Just as Australia’s youth unemployment rate hovers around 13 per cent nationwide, apprenticeship commencement and completion rates among young people have taken a sharp turn for the worse.
Between March 2014 and March 2015, apprenticeship and trainee commencement levels decreased by 19.8 per cent. Completion rates also dropped by 19.4 per cent over the same period, according to recent data from the National Centre for Vocational Education Research (NCVER). At this rate, apprenticeship completion rates are expected to fall to 41.4 per cent for trades and 57.5 per cent for non-trades.
Although it is normal for these numbers to fluctuate during times of economic uncertainty, youth unemployment rates increased dramatically after the GFC in 2009. Things are especially tough for 15 to 19 year olds, a cohort that reports an unemployment rate almost four times that of the national average.
Apprenticeship completion rates vary by industry, but some commonly cited reasons for leaving an apprenticeship are conflicts with an employer, low wages, desire to change career direction and lack of career advice, according to NCVER. Another potential reason for the decline in young people completing trainee programs and apprenticeships is the drop in students even starting any type of vocational training after leaving secondary school. In previous years, when entry-level job prospects were better, this trend would not have been so worrisome. But now the expectation that one can enter the labour market directly from school and find long-term employment is unrealistic.
It’s a reality that the Australian government is desperate to change. Various local governments have announced funding to boost engagement numbers, as well as offering incentives to businesses that employ apprentices. The federal government maintains a National Skills Needs List, which tracks all trades experiencing skills shortages and offers incentives for those willing to undertake training in a listed field, such as welders, cooks, arborists and aircraft engineers.
Additionally, the 2015 budget introduced a youth employment strategy worth $331 million. Comprised of three parts – youth transition to work, early school leavers and intensive support trials for vulnerable job seekers – this initiative funds community groups to help young people transition from school or unemployment to apprenticeship and trainee programs. These programs are especially valuable for youth who either drop out of secondary school or don’t continue with full-time education beyond compulsory schooling.
Most employers have goodwill towards young workers, but this is tempered with caution about the resources needed to train and engage an unskilled employee, especially in trying times. However, support from businesses is essential, and for those that complete traineeships or apprenticeships, the odds are in their favour: The Australia Jobs 2015 report states that 85.5 per cent of apprentices and trainees are employed within six months of completion, compared to 68.1 per cent for bachelor degree graduates.
HRMonthly magazine will be featuring an in-depth look into youth unemployment and what companies can do about it in the November 2015 issue. To get the full story and receive your copy, become an AHRI member today.