BIBB REPORT Edition 19/12

Out of the frying pan and into the fire? Vacant training places a future challenge faced by the training places market

Klaus Troltsch, Christian Gerhards, Sabine Mohr 

Translated by: Martin Kelsey (GlobalSprachTeam)

Although demographic change and its attendant consequences for the dual training system are not being revealed to the massive extent predicted by many, its effects on the training places market are already clearly discernible. Whereas for many young people the search for vocational education and training places was long characterised by unsuccessful application letters, by waiting loops extending over periods of several years and by career choice compromises, their initial opportunities are now improving on a step-by-step basis albeit without any indication that conditions on the training places market could yet be described as satisfactory. Demographic upheaval means that increasing numbers of companies are unable to fill the training places they have on offer and are being left empty-handed as they seek to recruit young skilled workers for their own company-based training.

One in three companies providing training experiencing recruitment problems

The following remarks are based on a new company survey on the topic of "Training and competence development" conducted by the Federal Institute for Vocational Education and Training (BIBB) and describe which companies are particularly affected by the problem of unfilled training places and the internal and external factors on which this primarily depends. The increasing proportion of companies providing training which were unable to fill some or indeed any of their training places in the year 2010 (cf. Figure 1) constitutes clear evidence that training place vacancies could become one of the most urgent problems on the training places market. One in three companies providing training failed to recruit (enough) suitable applicants for the training places they had on offer for the training year 2010/2011.¹

The following paper will commence with a brief overview of the relevant research results. This will be followed by a description of the various data sources used for the analyses. The results section will begin with a portrayal of the main structural characteristics of companies with unfilled training places. The next stage will be to explain the conditions determining whether a company is exposed to an increased risk of being unable to fill some or indeed any of the training places it has on offer. We will then present a summary of the implications which companies draw from their experiences in filling training places. The paper will then close with a short conclusion.

Reports on Vocational Education and Training were indicating extremely high vacancy levels at companies providing training as long ago as the early 1990's (cf. e.g. Federal Ministry of Education and Science, BMBW, 1991, p. 21). This problem, however, had faded into the background again by the end of the same decade as numbers of unfilled training places reduced and the lack of training places on offer to young people became the chief difficulty. Since 2010, the situation for companies has once again been deteriorating appreciably (cf. Figure 2).

Nevertheless, the information used in the figure regarding the number of applicants officially registered as unplaced and the number of unfilled training places only partially reflects the actual problem situation faced by the companies.² In a study dating back to 2004, the Institute for Employment Research (IAB) drew attention to the fact that 16% of companies in the federal states of the former West Germany and 9% of companies in East Germany had experienced problems in filling their training places and that nearly one in ten places offered remained unfilled. This particularly seemed to affect smaller companies, private service sector companies and companies operating in the fields of transport, commerce, communications and primary industry (cf. Bellmann/Hartung 2005).

A few years later, the annual surveys of member companies conducted by the Association of German Chambers of Industry and Commerce (DIHK) reported that training place vacancies were on the rise, indicating that the number of vacancies reached a new high of 21% in 2008. The sectors of trade and industry most significantly affected included the hotel and restaurant trade, banks and insurance companies. The situation in the federal states of the former East Germany, where 30% of companies surveyed stated that they were unable to fill their places, was particularly drastic (cf. DIHK 2008/2009). In the same year, a representative company panel survey carried out by the Institute for Vocational Education and Training showed companies reporting a somewhat lower proportion of training places which had remained vacant. An average of 15%, or one in seven, companies offering training had experienced difficulties in recruiting applicants (cf. Gericke et al. 2009). Once again, the federal states of the former East Germany and primary and manufacturing industry were particularly badly affected.

Several surveys undertaken during the following years all showed increasing numbers of vacancies on the training places market. The German Institute for Business Research (IW) reported that 49.7% of companies were unable to fill the training places they offered in 2009. This meant that around 13% or approximately 71,000 training places remained unfilled (cf. German Institute for Business Research 2010). According to the IW, the company vacancy rate for the following year - relating to companies which had sought to recruit trainees - was 27% (Werner et al. 2011; IW 2012). DIHK expects a similar figure for the year 2011 (DIHK 2012).

