Tuesday 5 December 2017

Apprenticeship and automotive skills: the UK, Germany and Spain compared

CVER's Hilary Steedman and colleagues have been looking at training in one area of the automotive sector

Car Service is central to the supply chain of the wider automotive sector, identified as a leading performer in the UK government’s 2017 Industrial Strategy. We asked Car Service employers in Germany, UK and Spain about skill shortages and their experience of training apprentices in the workplace.
Car Service technicians are trained in apprenticeship in Germany and the UK. The UK Advanced Apprenticeship and German 3-year Apprenticeship aim for a similar set of standards. In Spain, technicians are trained in full-time College courses which include a short period of work experience. In all three countries most firms are small.

Using both case study and survey evidence we found that German and UK firms report high levels of satisfaction with apprentices’ practical and theoretical skills. Spanish firms found that the short work placement did not develop the practical competences needed but used the work placement to screen trainees for employment.

However, while German firms cooperate locally to train more apprentices than they require to meet their skill needs, UK firms train far fewer and report damaging skill shortages which drive up costs.

Despite their difficulties finding the skills they needed, small UK firms were reluctant to train apprentices. The on-the-job training element of Car Service apprenticeship requires the firm to release a skilled technician to supervise the apprentice. In a small firm this constitutes a substantial investment of time and loss of productivity. For these UK firms, uncertainty about whether the apprentice would leave prematurely or be poached away by other firms was a powerful deterrent to using apprenticeship to meet skill needs.

There are clear implications for UK government skills policy arising from this study. When developing the new T-level provision, the government needs to consider carefully evidence from countries such as Spain and France where full-time College courses are the norm in vocational training provision. In technical fields like Car Service, short periods of work experience are not a good substitute for on-the-job training provided in apprenticeship.

The UK government’s model of apprenticeship provision and funding is based on the premise that employers can be relied upon to recognise and meet skill shortages by appropriate investment in apprenticeship training. This means that the Department for Education does not try to directly influence the mix of skills produced by apprenticeship funding. This approach fails to target government funding where there is market failure and fails to contribute to raising productivity (National Audit Office, 2016). Policy measures which directly address key areas of skill shortage are needed.

The introduction of the apprenticeship levy in the UK, now in its first year of implementation, offers automotive industry levy-payers the opportunity to start to increase apprentice numbers and escape from the cycle of bidding up wages to compete for scarce skills.

Small businesses hold the key to increasing the Car Service skill supply. Our study shows that in Germany small employers working together in a local Association together with labour market regulation ensure an adequate supply of skills. In the UK, labour market regulation, for example, requiring a completed apprenticeship for MOT certification could discourage apprentices from dropping out. Increased cooperation between businesses could be encouraged as part of the new UK apprenticeship levy arrangements.

From 2018 levy payers can choose to use their funds for the wider benefit of firms in their sector. Levy payers in the automotive sector could sponsor additional apprentice training in smaller businesses using their levy funds. These initiatives could contribute to overcoming skill shortages in Car Service but are unlikely to be sufficient to resolve the basic issues.

Ultimately, it should be recognised that not all apprenticeships make the same demands on firms. Those that develop advanced technical competence make more substantial demands on firms’ resources than some service sector apprenticeships. This requires a more discriminating policy approach. At present, firms receive no direct benefit from the subsidy that the government pays to help meet the cost of apprenticeship training. The skills training provided by firms in sectors such as Car Service should be acknowledged and a share of the payment to providers for skills training should be used to incentivise small employers to offer apprenticeships. Measures could include the provision of small local Group Training Workshops or designating suitable firms as recognised Training Companies to ‘over-train’ as is the practice in the Netherlands. Without such measures, it is difficult to see how the automotive sector can escape from the current crisis and prosper in the future.

"Building apprentices’ skills in the workplace: Car Service in Germany, the UK and Spain" by Philipp Grollmann, Hilary Steedman, Anika Jansen and Robert Gray", CVER Research Paper 011 (December 2017) is available at http://cver.lse.ac.uk/publications/default.asp

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