Chapter 3. OECD Skills Survey of Australian Employers
This section of the report presents findings from the OECD survey of Australian employers regarding apprenticeships. The results provide useful insights on the use of and the barriers to apprenticeships schemes. 95% of the 407 employers completing the survey were SMEs who have primary business operations catered to their local economic area.
OECD survey of Australian employers regarding skills and apprenticeships
Overview and characteristics of the respondents
In co-operation with the Australian Department of Education and Training, the OECD conducted an online survey among employers regarding their skills needs and evolving demands. A suitable sample was identified from the Australia Business Register database, and the survey was implemented from October to December 2017. Several multiple choice and closed-ended questions were asked as part of the survey, with the objective of better understanding employers' perspectives on skills development programmes.
While the results from the OECD survey cannot be generalised, they can still provide relevant insights on the use of and barriers to apprenticeships in key sectors, such as the construction sector.
This chapter will present the results based on 407 respondents (employers) who completed the entire survey. As shown in Table 3.1, the majority of the respondents come from South Australia and Western Australia, followed by Queensland, Tasmania and New South Wales. 95% of employers who completed the apprenticeship survey were small and medium enterprises (SMEs).
Source: OECD Survey, Australia 2017.
The majority of the firms who participated in the survey were from the construction industry (132), followed by other services, manufacturing, electricity, water, and waste services (Table 3.2). There are very few employers in mining, wholesale trade, and administrative and support services who completed the survey.
Most of the employers surveyed had a similar number of employees in the past year. More than one in two employers in NSW responded that the number of employees in the company had increased compared to the previous year. This potentially points to a relatively stable employment situation among the employers who responded to the OECD survey. Given that nearly 50% of the employers who completed the survey are small in size (e.g. reporting 2-9 total employees) and that at least 80% employers reported that the firm size has remained the same or grew in the last year, this indicates that the survey mostly included firms that are not shrinking in size (Figure 3.2). This pattern holds true across most of the industries (Figure 3.3). About one in two employers in the construction sector reported growth in their company based on the number of workers in the past year. Most of the participating employers cater to a given local area or within the states (Figure 3.4). Except for 4% of the employers who cater to clients across the globe, the rest of the respondents cater towards local demands or within Australia.
Source: OECD Survey, Australia 2017.
Source: OECD Survey, Australia 2017.
Source: OECD Survey, Australia 2017.
Employers' perspectives on skills demand and apprenticeships
Figure 3.5 indicates that the majority of the surveyed employers are looking for advanced literacy and numeracy skills, followed by basic literacy skills, problem solving skills and advanced IT skills. Nearly 70% of the employers are looking for advanced literacy skills among apprentices. Some of the relatively less demanded skills include foreign language skills, social and emotional skills, technical skills specific to the job, management skills and manual skills specific to the job. Most of the employers chose advanced skills as important, rather than technical and manual skills that are specific to the positions. This can be partly explained by the fact that employers expect to train apprentices to develop these specific skills during their apprenticeship.
Source: OECD Survey, Australia 2017.
As shown in Table 3.3, small businesses run by the owner may not have sufficient resources to offer apprenticeships regardless of their needs. Around 80% of small and medium-sized employers in the survey responded that they had apprentices in the past year. The likelihood of apprenticeship offers is the highest among large firms with more than 100 employees where 9 out of 10 employers responded that they offered apprenticeships. Large firms may have the capacity and the resources to systematically train and mentor the trainees as well as handle administrative tasks involved with offering apprenticeships.
Figure 3.6 show that surveyed employers consider the lack of time and resources as the most common barrier for offering apprenticeship opportunities, despite government initiatives such as the Australian Apprenticeship Support network (AASN) and the Australian Apprenticeship Incentives Programme (AAIP). 21% of employers who completed the survey chose this as the reason for not offering apprenticeships. About a quarter of the employers also cited that apprentices lack either the skills (15.8%) or off-the-job training (7.9%) to meet the needs of the firm. 11.8% of the employers attributed having a past negative experience as a reason for not offering apprenticeships. Another 11.8% of the employers responded that having apprentices cost them too much and another 2.6% reported that they lacked the information in finding and taking on apprentices.
