The over‐training of apprentices by employers in advanced manufacturing: a theoretical and policy analysis

• Date: 01 November 2014
• DOI: http://doi.org/10.1111/1748-8583.12039
• Published date: 01 November 2014

The over-training of apprentices by employers in

advanced manufacturing: a theoretical and policy

analysis

Paul Lewis, Department of Political Economy, King’s College London

Human Resource Management Journal, Vol 24, no 4, 2014, pages 496–513

This article reports the results of a study of the ‘over-training’ of apprenticesby large manufacturers in the

UK. The term ‘over-training’ was traditionally used to refer to the way in which nationalised industries

trained more apprentices than they needed, with the ‘surplus’ being released at the end of their training to

find another employer. In contrast, the evidence reported in this article indicates that over-training now

typically involves large employers helping to train apprentices who are employed and paid by other firms

from the outset. The project examines the extent and nature of over-training, the reasons why employers

become involved in over-training, and policy implications. The evidence suggests that over-training can

increase the number of high-quality apprenticeships. Large employers need to be made more aware of

over-training. Government can help promote over-training via its ‘Catapult Centres’.

Contact: Dr Paul Lewis, Department of Political Economy, King’s College London, 22

Kingsway, London WC2B 6NR, UK. Email: paul.lewis@kcl.ac.uk

INTRODUCTION

Why should a manufacturer take responsibility for training workers employed by

other firms? Both economic theory and HRM suggest that such behaviour will be

relatively rare. After all, if it is indeed the case – as both literatures suggest – that

employers who pay for training will be preoccupied with ensuring that the workers in whose

skills they invest remain with them for long enough that they gain a satisfactory return on their

investment, then the chance of manufacturers helping to train workers employed by other firms

seems at first glance to be rather slim.

However, as this article will show, there exist several examples in the UK of large

manufacturers taking responsibility for, and contributing extensively to, the training of workers

employed by other firms. The examples centre on apprenticeship training and are commonly

said to involve the manufacturers ‘over-training’ apprentices. Loosely speaking, ‘over-training’

involves large employers who currently offer high-quality apprenticeships playing a role in the

training of more apprentices than they themselves require to meet their own anticipated needs,

with the extra apprentices being employed by other firms in their sector and/or supply chain

(often small and medium-sized employers or SMEs).

However, the precise meaning of the term ‘over-training’ is unclear in the UK context.

Different organisations use it to denote rather different degrees of involvement by large

employers in the training of apprentices for other firms. In particular, the kinds of over-training

found today contrast with approaches that bore that title in the past. Practices traditionally

described as ‘over-training’ saw larger firms, most notably the nationalised industries, deliber-

ately taking on more apprentices than they needed, employing and paying the apprentices

themselves, and simply letting the surplus go at the end of their training to find an employer for

themselves. In contrast, contemporary examples of over-training involve apprentices being

employed from the outset, not by the firm that is carrying out the over-training, but by the firm

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doi: 10.1111/1748-8583.12039

HUMAN RESOURCE MANAGEMENT JOURNAL, VOL 24 NO 4, 2014496

© 2014 John Wiley & Sons Ltd.

Please cite this article in press as: Lewis, P. (2014) ‘The over-training of apprentices by employers in advanced manufacturing: a theoretical and

policy analysis’. Human Resource Management Journal 24: 4, 496–513.

for which they are ultimately going to work. Moreover, just as the nature of over-training is

unclear, so too is its extent, as there is no survey evidence on this issue.

The nature and extent of over-training are not merely of academic interest. Policy-makers are

becoming increasingly interested in over-training as a means of harnessing the willingness of

large manufacturers to train apprentices for other firms and thereby of increasing the number

of high-quality apprenticeship places on offer, especially in SMEs (CBI, 2011: 16–17; UKCES,

2011: 3, 27–28). The background is provided by a widespread belief that increasing the number

of apprentices, especially in STEM (science, technology, engineering and mathematics) subjects,

is essential for improving the performance of the UK economy (Department of Business,

Innovation and Skills, 2009; House of Commons Library, 2011). However, difficulties are readily

apparent: only 8 per cent of British employers offer apprenticeships; and Britain trains far fewer

apprentices per 1,000 employees than countries such as Australia, Switzerland and Germany,

so that the demand for places on apprenticeship training courses typically far exceeds the

supply. SMEs, in particular, tend to have little involvement in apprenticeship training (UKCES,

2010: 57–58; Holt, 2012: 4, 9).

The reasons for the low supply of apprentice training places in STEM subjects are complex.

The proximate causes include the relatively high wages paid to apprentices, the product market

strategies and approach to job design used by British firms, and the ready availability of

alternative sources of skills (e.g. overqualified graduates). Underlying structural causes centre

on the institutional framework within which firms operate and decisions about apprenticeship

training take place, a category that includes: the legal system, which determines whether the

content of apprenticeships is placed on a statutory footing; the role of employee organisations

such as trades unions, whose bargaining strategies affect the payroll costs incurred by

apprentices’ employers; the presence – or absence – of employer organisations with the capacity

to deter poaching; and the framework of corporate governance under which firms operate

(which shapes the time horizon for their investment decisions) (Fuller and Unwin, 2003: 9–10;

Brockmann et al., 2010; Wolter and Ryan, 2011: 553–569). While acknowledging the profound

importance of underpinning structural factors, and the potential limitations of polices that work

within the existing institutional framework (Keep and Mayhew, 2010), this article leaves aside

such broader political-economic questions to consider whether over-training by large

employers can help increase the number of high-quality apprenticeship places on offer in the

UK, as policy-makers hope.

It was against the background provided by this renewed interest in, but lack of clarity and

knowledge about, over-training that the project reported here was carried out. The project’s

goals were threefold. The first was to investigate the extent to which over-training is already

taking place and to examine the different approaches being developed. The second goal was to

explore why employers become involved in over-training, whether as providers or, via their

apprentices, as recipients. The third set of issues concerns implications for policy. To anticipate

the argument to come, there does appear to be scope for over-training to increase the number

of apprenticeships, especially in those geographical areas where there is a large manufacturer

with a high-quality apprenticeship programme that can take the lead in over-training. Large

employers need to be made more aware of what over-training involves and of the benefits it

can bring. There may also be scope for government to help develop such organisations, most

notably via its ‘Catapult Centres’. Over-training is also potentially important in sectors other

than manufacturing, most notably energy and construction. However, if over-training’s

potential to raise skill levels and improve performance is to be realised, it may need to be

augmented by policies designed to improve the utilisation of skills in firms that acquire

apprentices through it.

Paul Lewis

HUMAN RESOURCE MANAGEMENT JOURNAL, VOL 24 NO 4, 2014 497

© 2014 John Wiley & Sons Ltd.