term contract holders, with a 5% lower probability of unemployment and 16% higher chance of having a permanent contract (European Commission, 2013).

Apprenticeship programmes can help to improve the general level of skills in the local economy and can boost overall economic growth and productivity (Cappellari et al., 2012). While no national data is available in the United States, state-level analysis shows the return on investment in vocational training, including apprenticeships, can range from 8.4% in Wyoming to 48.3% in Massachusetts (Courtright and Fry, 2007). The institutional set-up of some apprenticeship systems has also enabled small businesses to better manage fluctuations in business cycles. Group training companies and other intermediaries who employ apprentices and then hire them out to different subcontractors in a sector can continue the training of apprentices during downturns and then make them available again as business activity increases.

Engaging in the apprenticeship system by providing training places to aspiring apprentices can also pose significant rewards for employers. Embedding young people within an existing business is an effective way to train future workers to the specific requirements, values and expectations of a particular workforce. While some time must be devoted to training young and inexperienced people, many employers recoup the cost of training before the completion of the apprenticeship and others within a time frame as short as 1-2 years, depending on the extent to which apprentices are engaged in productive activities (Mohrenzweiser and Zwick, 2009; Hasluck and Hogarth, 2012; ILO, 2014; Jansen et al., 2012). Investing in apprenticeship training has other diffused benefits for the business, including increased skills development for other employees as a result of interaction with training organisations, increased entrepreneurship and increased exposure to new technologies in the workplace (London Economics, 2011; Lerman, 2013; and Molenaar, 2012).

The connection between apprenticeships and organisational productivity also provides a rationale for employer investment in apprenticeships (Mieschbuehler and Hooley, 2015). Employers often cite the benefits of training apprentices as a method of ensuring skilled workers in the future, thus reducing skills and occupational mismatch. Research on larger firms that become registered as training organisations in their national system has shown a range of benefits. These include the ability to deliver qualifications through apprenticeships and other forms of work-based learning to large groups of workers quickly and in a manner that is customised to the enterprise’s own needs and requirements; the ability, through increased knowledge of the national vocational education and training (VET) system, to seek available government funding for training and to use this funding to develop their own training infrastructure; and the ability to gain supply chain benefits by training workers from other organisations such as subcontractors or suppliers to ensure the quality of work performed by these organisations (Smith and Smith, 2009a).

They have an ability to shape their approach to human resource management around the awarding of national qualifications, creating more innovative ways of managing and developing people (Smith and Smith, 2007). Firms that invest heavily in apprenticeships have reported reduced rates of staff turnover in entry-level positions and see apprentices and trainees as a stream of workers ready to move onto higher – level training and promotional positions (Smith et al., 2009). Firms that invest in apprenticeship programmes also report other benefits, including reduced recruitment costs, enhanced job satisfaction among workplace supervisors and achievement of corporate social responsibility outcomes (University of Warwick Institute for Employment Research, 2008).

Why is this publication important?

This publication aims to summarise the international literature on the role of employers and other actors in apprenticeship programmes. It provides a summary of the barriers to engaging employers and then draws on case study work to highlight key lessons for policy makers and practitioners on how to increase the overall engagement of employers in apprenticeship programmes. Table 1.1 provides an overview of the case studies that are summarised in this chapter, the key reform or programme, as well as the key actors involved in the programme.

Table 1.1. Case studies on employer engagement in apprenticeship programmes
Country	Key reform/programme	Key actors
United Kingdom	Apprenticeship Hubs at the city region level	City regions; local employers
Norway	Apprenticeship design and delivery in hyper-rural spaces	City Council; local employers; Group Training Organisations
Germany	Youth-focussed active labour market policies and school to work transition	Federal Employment Agencies; Federal ministries; Federal State actors
Australia	Enterprise-embedded model of apprenticeship delivery	ABN Group
New Zealand	Promoting apprenticeship retention and completion rates at the local level	Local leaders in Otorohanga; local employers; local training providers
United States of America	Promoting apprenticeships to build information technology skills among disadvantaged urban youth	Not-for-profits; Philadelphia school system; local Philadelphia IT sector
Turkey	Work-based training programmes for unemployed young people	Federal employment agency; GAN National Network; local employers
Bangladesh	Apprenticeship programme design and delivery in the informal and formal sectors	Leatherworking industry; SMEs; not-for-profit organisations; national employment agency
India	Legislative reform to improve employer engagement	National ministries and employer organisations

Building a better apprenticeship system: The role of employers

The use of apprenticeships varies across OECD countries (See Figure 1.2). To increase overall participation, policy makers need to strengthen the involvement of employers in vocational education and training systems. Employers can take a leadership role in steering apprenticeship programmes at the local level. As noted by Kramer et al. (2015), a new wave of companies is taking a far more active role by partnering with schools, non-profits and governments to directly improve educational outcomes. Bridging the gap between education and the world of work is fundamental to creating shared value, growing revenue and increasing productivity by raising the skills levels of youth and the overall workforce.

Figure 1.2. Apprentices per 1000 employed persons, 2011 or most recent year

Source: ILO (2012a), “Overview of apprenticeship systems and issues”, ILO Contribution to the G20 Taskforce on Employment, Skills and Employability Branch, International Labour Organisation, Geneva.

Engaging employers in the apprenticeship system can also improve the alignment between the supply and demand of skills. In particular, employers can ensure that curricula and competences remain up to date with the needs of the labour market, which can in turn improve the value and employment prospects associated with apprenticeship programmes (Steedman, 2005). Improving the match between education and work is particularly important at the local level, where globalisation and technological changes are creating a polarised labour market of high and low paid jobs.

Where apprenticeship systems are dictated by centralised policy priorities developed at the national level, employers can play an important role in translating these broader objectives into local reality. The success of national apprenticeship priorities hinges upon their acceptance and integration into the practical day to day reality of local business. For example, although the German apprenticeship system is based on a series of occupational skills profiles that are determined at the national level, the engagement of employers in this process helps to ensure that the system remains relevant and practical at the local level (Hoeckel and Schwartz, 2010). Engaging employers through the entire apprenticeship life cycle can help to ensure that the system meets the needs of the employers and apprentices alike. As noted by Smith et al. (2009), the apprenticeship life-cycle includes the period during recruitment, sign-up and induction of apprentices; training delivery and assessment; support during the apprenticeship; and completion.

The importance of developing genuine collaboration between employers and other stakeholders in the apprenticeship system is increasingly being recognised by policymakers at the national and local level (Skills Development Scotland, nd; Van Horn et al., 2015). Successful apprenticeship systems are underpinned by a strong tradition of collaboration between stakeholders, including employers, training providers, unions and government partners. These include the systems of Australia, Germany and Norway, who also have dual systems of vocational education where there is an integrated programme of on- and off-the-job training. These systems tend to be “industry-led” and driven by the demands of employers.

Employers in these countries tend to view engagement in the system as a fundamental social responsibility. Institutional knowledge and strong public opinion about the value of apprenticeship not only increases the number of training places provided by employers but also their willingness to engage in the entire lifecycle of the design and delivery of apprenticeship programmes. For example, Norwegian employers and a wide variety of social partners are represented in advisory bodies for upper-secondary and post-secondary VET programme development at both the national and county level and are actively engaged in the development of curriculum content, competence requirements and assessment. This is important to ensure that local labour market actors are able to communicate their training needs and requirements to policymakers.