In overall terms, these various sample surveys are only comparable with one another to a limited extent due to the fact that they are each based on different company statistical populations and each pursue different issues as of different cut-off dates. A further factor is that their primary focus is on the description and reporting of the extent of unfilled training places rather than on pursuing analyses and attempting to explain these company vacancies. For this reason, the aim below is to use data from the BIBB Training Panel in conjunction with data from official statistical sources to investigate the issue of which factors lie behind companies' inability to fill their training places or to fill all vacancies.

BIBB Training panel the new database for skills research at company level
The survey selection made by the BIBB Training Panel takes place on the basis of a disproportionately stratified sample of the statistical population of all companies with one or more employees subject to mandatory social insurance contributions. Alongside questions relating to company-based training activities, companies have also been surveyed on human resources recruitment, annual turnover, the personnel and qualifications structure of the workforce, continuing training, aspects of work organisation, further fields of operational activity and key economic indicators. The main planned focuses of the next waves of the survey are formal and informal continuing training or competence development of staff and issues relating to the activity requirements for different groups of employees. The latest evaluation results and publication references are available on an ongoing basis via the homepage of the BIBB Training Panel at http://www.bibb.de/qp

BIBB Training Panel
The BIBB Establishment Panel on Training and Competence Development (BIBB Training Panel) is a regular annual survey which has collected representative longitudinal data on training activities in companies in Germany since 2011.³ Data is collected via computer-assisted personal interview. Over 2,000 companies took part in the first wave of the survey in the spring of 2011, a response rate of 30%. In this first wave of the survey, companies were asked how many new training places had been established for the training year 2010/2011 and how many training places were still vacant at the time of the survey. Information on the structure of the companies' training occupations was also collected. The following evaluations were conducted on this basis.

Regional data
Because the assumption must be that training place vacancies are not solely due to internal company reasons, our view is that general regional conditions on which companies are able to exert only a limited influence also need to be included in order to obtain a better understanding of the problem situation. These include regional structural characteristics such as differing economic or employment structures in the employment agencies and the latest general conditions, which indicate the current situation on the regional training markets at the time of the survey. For this purpose, the official statistics produced by the Federal Employment Agency, the Federal Statistical Office and the Federal Institute for Vocational Education and Training have been used to inform the following analyses.⁴

Structural characteristics of companies with training place provision and vacancies

As already stated, 34.8% or one in three companies providing training and forming the object of the survey were unable to fill some or all of their training places on offer for the training year 2010/2011 (cf. Figure 3 and box).⁵ In comparison to previous years, this represents a significant increase in the pressure exerted on companies by this problem (for earlier numerical proportions, cf. Gericke et al. 2009). In East Germany, the proportion of companies with vacant training places is 47.8%, whereas in the federal states of the former West Germany one in three or 32.7% of companies experienced difficulties in filling training places. ⁶

Method of calculating the company vacancy rate
Proportion of companies with at least one unfilled training place as a percentage of all companies which offered training places for the training year 2010/2011.

The various areas of trade and industry produce an extremely heterogeneous picture with regard to the filling of training places. Whereas primary and manufacturing industry and the trade and repairs sector achieve only average proportions, companies operating in company-related services and authorities and companies in public administration, education and teaching perform significantly better. In the latter case, 22.2% and 25.1% respectively of companies are unable to find applicants to fill some or all of the training places they have on offer. The largest problems are experienced by companies involved in the provision of other services. 44.4% of such firms are experiencing recruitment problems. Company size also plays a part: the larger the company, the fewer the problems in filling training places. Only 18.8% of large companies (with 200 employees or more) were unable to fill (some of) their training places whereas the corresponding figure for the smallest company size classification is 40.2%. The greatest problems in filling new training places are experienced by companies which remain in the smallest company size classification and which employ up to 19 staff. The situation is also reflected in the chamber affiliation of the company. Large variances in the chances of successfully filling training places are shown between companies which are members of chambers of crafts and trades and companies which form part of chambers of industry and commerce. Craft trade companies have significantly greater problems than industrial and commercial companies in filling training places, the figures being 43.9% and 30.8% respectively.

