Figures are based on the Cologne Institute for Business Research (Institut der deutschen Wirtschaft Köln, IW) annual training survey, which covers 740 establishments in the private sector, totalling about four million employees. One in five companies is located in eastern Germany. More than 50% of the firms belong to the manufacturing and mining industries.
On 27 June 2005, the Cologne Institute for Business Research (IW) held a press conference to publicise new figures on training prospects for young people. The survey reveals that the number of apprenticeship places available could decrease in 2005. This may, however, be offset by a decline in the number of applicants.
Figures are based on the Cologne Institute for Business Research (Institut der deutschen Wirtschaft Köln, IW) annual training survey, which covers 740 establishments in the private sector, totalling about four million employees. One in five companies is located in eastern Germany. More than 50% of the firms belong to the manufacturing and mining industries.
Fall in number of vocational training places
According to the survey, the number of vocational training places in the private sector is expected to fall by 1.1% in 2005. Small and medium-sized companies (up to 499 employees), in particular, announced a considerable reduction in places: the expected falls in apprenticeship places are 13.7% and 11.3%, respectively, for these two groups of companies. This relates to almost 11% of small enterprises and 20% of medium-sized firms that intend to cut their apprenticeship programmes (Table 1 - net effect). In comparison to the previous year, the total number of places offered may decline by 5,700 in absolute terms. According to preliminary calculations by the Federal Institute for Vocational Education and Training (Bundesinstitut für Berufsbildung, BiBB), almost 19% of all apprentices were employed at establishments with 500 or more employees in 2003 (calculations are available on request). Therefore, an even larger decline ought to be prevented, with the involvement of large firms in initial vocational training remaining stable and high. The number of trainees in large firms has roughly stabilised (-0.1%); however, four in 10 companies did announce a reduction in the number of apprenticeship places.
| . | Share of enterprises providing apprenticeship programmes (%) | |||
| Increase | Stabilise | Lower | Net effect | |
| Secondary sector | 27.1 | 33.1 | 39.8 | -12.7 |
| Metalworking and electrical industry | 29.2 | 36.6 | 34.2 | -5.0 |
| Construction | 14.8 | 33.3 | 51.9 | -37.0 |
| Other industries | 27.1 | 27.1 | 45.9 | -18.8 |
| Service sector | 27.1 | 34.6 | 38.3 | -11.2 |
| Wholesale and retail | 23.0 | 34.5 | 42.5 | -19.5 |
| Other industries | 29.1 | 34.6 | 36.3 | -7.1 |
| 1-49 employees | 25.3 | 38.6 | 36.1 | -10.8 |
| 50-499 employees | 21.2 | 37.9 | 40.9 | -19.7 |
| 500 or more employees | 36.9 | 23.7 | 39.4 | -2.5 |
| Western Germany | 27.0 | 32.9 | 40.1 | -13.1 |
| Eastern Germany | 25.6 | 40.2 | 34.2 | -8.5 |
| Firms operating nationwide | 37.5 | 12.5 | 50.0 | -12.5 |
| All | 27.1 | 33.7 | 39.2 | -12.1 |
Source: IW training survey, 2005
In relation to their intention to provide apprenticeships, companies in manufacturing and mining do not differ greatly from those in the service sector. The balance between firms that intend to increase the number of places and those that plan to decrease them is roughly the same in both sectors (-12.7% and -11.2%, respectively). Regarding the general trend, the forecast for metalworking and electrical industries is favourable. Only 34.2% of establishments announced a reduction in traineeships; this compares to 29.2% that propose to increase their engagement. Figures for the service sector reveal a similar picture with the exceptions of wholesale and retail sectors. Expectations for firms in eastern Germany are more optimistic than for those located in western Germany or operating nationally. Overall, the balance between those establishments that intend to reduce their number of apprenticeships and those that plan to increase them is only 8.5% (net effect).
According to the IW, the moderate decline in the total supply of apprenticeships results from the general economic climate, which is sluggish and still prevails in 2005. Furthermore, ongoing sectoral structural change has adversely affected the supply of apprenticeships, as firms’ involvement in initial vocational training is higher in manufacturing and mining. Finally, the decrease is, in particular, attributed to the fact that companies have already exhausted their vacancies for additional applicants. In 2004, firms complied with the national training pact by offering 30,000 apprenticeships and 25,000 places for entry-level vocational qualifications (Einstiegsqualifizierung). In this respect, 21,600 additional traineeships were offered (net effect). The survey shows that one in four establishments raised their training offers. Nonetheless, companies will have to expand their efforts in order to provide a sufficient number of places in 2005.
Fall in number of applicants
The Federal Ministry of Education and Research (Bundesministerium für Bildung und Forschung, BMBF) expects a rise in the number of young people who may apply for an apprenticeship, due to increased numbers of school-leavers in 2005 compared to 2004. Yet the IW expects the number of persons, who will effectively apply for apprenticeships, to decline. This expectation is based on several facts. Firstly, according to the most recent figures from the Federal Employment Agency (Bundesagentur für Arbeit, BA), the number of registered applicants was, in June 2005, 9,200 below the previous year’s level. Secondly, more pupils are supposed to leave school with an ISCED-2 qualification (Mittlere Reife), whereas the number of drop-outs is expected to decline. A higher educational level means that young people can choose from a wide range of opportunities that extend beyond initial vocational training. Due to the relatively favourable employment prospects for highly skilled labour, enrolment rates at the universities are also expected to rise. Finally, the Hartz IV labour-market reforms (DE0401205F) relieve young people from reporting to the BA for child allowance entitlements. Therefore, reform may also negatively affect the number of applicants.
Reactions from the social partners
In a joint press release on 8 June 2005, the Federal Ministry of Economics and Labour (Bundesministerium für Wirtschaft und Arbeit, BMWA), the Confederation of German Employers’ Associations (Bundesvereinigung der deutschen Arbeitgeberverbände, BDA), the Federation of German Industries (Bundesverband der Deutschen Industrie e.V., BDI), the Association of German Chambers of Industry and Commerce (Deutscher Industrie - und Handelskammertag, DIHK), the BMBF, the German Confederation of Skilled Crafts (Zentralverband des Deutschen Handwerks, ZDH) and the BA declared their commitment to providing a sufficient number of vocational training places in 2005. Public agencies and private companies are urged to expand their training places. Moreover, the joint statement also impressed upon young people the need to search actively for training opportunities; these searches should even extend to regions in which they do not live and to occupations that they have not yet considered.
In a press release issued on the same day, a member of the executive board of the Confederation of the German Trade Unions (Deutscher Gewerkschaftsbund, DGB) criticised the declaration of the pact’s success and called it a serious failure. Furthermore, the DGB’s youth department not only disputed the success of the national training pact, but also contested the positive impact of entry-level vocational training places on the education and employment prospects of young people.
Commentary
Initial vocational training lowers the barriers to entering the labour market and hence prevents young people from becoming unemployed after leaving school. Regarding the declining numbers of apprenticeships in recent years, it is clear that the dual training system in Germany is in need of reform. More flexible arrangements on trainee wages would make apprenticeships more attractive to companies. The settlement in the chemical industry can be used as a role model. It stipulates an expansion in the number of training places in exchange for a wage freeze in 2004. Furthermore, content and length should be adjusted to the needs of both employers and trainees. In this respect, legal training ordinances are to be modernised. Most importantly, reforming Germany’s labour market will be the most effective step towards improving the training prospects of young people. (Oliver Stettes, Cologne Institute for Business Research, IW)
Eurofound recommends citing this publication in the following way.
Eurofound (2005), Survey highlights decline in apprenticeship places, article.