The depth of employer engagement in industry-led countries reflects the breadth and quality of access to apprenticeships. Completing an apprenticeship in countries like Germany, Australia and Norway acts as a pathway to employment in a wide variety of industries and occupations, ranging from the traditional trades sector to white collar work. This helps to meet the diverse needs of young people and improves perceptions of apprenticeship pathways in comparison to tertiary or other vocational education pathways.

In contrast, other systems have less formal linkages between the worlds of work and education. For example, the apprenticeship system in the United States features less formal governance relationships with employers, because each relationship is developed on an ad-hoc basis at the local level with the relevant stakeholders and there is no systematic and long-term tradition of close co-operation between actors federally.

Barriers to employer engagement in the apprenticeship system

There is considerable variation across national systems with respect to the degree that employers choose to become engaged in the provision of apprenticeship and training places, varying from estimates below 1% in the United States, 8% of employers in England to 30% in Australia (Steedman, 2010). While employer participation is affected by many variables, the design of apprenticeship systems has a major influence on the level of employer participation (Kuczera, 2017). Employers within national frameworks also differ in their engagement with the apprenticeship system – typically enterprises in the trades sector are more likely to offer training places than public sector organisations or enterprises in other sectors. Broadening the range of apprenticeship pathways available across a greater number of occupations and industry sectors opens more opportunities for employers to participate in an apprenticeship system.

VET systems are diverse and can be administered by governments at the local, regional, or national level. OECD and ILO work has found variation across countries in terms of the duration, qualifications, requirements, employer and union involvement, level, occupation and gender balance of modern work-based training programmes (OECD, 2014b; Quintini and Martin, 2014; ILO, 2013). These variations have an impact on the structure of financial and non-financial incentives that are available to employers for providing apprenticeship training places.

Financial incentives and the distribution of training costs can also boost engagement in the apprenticeship system. Costs are usually shared between the government, the employer and the apprentice, but the distribution of these costs can vary. Many countries have used subsidies and vouchers to increase the number of training places, but these may not necessarily be effective in expanding demand for apprentices in firms that already train them (Mühlemann et al., 2007). Some governments also target subsidies, vouchers and other financial incentives towards key industries – for example, the Australian government contributes to funding towards training costs for workers in the aged care, childcare, nursing and disability care sectors. However, care should be taken in the design of these mechanisms to ensure that they do not displace existing workers.

Apprenticeship systems are often very complex in terms of their governance and legislative structure. Apprenticeships and vocational education can often fall into the jurisdictions of national governments, regional governments or some combination of the two. In Germany, the jurisdiction for apprenticeships is shared between the thirteen federal states and the national ministry for employment, while the legislative regulation and operation of Australian apprenticeships is driven by the eight states and territories. Similarly, while there may be national standards of vocational competences, these can be implemented or enforced in different ways within regions or local areas. This poses difficulties for engagement from employers who operate beyond regional boundaries in terms of ensuring that they meet the relevant legislative requirements.

Similarly, the degree of institutional fragmentation can dis-incentivise participation from employers. The English and Australian case studies in this publication (see Chapters 2 and 5) highlight the difficulties of navigating a complex structure of institutions and incentives when attempting to access government assistance for training costs. This sentiment has been recognised by policy makers in both countries who are now attempting to streamline the system (Australian Government, 2013; HM Government, 2015). This challenge can be minimised by improving support services for employers. Employers often value receiving local advice for their institutional and legislative questions – the English case study found that local employers preferred being able to “get hold of someone” rather than interacting with an impersonal national website. Similarly, employers could be more likely to engage with the apprenticeship system that is streamlined across and between government institutions.

The English system also featured a fragmented training landscape, which further discouraged employers from engaging with the apprenticeship system. The apprenticeship system was characterised by a large degree of public support for training providers where 63-67% of all apprenticeships between 2005 and 2012 were government funded (HM Government, 2013). This resulted in a proliferation of training providers with “perverse incentives” to provide many short-term training places with high transaction costs (Chankseliani and Relly, 2015). This was discouraging for employers in Leeds, United Kingdom who reported discouragement with a local training environment that featured over 600 individual trainers and lacked streamlined support and information services. This indicates that government incentive mechanisms should be carefully considered to both ensure that training remains of a high standard and encourage employer engagement.

Some OECD countries “compel” employers to contribute to broader vocational education and training schemes through mandatory contributions to training funds (Hoeckel, 2008). While not all national training funds operate on the same basis, many provide financial support for apprenticeship schemes. This is the case in the UK, which announced a levy on large businesses to fund the expansion of the apprenticeship system in 2016. Other countries such as Denmark and Korea also operate such systems. Industries in some places, such as Belgium and some Australian states, have implemented sectoral training funds. The funds raised by these levies are usually redistributed to firms who provide training places or are used to fund institution-based training in that sector.

While these measures may be poorly received by some employers, they can increase employer and employee awareness of training and VET measures and have been generally found to increase the extent of training provision (Smith, 2005; ILO, 2016 forthcoming). However, smaller firms may not have the capacity or the resources to provide training places and thus may be unfairly penalised, unless specific measures are taken to encourage the participation of small businesses, as is the case in Malaysia and Singapore. These compulsory levy-based systems contrast starkly with the systems of New Zealand, the Netherlands and other countries, where enterprises have no legal obligation to fund training. Most countries do not use compulsory employer levies to fund apprenticeships, relying instead on a mix of incentives to encourage employer participation. In those countries with more established systems, such as Germany, employers voluntarily take significant financial responsibility for training apprentices on the basis of both a long tradition of vocational education and well-documented evidence that illustrate the return on investment from providing training opportunities.

Another barrier to employer engagement can include fears of other firms “poaching” newly trained apprentices. This fear is particularly significant for SMEs, who tend to experience more labour turnover and also may have fewer opportunities for career progression (McIntosh et al., 2011). However, an analysis of German firms that engage in the apprenticeship system found that fewer than 3% of firms that offer apprenticeship places had been affected by poaching, smaller firms actually tended to retain apprentices more than larger companies, and that it had negligible effects on expected returns to apprenticeship training for firms (Mohrenweiser et al., 2013). Kitching and Blackburn (2002) found that only 2% of employers reported the risk of trained employers being “poached” or leaving the company as a main argument against offering training. This suggests that the fear of poaching may be somewhat misplaced for firms.

In addition to incentives, one way to improve the engagement of employers in apprenticeships is to support intermediaries that can help employers navigate the apprenticeship system. Bridging institutions such as industry organisations, employer groups, trade unions, chambers of commerce and skills bodies can mobilise businesses, find appropriate training places and negotiate with governments. Additionally, specific “apprenticeship centres” have also been established to provide customised brokerage services, which are bundled with broader business advisory services in some cases.

However, intermediary bodies need deep knowledge of the training system to be able to advise on such issues, and this knowledge is sometimes lacking (Schofield, 2000). They can also act as sources of local knowledge and can help to translate national or regional schemes into practice. The German case study in this publication (Chapter 4) highlights how chambers of commerce and chambers of craft are particularly important actors in the German VET system because they maintain records of potential training places available among their members. They also help to customise the placement of apprentices with particular skillsets.

