Gross and net costs
For the calculations, the gross costs from the BIBB-CBS 2007 (cf. SCHÖNFELD et al. 2010) were broken down into three components:
- fixed costs that are lost in full upon dissolution of the training contract (e.g. costs of recruiting apprentices),
- annual fixed costs incurred at the beginning of a training year (e.g. premises and non-personnel costs, costs of teaching materials, occupational and protective clothing, administration, and fees to the sectoral training organisations known as competent bodies),
- variable costs incurred monthly which cease upon termination of the contract (e.g. personnel costs for trainees, personnel costs for training staff, and costs of external training measures).
Accordingly, where the time to contract dissolution t is less than or equal to twelve months, the gross costs are composed of the fixed costs, the annual fixed costs for the first training year, and t multiplied by the first year's monthly variable costs. For a period longer than twelve months, corresponding annual fixed and variable costs from the second (third, fourth) year are added.
Because the trainees are working productively in the company up to the point when their training contract is dissolved, the returns from unskilled and skilled tasks by the trainees in BIBB-CBS 2007 are calculated per training year and deducted from the gross costs in order to calculate the net costs. It is assumed that returns are distributed evenly across the months of each training year.
On overall average, gross costs of EUR 16,218 are incurred up to the point of contract dissolution, while returns amount to EUR 9,392. The net costs up to the point of contract dissolution amount to EUR 6,826. At company level, the net costs prior to contract dissolution can be multiplied by the average contract dissolution rate of the given occupation to obtain the expected value of losses due to dissolved contracts. On overall average, this comes to EUR 1,219 per apprentice hired (cf. Table).
Assessment according to sectoral domains shows that the free professions bear the lowest gross costs, at close to EUR 11,000, and the public services the highest, at EUR 20,300. Since this is partly attributable to the relatively prolonged average time to dissolution, the returns in the public services are also the highest. The net costs per dissolved training contract fluctuate between barely EUR 3,200 in the free professions and EUR 7,700 in the industry and trade sector. In addition, the table shows the five occupations in which the costs of dissolved training contracts are highest and lowest respectively.
If the net costs up to contract dissolution are extrapolated to all dissolved training contracts, they come to around EUR 580 million in total for all affected companies for the year 2007. The loss to the economy as a whole is a lesser figure. Since around half of trainees embark on a new apprenticeship place after having dissolved a contract (cf. SCHÖNGEN 2003), there are benefits to the trainees, on the one hand, from their partially undertaken vocational training programme, while on the other hand the new company makes cost savings if trainees are already partially trained. The calculations indicate the risk to which companies are exposed from early dissolution of training contracts. Apart from the lost costs of the initial vocational education and training provided, the company has to bear additional costs which may arise specifically due to dissolution. Moreover, although these figures are based on the average costs and returns of all apprentices, it could be that trainees whose contracts are dissolved incur higher costs or generate lower returns, for example if their motivation and commitment is lower. Overall the costs may prompt companies that have undergone this negative experience to restrict their participation in initial vocational training or withdraw from it entirely (cf. JABLONKA/HEMKES 2012).
