Research summary - Characteristics of firms hiring apprentices

Why this study

Most studies on apprenticeship training in Canada focus on supply for apprentices. We know little about the nature of employers’ demand for apprentices. This project helps increase our understanding of this demand. The results of the study can help advance appropriate policies related to apprenticeship training.

The study extends an earlier study on the link between business cycle fluctuations and Employment Insurance (EI) claims by apprentices. The earlier study mainly took a supply side approach, by focusing on the supply for apprentices. This study focuses on the demand side by considering firm behaviour. The study identifies firms that employ apprentices during their training and how they interact with the EI system.

The EI Commissioner for Employers asked for this study to supplement the 2018 to 2019 EI Monitoring and Assessment Report.

What we did

This study used matched data between employees and employers in the Canadian labour market. The data source is Statistics Canada’s Canadian Employer-Employee Dynamics Database (CEEDD).

The CEEDD includes employee data from the Canada Revenue Agency (T1 tax forms and T4 records) and the Record of Employment (ROE). The T1 tax file helps identify traits of apprentices like gender and age. The T4 and ROE records inform about the job apprentices hold. The firm level data comes from the National Accounts Longitudinal Microdata File.

Linking together these datasets, we observe apprentices and firms both during a selected year and across years. We study the link between apprentices receiving EI benefits and the firms that released them for block training. This resulted in very few apprentices from Quebec in the sample, because the province follows a different structure of training.

In every jurisdiction except Quebec, employers agree to release the apprentice to attend technical training. Apprentices spend 6 to 12 weeks at an institution or training centre per level of their apprenticeship. We call this type of training block training.

What we found

We find a positive link between the share of apprentices in a firm’s workforce size and its productivity. This pattern was more apparent after the 2008 to 2009 recession. A related result is that EI-supported apprentices are most concentrated in the workforces of moderately capital-intensive firms.

Another key result is that larger firms (with more than 500 employees) are more likely to hire an apprentice every year. These firms are also most likely to have hired an apprentice at least once (during the study period). However, smaller firms hire disproportionately more apprentices: almost 1 in 2 apprentices work in a firm with 5 to 49 employees.

The study also found that, on average, 4 out of 5 apprentices claimed EI from a single employer from 2001 to 2012. However, apprentices in the construction sector were more likely to make claims from multiple employers. In addition, just under 50% of apprentices stay for more than 3 years with the first firm that trained them.

Other findings of this study support existing research. Alberta and Ontario lead in the number of apprentice EI claims, even after adjusting for provincial employment size. More than half of apprentices work for firms in the construction industry.

We also found that more than half of all apprentices are over age 25. This suggests that for most apprentices, a career in the skilled trades is not their ‘‘first career’’ choice. This is mainly because they do not enrol in apprenticeship training/programs directly after they graduate from high school.

What it means

This study has a number of important implications. The first is that EI is an important source of income for apprentices on block training.

Secondly, smaller firms train a higher share of apprentices compared to large firms. This suggests that federal support for apprentices should focus on smaller firms, mainly in the form of employer consortia. This is because smaller firms cannot always offer all the experience required to complete the on-the-job component of apprenticeship training.

Finally, our results show that just under 50% of apprentices stay for more than 3 years with the first firm that trained them. However, we also find that firms that train apprentices train them regularly. This means that there is no conclusive evidence that firms poach apprentices from one another.

Contact us

Skills and Employment Branch, Labour Market Information Directorate, Policy, Research, Analysis and Geomatics Division

Email: ESDC.NC.SSPB.RESEARCH-RECHERCHE.DGPSS.CN.EDSC@hrsdc-rhdcc.gc.ca