SMEs require targeted programmes and services to enable them to provide apprenticeship opportunities

Small to medium-sized enterprises (SMEs) are significant sources of employment and job creation. SMEs employ on average 65% of the workforce and comprise over 75% of total enterprises across OECD countries (Criscuolo et al., 2014). The significance of the SME sector is even larger in emerging countries, which tend to have higher degrees of informal employment (World Bank, 2015). However, SMEs tend to engage less in the apprenticeship system than might be otherwise expected by their share of the industrial sector – for example, SMEs in the UK comprise 99.9% of all enterprises but less than 25% provide apprenticeship places (Department for Business Innovation and Skills, 2015; Holt, 2012).

Ensuring that SMEs are able to reap the greatest net benefits from apprenticeships should be a priority of VET systems in order to increase competitiveness, productivity and skills development for the wider economy. SMEs have also been found to benefit in terms of improved access to the latest technological innovation gained through apprentices who regularly attend local technical colleges (ILO, 2012a). However, SMEs are often unable to provide apprenticeship opportunities due to reasons of scale, variable demand, perceived lack of utility, geographical remoteness or issues with skills matching (Steedman, 2015). They consequently require more specialised assistance to become engaged in apprenticeship schemes.

In areas with little penetration from large or international employers, SMEs play the principal role in supporting local employment and promoting a thriving economy. It is therefore crucial that SMEs are able to both contribute to skills development and also reap the benefits of apprenticeships in terms of improved productivity and production in order to sustain the local economy. This is particularly significant for SMEs in emerging countries, where apprenticeship is often the only method of learning a particular trade or skill (Walther, 2007). For example, the case study from India (Chapter 10) highlights how specific measures that target SMEs can be integrated in policy reforms. Specific changes to the legislation and regulations governing apprenticeships allowed SMEs previously excluded due to their small size (as defined by the number of employees) to engage apprentices for the first time. This was supported by new financial incentives targeting employers in the form of public funding of apprentice wages.

The needs of SMEs will differ across local areas. For example, rural sectors tend to have higher concentrations of SMEs in their industrial structures and may have specific challenges associated with the provision of training opportunities, such as transportation and remote access to education and support facilities. In contrast, SMEs based in areas with clusters may need more support with building training networks with other local businesses to meet training regulations. This highlights the need for flexibility at the local level to ensure that specific local challenges can be met and addressed, flexibility not only in programme design and regulation, but also from training organisations prepared to offer flexible delivery options. Similarly, a supportive local training infrastructure is important to help SMEs deliver and ensure the quality of their apprenticeships (CEDEFOP, 2015b). In some cases, focussing on SMEs in a particular industry can help to enable rapid engagement from energised and relevant local actors, as was observed in the case of the mechanical trades sector in the New Zealand case study (see Chapter 6 of this publication).

Apprenticeships require financial, organisational and time investments from employers because they necessitate the sharing of responsibilities between the worlds of work and education. However, SMEs are less likely to have well-developed human resource and support functions that can find, train, support and protect apprentices. Lacking these capacities can be particularly difficult for SMEs operating in a fragmented or very complex VET environment. The case studies from the UK (Chapter 2), Norway (Chapter 3) and Australia (Chapter 4) highlight the success in the use of collective training offices that can provide training services and act as an intermediary between groups of SMEs and the government. These intermediaries can remove administrative or bureaucratic boundaries that may deter SMEs from providing training places to aspiring apprentices, while also performing some of the functions of a specific apprenticeship support manager. In some cases, they also act as the employer, removing the burden of full-time employment from smaller enterprises.

Box 1.2. Group training organisations and SMEs: The cases of Australia and Norway

Collective training offices are organisations that act as a mediator between employers, apprentices and the government. The structure of the organisation differs between apprenticeship systems but their common feature is that they serve as method of shifting the bureaucratic and administrative burden of engaging with the apprenticeship system away from employers. This enables more employers to engage with the apprenticeship system.

In Australia, group training organisations are not-for-profit organisations that receive government funding to directly employ apprentices, manage their training and support needs and hire them out to employers. The advantage of this model is that training offices boast institutional knowledge about navigating the apprenticeship system and supporting apprentices. In the Australian case study, the group training organisation ABN Training featured a dedicated training manager who was able to support apprentices through the programme by providing pastoral care and practical assistance with off-the-job training and theory requirements. This organisation has been successful in improving apprenticeship completion rates in the ABN Group above the state and national average.

In Norway, collective training offices sign apprenticeship contracts with the government on behalf of groups of small firms who offer training places. This shifts the legal obligation of off-the-job training to the collective organisations, who are then able to use economies of scale to provide a full range of training services to apprentices. This is particularly useful for SMEs, who would not otherwise be able to meet the national minimum standards for training apprentices and uphold the quality of apprenticeship programme.

SMEs also tend to have more specialised operations and may thus require more specific skillsets from apprentices. Similarly, the narrow focus of SMEs, particularly micro-enterprises, can leave them unable to provide the full range of general training often required by apprenticeship training regulations (Schweri and Müller, 2008). A potential solution to this problem could be to rotate apprentices among groups of SMEs or training networks, which would allow apprenticeships to have the benefit of experiencing a range of different production technologies. Similarly, local flexibility in the provision of training options could ensure that the packages available are able to be customised for the specific skills needs and requirements in local areas. Occupational and skills mismatches can be lessened by developing customised placement services for SMEs, such as the German PV placement programme (see Box 1.3). This can improve SME engagement in vocational education while strengthening the sector in the medium- to long-term.

Box 1.3. Meeting the needs of SMEs: Customising the placement of apprentices

The SME sector is a key driver for growth in the Germany economy. They cumulatively employ over 15 million staff, have higher turnover than the top 30 listed German companies and are among the most innovative and resilient enterprises in Europe.

However, despite their economic importance and Germany’s long tradition of vocational education, German SMEs were less likely to engage with the apprenticeship system than their larger counterparts. This was in part due to the customised nature of some SME craft businesses, which resulted in a need for firm- or occupation-specific skillsets required from aspiring apprentices.

In 2007, the German federal Ministry for Economic Affairs and Energy developed a programme to customise the placement of apprentices and trainees in the SME sector in order to lessen occupational mismatch, improve productivity and competitiveness and strengthen the SME sector over the medium- to long-term. Intermediaries interviewed both SMEs and apprentices with respect to their needs and desired skills and then matched suitable candidates with appropriate businesses.

The programme helped to improve the attractiveness of apprenticeships for SMEs. The majority of targeted SMEs found that they received accurate and appropriate apprentices for the apprenticeship vacancies available and the programme allowed them to save 40‐50% of apprenticeship recruitment costs. Similarly, around 90% of apprenticeship applicants found the mediation services “largely helpful”.

Another barrier associated with SME engagement with apprenticeship systems is retaining and engaging youth in potential training opportunities. SMEs, and micro-enterprises in particular, often do not enjoy the reputation and network benefits associated with firms of larger sizes and may struggle to recruit an apprentice. For small companies who form part of a larger supply chain, this can be addressed by sharing applications among other suppliers (Lewis, 2013).

Some research has suggested that SMEs that provide training places to apprentices tend to be motivated by the desire to substitute full-time workers. An Italian study on the impacts of a recent reform of apprenticeship contracts found that there was an increase in overall apprenticeship-employment but that this came at the expense of full-time staff (Cappellari et al., 2012). While the meaning of “apprenticeship” in this case might differ from that generally applied in other training regulations, the displacement effect may be due to the smaller scale of SMEs, which results in increased marginal benefits of savings on payroll and wages.

