Retention of Students to Year 12 and the Impact on Apprenticeship and Pre-apprenticeship Commencements

Transcription

1 Retention of Students to Year 12 and the Impact on Apprenticeship and Pre-apprenticeship Commencements October 2015 Construction Training Fund

2 Contents 1 Executive Summary Key Findings Additional Reforms during Research Period Mitigation Strategies Background and Issues Retention to Year 12 and half cohort of students Competency Based Wage Progression Apprentice Wage Increases Future Skills WA Methodology Research Responses Careers in Construction Outcomes Targeted Incentive Payments Funding for VET in Schools Pre-Apprenticeships and VET in Schools Programs Comparison with other Industries Increase in the Construction Industry Workforce Risks Due to New National Standards for Training Packages Conclusions Recommendations

3 1 Executive Summary This project was endorsed by the Building and Construction Industry Training Board (BCIT Board) in April 2013 and scoping documents were approved in August The research timeframe was 12 to 24 months, based on the following terms of reference and objectives to determine: The impact that the change in school leaving age had on the number of pre-apprentices and apprentices entering the Construction Industry. The level of awareness in parents and school students relating to being allowed to leave school earlier than Year 12, if a training or employment outcome is available. Possible strategies that could be utilised to encourage students to enter the Construction Industry. The level of awareness relating to choices of trade and how and when those choices are being made by students. The impact on the Construction Training Fund if there are delays in apprentice recruitment and the impact when students exit Year 12 in their 18 th or 19 th year. Anticipated recruitment from the new VET in Schools program. The impact of changes in the economic outlook. On completion of this research it was expected that the Training Fund would be able to predict the likely shortfall in the number of school students entering the industry. It would enable the identification of any changes in recruitment and training strategies that could mitigate the shortfall. 1.1 Key Findings Over the period 2012 to 2015, the Construction Industry, in contrast to other industries, avoided the negative impacts of reforms with the following identified outcomes: Increased market-share of all apprentices in Western Australia to 45% compared to 40% in years prior to After a fall of 25% in 2011 and a further fall of 12% in 2012, apprentice commencements increased by 22% in 2013 and 24% in In the year to July 2015, apprentice commencements had again increased by 14% and equalled the peak of Including electrical, employment of a peak number of apprentices in training with an overall increase of 15% since From 2012 to 2015 the number of combined apprentices/trainees increased by 34%. Increased overall market share of enrolments in approved VET in Schools, Certificate II Pathway Trades programs by 290% (226 students in 2013 to 881 in 2014). Reduced enrolment costs for pre-apprentices by 59% by reducing duration and excluding enrolment costs for work experience. Pre-apprenticeship numbers dropped -16.6% from 1,196 in 2012 to 997 in However, early indicators for 2015 show that pre-apprenticeship numbers are recovering to the previous peak of TRS data at July

