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Europe

Austria's apprenticeships get youth into work

In light of rising youth unemployment, business and government are being called upon to reassess what a good education means. Austria excels at getting young people into work. Alison Langley reports from Vienna.

By his own admission, Max Minderl (photo, above) was not a very good student. Perhaps it was because, at 15, he didn't know what he wanted to do with the rest of his life.

First he enrolled in a cooking school; then, a year later, he tried his hand at a commercial school. "To tell the truth, I guess I was a bit lazy," he admits now. He preferred to be on the soccer pitch, where he plays mid-field for a team in Burgenland. "My grades weren't very good."

So last October, at his mother's insistence, Max, now 17, applied for one of the 700 apprenticeships offered each year by Rewe International AG, a food and drug store conglomerate. He had already spent two summers working there, so he thought time spent in the purchasing department at the Austrian headquarters in Wiener Neudorf would be perhaps a better fit for him than a traditional classroom.

Compared with other countries within the Organization for Economic Cooperation and Development, the transition from school to the labor market works relatively smoothly in Austria - even for the initially unmotivated.

While countries in other parts of the EU are struggling with record high youth unemployment, countries like Austria with developed apprenticeship programs enjoy some of the lowest, although that number has been creeping up since 2010.

According to

one study

published in 2013, countries with strong apprenticeship programs place and keep young people in the job market better than countries without. In 2013, the share of Austrian 15- to 29-year olds who were neither in employment nor in education or training (NEET), was about 10 percent, below the OECD average of 15 percent.

This year, unemployment among under 24-year-olds in Germany is 7.2 percent and Austria 10.3, while about half the youth in Greece and Spain don't have jobs.

Enviably, more than half of those leaving school in Germany and Austria find a job without experiencing any period of unemployment. This is not true, however, for many young people with immigrant backgrounds.

Apprentices in a German factory

Germany has a similar system of apprenticeships to Austria

The dual system works like this: Youth like Max who are usually around 15 years old and who are not interested in or do not qualify for university can enter apprenticeships or vocational training. In Austria, this means about 80 percent of the workforce. Typically students split their time between working - and learning on-the-job skills - while studying in a formal school. Max spent 10 weeks last fall at a boarding school and plans to attend again this year. Within about three years, he hopes to receive his diploma.

Most university graduates in Austria enter the workforce as paid trainees or interns.

Rewe Austria's Head of Human Resources Christian Meister, himself a former trainee, is also responsible for recruiting in seven other central and eastern European countries where his company does business. Those nations do not have dual education systems, and frequently, he says, he gets applications from people who are over-qualified. He speaks with incredulity about university graduates applying for receptionist jobs.

"From my perspective, it's not necessary to have a university degree" to do well on the job, he says. Rewe's chairman of the board Frank Hensel began his career as an apprentice. "In retail, that's common practice," Meister adds.

Youth advantage

The system is not without flaws. As technology advances, so does the need for skilled labor. And Martina Ernst, head of human resources at Erste Bank Group, said that while she strongly supports and appreciates the dual system, it could improve the speed with which it adapts to technological changes.

"You know how fast technology changes? That's how fast we need to adapt," she says.

Even in the banking world, apprenticeships are valued. Ernst says Erste Bank hires around 25 apprentices per year. The bank also takes on interns from universities. Because Austria lags OECD countries in the number of tertiary graduates, Erste sometimes needs to look outside of its home country to find people in specialty fields, like risk or compliance.

It's not surprising that the OECD has found that in most countries, better-educated workers have an easier time staying employed. But it also finds that young college-educated workers have on average a harder time actually getting a job in the first place.

Research by Ludger Wössmann, an economist at the Ifo Institute in Munich, suggested two years ago that vocational education could have a downside. Early skills learned as in vocational training can turn into a disadvantage by the age of 50. Thus low youth unemployment could mean higher old-age unemployment later on, he said at the time. That is true now in Austria, where 16.8 percent of the workforce over 50 years old are unemployed.

In an attempt to help older workers return to the workforce, Rewe has for the first time introduced two apprenticeships for people over 45. But this is rare.

Butcher apprentices in Leipzig

The apprenticeship system is focused on training young people

What isn't unusual, though, is that both Rewe and Erste said their companies had strong continuing education components to help employees grow. This helps the firms maintain a workforce with the skills they need not only at the moment, but also in the future.

The EU study showed that turnover in countries with dual education systems is lower than other nations. In most cases, the apprentices and interns stay on as fully qualified workers. That, along with the chance to rise within the firm, increases employee loyalty.

Max, who will start his second year of schooling this fall, already has plans for a future with Rewe. He wants to become a specialist in a purchasing area, perhaps beer, perhaps cheese. Actually, he jokes, he'll take anything. He is so excited to have found something he likes doing that his grades have now improved. He averaged a 1.3 - the equivalent of an A- - in his first year of studies and is excited to start again this fall.

"My next goal is to finish my apprenticeship program with good grades and stay here," he says now, his deep blue eyes twinkling. "The colleagues are super nice, also young, I get along well with them. I've never had any problems since I've been here."

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