Consequently, rigour and care must be taken to ensure that minimum standards are upheld such that apprenticeships undertaken in SMEs are of comparable quality and utility as those undertaken in larger firms. To a large extent, this responsibility falls to training organisations as much as regulators, as the interaction between individual employers and the training organisation responsible for the off-the-job training component of an apprenticeship provides a valuable channel to ensure the quality of on-the-job training while providing support to apprentices and employers alike. Management systems should have the capacity to identify employers who “churn” large numbers of apprentices or whose apprentices consistently fail to meet assessment standards.

Increasing employer participation involves aligning the needs and clarifying the roles of all stakeholders

VET systems are comprised of a diverse network of actors, including employers, aspiring apprentices, intermediaries including training providers, social partners and employer groups, and a range of policymakers and leaders at the local, regional, and national levels. Each actor in the VET system has a range of financial and non-financial incentives that will impact their engagement in the provision of apprenticeships. Aligning these desires and needs is central to ensuring that access to apprenticeships remains broad and of high quality.

Care must be taken in the design of vocational education and training systems to ensure that the standard and quality of apprenticeships remains high and that young people are not exploited. There may be a trade-off between ensuring that the costs of firm investment and training in apprenticeships are low enough to promote engagement but remain high enough to ensure a quality placement for aspiring apprentices (OECD, 2012).

Box 1.4. Building apprenticeships of higher quality

At the G20 meeting in Mexico in 2012, ministers committed to “promote, and where necessary, strengthen quality apprenticeship systems that ensure high level of instruction and adequate remuneration, and avoid taking advantage of lower salaries”.

Apprenticeships must be of high quality in order to attract young people and be recognised as valuable by employers. High quality apprenticeships have a number of features, including:

• Relevant and rigourous training both on and off the job.

• Adequate remuneration that reflects the skills and productive input of apprentices, while costs are shared among employers, governments and the apprentice.

• Adherence to minimum standards of workplace and occupational health and safety standards.

• Flexible and integrated pathways with the formal education and tertiary education system.

• Broad and equitable access, particularly for people of all stages of life, women, people with social, mental or physical handicaps and those with an immigration background.

Strong governance mechanisms are necessary to ensure that employers adhere to minimum standards and to ensure that apprenticeships are not exploited as a form of cheap labour. Similarly, a robust governance system should be developed to ensure that apprenticeships remain valuable to both apprentices and employers during periods of economic recession or social, institutional or demographic pressures.

Source: G20 (2012), Key elements of quality apprenticeships, G20 Task Force on Employment, 27 September 2012.

For many countries with established apprenticeship systems, the solution to this trade-off has been through a focus on mandatory assessment and certification to ensure that apprenticeship programmes have the same status and credential outcome as non-apprenticeship pathways. With the expansion of national qualification frameworks across the globe, apprenticeships that once resulted in a certificate of completion are increasingly leading to nationally recognised qualifications that create pathways for learners and give greater certainty to employers that off-the-job training meets occupational competences set by employers (ILO, 2012a). This allows apprenticeships to successfully meet minimum standards that can then be certified, while also ensuring that employers are able to focus on building competences on-the-job rather than solely through external training provision. Other measures can also be introduced to safeguard the quality of apprenticeships in micro, small- and medium-sized enterprises (SMEs), such as fixed ratios of skilled workers to apprentices and minimum training qualifications for supervisors of apprentices (ILO, 2013).

The case studies from Australia (Chapter 5) and the United States (Chapter 7) highlight the movement towards competence-based training models and away from time-based models as a positive method of improving practical, on-the-job skills development while meeting the needs of employers. When coupled with modular and flexible VET systems that recognise past experiences, competence based training models can also hasten the attainment of other certifications and qualifications. Recent research from Australia indicates that there are growing numbers of individuals across all ages completing their apprenticeship in a shorter timeframe through a range of options, including early sign-off, competency-based progression or recognition of prior learning and gap training (Hargraves and Blomberg, 2015). This has resulted in well over half of adult apprentices completing their apprenticeship in under two years. However, some of the barriers to competence progression include a lack of flexibility in training providers and employer attitudes to allowing apprentices to complete early (Clayton et al., 2015).

While the engagement of employers is clearly fundamental to the operation of apprenticeship systems, the involvement of unions in the design, development and implementation of apprenticeships is also a key success factor. As apprenticeships are employment-based training arrangements, issues such as the employment status, wages and other legal entitlements of apprentices need to be negotiated by the main actors in the labour market, and thus requires the active involvement of unions. If apprenticeships are included in collective bargaining agreements at the sectoral or enterprise levels, there is increased potential for apprenticeships to be taken up across a range of occupations and enterprises. As evident from the case studies on Germany and Australia, unions are active partners in apprenticeship systems and are key contributors to the success of the broader technical and vocational education and training systems in those countries.

However, the balance between the alignment of the different priorities and needs of stakeholders will vary between countries and within national systems, namely at the local level. Variation in local development necessitates the development of robust systems that can be varied to meet specific skills supply and demand requirements. Balancing both the employment and training imperatives of apprenticeships and other work-based learning programmes requires effective institutional arrangements between social partners at the local level.

Local and regional stakeholders can make or break the success of apprenticeship programmes

At the local level, effective apprenticeships programmes can help to achieve key economic development objectives. They provide a mechanism to boost the competitiveness of strategic local sectors. Apprenticeship programmes can stimulate quality employment opportunities in service-based occupations by providing skills development opportunities that are tied to the workplace. They can thus be targeted beyond the traditional trades to new and emerging sectors which can provide new economic growth opportunities.

A precondition for a high quality apprenticeship system is effective implementation at the local level. The potential role for local governments, public agencies and social partners to enhance apprenticeships can often be overlooked at the national level and even by local actors themselves when they do not have the ability to shape local actions. The design of national schemes should include specific measures to encourage engagement of stakeholders at the local level to incentivise their engagement with the apprenticeship system.

Leadership from key stakeholders is particularly important in ensuring that national schemes are effectively implemented at the local level. In the New Zealand town of Otorohanga, (see Chapter 4) employers and young people were targeted by a group of concerned local leaders, including the mayor, church leaders and major employers. The activism and leadership from these actors resulted in custom initiatives to improve apprenticeship participation and completion rates, including personalised assistance, increased access to off-the-job vocational training and personal pastoral care. The mayor, a former apprentice himself, prioritised the development of a network of local stakeholders to improve the outcomes of the apprenticeship system and to reach out to local employers. Similarly, the presence of a hands-on tutor to help apprentices liaise with employers and complete their academic training requirements was critical to improving apprentice retention and completion rates.

While the initial collaboration was largely informal, the outgoing leaders developed formal governance and implementation mechanisms for the stakeholders through the creation of a District Development Board for Economic Development. Since the initiation of the project, local youth increasingly engage in the apprenticeship system and Otorohanga now has one of the lowest percentages of youth unemployment in New Zealand (Sustainable Business Council, 2013).

Similarly, the active leadership of key stakeholders in the leather industry in Bangladesh (see Chapter 9) was a major factor in stimulating an effective and supportive response from government and the donor community. This leadership was more easily harnessed because of the concentration of major enterprises in a geographical cluster, and the ability of the industry-owned Centre of Excellence to support a network of firms in the implementation of apprenticeships in that area.

