THECOSTEFFECTIVENESSOFAPPRENTICESHIPSCHEMES–MAKINGTHEBUSINESSCASEFORAPPRENTICESHIPS

FinalConference

Brussels15.03.2016

AlexandraCostaArturKeithBrum;itt

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships

• Agendafortoday•  Theproject/context/activities•  Thedifferentsystems-de;initions-contractualarrangements

•  Costeffectiveness•  Governanceandpartnerships

•  Conclusions/thoughts

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships

Theproject•  Identifyingthecurrent‘stateofplay’+reformsin15targetcountries

•  Collectionofexamplesofeffectivepracticeandpolicy(casestudies)

15 target countries – BG/CZ/EE/FI/FR/EL/HU/IE/IT/LV/PL/PT/SK/ES/UK5resourcecountries–DE/AT/DK/NL/SW3targetsectors–ICT/Commerce/Engineering

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships • Outputs•  1questionnairetoBUSINESSEUROPE,CEEP,UEAPMEmembers

•  SectorialquestionnairestoCEEMET,EUROCOMMERCE,DIGITALEUROPE,ERT,EUproVET,EFVETmembers

•  15nationalcountryreports•  1resourcecountriesreport•  1onlinequestionnaire•  Interviews10casestudies•  5clusterseminars+FinalConference•  FinalReport+Recommendations

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships• DeLiningapprenticeship•  EuropeanCommission’sde;initionhighlights(updated)•  -itispartoftheformalVETsystem;•  -it involves a dual learning principle: combines oralternates company-based training (periods of practicalexperience at a workplace) with school-based education(periods of theoretical/practical education in a school ortrainingcentre);

•  completing the apprenticeship leads to a nationallyrecognisedqualiLication;

•  there may be a contractual relationship or agreementbetweenanemployerandapprentice.

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships •  The functioning of an effective apprenticeship systemdependsonmanyelements:

•  itsplaceintheVETsystem;•  governance;•  contractualarrangements;•  cost-sharing;•  supportstructures;•  recruitmentprocedures;•  ownershipofthesystem.Important - right balance between these elements andrespect the diversity of different countries’ education andlabourmarketsituations.

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships Thedifferentsystems•  Last threeyearsmanyof the15 target countrieshave reformedtheirVETsystems– toprintmoreWBLarrangements/elementsofthedualsystem

•  Differentcontextsandmotivations•  Political priority to youth unemployment/NEETs -occupationaltrainingandtrainingtoaspeci;icjob;

•  asawayofachievearecognisedquali;ication;•  awayoforganizingpracticaltrainingpartofaVETprogramme;•  awayofaccesstolabourmarket;•  awaytomatchlabourneedswithskills•  awayto;indtherightskills

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships •  Each system can be considered in relation to whetherapprenticeships:

•  areschoolbasedornot;•  areawaytoachieveaformalquali;ication•  foryoungpeopleoradults;•  forthosewhoareemployedorunemployed.

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships • WiderangeofdeLinitions/approaches- Apprenticeship integrated into school based initial VET –schooldriven(8countries)-  Apprenticeship as a separate track – enterprise driven ( 2countries)

- Mixedformula–bothschoolandworkbased(5countries)Others programmes which support transition to the labourmarket (traineeship programmes) often developed tocomplement an initial VET programme or to provideadditionalhelptothosewhoareunemployed.

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships

• Duallearningprinciple

•  Signi;icantdifferencesinthe15targetcountries-  time spent in the enterprises is insuf;icient to enable thecompaniestobethedriversofapprenticeships

-  9 countries -work based learning is less than 50% -school based initial VET is the main model forapprenticeship

-  6countries-workbasedlearningismorethan50%oftheapprenticeship

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships Contractualarrangements

ApprenticesasstudentsVETprovideristheowneroftheprocess;Placementapproachratherthanalearningtime Apprenticesasemployees:Employersareinvolved:-intherecruitmentdecisions;-  inassessmentandqualitydecisions-  inthetimespentincompany,theorganisationoftraining-  Inapprentices productivity

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships •  Apprentices’compensation

Theserangefromacompensationestablishedby:•  collectiveagreement/nationalminimumwage•  casebycasebasis-(schoolbasedsystem)

•  Sectororganisation•  National/regional/locallevel•  Couldbelinkedtoproductivity

Thesesituationsarenotcomparableandthisprecludesasystematicanalysis.

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships

• Resourcecountries

• Apprenticeshaveacontractwiththeenterprises• Morethan50%oftimespentincompany•  Compensationisde;ined

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships •  SME’s•  Resource countries + well established apprenticeship systemcountries-SME’saremoreinvolvedinreceivingapprenticesthanthelargecompanies.SMEsneedskilledpeople.

•  Countries more school based - large companies are in betterposition. SME’s face more challenges. Matching applicants iscritical.

•  Supportsystems–intermediarybodies–keysuccesselement•  CasestudyHowtheapprenticeshipprogramme isorganised isparticularly importantto a medium sized company and the practicalities have to be carefullymanaged e.g. everyone starts the programme at the same time as thecompanydoesnothave the resources tomanageapprenticesoperatingatdifferentlevelsandatdifferentstagesoftheirprogramme.

