If I were to address one thing within the Australian skills system, someone recently asked me, what would it be? My response, that I’d get large employers to play a more active role, was not what they expected. 

Australia’s economy is built on small and medium enterprises (SMEs), yet our apprenticeship system places the greatest training burden on these least-resourced businesses. While incentives help, they don’t address the structural imbalance. SMEs often lack the HR systems, training facilities, and breadth of work needed to develop well-rounded workers. Career pathways are narrower, and apprentices frequently move on, either to larger firms or to start their own businesses, once qualified. 

For small businesses, an apprentice is a high-risk investment. For the apprentice, it can be a limited training experience. In contrast, larger employers typically achieve higher completion rates. They can afford to recruit carefully, offer mentoring, and provide diverse learning opportunities. 

We often speak of an “industry-led” system, but, in practice, this leadership is confined to shaping training products. The apprenticeship system has become increasingly transactional, focused on the immediate needs of individual employers. This narrow lens fragments training ecosystems and perpetuates skills gaps in critical sectors like construction, manufacturing, and energy. 

Veteran employers often reminisce about the SEC or the Department of Public Works, institutions that once played a strategic role in workforce development. While those bodies are gone, the concept need not be. 

Imagine if large employers made decisions not only based on business need but also on industry and national priorities. In sectors with complex supply chains, the performance of SMEs directly affects the outcomes of larger firms. Strategic investment in workforce development could lift quality, reduce delays, and spark innovation across networks. 

Nous recently hosted BAE Systems, a company that offers a partial blueprint for how large employers can help address persistent skilling challenges. Their approach goes beyond hiring more apprentices. It leverages their assets, capabilities, and brand to strengthen the system.  

Drawing inspiration from their approach large employers can: 

  • Blaze a new path. Large employers are better positioned to tackle the policy, regulatory, industrial and other barriers that inhibit the development of talent for businesses. Degree apprenticeships and tertiary harmonisation are some examples where leadership can have immediate impact. 
  • Position apprenticeships as a credible and desirable career pathway. Large employers can use their brand equity to elevate lesser-known career options and build trust in vocational pathways. 
  • Refer quality candidates to other employers. Large organisations often attract more applicants than available roles. Sharing screened and interviewed candidates can support broader industry talent needs. 
  • Collaborate with other employers to design tailored training programs. Partnering with peers and training providers enables the development of bespoke solutions that better meet workforce needs. 
  • Open training facilities to reputable education providers. Businesses investing in bespoke training infrastructure can extend access to benefit local communities and strengthen education-industry ties. 
  • Offer blended apprenticeships in partnership with SMEs. Structured rotations across businesses expose apprentices to diverse experiences and deepen relationships across the supply chain. 
  • Fund apprentice masters to mentor across organisations. Large employers can support quality on-the-job training by employing experienced mentors who work across multiple workplaces. 
  • Overtrain to meet broader industry needs. While not commercially viable under current settings, with the right incentives, large employers could train additional apprentices to support their supply chain or sector, similar to BAE’s approach in the UK. 

The Strategic Review of the Australian Apprenticeship Incentive System recognised these opportunities. Now is the time to unlock them. We must rethink the system to better incentivise large employers to support their suppliers, contractors, and regional labour markets. Funding can help, but it shouldn’t be the only lever. 

By collaborating with their ecosystems, large employers can turn apprenticeships into a strategic tool for growth and innovation. This model addresses immediate shortages while building long-term capacity, strengthening supply chains, and fostering inclusive economic development. 

Australia may never reach the level of industry leadership observed in Germany, Switzerland and some Scandinavian countries due to the industry and employer mix and cultural differences.  However, greater leadership by large employers can be a first step towards a system that can better respond to skill shortages, drive productivity and prosperity and provide a long-term competitive advantage to Australian businesses and industries. 

Get in touch to discuss how your organisation can leverage large-scale apprenticeship strategies to solve skills shortages and drive sustainable growth.

Contact Hamish Ride on LinkedIn.