There are a number of methods of developing a supportive, stakeholder-led infrastructure of local actors in the apprenticeship system. In Western Australia (see Chapter 5), a core employer identified skills shortages in the local building and construction industry as a result of the attraction of labour to the booming mining industry. The employer then specifically approached the regional government to develop a discussion committee that included representatives of the state government, industry councils and associations and unions. As a result, the regional apprenticeship system was reformed to allow the recognition of previous qualifications from apprentices and the development of enterprise specific competence-based learning frameworks. In this case, direct engagement from employers was necessary to build a strategic partnership to align the goals and needs of the relevant stakeholders.

Granting concrete powers to regional and local governments to develop the priorities for apprenticeships can also be effective. For example, the devolution of national powers to local regions in England has allowed city areas to independently develop and implement apprenticeship and skills policies. In the case of Manchester and the Greater Leeds city regions (see Chapter 2), new local powers enabled the development of grant schemes to employers that supported the economic priorities of each local area. They were also able to emphasise high-quality apprenticeships by prioritising advanced or higher apprenticeships or those with career progression opportunities. They also enabled the local regions to specifically target core social groups, including young people with ethnic minority origins. However, while locally developed apprenticeship frameworks are more able to suit individual enterprises and local needs, they may do so at the expense of greater occupational and labour market mobility facilitated by wider sector/occupational-based frameworks.

Figure 1.3. Key components of successful local employer engagement strategies

Flexibility in programme delivery is essential to ensure that apprenticeship programmes can respond to local demand

Employers and young people in local areas have different needs depending on local regulations, industrial structure, geography, labour markets and education systems. National and regional schemes must have enough flexibility to respond to local variation in the supply and demand of skills. Building flexibility into local apprenticeship programmes can involve adapting delivery and assessment arrangements, administrative and bureaucratic procedures and methods of programme delivery.

Many OECD countries have incorporated flexibility into apprenticeship programmes through increased modularisation of off-the-job training. This allows the programme offering to be tailored to the custom needs of the apprentice as well as the specific skills requirements of the local region. This trend can be observed in Denmark, Italy, the Netherlands and Poland where local VET provision increasingly varies according to region and local education providers (CEDEFOP, 2015c).

Another feature of programme design that can improve local engagement is improving access to flexible options for training for employers with seasonal or variable operations. The case study from Germany in this publication (Chapter 4) shows how employers with seasonal or variable demand offer more training places to aspiring apprentices when they were able to do on a part-time basis, which also allowed the apprentice to pursue other activities alongside work-based training. This feature is of particular interest to employers in rural areas that may experience more variable demand, as noted in the case studies from Norway and New Zealand (Chapters 3 and 6).

The German dual system also allows some apprentices the option of flexibly completing work-based training through intensive blocs if they so choose. This method of building flexibility into these systems can also help to tailor modules and curricula to local skills needs. This may also suit the desire for flexibility among young people, who may prefer to combine apprenticeships with work or other education opportunities. Other flexible delivery options include apprenticeship programmes for part-time employees, and RPL/accelerated completion options for mature age apprentices and apprenticeships offered to existing workers who wish to expand their skillsets.

Apprenticeship programmes can be tailored to local needs by adapting the method of local programme delivery. For Norwegian apprentices in rural settings, apprentices have had success in completing programme requirements through e-learning platforms. This can reduce the logistical barriers to inclusion faced by apprentices completing work-based training in remote regions (see Box 1.6). The use of ICT by training organisations can also enable the provision of more flexible delivery and assessment platforms for students and employers.

The use of video-enabled devices (tablets, smartphones) and new technologies to capture evidence of skilled performance in the workplace, and the use of SMS and text-based chat systems are improving the level of pastoral care and instructional support available to apprentices. The Government of Canada is also testing the use of these and other innovations, including increased use of videoconferencing, in-class simulators and flexible in-class training delivery approaches, in order to determine whether they can be used to tailor apprenticeship programmes to local requirements (Government of Canada, 2015).

Box 1.5. Flexible programme delivery in Norway

In Norway, apprentices are now able to complete training requirements, provide documents and access government assistance through specialised e-platforms. One popular system known as OLKWEB has been optimised for use by training offices, who are able to follow up on their apprentices and generate reports that document the apprentice’s activities and outputs. Training providers are able to perform a number of key functions, including:

• Access the contacts and details of member companies.

• Analyse and monitor the apprentice’s progress through curriculum goals provided through traditional means or through the use of films, images and mobile apps.

• Access details of grants and general accounting.

Apprentices are also able to interact with each other through the system, and can use the interface to record meetings and receive information. The employer is also able to monitor the apprentice’s progress in off-the-job training.

In the hyper-rural Norwegian area of Nordland, the customised apprentice interface allows apprentices to fulfill their training requirements without travelling vast distances. E-platforms also remove administrative burdens and allows young people to flexibly complete their apprenticeship requirements.

Flexibility in apprenticeship programme delivery is also necessary in order to address the changing policy environments in local areas. In the case of the local apprenticeship initiatives spearheaded by English city regions, the objectives, mechanisms and targets of the apprenticeship programme were shifted to accommodate the changing demand for skills in the local area. In both the Greater Manchester region and the Greater Leeds City region, the newly developed Apprenticeship hubs were able to pivot towards engaging young people after successful efforts to engage employers resulted in a surplus of apprenticeship vacancies.

Successful apprenticeship programmes must target the specific needs of young people

In order to ensure that apprenticeships and work-based training programmes are as successful as possible, more effort should be made to ensure that they are targeted towards the needs of young people. Young people are a key source of labour supply and programmes that are intended for more mature jobseekers may not be effective in reaching young aspiring apprentices, who may prefer more flexibility or vocational opportunities outside of traditional apprenticeship sectors. Young people also increasingly prefer to pursue and combine a number of activities following compulsory education, (OECD/EC, 2013).

In this context, increasing the amount of modular or unitised apprenticeships and education programmes, wherein the training and competence requirements of programmes are met through flexible combinations of units and modules, could be an effective method of meeting the needs of young people. A broad assessment of trends towards modularisation and unitisation in apprenticeship programmes across Europe found that the new structures have resulted in increased flexibility to the perceived needs and demands young people, particularly with respect to programme duration and multiple entry and exit points (CEDEFOP, 2015c). In many cases, modularised VET was initially targeted towards young people with disadvantages to help them engage with apprenticeships in a method customised to their needs.

Modularised and competency-based apprenticeship programmes also provide the opportunity for early completion based on the achievement of competence rather than the completion of a programme of fixed duration. While the needs of employers must be considered when reducing the period of apprenticeship, the potential for early completion can be an attractive option for young people. Increasing the range of occupations through which apprenticeships are offered is also a way to increase the attractiveness of apprenticeships to young people. New and emerging sectors, particularly in the service sector, are a rich source of potential growth for apprenticeships and provide the opportunity to rebrand through social marketing.

Additional attention should also be paid to flexible delivery arrangements which provide different options for apprentices to undertake their off-the-job training. Evening and weekend classes, mobile and on-site training facilities coupled with part-time apprenticeship options provide greater choice for young people and employers to participate in programmes designed to suit their needs.