The following remarks will investigate which company-related, structural and general contextual conditions are responsible for the risk that companies may be unable to fill at least some of their training places. The investigation will take place at an individual company level as well as according due consideration to selected regional characteristics. The dependent variable deployed in the present analysis is whether a company surveyed within the scope of the BIBB Training Panel stated whether it was unable to fill any or some of its training places. These companies with (some) unfilled training places will be compared with companies which had no problems in filling their training places.

Company characteristics
Alongside company characteristics such as size, territory, branch of trade and industry and chamber affiliation, the particular aim was to use characteristics which measure company skills requirements. These include characteristics such as the proportion of trainees completing a dual course of higher education study as well as the recruitment of skilled workers with an intermediate secondary school leaving qualification. In addition to this, two further variables of particular interest were formed with the aim of mapping the occupational structure of company-based training in the companies forming the object of investigation. These are:

1. an indicator for the attractiveness of the training places offered by a company
2. an indicator for the level of difficulty of the training places offered by a company.

The first indicator measures the proportion of training occupations offered in a company for which there was a nationwide average surplus of supply in the year 2010. This therefore focuses on the proportion of training occupations in a company in respect of which there is insufficient demand on the part of young people. For this reason, such occupations are likely to be considered unattractive.⁷
The second indicator measures the proportion of a company's training occupations which required an above-average level of prior learning in national terms in the year 2010. In the evaluations which follow, these training occupations are designated as being particularly knowledge-intensive.⁸

The following initial assumption is made: the higher the proportion of training occupations in respect of which there is either a national surplus of training places or in respect of which special requirements are made of the prior learning of young people, the more likely a company surveyed is to be exposed to the risk of being unable to fill its training places.

Regional contextual characteristics
The regional educational systems indicators used are information provided on trainees from general schools in accordance with prior school learning in employment agency districts. This enables an investigation to be made of the influence exerted by the prior learning structure of the potential training place applicants on the respective amounts of unfilled training places in the employment agencies. For the regional training places market, information on registered training place applicants as a proportion of school leavers in the employment agency districts for the year 2010 was used. These indicators assist in mapping the data status of the employment agency districts at the time when the companies surveyed within the scope of the first wave of the BIBB Training panel were endeavouring to fill the training places they had on offer.

Regional structural characteristics
Additional time-invariant regional structural characteristics are included in the evaluation to supplement this contextual data relating to the current situation in 2010. The regional classification system used is the typology for different training place markets developed as a by the Institute for Employment Research (cf. Heineck et al. 2011). 12 regional clusters of employment agencies, in which young people have greater or lesser opportunities to make a successful transition to company-based training, were formed on the basis of various indicators relating to the regional

• labour market situation (unemployment rates),
• population structure (population density, proportion of foreigners),
• economic structure (degree of tertiarisation),
• company structures (size classes) and
• demand structure (proportion of school leavers obtaining an upper secondary school leaving qualification, size of school leaver cohorts).

The present authors deployed a multi-level procedure comprising regression and cluster analysis evaluations to test and validify the stability of these training market types over a period of three years (2006 to 2008) (cf. Figure 4).

Alongside the above-average overall proportions of companies with unfilled training places in East Germany, Figure 4 shows that low population density and a low degree of tertiarisation exert a negative influence on successful recruitment of trainees by companies. By the same token, an above-average proportion of large-company structures increases the chances of successful recruitment of applicants in both East and West Germany.

Multi-level analysis evaluation procedure
A multi-variate evaluation procedure in the form of a multi-level analysis is particularly suited to the investigation of these various influencing factors at different analytical levels by dint of the fact that such a process accords due consideration to hierarchical data structures in calculating the cause variables. Because the dependent variable is dichotomous (company with/without vacant training places), a multi-level binary logistic regression can be deployed (cf. Figure 5). This enables both the influence of factors at company level and the influence of the regional units on the rate of company vacancies to be determined whilst including the respective other factors as a control. Negative coefficients indicate a decreased risk that companies will be unable to fill their training places, whereas positive coefficients indicate an increased such risk.⁹

Results

As already described in Figure 4, regional structural conditions have a significant influence on the risk that companies will be unable to fill their training places, both in West and in East Germany (cf. Figure 5).

