Australia’s apprenticeship system is due for an overhaul to create the workforce of the future, leaders said at an Ai Group webinar last week.
While this work-based learning model system has been serving industry as a powerful structure for effective knowledge and skills transfer for some time, now is the time to hone its successful features and extend it across more industries and qualification types to benefit more employers, learners and the economy.
“In Australia, the apprenticeship system is often viewed as existing solely for trades – the Certificate 3 qualification in the Vocational Education and Training (VET) sector,” Ai Group Centre for Education and Training (Ai Group CET) Executive Director Caroline Smith, who led the webinar, said.
“But the opportunities are far greater.”
Dr Smith explored the topic with the Australian Industry Group (Ai Group) Chief Executive Innes Willox and The Honourable Justice Iain Ross, who has been leading the Strategic Review of the Australian Apprenticeships Incentive System, along with Lisa Paul.
The Review is investigating the support available to help more people start and complete apprenticeships and traineeships.
Apprenticeships are the system by which we train the workforce of the future, Mr Willox said.
“The system has evolved since the 1980s, with traineeships in areas such as aged care, health care and early childhood education now part of the broader apprenticeship program,” he said.
“But the evolution we've seen from the ‘80s is probably at a point where it needs some rethinking, owing to some key developments.
“One is the technological revolution we're going through at the moment — what we call the 4th Industrial Revolution (Industry 4.0), which may be extending further with the introduction of artificial intelligence (AI) and quantum not far behind.
“So, you can see a scenario where, in a decade from now, how we work, the way we work, where we work and what we want to do with work will perhaps go through fundamental change.
“We have to think about how to set up a system that allows our young people — the workforce of the future — to be productive participants in the workplace of the future.”
“With rapid technological change, we've got to think about how the traditional system of a four-year apprenticeship will work,” Mr Willox said.
“The way employers think about work is changing, too.
“Then there are the employees; young people are thinking much harder about how they want to work and the way in which they want to work and contribute to their workplace.
“Given these factors, it’s an appropriate time to look at this system and ask: ‘Is it still fit for purpose? Are parts of it still fit for purpose? Which parts should we keep and what should we potentially discard?'
“Expectations have changed on all sides of the equation, even since the 1980s.
“That's why apprenticeships are so important, because in a time of labour shortage, employers want their workforce, young and old, to be more productive and for the younger ones to be more work-ready, more quickly.”
“We are at a tipping point in terms of rapid change for our economy,” Mr Ross said.
“As well as Industry 4.0, there’s also the transition to Net Zero.
“These developments and our productivity challenges require a more agile training system.
“That has implications across the apprenticeship system around mutual recognition of occupations, RPL (Recognition of Prior Learning) and micro credentialling.
“Properly matching skills with the needs of industry is one of the key elements of addressing the decline in productivity growth.
“That has put the apprenticeship system front and centre of everyone's consideration.”
Employers increasingly want learners to have practical skills as well as theoretical knowledge.
“There is a greater desire for those going through a training system to have a combination of technical skills and theoretical knowledge and a capacity to work across different elements of training, now and into the future,” Mr Willox said.
“This requires a greater involvement from both universities (the higher education sector) and the vocational sector to develop apprentices or trainees who are more highly skilled, more adaptive and more work ready.”
“The main focus of our Review was the incentive system, because that's primarily the lever that the Commonwealth brings to bear on it,” Mr Ross said.
“But we covered a range of other issues around the need for flexibility and to adapt the system to meet the demands of the economy.”
Mr Ross said there were instances where apprentices were completing multiple apprenticeships, each taking four years to complete.
“We need to find a better way of stacking skills and recognising prior learning etc so an individual has the broad range of skills the economy requires,” he said.
“A greater capacity for individuals to move through vocational into tertiary education – if that's what they want to do – is also needed.”
“The disconnect between tertiary and vocational education is a big problem,” Mr Willox said.
“We need to get those two talking together. The Australian Universities Accord process started that conversation, to get universities and vocational education providers more integrated so that those who are learning are able to switch between the two — not just much more easily, but at all.
“That has to be a priority so that we get the same recognition for VET qualifications as we do for university qualifications.”
“Everyone is aware of the issue around occupational licensing and transfers between states,” Mr Willox said.
“It’s a nightmare for nationally based companies, but it also flows down into apprenticeships and recognition of training more broadly.
“I can think of more than one qualification regarded as an apprencticeship in one state, a traineeship in another and in a third, it’s not recognised at all.
“There is a need to get the states aligned around understandings and agreements on what defines an apprenticeship or traineeship and the requirements for each.
“That disconnect between the states impacts employers and their ability to access incentive programs and payment systems.