In broad terms, young people with social or physical disabilities, low educational attainment, non-native background or low socio-economic education tend to face greater challenges in engaging with the post-secondary education system. These challenges can be magnified when engaging in apprenticeships, which typically involve structured participation in both vocational education and embedded on-the-job training. Some barriers to engagement in apprenticeship for disadvantaged young people can include (Buzzeo et al., 2016):

• Financial issues;

• Prohibitive entry requirements;

• Lack of basic skills;

• Attitudes and behaviours towards work;

• Lack of awareness of the value of apprenticeship;

• Lack of pastoral care or support.

While vocational education pathways tend to have higher percentages of students of low socio-economic background and low educational attainment, these groups also have lower participation and completion rates (Ainley, 2010). This indicates a need to improve the quality of vocational education pathways such that young people with disadvantage have support to successfully complete apprenticeship programmes and transition into employment. The use of “pre-apprenticeship” programmes that address basic skills deficits and sensitise apprentices to the occupation and sector that they are about to enter have also been found to increase completion rates.

Non-completion of apprenticeships is also an issue for employers who lose the opportunity to recoup their investment when an apprentice fails to complete the programme. Enhanced completion rates have been achieved for apprentices who have undertaken some form of pre-apprenticeship programme that introduces apprentices to the sector and provides guidance on practice-based learning prior to employment in a workplace (Cannon, 2015).

Box 1.6. Apprenticeships in rural areas: Broadening access for young people

Young people in rural areas face a number of specific barriers to engagement in the apprenticeship system, including:

• Limited access to off-the-job vocational education providers.

• Logistical difficulties associated with traversing long distances to reach training commitments.

• Limited access to career guidance and information.

• Limited access to public employment services or youth services.

• Fewer employment, higher education and training opportunities.

Young people in rural areas are also more likely to be in low-paid or insecure employment or employed within SMEs than urban youth, indicating a need to improve access to quality jobs and employment within rural areas.

Rural areas have differed in their approach to assist local youth to successfully complete apprenticeships. In the New Zealand town of Otorohanga, these challenges were addressed by providing local training support and assistance to aspiring apprentices. The town established a local satellite campus of the vocational education provider while also providing mentorship and guidance to aspiring apprentices. In contrast, the Norwegian region of Nordland pursued a flexible model to allow apprentices to complete programme requirements through e-learning platforms. Public transport and home sharing services also serve to overcome some of the logistical barriers associated with rural areas.

Source: Commission for Rural Communities (2012).

Young people with social disadvantages or disability, including those who have failed to complete secondary education or those with a migrant or low socioeconomic background, may need more specialised assistance to complete apprenticeships. Young people, particularly those who are disenfranchised, often require pastoral guidance and support throughout the transition from school to work. Examples from New Zealand, the United States and Australia found that embedding mentorship and guidance into the apprenticeship programme helped to increase participation and completion rates. The New Zealand case study found that support from trusted local figures of authority is also perceived to be more effective than services provided from regional centres.

The German federal state of Hamburg has had some success with addressing the needs of young people who are not in employment, education or training (NEETs) by developing custom youth employment services. The federal government has partnered with a vast coalition of social partners, employer groups and government agencies to streamline programme delivery through a “one-stop- shop” of employment services for young people. Young people can choose to have their data shared between agencies to access integrated employment assistance as well as custom supervision and advisory services.

Young people with social or physical disadvantages tend to exist on the margins of mainstream institutions and apprenticeship opportunities may not be visible to them. Conventional information dissemination mediums, including schools or government institutions, may not necessarily reach them. As a result, successful programmes should partner with intermediaries such as youth organisations, who may also have specialised local knowledge regarding the needs and desires of disadvantaged young people.

A method increasingly pursued across European countries to include young people with disadvantage into apprenticeship programmes are work integration social enterprises (WISE). WISE are programmes that aim to provide work-based training opportunities for people with disadvantages, including young people with social and physical disabilities or lacking a secondary leaving certificate. WISE programmes operate on a not-for-profit basis in the private training market and aim to integrate disadvantaged persons into the world of work by providing them with opportunities that are tailored to their needs and skills. The focus on job-ready skills acquired through active employment is central to ensure that disadvantaged youth remain engaged with employment during the initial apprenticeship period (European Commission, 2015).

Apprenticeship programmes are a key skills development mechanism to tackle informality

Apprenticeship structures and systems vary among and between developed and emerging economies. While formal apprenticeship systems do exist in some emerging economies, in many cases they only cater for small numbers and are outside of the formal VET system. In such cases, apprenticeships in the informal economy typically offer many more young people an opportunity to learn a trade and enter the world of work. In many emerging economies, these informal or traditional apprenticeships are the largest provider of skills for the mostly informal labour market (ILO 2011a).

Practices in informal apprenticeship vary according to local context. In some African countries, apprentices are trained in specific skills for a shorter period of time rather than in all skills relevant for an occupation over a longer period of time. In many cases, the apprentices pay a fee. In West Africa, more structured systems of informal apprenticeships exist, which culminate in graduation ceremonies that involve other members of the community. Given the lack of official records on informal apprentices, most countries where this system exists have only rough estimates of the number of apprentices in the informal economy. Within the informal economy, apprenticeships are not unorganised but social rules and local traditions provide a conducive framework for training to take place. However, informal apprenticeship systems are typically characterised by low quality training and various decent work deficits that can lead to exploitation (ILO, 2012b).

The case studies of apprenticeships programmes in Bangladesh (Chapter 8) and India (Chapter 9) in this publication highlight the specific challenges faced when trying to develop an apprenticeship system in developing countries. These challenges include the limited tradition of employer engagement in skills development, poor governance and co-ordination, and limited integration of apprenticeship training into the formal vocational education and training system. These constraints are compounded by high levels of informality, weak links between training organisations and employers and relatively low levels of basic and foundation skills among jobseekers. In developing countries, limited access to training places, low quality and limited programme relevance have led employers, students and parents to see formal VET as an unattractive choice.

However, as increasing attention is paid to improving the quality and relevance of vocational training and reducing informality in developing countries, the reform of skills systems is increasingly including a focus on formalising informal apprenticeships so they can be upgraded to more legitimate pathways for learning and school-to-work transition (Comyn, 2015). In South Asia for example, while countries such as India, Pakistan, Bangladesh and Sri Lanka have formal apprenticeship systems, they are based on archaic regulations and severe penalties for non-compliance as well as limited enterprise eligibility and participation, thus contributing to the on-going participation in the informal apprenticeship systems outside of those governed by formal apprenticeship legislation (ILO, 2013).

In this context, and as outlined in the Bangladesh case study in this publication, efforts are needed to improve and expand informal apprenticeship systems so a greater number of quality training and employment places are available for more young people. ILO experience in strengthening informal apprenticeships has found that steps can be taken to:

• Complement learning at the workplace with more structured institutional learning;

• Upgrade the skills of master craftspersons, e.g. by introducing them to modern technology and on-the-job training techniques;

• Introduce formal assessment and certification systems;

• Introduce standardised contracts of employment and codes of practice to address deficits of decent work;

• Strengthen community involvement, especially with a view to increasing opportunities for young women;

• Include literacy/numeracy training and livelihoods skills; and

• Involve business associations and labour organisations, especially those representing the informal economy (ILO 2012b).

A key strategy for upgrading informal apprenticeship systems is to foster improvements from within the existing system. If small business associations exist, they need to play the primary role in upgrading informal apprenticeships. Any outside intervention in informal apprenticeship systems must be based on a sound understanding of local practices and of the incentives to participation for both master craftspersons and apprentices in order to avoid the risk of destabilising what is in many cases the most significant skills development system in that industry, sector and country (ILO, 2013a).