It is also revealed that, for West German companies, current general conditions in the training market regions are scarcely relevant to the specific recruitment problems of the companies forming the object of the survey. None of the context factors included in the explanation model exhibits significant values in this regard. In West German companies, the surveys show that specific company characteristics determine whether recruitment of trainees will be successful or not.

Compared to companies with a chamber of industry and commerce affiliation, craft trade companies are particularly affected, and small companies and smaller SME's are particularly affected as opposed to large companies due to the fact that risk decreases in line with increasing company size provided always that the influence of other important factors is controlled. One effect which still needs to be emphasised as far as West German companies are concerned is that a high level of requirements for skills and skilled workers leads to an increased risk of unfilled training places for companies. This results in the supposition that the training places market in the federal states of the former West Germany tends to be supply-induced in nature and that the main underlying reason for unfilled training places could be that there are too few applicants - and from the point of view of the companies an insufficient number of qualified applicants - to meet the high demand for qualified young skilled workers (cf. BIBB Training Panel 2012).

It is noticeable that companies with higher proportions of trainees from a migrant background have somewhat greater problems in filling training places. This is conspicuous to the extent that this is a group of training place applicants which experience particular problems on the training places market. Further analyses will be required in order to demonstrate why companies which already have such a group of applicants amongst their trainees show particular recruitment problems. By way of contrast, rising proportions of knowledge-intensive occupations in companies lead to a corresponding fall in the vacancy risk.

One factor which should be highlighted as far as East German companies are concerned is the fact that vacancies in training provision particularly tend to occur if a company is already training young people in occupations for which there is a surplus of supply on the training market due to the fact that too few young people are interested in such training provision. From the point of view of young people interested in company-based training, this clearly constitutes a reason not to commence training in training occupations which are less in demand.

If, on the other hand, training takes place in occupations which may be described as knowledge-intensive by dint of the above-average level of prior learning of trainees - and this no longer corresponds to the initial hypothesis postulated - the risk that companies will have vacancies in their new training provision at the end of the placement year decreases significantly.

Otherwise, alongside fundamental structural conditions, the current situation on the respective training places market plays a greater role in the East than is the case in the West. This reveals that, despite higher proportions of training place applicants who have obtained sufficient qualification at school, East German companies are exposed to an increased risk of being unable to fill some or all of their training places. One possible explanation is a change in the career choice behaviour of young people in East Germany. The current labour market situation in the federal states of the former East Germany may not be the least of the reasons why particularly those who have obtained an Intermediate or upper secondary school leaving certificate could arrive at the conclusion that it is better to look around for alternative school-based or higher education pathways or gravitate towards more attractive labour and training places markets in West Germany. This thesis is also supported by the fact that, notwithstanding the requirement for skilled workers, small firms and craft trade companies experience particular problems in filling their training places (cf. Schank 2010). Whether the career choice of young people in East Germany has really altered in this regard needs to form the object of investigation in further studies.

Will fewer companies participate in training in future?

What are the consequences which companies will draw following unsuccessful attempts to find young people for their training places? Should economic aspects predominate, the expectation would be that companies will either withdraw from company-based training entirely or else at least reduce their training provision and seek other routes for the recruitment of skilled workers. In order to obtain more precise information on intended strategies, companies were asked about their plans for training place provision over the next three years and about the possible difficulties which may arise from their perspective in filling training places.
A consideration of the plans for training place provision for the next three years made by companies offering training shows that, contrary to our initial supposition, a majority of 75.3% wishes to continue training activities in unaltered form (cf. Figure 6).

One in six companies (16.0%) is even planning an expansion of training capacities. Only 7.4% of companies feel compelled to decrease the amount of training they offer over the coming three years, and as few as 1.4% plan to end training involvement entirely.

One astonishing fact is that especially companies which have had poor experiences in the recruitment of training place applicants adopt a thoroughly optimistic view of training provision planning. Of the companies which have not succeeded in recruiting a single applicant for their training places, only 6.8% plan to reduce provision whereas a majority of 78.0% expects that training place provision in their company will remain unchanged. One in six companies is even intending to increase provision. Such a strategy is similar to that adopted by companies who have no unfilled training places to report. Surprisingly, increased endeavours will be taking place over the coming years at companies who have only been able to fill part of their training provision. The supposition here is that the requirement for qualified young skilled workers is so great that, because of their particular prevailing general conditions such as highly company-specific skills requirements, these companies see no other possibility other than to continue their efforts.