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships Apprentices provide enterprises with opportunities tomakeapositivereturnontheirinvestment:-acosteffectivewaytorecruittalent-distinguishonebusinessfromanother-helptobuildcompanyloyalty-improvetheskillsofexistingstaff-whenrecruitmentisdif;icult,a‘cheap’waytorecruit-overcome the mismatch between business needs andtrainingprovidedbyinstitutions

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships •  CostsandbeneLits

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships • Resourcecountries’experiences

Sharingcostsandimprovingproductivity:•  GermanyandAustria–in-companytrainingpaidbycompanies

•  Switzerland–thestatecoversoff-the-jobeducation• Denmark–mainlystatefunded.Allemployerscontributetoacentralfund

• Netherlands–companiesreceiveasubsidyforeachapprentice

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships •  Costsandbene;itsvary

•  occupation•  sizeofthebusiness/enterprise•  theeconomicsector

In general short term cost and long-term bene;its if theapprenticestayswiththeenterprise.Bene;itsdependonthelevel of the state’s support, but in well-functioning systemscompanies recover their costs by the end of theapprenticeshipperiod.

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships •  Whatdoestheresearchsay

OnlyGermanyandSwitzerlandhavestudiesonthecostsandbene;itsofapprenticeshipsfromtheperspectiveofcompanies.But•  apprenticeships offer a relatively effectivemeans ofmeeting the skillsneedsofemployers.Thisistypicallymorecost-effectivethanrecruitingskilledworkersfromtheexternallabourmarket;

•  apprenticeshipsproduceapoolofskilledpeoplefromwhichpromotionintomoreseniorrolescanbemade;

•  labour turnover rates are often reduced as a result of providingapprenticeship training as apprentices who train with a company aremorelikelytoberetained;

•  apprenticeships allow for company values and ethos to be instilled inworkers. Employers consider this to be particularly important whenapprenticesstaywiththecompanyaftertraining.

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships • Whyaresomecompaniesreluctant?

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships •  ITsector–costeffectiveness

•  Staffshortages• Mismatchbetweencompanyneedsandtraditionaltraining• Recruitingtonewoccupationalareas

Greatercontrolovercontent;apprenticesstartfromahighlevel;on-linelearningreducescosts.

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships •  Engineeringsector–costeffectiveness

•  Traditionalapproachtorecruitment•  Cost of capital has made traditional courses out of touchwithcurrentneedsofindustry

• New way to recruit staff with the required skills (staffshortages)

Apprenticeshipsareexpensivebuttheyhelptomeettheskillsneededbyindustry

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships •  Commercialsector–costeffectiveness

•  Therateofchangeinthesectorneedstobemanaged–newoccupationsandprocesses

•  The competences required by the sector are wellestablishedandagreed

•  The development of soft skills and the need to learn tomulti-task

•  The need to be up-to-date and respond to customers’requirements.

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships • Governance,partnershipsandsocialdialogue

•  TheroleofthestateisimportantinallcountriesFor those countries beginning to develop an apprenticeshipsystemthereisaneedforagovernanceframeworkalongsideclear mechanisms for engaging employers in the design ofapprenticeshipschemes.• Resourcecountries•  Thestructuresaremoreinstitutionalisedandemployersarepartofthesystemonnational,stateandregional

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships

•  Differentdegreeofsocialpartnersinvolvement

10ofthetargetcountries•  Governancelevel–institutional/consultativerole•  Operationallevel-autonomyofVETproviders

5ofthetargetcountries-aleadingorstrongroleforsocialpartnersbothatGovernanceandoperationallevel.Adevelopmentalrole.

•  The effectiveness of a sector approach - betterway tomeet the skillsneedsofemployers;

•  The emergence and growth of intermediate structures - facilitatecooperation, help to establish a clear division of responsibilities andmake the governance of the VET/apprenticeship system moretransparent.

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships

•  Astronglevelofconsensusaboutthetrainingsystem(andthetraditionofself-regulationbythesector,thesocialpartners,theemployers)createsasafeenvironmentforcompanies.

About the lack of skilled workers in Denmark, the Confederation of DanishIndustry launcheda two-yearproject ‘OperationApprenticeship’ to encouragecompaniestosecuresufEicientskilledlabourthroughthecreationofadditionalapprenticeshipsandadviceonhowtorecruitapprentices.

•  TheEirststep involvesthecollectionofdataandinformationontheneedforskilledlabourandapprentices.

•  secondstep-forecastingthesupplyanddemandforskilledlabourin2025

•  third step is to draw up a strategic plan with actions and an agenda toimprovethesituation.

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships • ADECAT-Catalonia•  Thesectorassociationusesadualtracksystemtosupportcompaniesinrecruitinganddevelopingstaffwiththerequiredtechnicalskills.

•  ThestudentscompletetheoreticaltraininginschoolsandpracticaltraininginacompanyafEiliatedtotheADECAT.

•  gratifyingastheAssociationworkswithsmall,traditionalcompanieswithemployeeswhoseaverageageishigh.Thearrivalofapprenticesalsoencouragesexistingstafftoreturntotraining.

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships •  Somethoughts•  skillsneeded(by2025)11countries–highskillslevels•  2countries–mediumskills•  2countries–lowskills•  Higherskills/Higherapprenticeship•  Forapprenticeshipstocompetewithhighereducationtheyneedtobeofferedatahigherlevelandtheyneedtoleadtoa quali;ication which is as well regarded as the outcomesfrom higher education. There is a need to develop higherlevel apprenticeship routes closely aligned with labourmarketneeds.Attractiveness

Thecosteffectivenessofapprenticeshipschemes–makingthebusinesscaseforapprenticeships

• A legal framework is a pre-condition - stakeholders,particularlyenterprises,needclearrulestoimprovetrustatboththegovernanceandoperationallevel.

•  The social partners play an important role in improvingapprenticeshipsystems,inparticularwheretheyaredeeplyinvolvedintheirdelivery.