In emerging economies, there is also potential for third-party actors to develop sustainable apprenticeship programmes alongside the conventional employment and skills system. This can occur in both the formal and informal economy. In emerging economies that do not have a well-developed formal vocational education and training system, apprenticeship programmes administered through intermediaries have proven to be an attractive option. Egypt, for example, has a well-established alternative apprenticeship system that is managed by the Egyptian Federation of Building and Construction Contractors.

Whether part of a formal system or not, the importance of active engagement of business and labour organisations is a well-established success factor in apprenticeship systems in both developed and emerging countries (ILO 2012b). In the case study on Turkey (Chapter 7), the establishment of the GAN national network as part of the Global Apprenticeships Network (GAN) highlights the potential benefits of integrating both formal and informal apprenticeship systems. It also highlights the important role that employer associations can play in facilitating and supporting member companies to participate in apprenticeship schemes. However, the existence of formal employer apprenticeship networks are not necessarily a guarantee of success.

Earlier ILO research in Indonesia noted that while Apprenticeship Forums were supposed to operate in all of Indonesia’s 33 provinces, they were weak and barely functioning in many areas due in part to the lack of a clear national policy framework and the absence of clearly defined roles in the system for social partners (ILO 2013). As noted in ILO (2015a) the success of the regional forums has depended entirely on the dedication of the people appointed as co-ordinators in the provinces. While OECD countries are exploring ways to deepen the level of collaboration in local areas, limited local institutional capacity in some emerging economies coupled with weak labour market information can dampen the potential for local collaboration on apprenticeships.

Box 1.7. Global Apprenticeship Network

The Global Apprenticeships Network (GAN) was founded with the aim of promoting work-based training and improving the status of apprenticeship programmes. It also aims to provide a method of sharing best practices among countries at the local, regional, national and international levels. The GAN is co-ordinated by the International Organisation of Employers (IOE) with the support of the International Labour Organisation (ILO). Major corporations involved with the GAN include Adecco Group, Astra International, Ericsson, GI Group, Hilton Worldwide, Huawei, IBM, Mastercard Foundation, Nestlé, Randstad Holding, Samsung, Telefónica and UBS.

At the national level, the GAN acts through national networks, which helps them to act quickly and agilely to disseminate new ideas and best practices. It also enables advice and assistance to be tailored to the national regulatory framework.

The first three national networks were:

• Turkey with 25 member companies.

• Indonesia with 19 member companies.

• Spain with 29 member companies.

Other national networks have been established in Colombia, Argentina and Mexico, with preparatory work underway to establish national networks in Malawi, Tanzania, Nigeria and Namibia.

Source: www.gan-global.org.

However, as detailed in the case study on Bangladesh in this publication, revitalisation of apprenticeships in the leather industry occurred as a result of leadership from key industry associations and enterprises in the sector with support from development partners, and was subsequently integrated into the formal apprenticeship system with support of the government and the national skills regulatory body. The industry associations were instrumental in establishing an industry-led training centre which acted as a broker for the new apprenticeship scheme. The centre took an active role in working with individual firms in the cluster to identify training places and establish a network for apprenticeships in the sector. Participating firms have reported reduced labour turnover and reduced skills mismatch as a result of participating in this new industry-led apprenticeship scheme. A key success factor that influences employer engagement in apprenticeship systems is thus the extent of their role in delivery, assessment and certification arrangements.

In the cases of Turkey and Bangladesh, the respective roles of TESK and COEL (Centre of Excellence for Leather Skills Bangladesh) in conducting assessments of apprentices across the sector ensured strong engagement with the system and parallel promotion and marketing of apprenticeships throughout their industry networks. The importance of this assessment role has also been highlighted in earlier ILO work in Africa, Asia and Latin America (for example, see: ILO, 2015) which has supported the active engagement of industry bodies, including in the informal sector, to lead the development of improved delivery, assessment and certification arrangements for apprenticeships. As noted in ILO research (2015b), assessment at the end of an apprenticeship should involve tripartite actors and certification of successful completion of apprenticeships should be recognised nationally, an ideal which is not always achieved in either developed or developing countries.

In emerging economies, the eligibility of enterprises and employers to take on apprentices is also a key factor influencing the extent of industry engagement. The case study on India (Chapter 10) shows that requirements surrounding supervision ratios, enterprise size, workplace training facilities and occupational coverage were key barriers to employer engagement in the system. In many developing countries, the legislative and other responsibilities of employers in apprenticeships are set out in a complex array of industrial laws (ILO, 2013). While the case studies on both Bangladesh and India in this publication found that it was obligatory for eligible employers to take on apprentices under the legislation, compliance was weak, and apprenticeship numbers are low relative to the size of the labour force.

Despite this, reforms have been introduced which increase the number of apprenticeships and participating enterprises, illustrating that even in developing countries there exists considerable potential to utilise the apprenticeship model to improve access to quality training relevant to employers. In both these countries and Turkey, the need to revise and update existing legal frameworks for apprenticeships have been central to efforts to revitalise the apprenticeship systems, for as noted by Steedman (2015), removing regulatory uncertainty lowers the transaction costs of apprenticeships both for employers and for apprentices.

The perception of low quality employment and “lock-in” associated with apprenticeship schemes is also a feature in some emerging economies. Challenging these perceptions can increase employer engagement in this sector. The revitalisation and promotion of the apprenticeship brand by governments and social partners is an important social marketing strategy particularly in developing countries where the status of apprenticeships is low. Initiatives such as the Global Apprenticeship Network (GAN), which has established national networks in Turkey, Indonesia, Spain and Argentina, the European Alliance for Apprenticeships (EAfA) and targeted marketing by sector bodies such as SENAI in Brazil, NAMB in South Africa and industry skills councils in the UK, NZ, Canada and Australia have highlighted the importance of branding and promotion to employers, family and students. In emerging economies, where the introduction of NQFs continues at pace, new opportunities to integrate apprenticeships into recognised learning pathways have emerged. In India, Bangladesh, South Africa and the UK, new apprenticeship credentials are now leading to NQF based qualifications.

Central to effective marketing to employers is the value proposition that apprenticeships present. However, firm level data on the return on investment from apprenticeships is not widely available despite its potential to promote employer take-up of apprenticeships (see for example ILO 2014a). In developing countries however, structured recruitment systems in many firms are absent, thus limiting the immediate potential of apprenticeships to form part of strategic human resource management practices in enterprises. However, despite this, the case studies of India and Turkey demonstrate that through the targeted use of financial incentives and support from intermediaries, steps can be taken to link apprenticeships with the immediate skill needs of enterprises, especially in the formal economy.

In developed and emerging countries, multinational corporations have a particular role in modelling good practice apprenticeship arrangements. The ILO (2014) has highlighted the role of German companies in promoting innovative apprenticeship programmes through active co-operation with community colleges and municipalities in the United States, a similar situation to the Skillsonic initiative in India which involved Swiss firms partnering with Industrial Training Institutes (ITI) and Swiss training organisations with financial assistance from the Swiss government in India. In both cases, well-established enterprise HRM systems and experience with formal apprenticeships in the countries of origin provided multinational corporations with a foundation for introducing formal apprenticeship arrangements through local partnerships in their different countries of operation.