Given that the companies surveyed fully expect problems to increase in future, the fact that an average of 74.2% (cf. Figure 7) expect to find sufficient numbers of suitable applicants for their training places over the course of the coming years renders the results even more astonishing.

On the other hand, one in four companies believes that the present situation will remain the same. Of the companies currently experiencing recruitment problems, 83.8% and 81.0% respectively, i.e. more than four in five in each case, state that they are expecting greater difficulties in future. If no recruitment problems were to arise for the training year 2010/2011, only two in three companies fear a shortage of suitable applicants.

Conclusion

Although a considerable proportion of companies involved in the training of young people in Germany has major problems in filling their training places, these companies are yet not currently drawing the fundamental implication of exiting company-based training or of significantly reducing their training provision. Despite poor experiences, the principle of hope appears to continue to prevail, especially given the fact that sufficiently large demand potential still exists (cf. Maier et al. 2011; Walden/Troltsch 2011).

In general terms, demographic and structural change amongst school leavers will not exert an equivalent neutral effect on all company size classifications, branches and regions - a trend clearly discernible from the figures presented. The following sorts of company in particular are already experiencing difficulties in filling the apprenticeships they have on offer, and this is a development that is likely to intensify in future.

• Craft trade companies, the smallest category of company in general and smaller SME's
• Companies in the "new federal states" - i.e. the former East Germany
• Companies with training place provision in occupations which are not generally in sufficient demand on the part of young people and young adults
• Companies in regions where training market conditions are increasingly easing
• Companies in regions where proportions of young people with higher qualifications are increasing

In overall terms, this means that the prevailing "balance of power" of yesteryear on the training places market is gradually turning around as ever greater significance is being accorded to the supply side and to young people in their capacity as "consumers" of vocational education and training. Within this context, further considerations and measures for the support of dual training would be desirable from a practical, academic research and educational policy point of view.

Especially the companies affected could use various practical measures, such as a broader range of recruitment strategies, in order to bring about a sustainable improvement in their initial situation. More personal and specific initiation of contact with young people and a greater insight on the part of the young people themselves into the training occupations on offer via such vehicles as internships or company visits will, in turn, afford the companies a better opportunity of concluding training contracts with young people interested in training. An appropriate approach via social or regional networks would also pay off for companies in the long run and would at the very least act as evidence of acceptance of new communication routes of this kind.

The securing of suitable up-and-coming young skilled workers is becoming an increasingly important field of investigation in vocational education and training research. One particular area requiring closer study in order to gain indications of problems and potential opportunities for improvement is the way in which companies attempt, with greater or lesser success, to fill training places (cf. Ebbinghaus 2011). Further important research issues are also arising with regard to the execution and quality of training (cf. Beicht et al. 2012).

Of particular interest to vocational education and training policy would be a specification of the agreed measures within the scope of a Training Pact with a targeted alignment towards the occupational groups mentioned above which are particularly affected by the problem of unfilled training places. In such a case, all those involved in the Training Pact would be better able to focus their initiatives for the support of companies and young people. A more targeted orientation of public programmes towards companies with particular problems in filling training places would also be conceivable within this context. One possibility would be expansion and more precise definition of external training management involving the implementation of innovative support measures for companies in the recruitment of trainees. Marketing measures could also be developed for training occupations in which companies find it particularly difficult to find applicants. It would probably be worthwhile to specify measures of this kind regionally.

The creation of new training occupations which help to cover new company skills fields remains of considerable significance. The untapped areas of potential which exist in this regard are particularly revealed by the fact evidenced above that companies offering so-called knowledge-intensive training occupations experience fewer recruitment difficulties. Such a finding is of particular interest, not least in light of the fact that various authors postulate the thesis that the general trend towards a knowledge economy and educational expansion would lead to a fall in demand for dual training on the part of young people with better levels of prior school learning (cf. e.g. Baethge et al. 2007).

