Bucking the trend, SMEs keep apprentice and trainee numbers steady – training levels differ by region

• SMEs provide training for 1.2 million apprentices and trainees – 90% of total
• Training intensity varies across states – Rhineland-Palatinate and Saarland are leaders
• Microenterprises have few trainees or apprentices

The number of trainees and apprentices in German businesses has declined further, reaching a new record low of 1.32 million in 2016. A preliminary evaluation by KfW Research on the basis of the representative KfW SME Panel 2017, however, shows that SMEs are successfully bucking this downward trend. The number of trainees and apprentices in SMEs has stabilised at some 1.2 million since 2012 – a level that has remained steady in 2016 as well. That means two thirds of all workers are employed in the 3.76 million SMEs across Germany, but some 90% of all trainees and apprentices.

Commenting on the analysis, Dr Jörg Zeuner, Chief Economist of KfW Group said: ‘Providing junior employees with vocational training is vital to the survival of small and medium-sized enterprises. After all, they are the skilled workforce of the future!’ SMEs still manage to keep the number of trainees and apprentices steady, he said, but that will likely become increasingly difficult from year to year. ‘Declining numbers of students and the young generation’s growing inclination to pursue tertiary studies are already leaving training places empty in many businesses. The problem is particularly acute in rural areas.’

Even if SMEs in their entirety provide for most vocational training, by far not every small or medium-sized business in Germany has trainees or apprentices. Of the 3.76 million SMEs, 440,000 were last offering training – a rate of 11.7%. The general rule is that the smaller a business is, the less likely it is to have trainees or apprentices in its workforce. Only around 5% of microenterprises with fewer than five employees provide training, but three fourths of those with more than 50 employees.

A glance at the map shows that training activity is unevenly spread across Germany’s federal states. Most active are Rhineland-Palatinate and Saarland, where 18% of small and medium-sized enterprises provide training, followed by Lower Saxony (including Bremen) with 17% and North Rhine Westphalia with 16%. The large eastern states of Saxony, Thuringia (with 10% each) and Mecklenburg Western Pomerania (11%), and the city states of Berlin (10%) and Hamburg 11%) are at the bottom of the list. The ranking can be largely explained with the different structure of SMEs in the states. Manufacturing, construction and handicrafts – sectors that traditionally are very active in training – have less representation in large cities, which explains the low ranks of city states. One reason fewer businesses in eastern Germany provide training is that microenter-prises are more common there.

‘Training activity in the federal states is determined by the regional differences in the SME profile. Regions with many microenterprises offering little training could benefit from more collaborative training, in which one apprentice is trained by several businesses’, said KfW’s Chief Economist Zeuner. ‘This applies particu-larly to the large eastern German states. Yet it is precisely there that, as a result of dwindling populations, not only is supply lacking, but demand for training as well.