“We're working hard to get those sorts of issues addressed, but anytime you're dealing with issues across a variety of jurisdictions of government, it’s hard to fix.
“Trying to work through industrial and award coverage for traineeships and apprenticeships which then leads to discussions around the proper levels of pay and conditions is an issue that keeps coming up when it comes to young people undertaking their training and doing apprenticeships.”
For apprenticeship training that involves a university degree, many employers want to contribute to the HECS fees of their employees to allow them to train, Mr Willox said.
“However, when they do that, they get burdened with having to pay fringe benefits tax on that,” he added.
“That's a massive disincentive to actively help their apprentices and trainees through the system.
“We're working to help governments recognise this and to change that tax.”
“If you're a small business, the process of managing apprentices is devilishly difficult,” Mr Willox said.
“It’s both mind-numbing and time-consuming — you’re wanting to run your business; you don't want to get bogged down in bureaucracy with universities or TAFE.
“We could make it much easier for business in terms of hiring, engaging and facilitating.
“If we can make progress in these areas, we'll go a long way towards having a much stronger and more viable long-lasting system.”
Mr Willox said he hoped the Review would address some common questions about incentivising apprenticeships.
“Are we trying to incentivise people to take up apprenticeships or are we trying to incentivise companies to offer apprenticeships?” he said.
“We would rather the balance goes towards the employer, because they're the ones who have the job openings.
“Once employers are incentivised to take on apprentices or trainees, they will do it.”
“As we try to improve completion rates, we need to ensure young apprentices and trainees understand what they're getting into,” Mr Willox said.
“In many cases, there's a mismatch between expectation and reality.
“Schools and careers counsellors can bridge that gap by having honest conversations with students to find out what they expect from an apprenticeship or traineeship.
“That should be a big focus.”
The cost of living has also put pressure on the number of young people who want to start apprenticeships, Mr Ross said.
“Making apprenticeships attractive to mature-aged people is another challenge, along with gender imbalance across certain qualifications.”
“The issue was found to be particularly prevalent among young workers,” Mr Willox said.
“It leads to all sorts of concerns around safety and capacity, willingness and ability to train.
“We can add that to the long list of issues to be fixed.”
Ai Group is involved in a number of 'earn while you learn' programs sometimes called higher apprenticeships or degree-level apprenticeships across a range of occupations in Victoria, South Australia and Queensland.
The model allows the apprentice to work under experts in the field to learn a trade while completing a university degree.
“This partnership between business, tertiary and vocational education and students demonstrates the changing notion of apprenticeships,” Mr Willox said.
“Through these three-way partnerships, Ai Group has been working with companies across the country — in areas like software engineering, mechanical engineering and electrical engineering — to create opportunities that combine on-the-job learning at a more technical level, coupled with a degree or diploma from a tertiary institution.
“The apprentice finishes with strong technical capabilities as well as the theoretical work.
“They are learning as they go and learning as they earn. We're trying to upskill our younger intake of workers more quickly to give them that broader education learning and training framework, all pulled into one.”
Ai Group continues to fully support the traditional apprenticeship model, Mr Willox said.
“There is a great need for the traditional model,” he said.
“Higher apprenticeships are a step up from that level, for people who want to develop those highly technical skills that are so in demand by our evolving economy.
“So, as technology takes hold, we think these programs have enormous potential for the economy to more quickly develop a competent young workforce that is able to learn while they earn and contribute while they learn, as well.”
“Australia is always looking at what happens overseas when it comes to finessing the higher apprenticeship model,” Mr Willox said.
The UK implemented degree apprenticeships in 2016 in preparation for Industry 4.0 and the system largely started out in business, administration, law and the care sector.
Today, the model covers a wide range of industries as the UK seeks to widen the skills of its workforce.
Germany is renowned for its dual vocational education system, which operates across a wide range of occupations.
In France, the Government provides many financial incentives towards its higher apprenticeship model.
The US and Canada have their own systems around cooperative education models, while Singapore has work-study degrees where much work is integrated with study.
“They’re just some of the examples,” Mr Willox said.
“We have to find models that work for us in the Australian context.
“Obviously, decarbonisation is going to be a huge issue within the Australian economy, as well as digitalisation.
“Defence is another area where there's going to be enormous need for a skilled workforce.
“A lot of Australian businesses from right across the economy will benefit from a more enhanced workforce, with people who are able to work, earn and learn and contribute from a younger age.”
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Wendy Larter is Communications Manager at the Australian Industry Group. She has more than 20 years’ experience as a reporter, features writer, contributor and sub-editor for newspapers and magazines including The Courier-Mail in Brisbane and Metro, the News of the World, The Times and Elle in the UK.
