Employer investment in intermediate-level STEM skills: how employers manage the investment risk associated with apprenticeships

This report is about publicly funded science, technology, engineering and mathematics (STEM) related Apprenticeships in England. It has a particular focus on a specific type of STEM Apprenticeship - that of engineering delivered at Level 3. There is a wealth of evidence that demonstrates the value apprentices confer upon the employers who train them. This is particularly so with respect to STEM Apprenticeships. However there remains the challenge of persuading more employers to invest in STEM Apprenticeships, in order to avoid skill shortages arising that have the potential to stymie the development of hi-tech growth sectors. The challenge is essentially that of persuading more employers to make relatively costly investments in intermediate-level STEM skills. Persuading more employers to take on apprentices may lie in understanding how employers manage the risk attached to investments in skills. To provide a review of the concept of risk relating to employer investment in STEM Apprenticeships, the report takes the perspective of the Apprenticeship system in England, and the role of policy in sharing and shifting the cost of Apprenticeships between the employer, the apprentice, and the state. From a policy perspective, insights will also be provided from Germany and Switzerland on how these countries have been able to persuade employers to invest in Apprenticeship training.

The report commences with an overview of the demand for, and supply of, STEM Apprenticeships and the extent to which there may be under-supply of key skills that Apprenticeships are well placed to provide. Contextual information is also provided about development in Apprenticeship policy over recent years. In the third section of the report, an outline of the rationales that guide employer investments in STEM Apprenticeships is provided, along with the costs they face, and how employers recoup these costs. This is followed by a section that looks at how the take-up of STEM Apprenticeships might be extended beyond the group of employers which currently provide them. This focuses in particular upon how collective or group measures might be used to achieve this aim. Finally, a conclusion is provided that outlines how policy might be augmented to increase the number of employers offering STEM Apprenticeships.

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