As shown from these responses, lacking relevant skills and high administrative burden and/or lack of resources for employers may lead to low apprenticeship opportunities and take up rates. There does not seem to be a huge variation across states in terms of apprenticeship opportunities. About 9 out of 10 employers in ACT (who participated in the survey) offered apprenticeships, followed by Northern Territory and Southern Australia. A quarter of employers in Western Australia, Victoria, and Tasmania did not offer apprenticeships.
Source: OECD Survey, Australia 2017.
Source: OECD Survey, Australia 2017.
All Australian employers who completed the survey offered apprenticeships in the past year across all sectors except for mining. The share of apprenticeships offered varies from 20% (Financial and insurance services) to 100% (Figure 3.8). This indicates that apprenticeship opportunities are available across various industries and sectors that traditionally did not have as many apprentices. The average number of apprentices hired in the past year ranges from 21 (Northern Territory) to 69 (South Australia). This is in line with the earlier figures where the Australian Capital Territory and Northern Territory have the lowest number of apprentices in training.
Source: OECD Survey, Australia 2017.
Source: OECD Survey, Australia 2017.
At least one out of two employers surveyed in all Australian states and territories reported that they plan to offer the same or more number of apprenticeship opportunities in the future (Figure 3.10). In Victoria and New South Wales, two states that have the highest projected employment growth rate in the upcoming years, about 50% or higher share of employers responded that they would like to offer more apprenticeships than what they currently do.
Source: OECD Survey, Australia 2017.
The number of employers who responded that they usually keep apprentices on payroll once the apprenticeship is over ranges from 20 in Northern Territory to 65 in South Australia, for a total of 331 out of 407 surveyed employers (Figure 3.11). In South Australia, 32 employers responded that they keep 100% of the apprentices, which is a higher share than other states like Queensland and Western Australia. Overall, at least 50% of surveyed employers in all states and territories retain at least 75% of the apprentices on payroll when the training is done.
Source: OECD Survey, Australia 2017.
Some industries are more likely to keep the apprentices than others. About 70% of the employers in the construction, manufacturing, and accommodation and food services industries reported that they keep at least 75% of the apprentices on payroll. On the other hand, Financial and insurance services, Public administration and safety, and Wholesale trade tend to have a higher share of employers reporting that they keep less than half of the apprentices (Figure 3.12). The retention rate of apprentices seems to be inversely correlated with firm size (Figure 3.13). 71 small sized firms (with 2 to 9 employees) reported that they kept 100% of the apprentices whereas less than 5 large sized firms (100 or more employees) reported doing so. This could suggest that SMEs benefit a lot from apprenticeship training and have high demand for apprentices and trainees.
Source: OECD Survey, Australia 2017.
Source: OECD Survey, Australia 2017.
When employers are asked to choose a maximum of three anticipated gains from having apprenticeship training, 70% of them responded that they try to maintain or improve future skill levels of their organisations (Figure 3.14). About 35% of the employers cited improved productivity levels and another 30% cited improved retention as a potential benefit from the apprenticeships. Improving the morale or image of the industry sector was not the top reason to have apprenticeship training from the employers' point of view.
Source: OECD Survey, Australia 2017.
On their main concerns about the current apprenticeship programme, nearly one quarter of the employers answered that they did not have any (Figure 3.15). The top commonly cited concerns about the current apprenticeship programme are poor collaboration with training organisations, inadequate off-the-job training by some of the apprentices and dropout. This suggests that training needs to be more aligned with industry demands and that stronger collaboration with the training sector is required.
Source: OECD Survey, Australia 2017.
Accordingly, many employers in the survey expressed strong interest in establishing partnerships with training providers for the design of training programmes. More than 250 employers indicated that they are somewhat or very interested in doing so (Figure 3.16). Also, the employers expressed interest in forming partnerships with government agencies and other employers but not as much as with the training providers.
Source: OECD Survey, Australia 2017.