4 In comparison and due to the half cohort of students 2, the following indicators demonstrate how other sectors performed: In 2013, total enrolled Year 12 students dropped 33% from 24,556 to 16,387. In 2014, University applications fell by 31.2% from 11,762 in 2012 to 8, All other industries, apart from Hospitality and Tourism and Process Manufacturing had a decline in apprentices and trainees in training. All other industries had a combined decrease of 5.6% in apprentices and trainees. Enrolments in Construction VET in Schools programs only account for 4.4% of total enrolments in VET programs in comparison to the overall Construction Industry which represents 11% of the State workforce. 3 Additional Reforms during Research Period During the initial research, a number of reforms outside the original scope of the project were identified. All had the potential to affect apprentice and pre-apprentice numbers, these included: Changes to Western Australian Certificate of Education (WACE) requirements for students to exit Year 12 with an ATAR or minimum Certificate II VET qualification Impact of the half cohort of students in caused by changes to pre-primary and primary school commencement requirements in 2001 (actual 31% drop). Introduction of Competency Based Wage Progression (CBWP). Apprentice Wage increases in 2014 and Increases in enrolment fees under the State Government s Future Skills policy. The combined reforms were identified as having the potential to create a perfect storm that would significantly reduce apprenticeship commencement numbers. The reforms affected the focus of the research and coupled with delays in obtaining timely and accurate data on school enrolments, the project extended well into However, during the project a number of additional research papers addressed the additional reforms. 1.3 Mitigation Strategies In order to mitigate the additional reforms, a number of strategies were undertaken, including those supported by the Construction Training Fund: Amendments to VET Regulations to recognise the role of employers in validating competency of apprentices with institutionally gained competencies and therefore mitigate the impact of CBWP. Implementation of a new pre-apprenticeship program that aligned with the VET in Schools program to reduce costs for students and for the Government. $400 capped fees for school and institutional students under 17.5 years who undertake VET in Schools and pre-apprenticeship programs. Active promotion of industry supported, VET in Schools programs and provision of up to $1M per financial year for a two year period, extended to the end of 2016, to support an increase in demand for VET in Schools programs. Provision of additional subsidies to employers of wet trades apprentices and a range of other Construction trades 2 School Curriculum Services Authority, Year 12 Student Achievement Data 2014, January Australian Bureau of Statistics Labour Force 4

5 2 Background and Issues From 2014 onwards, students in Western Australia were required to remain at school until the end of the year they reached 17 years and 6 months. The exception being if students are participating in employment, further education and training, or have graduated from high school. 4 The higher leaving age means some school leavers enter employment in their 18 th or even 19 th year and are eligible for adult wages shortly after commencing as an apprentice in the Building and Construction Industry. In addition, students who complete Year 12 and go onto training, for example in a pre-apprenticeship, are required to pay adult fees rather than concessional school student fees. From 2016, to receive a WACE, students must complete a minimum of a Certificate II VET qualification or attain an Australian Tertiary Admission Rank (ATAR). 5 The new policy has resulted in a significant number of accredited VET programs being delivered to high school students. These changes, plus a number of additional issues, had the potential to significantly impact on the uptake of apprenticeships and pre-apprenticeships. The following provides an overview of the issues: 2.1 Retention to Year 12 and half cohort of students In addition to the compulsory school leaving age changing to end of Year 12, there was the added impact of the 2001 change to the school starting age. The cohort of students starting compulsory schooling in that year was approximately half the usual size. 6 This half cohort resulted in a Year 12, 2014 school-leaver cohort of fewer than 17,000 students, compared to over 24,500 students in the previous year. The half cohort of school students impacted on the number of enrolments with a decrease of 31.5% since COGNOS Institutional Report June 2015 As a result, in 2015 there were fewer candidates for apprenticeships and preapprenticeships, as well as increased competition between registered training organisations, universities and employers to attract school leavers. 4 Senior School Curriculum and Certification Committee, Government of Western Australia, School Curriculum and Standards Authority. (SCSA) The Western Australian Certificate of Education December SCSA, Western Australian Certificate of Education Requirements for Year 12, 2015/ Michaela Kronemann AEU Research Report, Western Australian Model of Preschool Education, July