Finally, the systemic consequences for dual training of falling numbers of school leavers should not be forgotten. Since the 1980's, companies had been reacting in a slightly time-delayed manner to the decline in demand by young people occasioned by demographic developments by retreating from company-based training. Even at that time, smaller firms and craft trade companies were the first to withdraw their training place provision and depart vocational education and training in the long term. The consequence was that the proportions of companies providing training fell to a significantly lower level on average than in the 1980's, a level which has remained relatively unchanged down to the present day. In addition to this, a structural change has taken place in dual training which has seen company training participation shift towards larger SME's and major companies (cf. Troltsch 2010). Such persistent phases of imbalance between supply and demand thus seem to have created a level of participation which can only later be influenced to a limited extent.

Related literature

Translations of the titles, authorship details and publication references of German language literature are intended merely as an indication of the contents of these works and of the nature of the source and do not necessarily suggest that these works are available in English.

Baethge, Martin; Solga, Heike; Wieck, Markus (2007):
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Beicht, Ursula; Krewerth, Andreas; Eberhard, Verena; Granato Mona (2009):
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Deutscher Industrie- und Handelskammertag [Association of German Chambers of Industry and Commerce, DIHK] (2009):
Ausbildung 2009 - Ergebnisse einer IHK-Online-Unternehmensbefragung [Training 2009 - results of an online Chamber of Industry and Commerce company survey].
(http://www.dihk.de/ressourcen/downloads/ausbildungsumfrage_09.pdf)

Deutscher Industrie- und Handelskammertag [Association of German Chambers of Industry and Commerce, DIHK] (2012):
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Dionisius, Regina; Lissek, Nicole; Schier, Friedel (2012):
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Gerhards, Christian; Mohr, Sabine; Troltsch, Klaus (2012):
Betriebliche Ausbildungsbeteiligung, unbesetzte Ausbildungsplätze und Fachkräftebedarf - Ergebnisse aus dem BIBB-Qualifizierungspanel.[Company training participation, unfilled training places and skilled worker requirements - results from the BIBB Training Panel]. In: Federal Institute for Vocational Education and Training (Ed.): Data Report to accompany the 2012 Report on Vocational Education and Training, pp. 204-212, Bonn. (https://datenreport.bibb.de/html/dr2012.html)

Gericke, Naomi; Krupp, Thomas; Troltsch, Klaus (2009):
Unbesetzte Ausbildungsplätze - warum Betriebe erfolglos bleiben [Unfilled training places - Why enterprises do not succeed in filling them].
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Institut der deutschen Wirtschaft [German Institute for Business Research, IW] (2010):
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Kau, Winand u.a. (2010):
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Maier, Tobias; Ulrich, Joachim G. (2012):
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Maier, Tobias; Troltsch, Klaus; Walden, Günter (2011):
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Schank, Christoph (2011):
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Troltsch, Klaus (2010):
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Troltsch, Klaus; Walden, Günter (2010):
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Imprint BIBB REPORT

BIBB REPORT Volume 6, Edition 19, October 2012 ISSN Internet: 1866-7279 ISSN Print: 1865-0821 Published by Federal Institute for Vocational Education and Training (BIBB) The President Robert-Schuman-Platz 3, 53175 Bonn Publishing house, advertising, distribution W. Bertelsmann Verlag GmbH & Co. KG Postfach 10 06 33, 33506 Bielefeld Telephone: 0521 91101-11 Fax: 0521 9110119 http://www.wbv.de/ service@wbv.de Print version The print version of this publication can be ordered from W. Bertelsmann Verlag GmbH & Co. KG.. Further information www.bibb.de/impressum

Editors Margit Ebbinghaus, Dr. Günter Walden Dr. Eckart Strohmaier (in charge) Editorial assistant Katharina Faßbender Telephone: 02 28 / 107-17 17 Heike Rotthaus Telephone: 02 28 / 107-20 44 E-Mail: bibbreport@bibb.de Copyright Reproduction of this publication - in part or in whole - is prohibited without BIBB's prior permission. Point of contact regarding content Klaus Troltsch - troltsch@bibb.de