Financial incentives and non-financial incentives for apprenticeships, traineeships and employment

In January 2025 the Australian Government released the final report for the Strategic Review of the Australian Apprenticeship Incentive System - Skills for tomorrow: Shaping the future of Australian apprenticeships (https://www.dewr.gov.au/australian-apprenticeships/resources/strategic-review-australian-apprenticeship-incentive-system-final-report).

As part of the broader review, the CIE was commissioned by the Department of Employment and Workplace Relations to conduct an international literature search and critical review of research and literature on policy interventions related to apprenticeship financial and non-financial supports, including:

Identifying the range of financial and non-financial supports in the international literature.
Mapping the impacts of these supports to outcomes. This includes understanding their impact on key outcomes, as well as unintended consequences of supports, including:

- how incentives affect apprenticeship commencements, completions and completion rates

- interactions between non-financial and financial supports, and how these interactions affect their respective effectiveness and efficiency

- the effects of workplace and training experiences for apprentices, including effects on retention and completion and transition to work in the occupation and/or industry in which they were training

- the effects of the above for priority cohorts such as women, First Nations peoples or culturally and linguistically diverse communities, people with disability and those living outside of urban locations (major cities)

- community attitudes towards apprenticeships and their impact on take up, retention and completions

- the impact and effectiveness of targets (quotas) on employment outcomes.

The CIE’s study found that:

actions that lower the financial costs for employers generally increase the number of apprentice commencements, although the responses varied by sector and with time
employers’ responses to financial incentives can differ depending on whether the business’ focus is primarily on short-term profits or on the long-term skills of their workforce
in contrast to direct financial incentives, non-financial incentives do not pose the same risk of creating windfalls for companies; however, they can still be costly labour market instruments that necessitate continuous evaluation of their efficiency and effectiveness.

LINK TO CIE REPORT