6 2.2 Competency Based Wage Progression During there were major issues raised by employers relating to the introduction of Competency Based Wage Progression (CBWP). This reform had the potential to make employers pay second or third year wages to new apprentices who have completed a VET in Schools or pre-apprenticeship Certificate II VET program. Employers and Industry Associations expressed concern and suggested that the changes would impact employer decisions to train and employ graduates of institutional training. Group Training Organisations reported a significant drop in recruitment, again due to concerns with the impact of CBWP and the age of students increasing due to retention to Year Apprentice Wage Increases Apprentice wage increases had the potential to have a major impact on pre-apprentice and apprenticeship commencements. The increases also included a Clause for implementation in 2015 that changed 1 st year commencement rates from 50% to 55% and 2 nd year wages from 60% to 65% of the standard rate, for students that had completed Year 12. The wage increases also had an impact with many employers suggesting that it was no longer viable to employ mature age apprentices. It was also identified that Group Training Organisations (GTO), who operate to tight margins, have not increased their apprentice intake at the same rate as direct indenture employers. 7 From 2007 to 2015, the market share for GTOs in Construction/Electrical reduced by 32.4% and their numbers of apprentices reduced by 28%. 2.4 Future Skills WA In January 2014, under the National Partnership Agreement on Skills Reform, the Department of Training and Workforce Development introduced the Future Skills WA funding model. As a result, a greater share of the cost of training was passed on to students, apprentices and employers resulting in increased fees. With regards to pre-apprenticeship programs, enrolment costs increased from approximately $1000 to $3000. It was predicted that this would make pre-apprenticeships unaffordable for many potential students and consequently reduce enrolments. In contrast to the decline in pre-apprenticeship enrolments, there was a significant increase in the Construction Industry approved VET in Schools Certificate II programs which are essentially pre-apprenticeships. This could be attributed to the drop in students exiting school in Year 10 and 11 and remaining to undertake VET programs in school. 7 Report into the Suspension and Attrition rates of apprentices 2007 to Construction Training Fund May

7 3 Methodology The project involved a significant amount of desktop research involving: School Curriculum and Standards Authority (SCSA) reports. Western Australian Model of Pre-school Education, July Media reports. University Annual reports and other relevant Government publications. Face to face meetings with stakeholders, training providers and employers were also conducted, including attendance at SCSA workshops. Statistics on apprenticeship, traineeship, pre-apprenticeship and VET in Schools enrolment numbers were gathered on a regular basis from DTWD, SCSA, Registered Training Providers and a sample of Group Training Organisations over a period of two years to monitor any changes in enrolment patterns. An online questionnaire was sent to random small to medium businesses, including subcontractors, with a request for feedback on relevant issues. 8 Output from the IPSOS Social Research Study (2014) was also used to identify perceptions of industry with youth and parent groups. 3.1 Research Responses There were 98 responses to the question on whether students who completed a VET in Schools or pre-apprenticeship in Construction course would influence employer s decisions to employ them as an apprentice or trainee. 60% stated that completion of a VET in Schools course or pre-apprenticeship would not influence the decision to employ apprentices. 40% stated they would be positively influenced. Respondents were asked if the age of students retained to Year 12 would impact on the decision to employ and would the age of an applicant impact on your decision to employ a school student? 39% responded that the age of the student would influence their decision. 61% stating that it would not have any influence. 11% stated that being old enough to have a drivers licence was a positive factor. Attitude, maturity and willingness to learn were ranked as important with the majority of respondents preferring to employ Year 12 students and/or younger. 3.2 Careers in Construction The 2014 IPSOS Social Research Study in part relates to this research project in identifying perceptions and misconceptions of the industry and the triggers and barriers to considering a career in the industry. 9 The IPSOS study found the following: Youth Responses The general perceptions of youth were found to be largely negative and that the industry requires high physical strength and tolerance to hard work and that it has limited skill requirements. 8 Construction Training Fund, Impact of Subsidies on Employer Decisions to Recruit, June IPSOS Social Research Study for the Construction Training Fund,

8 25% of youth acknowledge they are influenced by school/teachers/career counsellors in their choice of career path. However, the research indicated that subject-specific teachers lack sufficient knowledge of the Construction Industry. This can result in minimal to no effort to encourage students to pursue a career in the Construction Industry. Youth target groups do not have detailed knowledge of pathways to access the Construction Industry or what is on offer in the industry. 48% believed the average income paid in the industry is average or lower than average and 16% did not know. Parent Responses/Influences Parents have high perceptions of job opportunities in the industry (76%), but this did not translate into parents being promoters of the industry as a career pathway. There is also a perception of a male dominated industry. 40% of parents were familiar with the Construction Industry. 13% of parents claimed to know the industry well. 27% of parents knew the industry somewhat well. 45% of youth identified parents as a key influence. 43% of parents were familiar with apprenticeships as a career pathway. Industry Responses It was identified that 66% of those in the industry believe it is an appealing industry to work in and develop a career. However, only 28% being advocates for the industry as a career for youth and 25% being detractors. The main positives associated with working in the industry include: High Income Opportunity for learning Opportunity for career progression. A total of 56% of responses from industry would consider employing apprentices and trainees but one of the barriers identified was for new employees to have basic knowledge of the work/industry. 8

