NCVER latest data shows huge increase in apprenticeship and traineeship commencements, but decline

The NCVER has released two major data reports in the past month: Apprentices and trainees 2020: December quarter; and Completion and attrition rates for apprentices and trainees 2020.

These reports provide statistics across Australian Apprenticeships, specifically in relation to commencements, those in training, cancellations and withdrawals, and commencement numbers and rates. Both reports provide annual data for 2020, meaning that this is the first time we can see the full effects of both COVID-19 and the Federal Government responses to this.

The NCVER has asked all readers to note that the COVID-19 pandemic in Australia has created uncertain times for individuals, businesses and governments. Governments have also implemented various stimulus packages for eligible employees, apprentices and trainees. Care should be taken when comparing 2020 data with data from previous years.

Commencements and in training numbers

The December 2020 Quarter reflects a huge growth in commencements across Australian Apprenticeships of 141.5% when compared with the same quarter in 2019.

Despite the phenomenal growth in commencements for the quarter, the number of in-training apprentices and trainees only increased by 13.9%. Additionally, commencements for the 2020 year increased by only 10.6% compared with 2019.

The graph below shows the commencement numbers for each quarter, across both 2019 and 2020. As we can see, for the first 3 quarters of 2020, commencement numbers were lower than in 2019. This is predominantly due to the effects of COVID-19, particularly in the middle of the year.

When we move to the fourth quarter, we can see the huge increase in commencements. During this quarter, the Boosting Apprenticeship Commencements wage subsidy was implemented by the Federal Government. Additionally, most of Australia started moving to a 'COVID-normal' environment with economic activity picking up across the country.

The annual data reflect the combined effects of the initial downturn, along with the increase at the end of the year. The in-training numbers also reflect this, as they are counted at a point in time (31 December).

Completion numbers and rates

The two NCVER reports both provide data about Australian Apprenticeship completions but vary in what they are measuring. The Apprentices and trainees collection, released quarterly, provides information about the number of apprentices who have completed within the quarter.

To find out what percentage of apprentices and trainees have completed, we need to turn to the completion and attrition rates report. Within this report we can find out what percentage of a cohort have completed, with reference to the year of commencement.

One way to think about the difference is:

• The completion numbers look at when a training contract was completed, and counts these for the quarter
• The completion rates look at a group who commenced together, in this case the 2016 cohort, to measure what happened across that cohort

The number of completions declined in 2020 compared with 2019, by 14.9%. Completions in the December quarter had also declined by 15.7%.

The increased commencements in the December quarter will not start showing in the completion numbers for several quarters, depending on the duration of the apprenticeship or traineeship. We would expect to see an increase in completion numbers in the 2021 data as that becomes available across the next year.

Completion rates have also declined, when looking at Australian Apprentices who commenced in 2016. Individual completion rates were 56.1% down 1.5 percentage points from 2015, while contract completion rates were 48.3% down 1.4 percentage points from 2015.

It is important to note that COVID-19 would have a minimal effect on these completion rates, particularly in non-trade areas and for full-time apprentices and trainees, many who would have completed prior to 2020. For longer duration apprenticeships, in the trades and part-time, COVID-19 may have affected the final completion rates.

Regarding contract cancellations, a large proportion of cancellations occur within the first year of the contract, in both trade and non-trade Australian Apprenticeships. Data from the 2015 commencements cohort shows that 32.9% of contracts were cancelled or withdrawn in the first year, which had remained relatively stable across 2013-2017.

What this means

• The impact of the BAC on commencements is clear in the above data. It is crucial when accessing this data to understand that there are a lot of commencements that were pushed through in this quarter due to the BAC, which is a bit of a catch up from the previous quarters. If there have been a 'true' increase in commencement numbers, it will only be known after the release of the commencement date for the next few quarters.
• Completion numbers are down, however it is important to note that the BAC will not have an impact on completion rate for some years. The true impact of the BAC will only be seen when these cohorts complete their Australian Apprenticeship, as that will show how affective it was at creating sustainable job pathways for jobseekers and a future workforce for industry.
• Completion rates have remained at a steady number for some time, which is reasonably low. There continues to be a high rate of 1-year withdrawals which shows that COVID-19 had a minimum impact on this data. The impact on COVID-19 will have an impact on completion rates, however that is predicted to be seen in several years as the affected cohorts continue their Australian Apprenticeships.