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Shortage of apprentices in Denmark: no time to waste

This year, new funding is to be used to secure sufficient levels of skilled labour. This April, the AUB Apprenticeship Scheme will pass judgement on Danish employers: are they taking on enough apprentices?
According to Deputy Director General Kim Graugaard, DI all employers should consider whether they are able to provide employees with training and, if not, pay others to do so.

Publiceret: 12.04.2018
Af Uffe Hansen mail

We simply need to train more to replace the ones who are leaving. And we need to do more than just talk. We have to use other means and incentives to ensure that we attract more apprentices.

That is the way Deputy Director General Kim Graugaard of the Confederation of Danish Industry describes the situation in the long-standing efforts to attract more young people into vocational training.

Efforts that this April mean that employers will be given their own targets for the number of apprentices that they need to train if they are to be exempt from paying contributions to the AUB Apprenticeship Scheme.

“Securing apprenticeships and apprentices has long been a problem and nothing has changed of its own accord. This is why we negotiated the AUB Apprenticeship Scheme at the tripartite negotiations in 2016. The scheme came into force on 1 January 2018,” explains Kim Graugaard.

See also: Better integration could bring 139.000 into the workforce

Carrot and stick

The scheme is a combination of carrot and stick in which businesses that do not meet the targets set for a given industry have to pay extra to finance training centres while the contributions payable by the remaining businesses are reduced.

Total contributions from businesses are to remain unchanged. A bonus of up to DKK 50,000 for companies setting up additional apprenticeships is also being introduced.

“In the period to 2025, the AUB Apprenticeship Scheme is to generate 8,000-10,000 training contracts. This year alone, the first 2,100 contracts are to be put in place. It means that we cannot waste any time,” says Kim Graugaard.

A shortage of skilled labour has developed into the main challenge facing employers in a time when the economy and market opportunities are growing.
See also: Use praktikpladsen.dk to find apprentices and save money on AUB

 “Apprentices are a key employee resource and if it dries up, other activities also dry up. This can mean that businesses have to restrict their production or move some of it abroad,” predicts Kim Graugaard.
The shortage of skilled labour constitutes the biggest problem in the manufacturing, technology and IT industries. This shortage cannot be eliminated by recruiting foreign nationals as demand is just as high in many other countries.

“The average age of the skilled worker is quite high. We are not attracting enough young people to replace the older ones who gradually retire or take early retirement. Every year, more skilled workers are leaving than joining the labour force,” explains DI’s Deputy Director General.

See also: Looking for a permanent job? Start as a temp

Scheme widely criticised

The AUB Apprenticeship Scheme has been widely criticised. Small businesses who may already have one apprentice for every five skilled employees score far better than the targets set by the new AUB scheme. They do not get the special bonus, but there is a good reason for that.

“I understand if some people believe that that is unfair. But we have only had limited funds available for the bonus scheme. If you spend that money rewarding things that happened in the past, no additional apprenticeships will be generated from it in future,” explains Kim Graugaard.

These businesses may, however, get off more lightly as they will have their contribution to the vocational college work experience scheme reduced.

Other businesses do not take on apprentices because they are experience extensive seasonal variations or are in the temporary recruitment industry. Kim Graugaard admits that things may be difficult for certain types of industry and business.

“Skilled labour does not come out of nowhere. Danish industry needs skilled workers, but also needs to train them. All employers should consider whether they are able to provide employees with training and, if not, pay others to so through higher contributions to AUB,” he says.

More stringent requirements possible

If the AUB Apprenticeship Scheme does not pave the way for an additional 2,100 apprenticeships in 2018, requirements may be made more stringent relatively quickly.

“A thriving economy usually makes taking on more apprentices easier which is why I expect positive developments this year. Of course, this also requires that some young people – or adults – want to take up the apprenticeships that are being advertised by businesses,” says Kim Graugaard.

He encourages Danish businesses to advertise all their apprenticeships on the praktikpladsen.dk website. If the apprenticeships have not been filled within three months, businesses can have their AUB contributions reduced.

FACTS
AUB Apprenticeship Scheme

The AUB Apprenticeship Scheme which redistributes contributions from businesses to the training of apprentices and trainees came into force in January 2018.

The contribution required by each business is determined by a target figure. If they have fewer apprenticeship hours than their target, their contribution increases and vice versa. Additional bonus schemes may be brought in.

This year, the scheme is to create an additional 2,100 vocational training placements. 8,000-10,000 apprenticeships are to be created annually by 2025.

Please contact Senior Consultant Birgitte Winge, Confederation of Danish Industry on 33773893 or biwdi.dk if you should have questions about the AUB Apprenticeship Scheme.

Apprentices are a key employee resource and if it dries up, other activities also dry up.
DEPUTY DIRECTOR GENERAL KIM GRAUGAARD OF THE CONFEDERATION OF DANISH INDUSTRY
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PUBLISHED: 4/12/2018 LAST MODIFIED: 4/12/2018