Apprenticeships and traineeships underpin the pipeline of skills needed to deliver some of the biggest priorities facing our nation. In an environment of widespread skills and workforce shortages, a strong apprenticeship and traineeship system is more important than ever.
No apprentice or trainee commences without an employer. This report highlights the experiences of employers in the system, based on insights from Australian Industry Group’s Centre for Education and Training and direct engagement with a broad range of employers.
Employers value the apprenticeship and traineeship system, and thousands achieve successful outcomes through it each year. The benefits of apprenticeships and traineeships extend beyond employers to the individuals completing them and society at large.
To meet current and future skills needs, Australia needs an urgent and sustained step change in the numbers of apprentices and trainees commencing and completing. Yet, in recent years, apprentice and trainee commencements appear to be reverting to pre-pandemic trends.
Every decision to employ an apprentice or trainee weighs up a broad range of costs and benefits. Along with direct costs, employers are grappling with attracting suitable candidates to apprenticeships and traineeships, meeting supervision requirements, navigating the complexity of the system, the impacts of non-completion and challenging business conditions.
This represents a complex economic equation – one that employers of all sizes and across industries report is increasingly challenging. The cost and complexity of employing apprentices and trainees is increasing, and employers report their satisfaction with the system is decreasing.
Financial incentives received by employers of apprentices and trainees are an important component of the economic equation for businesses of all sizes and across all industries. While they do not solely drive decisions or cover costs, they do help to balance the overall equation. Any substantial reduction to employer incentives poses a significant risk of further negative impacts on the engagement of employers in the system.
Renewed effort is needed to ensure the apprenticeship and traineeship system remains a cornerstone of our skills development system. This report identifies six areas of priority, against which ten evidence-based recommendations are made. These recommendations focus on strengthening the apprenticeship and traineeship system from the perspective of employers to ensure it continues to meet the skills needs of industry, and Australia, for many years to come.
This report is underpinned by a survey of employers in April and May 2025.
Survey findings include:
More than 8 in 10 employers of apprentices and trainees surveyed identify them as important or very important to their business.
96% of employers surveyed face barriers when hiring apprentices or trainees, with the most commonly reported barriers being difficulty finding suitable candidates and difficulty supervising and training on-the-job.
Around half of employers surveyed report that their employment of apprentices and trainees would reduce if they no longer received financial incentives.
Six areas of priority have been identified:
Ensuring the economic equation remains viable for employers through policy settings including incentives
Widening the pool of employers offering apprenticeships and traineeships by enabling access to group training and supporting large employers to train in their supply chains
Ensuring a strong future pipeline of apprentices and trainees by lifting the status of the system and encouraging pre-apprenticeships
Expanding the apprenticeship model into new areas by removing barriers to and supporting increased uptake of degree apprenticeships
Minimising inconsistency across jurisdictions to reduce system complexity for employers operating across borders
Supporting high quality apprenticeship and traineeship experiences by building workplace supervision capability and enabling quality and timely off-the-job training
Recommendations
1
All decision making by governments in relation to apprenticeships and traineeships should closely consider the economic equation for employers, noting consistent reports that the costs and complexity of employing apprentices and trainees is increasing.
2
Commencement incentives should be provided to employers of apprentices and trainees across industries, regardless of size, with additional incentives for employers to attract and retain apprentices in priority sectors and skills shortage occupations. Additional incentives would also assist employers to attract and retain apprentices in underrepresented cohorts.
3
Explore opportunities to make using group training more accessible, particularly for small employers that have never employed apprentices or trainees. The Group Training Organisation Reimbursement Program is a good model that could be considered for expansion to accommodate returning or first-time businesses.
4
In partnership with industry, identify and implement options to explore how larger businesses can support their supply chain by overtraining, including government owned entities leading by example.
5
Governments, industry and the education and training sector work collaboratively to strengthen the perceptions and status of apprenticeships and traineeships in a broad range of industries. This should build upon existing successful activities and include actioning recommendations 3.1 to 3.4 in the Strategic Review of the Australian Apprenticeship Incentive System focussed on career information and advice and lifting the status of apprenticeships and traineeships as a valuable career pathway.
6
Expand opportunities to develop preapprenticeship programs, particularly those that provide exposure to a wide range of trade occupations. The Multi Industry School Based and Pre-Apprenticeship Support Project piloted by the Apprentice Employment Network provides a good example of what this might look like.
7
The Australian Government and State and Territory Governments use policy settings to encourage and enable greater uptake of higher and degree apprenticeships. This should include, but not be limited to, removing Fringe Benefits Tax barriers and making degree apprenticeships eligible for system supports such as employer incentives and mentoring.
8
The Australian Government and State and Territory Governments, in consultation with industry, work collectively to identify and resolve national inconsistencies that increase complexity for employers of apprentices and trainees.
9
Make supervision training for supervisors and new employers of apprentices and trainees more widely available. This training is likely to be most effective if delivered in an industry-specific manner in partnership with relevant industry bodies, as recommended through the Strategic Review of the Australian Apprenticeship Incentive System.
10
In consultation with industry, ensure that policy and funding settings enable, rather than constrain, the ability of registered training organisations to deliver high quality off-the-job training that meets the needs of employers in context of the challenges highlighted through this report.
