Overview: Making apprenticeships work

Chapter 1: Can apprenticeships provide a useful contribution in every country?

The challenges arising with apprenticeship implementation depend on contextual factors

There is wide variation across countries in the use of apprenticeships. Many countries seek to promote apprenticeships to facilitate school-to-work transition or to offer opportunities for adults to re-skill and upskill. Building apprenticeships in countries where apprenticeships are uncommon, or creating new programmes in economic sectors that typically rely on other forms of training, is challenging. However, some simple principles underpin effective provision:

• Social partners, notably professional bodies, should be involved in the design and implementation of apprenticeship schemes. This is essential to encourage their engagement with apprenticeships and ensure that programmes are suited to their needs and employers’ capacity to provide placements.

• Competition between apprenticeships and alternative learning pathways (e.g. school-based programmes, post-secondary or tertiary education) needs to be fair.

• Apprenticeships are easier to implement where formal qualifications bring substantial benefits to the learner.

The design of apprenticeship schemes can be adapted to suit different contexts

There are many ways of organising apprenticeship schemes. The challenge is to identify an approach that works for both employers and learners. The country context matters, as do sectoral and firm characteristics, notably the size of the enterprise. The optimal design features (e.g. choices concerning wages, duration and funding) will often vary depending on these factors.

• The parameters of apprenticeship schemes can be adjusted to ensure that an apprenticeship is attractive to both employers and prospective apprentices.

• Analysing the costs and benefits of apprenticeships can inform the design of new schemes and the reform of existing schemes. Undertaking surveys to measure the costs and benefits of apprenticeships to employers can provide empirical evidence to inform policy making.

Chapter 2: Should employers receive financial incentives for providing apprenticeships?

Financial incentives to encourage employers to take on apprentices should be used with caution

There is a strong argument for governments to dedicate public resources to support apprenticeships, given the role of apprenticeships in preparing individuals for a job and a career, and the wider social benefits that apprenticeships yield. Many countries face the challenge of securing enough apprenticeship placements in firms. As a result, financial incentives have been widely used to encourage employers to offer more placements. Whether the use of financial incentives is desirable depends partly on the targeted policy objective.

Financial incentives may be offered to reward firms that recruit apprentices, in recognition of the fact that they shoulder a burden that would otherwise be carried by the state: the task of preparing young people for a career. This rationale may underpin incentives offered to all firms that take apprentices, regardless of the impact of the incentives on the provision of apprenticeship places.

However, international experience suggests that financial incentives should be used with caution and carefully evaluated.

• Universal incentives, which give all firms that take apprentices a fixed sum, have a small impact on firms’ provision of apprenticeship places.

• Targeted incentives are designed to focus resources on placements that would not be offered in the absence of incentives: they may reward firms that take apprentices with certain characteristics (e.g. disadvantaged youth, disabled people) or be available only to certain sectors or types of firms (e.g. small firms). In theory, such incentives may have more impact, but they are costlier to implement and their effectiveness will depend on how precisely the scheme is designed. When targeted incentives are used, their impact should be carefully evaluated and compared to alternative tools (e.g. supporting training capacity in firms).

• Employers may have an interest in setting up a levy to share the costs of training between firms when the labour market is tight and it is hard to find skilled employees on the external labour market. Employers may also face a high risk that other firms will poach their fully trained apprentices. Money collected through a levy may then be used to offer incentives to employers taking on apprentices.

To encourage employers, governments should aim to improve the apprenticeship cost-benefit balance through system design, support and capacity building

Attention should focus on non-financial incentives that improve the cost-benefit balance to employers, such as readjusting the design of apprenticeship schemes and enhancing training capacity in companies. Governments and social partners can support smaller employers by:

• Encouraging employers to find ways to share the responsibilities and risks associated with the provision of apprenticeships.

• Promoting bodies that work with groups of small employers to co-ordinate training.

• Supporting small employers with the administration and provision of apprenticeships.

International evidence offers limited support for the use of financial incentives, but there are many other ways of making apprenticeships appealing to employers. Design features of apprenticeship schemes can be adjusted so that they work better for employers (as set out in Chapter 1), and these can be augmented by capacity-building measures that aim to support employers and get the best out of apprentices.

Chapter 3: What is the right wage for apprentices?

Apprentice wages should reflect the cost-benefit balance of different apprenticeships

Apprentice wages represent the largest share of the costs of apprenticeships to employers, so their level will impact firms’ willingness to take on apprentices. Apprentice wages need to be set at a level that when all other costs (e.g. trainer’s wages, training equipment and administrative costs) are included, employers can expect to recoup the total cost of apprenticeships through the productive work of apprentices and the prospect of recruiting the best apprentices as skilled workers.

Allowing apprentice wages to vary across occupations is desirable because the cost-benefit balance of apprenticeships to employers varies across occupations, and room for variation allows wages to help match supply to demand.

• Governments should not impose an overall level of apprentice wages, (although it may want to set a minimum wage to protect against exploitation) instead wage setting arrangements should allow for variation across sectors and occupations.

• Apprentice wages should gradually increase over the programme, as apprentices become more skilled and their productivity improves.

