APPRENTICESHIP

Apprenticeships are a structured mix of work and training. It formally combine and alternate company-based training (periods of practical work experience at a workplace) with school-based education (periods of theoretical/practical education followed in a school or training centre), and lead to nationally recognised qualification upon successful completion. Most often there is a contractual relationship between the employer and the apprentice, with the apprentice being paid for his/her work. The term apprenticeships is defined and understood differently in many countries and for research purposes.

Apprenticeships typically involve a structured mix of: 1) work placements during which apprentices develop new skills and perform productive work; and 2) off-the-job education and training involving no or limited productive work and typically funded and managed primarily by public
authorities (e.g. education and training provided in vocational schools, colleges, recognised educational and training providers).

There are wide differences across countries in the use of apprenticeships. In some countries, apprenticeships are a well-established route to skilled employment, whereas in other countries, apprenticeships are uncommon, with employers favouring other means of training and upskilling. These large differences across countries reflect differences in national policy choices, as well as cross-national differences in the costs and benefits of apprenticeship training for employers and apprentices, and therefore the incentives for both parties to pursue such training.

In many countries (e.g. Austria, Denmark, England, Germany, Switzerland), apprentices receive an apprentice wage during the entire period of the apprenticeship, regardless of whether they are in a work placement with the company or in off-the-job education and training with a school (or other educational provider) at any point. The cost of the apprentice wage during the off-the-job period may be borne solely by the employer providing the apprenticeship, or shared more broadly among employers and taxpayers. For
example, in Denmark, the cost of the apprentice wage paid to apprentices during the off-job-period in vocational schools is reimbursed to companies providing apprenticeships from the employer levy fund. In Austria, subsidies to companies providing apprenticeships cover part of the cost of the apprentice wage during off-the-job education and training.

BENEFITS FOR SMEs

A carefully designed apprenticeship scheme can be a worthwhile investment for both employers and individuals. Employers provide apprenticeships to recruit the most able apprenticeship graduates and invest in their future workforce. Employers also provide apprenticeships as apprentices make a valuable contribution through their productive work. For apprentices, a well-designed apprenticeship ensures a smooth entry to the labour market and provides good preparation for their chosen career.
The costs and benefits of apprenticeships for employers depend on hours of instruction, the contribution of apprentices to productive work in the company, apprentice wages, the cost of trainers and mentors, and the context in which the apprenticeship is provided, including labour market institutions and level of regulation, and the characteristics of companies in the economy, such as company size.

SMALLER EMPLOYERS

Evidence shows that small employers often make effective use of apprentices. This may be because small employers also learnt their trade as apprentices and understand and appreciate the apprenticeship route. Circumstances may be different in countries with a weaker overall apprenticeship culture, and in countries where individual small employers may not fully understand how to go about realizing the potential benefits.

For further information:
Kuczera, M. (2017), “Striking the right balance: Costs and
benefits of apprenticeship”, OECD Education Working Papers,
No. 153, OECD Publishing, Paris. http://dx.doi.org/10.1787/995fff01-en

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