9 4 Outcomes During , the expected downturn in apprenticeships did not occur and in the case of pre-apprenticeships, including industry approved VET in Schools programs which are the same as pre-apprenticeships, numbers also increased. From the low point of 2013, apprentices In training increased overall by 29.5% and trainees by 85% TRS DataCube July2015 The number of apprentices and trainees in training reached an all-time high in From the low of 2012, apprentice commencements increased by an overall 51% and reached the 2010 peak again in TRS DataCube July2015 In relation to apprentice commencements, the predicted decline did not eventuate. This could be due to a number of factors including an increase in housing commencement activity and increased apprentice subsidy payments. 4.1 Targeted Incentive Payments The increase in incentives from the Construction Training Fund was introduced in 2013 to address an identified decline in apprentices in wet trades. There is a strong correlation between the start of the additional subsidies and a marked increase in apprentice commencements in these trades. The increase in apprentice numbers in the wet trades exceeded growth in most other trades; with Wall and Floor Tiling (+23%), Concreting (+960%) and Bricklaying (+229%). 9

10 4.2 Funding for VET in Schools One of the factors affecting growth in industry approved VET in Schools programs is the cap on funding provided by DTWD. To provide for growth in the approved programs during 2013 to 2014, the Construction Training Fund provided additional funding for enrolments in excess of the DTWD limit (cap). This funding was extended to the end of 2016 and it is expected that additional funding will then be provided by DTWD. The following chart shows that Building and Construction only had 4.4% of total VET in Schools enrolments in This is in contrast to having over 11% of the State Workforce and 45% of all apprentices (including electricians). In comparison, Arts, Social and Recreation had 42% of enrolments yet only employ 2.2% of the State Workforce and 0.7% of all apprentices and trainees. In 2014, of 31,981 enrolments in Years 10 to 12 only 4.4% were in Building and Construction. 42% of enrolments were in Arts, Social and Recreation However, as the following charts show, there was a significant increase in the number of students enrolled in VET in Schools industry approved Construction programs. 4.3 Pre-Apprenticeships and VET in Schools Programs The following chart shows that the number of pre-apprenticeships declined by 16.6% during 2012 to However, overall training numbers for pre-vocational training increased. The increase in industry approved programs delivered to Year 11 and 12 students more than compensated for any decline in institutional preapprenticeship programs DTWD and SCSA Data - June

11 The following chart shows the change in the composition of VET in Schools programs. The introduction of industry approved pathway programs has replaced over 50% of the previous programs that did not fully articulate to apprenticeships. The DTWD Qualification Register recommends that schools and RTOs should use the industry approved programs. An increase in enrolments of 290% in the industry approved VET programs has maintained the overall numbers in VET in Schools Construction *CTF Funded - Includes Trades and Para-Professional Pathways Data for 2015 is not yet available, however, at June 2015; the Training Fund provided funding for 517 students. 4.4 Comparison with other Industries It was also identified that when compared to other industries, rather than see a decline in apprenticeship numbers in Construction, there was a significant increase in apprentice commencements and those in training. The growth was in contrast to the overall decline both nationally and in Western Australia. In December 2014, NCVER reported that the overall number of people in training in WA had declined by 12.1% and fallen by 38.8% nationally compared to An explanation for WA s better performance is that the number of people in training in the Construction sector reached a record high in In 2012 to 2015 Construction increased apprenticeship numbers and market-share of apprentices compared to other industries. Construction and Electrical combined account for 45% of all WA apprentices DataCube - May Business News, Apprentices and Training, June

