Bundesinstitut für Berufsbildung (BIBB)

Why do companies chose not provide in-company vocational training?

'Only' 24 per cent of all companies in Germany provided in-company vocational training in 2008 (see TROLTSCH 2010a). As shown by the BIBB survey on the costs and benefits of in-company vocational training, such training is worthwhile for the company providing it because its benefits usually exceed its costs (see SCHÖNFELD et al. 2010). Then why do the majority of companies opt not to provide in-company vocational training and how do such companies meet their skilled labour needs? To answer these questions, BIBB conducted in 2008 the Company Survey on the Recruitment of Skilled Workers.

A total of 725 companies that did not provide in-company vocational training in 2007 took part in the survey. The findings were supplemented by the evaluations from a parallel survey of nearly 3,000 'training companies' (companies that provide in-company vocational training) on the costs and benefits of in-company vocational training (regarding the design of these studies, see SCHÖNFELD et al. 2010).

The reasons why a company does not provide in-company vocational training are many and diverse (see SCHÖNFELD/WENZELMANN 2010). Thirty-six per cent of the 'non-training companies' surveyed do not have the physical conditions or the personnel necessary for providing in-company vocational training and another 29 per cent meet only one of these prerequisites. Of these companies, 78 per cent have not provided in-company vocational training in the last ten years and have no plans to do so in the future. Most of these companies (92%) are very small (less than ten employees) and therefore never or only seldom look for new employees. As a result, vocational training does not play a role in their personnel development plans. Those companies which meet the prerequisites for providing in-company vocational training cite, first and foremost, the lack of qualified applicants (56%), the high cost of providing training (55%) and the fact that the trainees would be absent from work too long (49%) as their primary reasons for not providing such training.

The personnel requirements for conducting in-company vocational training are met when at least one person at the company is authorised to provide training (e.g. has passed the trainer aptitude examination).
The physical requirements for conducting in-company vocational training are met when the company has the space and technical equipment and facilities necessary for providing in-company vocational training in accordance with the provisions of the Vocational Training Act or the Crafts and Trade Code. These requirements can vary greatly from occupation to occupation.

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Personnel recruitment strategies

In most cases, training companies seeking to fill vacancies for skilled workers first draw on the people they have trained themselves (see Table 1). Non-training companies do not however have this option. Consequently, hiring experienced skilled workers from the external labour market is the most important channel for this latter group of companies. This recruitment channel is often used by training companies as well, particularly by those with large skilled labour requirements. At the same time, non-training companies rely on internal training for employees who have never undergone formal in-company vocational training. This is particularly the case with companies which have hired skilled workers in the last three years or which expect to have an increased need for skilled workers in the future. Hiring new entrants to the work force who received school-based training or were trained in another company is of subordinate importance for most training companies and non-training companies. Individuals who received in-company vocational training in other companies have better chances of landing a job at larger non-training companies. Individuals who received school-based training have better chances in non-training companies in the public sector and in the liberal professions.

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Measures to increase the number of training places on offer

Non-training companies are particularly dependent on recruiting new skilled workers on the labour market. Given the current demographic trend and the predicted decline in the labour supply, they will probably have less success with this method in the future. Providing in-company vocational training constitutes a possible alternative. Some 16 per cent of the non-training companies surveyed want to provide (or resume providing) vocational training (for more on the change from non-training company to training company, see TROLTSCH 2010b).

What kind of changes would have to be made in the underlying conditions in order for more companies to provide in-company vocational training? Training companies were also asked which measures would make it easier for them to increase the number of training places they offer.

More than three-quarters of the non-training companies surveyed said that reducing the amount of bureaucracy (see Table 2) involved in, for example, applicant selection or in their collaboration with the respective chamber would facilitate the provision of in-company vocational training. At 51 per cent, this figure was considerably lower among training companies. This could mean that non-training companies estimate the amount of bureaucracy as being more than it actually is. The picture is similar for financial assistance from the state: More than three-quarters of the non-training companies surveyed also felt such measures were suited to facilitating their provision of in-company vocational training, in contrast to just slightly more than half of the training companies surveyed. Non-training companies view the cost-benefit ratio of providing in-company training to be less favourable. Consequently, government subsidies or tax incentives would have a greater influence on their decision to provide in-company vocational training. High percentages of both training companies and non-training companies say that "greater coordination between vocational schools, chambers and companies" would be conducive. This could include a variety of different factors such as better coordination of training content between the different venues and even greater flexibility in connection with training hours and times. Approximately two-thirds of the training and non-training companies surveyed said that improving the schooling that comes prior to the vocational training stage could lead to more training places being offered. By contrast, only a few companies felt that changes in the general structure of vocational training 0 such as shortening or lengthening the duration of vocational training 0 would facilitate the provision of in-company vocational training.

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Conclusion

For many non-training companies, providing in-company vocational training is not possible or not worth their while because the necessary conditions are not given: This pertains not only to the means for providing in-company vocational training (e.g. the company does not have the necessary personnel or fulfil the physical prerequisites) but also to the subsequent use of trainees (e.g. the company has no need for skilled workers). Nonetheless, some companies that are not yet doing so could provide in-company vocational training.

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Related literature

• SCHÖNFELD, G.; WENZELMANN, F.
  Die duale Ausbildung aus der Sicht von Nichtausbildungsbetrieben. In: BIBB (Ed.); Datenreport zum Berufsbildungsbericht 2010. Bonn 2010, pp. 205-213
• SCHÖNFELD, G. et al.
  Kosten und Nutzen der dualen Ausbildung aus Sicht der Betriebe. Ergebnisse der vierten BIBB-Kosten-Nutzen-Erhebung. Bielefeld 2010
• TROLTSCH, K.
  Ausbildung und Beschäftigung 0 Ergebnisse der Beschäftigtenstatistik 2008. In: BIBB (Ed.); Datenreport zum Berufsbildungsbericht 2010. Bonn 2010, pp. 191-195
• TROLTSCH, K.V
  Verlauf und Nachhaltigkeit betrieblicher Ausbildungsbeteiligungen zwischen 1999 und 2008. In: BIBB (Ed.); Datenreport zum Berufsbildungsbericht 2010. Bonn 2010, pp. 195-200
  

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Last modified on: October 27, 2010