Apprentice wages should also reflect the characteristics of apprentices and policy priorities

Apprentice wages need to be low enough to encourage companies to offer apprenticeships, but high enough to attract apprentices. From the point of view of potential apprentices, the attractiveness of the apprentice wage depends on their needs and how the apprenticeship compares to alternative career pathways available to them.

• Where youth apprentice wages are low, governments should ensure that they are balanced by extensive benefits to the young apprentice in terms of the quality of the learning opportunities with the employer.

• When policy efforts aim to increase the use of adult apprenticeships, measures should be devised to ensure that the apprentice income is sufficient to make the apprenticeship affordable for adults. This should be based on analysis of the relevant costs and benefits of particular target groups (e.g. by employment status and age) and may include financial support, on top of wages, for adult apprentices.

Chapter 4: How long should an apprenticeship last?

Apprenticeship duration should reflect the targeted occupation

Over the duration of an apprenticeship, apprentices need time to develop the targeted skillset, but once they have acquired those skills they have an interest in becoming a qualified skilled worker as soon as possible. Employers, on the other hand, need time to train apprentices on the job and put apprentices’ newly developed skills to use by engaging them in productive work. This productive work, particularly in the later stages of an apprenticeship, typically compensates for employers’ earlier investment into training. How long it takes to develop occupational skills and how those skills can be used in productive work varies across occupations.

• The duration of apprenticeships should be adapted to reflect the targeted occupation, in particular how apprentice productivity evolves during training.

• In occupations that target a more complex skillset and where more time is needed to master skills, a longer duration will be more appropriate.

Some flexibility in duration should be allowed to accommodate for different starting points and learning speeds of apprentices

Apprenticeship schemes are typically built around the needs of the main target population. However, some apprentices have a different background, for example, adults starting an apprenticeship in a country with a large youth apprenticeship system. The profile of the apprentice population within the same country can also change, for example through migration, creating a need to adapt schemes to the learning needs of apprentices.

Individuals who have some of the skills targeted by an apprenticeship programme can benefit from the possibility of adjusting the length of programmes to reflect some degree of prior learning. Policy options include:

• Encourage the possibility of accelerated completion to recognise that some adult apprentices already have many general and occupation-specific skills. This may be supported by creating framework conditions for apprentices with relevant work experience, rather than leaving everything to individual negotiations.

• Ensure that the package associated with shorter apprenticeships is attractive to both employers and apprentices.

Allow access to the final qualifying examination of an apprenticeship

Some individuals, particularly adults with relevant work experience or apprentice dropouts, will have most of the skills targeted by an apprenticeship programme and effective systems will respond to their higher levels of ability. For such people, even a shortened programme may seem too long. A more suitable path may involve topping up skills and filling in gaps through targeted preparatory courses prior to final apprenticeship examination. In those countries which allow direct access to examination without requiring participation in a full apprenticeship programme, participation rates are high.

Chapter 5: How to ensure a good learning experience at work?

The training capacity of employers must be built and supported

The quality of the learning experience in workplaces has a huge impact on the overall quality of apprenticeships, as apprentices spend much (and indeed, often most) of their time with an employer. But while schools are built around the objective of teaching, workplaces are designed primarily to produce. Taking on and training apprentices while continuing with day-to-day production activities is demanding for employers.

• Training capacity should be supported, helping employers to deliver high-quality training to apprentices. This support may be facilitated through public policy, through collective action by firms (e.g. sectoral bodies, employer organisations or unions) or a combination of both. Targeted training should be offered to apprentice supervisors.

• Stronger training capacity in workplaces benefits apprentices by ensuring that all have a high-quality learning experience at work, meaning that they can develop the technical and softer skills targeted by the programme that will equip them for successful careers.

• Employers can benefit by strengthening their training capacity through a better integration of apprentices into the production process. In firms that are better at training, apprentices develop skills faster. Where learning is better integrated into productive work, apprentices can practice and hone their skills, while also contributing to output.

Apprenticeship assessments must be rigorous

When an employer takes on an apprentice, it commits to develop the skillset targeted by the programme. Employers have some degree of autonomy over how they organise their apprentice’s time on the job, as long as they cover that skillset. This autonomy needs to be balanced by rigorous assessments to check that all apprentices have developed the desired skills by the end of the programme.

One challenge is that occupations targeted by apprenticeships require a wide range of skills, including practical technical skills, which are often expensive to test directly, and soft skills (e.g. how to deal with an awkward client), for which traditional paper and pencil tests are poorly adapted. As a result, these aspects of the targeted skillset are often inappropriately assessed in examinations.

• Standards and procedures for assessment should be established to support clear and reliable qualifications. These should cover issues such as: what skills are assessed, how the assessment is conducted, and who will carry out the assessment. Mechanisms are necessary to ensure consistency in standards and in the use of the assessment in different parts of a country and at different points of time.

• Given the wide range of skills required by many occupations targeted by apprenticeships, assessments should incorporate, whenever possible, tests of the full range of skills required in the target occupation. These should include skills not adequately measured by traditional written and oral assessments, including practical technical skills and soft skills.