12 4.5 Increase in the Construction Industry Workforce Due to the increase in activity in the Residential sector and workers returning from the Resources sector, the number of people employed in the Construction Industry increased by 10.5% in 2014 and 11.1% in 2015 to a peak of almost 163,000 in August More importantly the number of tradespeople increased by 12.2% while apprentices increased by an overall 51%. This demonstrates strong growth and retention of apprentices and that the Construction Industry attracted a greater percentage of the available students Risks Due to New National Standards for Training Packages Although not part of the research project, a risk for VET in Schools and pre-apprenticeship training was identified. The Construction and Property Services Industry Skills Council (CPSISC) are finalising a Review and Redesign Certificate III in Carpentry, Joinery and Formwork/Falsework Qualifications. This involves redesign of most units of competence within the Certificate III qualifications to AQF level 3. Key stakeholders throughout Australia have strongly opposed the changes due to the negative impact on VET in Schools and pre-apprenticeship programs. The major implications will be elimination of clearly defined articulation between Certificate II and Certificate III qualifications, an increase in funding costs for the Department of Training and Workforce Development and increased costs for employers of apprentices. 6 Conclusions Although it was initially expected that the number of apprentices and pre-apprentices would decline due to the retention of students to Year 12, the Construction Industry has maintained and in most cases increased its apprentice, trainee and pre-apprentice numbers. This is especially the case when compared to other industries and other States throughout Australia. The strategies undertaken on behalf of the Construction Industry in Western Australia have counteracted the negative impacts of changes to the school leaving age, retention of students to Year 12 and unexpected changes in Departmental (DTWD) policy and Industrial Awards. It is confirmed that during 2013 to 2015: Industry approved VET in Schools programs provided a vital supply of pre-vocational training as reliance on numbers in pre-apprenticeships declined. Financial support to assist Registered Training Providers in their delivery of VET in Schools programs successfully raised the numbers of students entering industry approved VET in Schools programs. Additional incentive payments to employers caused an increase in apprentice numbers in trades at risk. Changes to the VET Regulations alleviated concerns with Competency Based Wage Progression and apprentice wage increases. Introduction of a pre-apprenticeship with the same content and timeframe as the VET in Schools program reduced the impact of fee increases under Future Skills (WA) policy. The combined impact of the half cohort and retention of students to Year 12 did not have a negative impact on apprenticeship and pre-vocational enrolments. 11 ABS Labour Force

13 The Construction Industry has increased its market share of available students in school or exiting to pre-apprenticeships. Although the DTWD provides a qualification register which recommends qualifications for delivery in schools, it is not mandated. Non-articulating qualifications continue to be funded and delivered in schools. The industry has increased its market share of apprentices to 45% and employs an alltime high number of apprentices. Even without electrical apprentices, the industry employs more apprentices than any other industry sector. 12 It was not possible to address the level of awareness of parents and school students relating to being permitted to leave school earlier than Year 12 if a training or employment outcome is available. However, in discussions with school teachers, they are making students aware of the ability to leave school early, especially for those not on an ATAR program. 7 Recommendations It is recommended that the Construction Training Fund: Maintain or increase promotion of VET in Schools and pre-apprenticeship programs and in particular, target parents of school students and subject-specific teachers. Ensure maintenance of market-share, by continuing to monitor the number of apprentices and trainees in the Construction Industry and especially in comparison to performance of other industries and the size of the industry workforces. Request that the Department of Training and Workforce Development and Department of Education increase the allocation of funding for industry approved VET in Schools programs. Request that the Department of Training and Workforce Development mandate rather than recommend the existing Qualification Register as a means of increasing participation in industry approved Certificate II VET programs. 12 As at May

14 Retention of students to Year 12 v docx 20/11/ :44:42 PM 14