The reform of TVET and skills systems in emerging economies typically focuses on engaging with employers and industry to improve current arrangements. However, in developing countries, the tradition of social dialogue involving employer and worker organisations does not have a strong tradition. As such, the limited capacity of social partners often acts as a barrier to improved engagement of enterprises in the skills system and calls for increased attention to the capacity building of unions and employer organisations so they can more effectively promote the introduction and uptake of apprenticeships. However, as apprenticeships are an option to respond directly to skills needs in enterprises, they can be a more effective vehicle to promote social dialogue on skills development than is possible through other mechanisms (ILO, 2016).

Increasing the participation of employers and individuals involves changing perceptions of apprenticeships

Countries with long histories of vocational education tend to view vocational education as an equivalent, or in some cases preferred, pathway from school to work in comparison to tertiary education. However, in other countries apprenticeship programmes are stigmatised as less worthy educational choices (Brophy et al., 2009; European Commission, 2015b). The UK case study in the publication (see Chapter 2) highlights the impacts of a lack of “parity of esteem” between vocational education and tertiary education pathways which is also a major issue in developing countries. Increasing the engagement of employers and individuals with the apprenticeship system demands that apprenticeships are considered a good method of entering high quality and desirable employment as well as an option for employers to address skills shortages.

Cultural attitudes towards apprenticeships can influence the attractiveness of apprenticeship for young people. In countries with a strong tradition of vocational education where apprenticeships are viewed as desirable and respectable pathways, apprentice candidates tend to have higher secondary education scores (ILO/World Bank, 2013). In contrast, employers and young people can be discouraged from engaging with the apprenticeship system where that training and the employment it leads to is viewed as of low quality. Perceptions can also vary among sectors, businesses and geographical areas – smaller companies in less attractive industries or in declining local areas can struggle to attract suitable apprentices. In England, apprenticeships in industries with a strong history of craft instruction tend to be viewed as more desirable than those in more traditional trades sectors (ILO/World Bank, 2013).

Some of the misinformation surrounding apprenticeships is due to the historical association between vocational education and careers in the trades or secondary sector. As noted in the United States case study (see Chapter 7), the apprenticeships are broadly perceived within OECD countries as typically within blue-collar and male-dominated sectors. Broadening training opportunities to other sectors and occupations may help to improve engagement from both employers and apprentices. The case study from the United States found that training opportunities can boost later career prospects despite an unconventional employer, namely the public secondary education system, and what has been traditionally an unconventional focus, namely information technology. Mohrenweizer and Zwick (2009) found that the net benefits for German employers are actually higher in commercial, trade, craft and construction occupations than for manufacturing occupations, indicating that there might be increased incentive for tertiary industry occupations to pursue apprenticeships if these benefits were made more widely known.

The association between the trades and apprenticeships is further linked to the historical association of apprenticeships with particularly demographic sectors, namely young white men. As noted in the American case study, this perception can discourage inclusion from more diverse aspiring apprentices. This is particularly significant because occupational and sectoral segregation has been found to reduce the economic benefits of work-based training for women (Ryan, 2001). Of the surveyed countries, only the German apprenticeship system has similar entry rates and pay benefits for women (European Commission, 2013), but there are still stark differences in the choice of apprenticeship occupations. This suggests that more needs to be done to broaden access to apprenticeships to equitable and inclusive economic benefits for the full spectrum of young people, including women, who are typically underrepresented in apprenticeship schemes (ILO, 2013).

The German and British case studies in this publication highlight potential negative perception among students and parents that apprenticeships can be inflexible and result in path dependence. Thus, improving perceptions of apprenticeships may require improving the ability of vocational students to transition to other educational or occupational paths to avoid ‘lock-in’. This may involve developing more modular and integrated education systems such that students and apprentices are able to freely move between programmes and between the vocational and tertiary education systems. As noted earlier, developing robust qualification recognition systems and credit transfer arrangements is particularly relevant to ensuring that VET systems have flexible entry and exit points and that apprenticeship programmes provide opportunities for higher level study, as is the case in the UK following recent reforms. To address this, the German VET system has enabled higher vocational attainment and successful as an alternative to secondary leaving certificates as a means of gaining acceptance into university, but this has not been widely adopted. Improving the flexibility of the apprenticeship system can help to improve its responsiveness to shifts in skills supply and demand at the local level.

Adequate support and guidance for young people is necessary to ensure that they have the broadest range of information of future education and career paths following compulsory education. The negative impression of apprenticeships may be partially due to the underdevelopment of career guidance and information. Current career guidance systems at the secondary level across the OECD pay little attention to vocational pathways in comparison to tertiary education (Watts, 2009), indicating that young people may be uninformed about the potential benefits of pursuing work-based career options. The British case study also noted that improving misperceptions regarding the wages and conditions of apprenticeships among both students and parents helped to improve the pool of aspiring apprentices.

As noted by Sweet (2013), countries with large or medium-sized apprenticeship systems tend to have a stronger emphasis on external support, experiential learning and labour market relevance. In Germany, local secondary schools have found success with incorporating skills assessments within career guidance two years before the final compulsory year of education. A focus on assessing hard and soft skills and relating those skills to potential career paths was found to be helpful in directing students towards the most appropriate vocational or general educational pathways. Careers guidance should be embedded throughout the secondary education system to provide coherent and labour market relevant information to enable young people to make the best careers choices (OECD, 2014a). As career and vocational guidance is also provided by public employment services and training organisations in the TVET sector, it is important that they also be included in any systematic approach to providing young people with high quality advice and guidance related to apprenticeship programmes and the career pathways they support. As noted in the British case study, the governance responsibility for career guidance and information should be clear in order to ensure stable and streamlined services to the local community.

Local community leaders and “success stories” can also play an important role in building the “parity of esteem” between apprenticeships and other vocational educational pathways and tertiary pathways following compulsory secondary education. In the New Zealand town of Otorohanga, the former mayor was a key driver of the initiative to improve the participation and completion rates for local apprentices. As a former apprentice himself, he prioritised the celebration of the successful completion of apprenticeships through a formal graduation ceremony. By personally honouring trades apprentices, the mayor played an important role in helping to elevate the status of work-based training paths.

Employers can also play a role in boosting awareness about work-based training opportunities to students at the secondary level. Developing integrated partnerships between workplaces and compulsory secondary education can help to inform students about the world of work and future career opportunities (OECD, 2010). The New Zealand and Australian case studies highlight the utility of using local employers to highlight the apprenticeship opportunities available in the local community. In particular, the Otorohanga community had great success with a careers fair that highlighted a range of work-based training opportunities in a variety of sectors from the local sector, ranging from accounting to the dairy industry. This stimulated engagement from both aspiring apprentices and local businesses and allowed both actors to develop an immediate and close relationship. Alongside other initiatives, the careers fair was credited with improving both the participation and completion rates for apprenticeships in the area.

Career guidance and information should also be incorporated into apprenticeship programmes to inform apprentices about the future applications of their acquired skills and importance. Career advice throughout the process is particularly important in inflexible education systems, where VET pathways can “tighten” career prospects (Watts, 2009). Alongside a robust and flexible apprenticeship system, the provision of career guidance to apprentices can increase retention rates by allowing them to shift to different paths instead of dropping out altogether. The provision of additional support to highlight the self-employment potential of graduate apprentices is also an important strategy to increase completion rates and deliver successful employment outcomes from apprenticeship programmes.

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