Chapter 6: How to make apprenticeships work for youth at risk?

Apprenticeship schemes need to be designed in ways that address the needs of youth at risk, while remaining attractive to employers

To realise the full potential of apprenticeships for youth at risk it is important to ensure that the prospect of taking on a young person at risk aligns with the business interests of enterprises. This requires shifting the balance of costs and benefits to employers to make it more attractive for them to offer opportunities to this group. International evidence suggests that this is best done through non-financial measures.

Changing the parameters of apprenticeship schemes (e.g. apprentice wages, duration, how apprentices’ time is spent) can help make apprenticeships for youth at risk more attractive to employers. This may be implemented by:

• Creating a targeted apprenticeship scheme with a modified design that is suitable to the specific needs of youth at risk and is attractive to employers, for example, a shorter programme.

• Putting in place preparatory programmes (pre-apprenticeships) and support measures for youth at risk enrolled on regular apprenticeship schemes.

Youth at risk often need preparatory programmes to get them ready for an apprenticeship

When apprentices are well prepared, for example, they have caught up with any gaps in literacy or numeracy, have carefully chosen their target occupation and are ready to operate and learn in a real work environment, they will be more attractive in the eyes of potential employers and have more chance of completing their training. Many countries pursue extensive pre-apprenticeship programmes to this end.

• Pre-apprenticeship programmes encourage and offer financial resources to prepare youth at risk for apprenticeships.

• Given the diversity of approaches in this area, and the limited evidence base, new initiatives should be piloted and evaluated with the most effective programmes rolled out.

Youth at risk often require additional support over the duration of the apprenticeship

Youth at risk are more likely to drop out of an apprenticeship. This is likely to be to their own detriment and that of their employer. Dropout can be the result of both academic and personal difficulties. Consequently, youth at risk should be provided with additional support which might include remedial courses (e.g. in literacy and numeracy), mentoring and coaching. Employers should also be helped to build their capacity to provide apprenticeships for youth at risk. This might include support on how to handle difficulties that may arise with apprentices (e.g. through mediation), and how to put in place effective training for supervisors.

Chapter 7: How to attract potential apprentices?

Quality matters in making apprenticeships attractive

Achieving high-quality and high-status apprenticeships requires the creation of a virtuous circle in which investment in the quality of a programme leads to better employment prospects and earnings for the learner, which in turn attracts more high-ability candidates into the programme. This flow of high-ability students further improves the status of the programme and its attractiveness to employers, who will come to see it not only as high-quality education and training, but also as a means of recruiting able young students. This will further improve the labour market outcomes from the programme.

Career guidance is an essential feature of apprenticeship policy

Career guidance is both an individual and a social good: it helps individuals to progress in their learning and work, but it also helps the effective functioning of labour and learning markets and contributes to a range of social policy goals, including social mobility and equity. This justifies public investment in career guidance activities.

Strategic use of career guidance will broaden aspirations and challenge stereotypes

Effective career guidance services have a positive influence on the educational and employment outcomes of young people (Hughes et al., 2016[7]). The question of what makes career guidance effective has been considered by the OECD and other researchers extensively over the last ten years (Musset and Mytna Kurekova, 2018[6]). Some of the common challenges facing countries include the risks that career guidance is marginalised within school life, and that services are under-resourced and/or delivered by poorly trained staff who may lack objectivity and/or knowledge of the labour market (OECD, 2010[8]). Data from the Programme for International Student Assessment (PISA) show that it is often students who appear to have greatest need who have the least access to career guidance. For example, girls and students from low socio-economic status (SES) backgrounds often engage less frequently (Musset and Mytna Kurekova, 2018[6]).

Effective provision of career guidance should take into account the growing body of research literature and should:

• Provide regular opportunities for young people, from primary education onwards, to reflect on the relationship between their educational experiences and their prospective futures.

• Allow students to consider the breadth of the labour market, particularly occupations that are of strategic economic importance, newly emerging and/or likely to be misunderstood (such as the skilled trades).

• Undertake school-wide approaches that bring on board career guidance specialists, teachers and school leaders, and parents.

• Systematically engage people in work and workplaces.

• Provide easy access to trustworthy labour market information and advice from well-trained, independent and impartial professionals in advance of key decision points.

• Challenge gender and ethnic stereotyping.

• Target young people from the most disadvantaged backgrounds for the greatest levels of intervention.

Effective career guidance strategies demand close co-operation between schools and the world of work

To make properly informed decisions, students need to have a good picture of work and where they need to put their efforts while still in education in order to be able to realise their dreams. To achieve this, schools should encourage a first-hand understanding of the world of work from the earliest years.

Career guidance activities should fully integrate diverse members of the economic community into their career guidance services, ensuring multiple and authentic interactions with young people from an early age. Action should be taken to identify and address obstacles preventing engagement. Where countries are new to employer engagement, it is best to begin where logistics are easiest. In terms of delivery, countries and schools should consider that:

• Employer/employee talks and career fairs are a relatively easy and effective tool.

• Information and communication technology (ICT) can provide many new ways of facilitating the interactions between schools and employers.