To train or not to train, that is the question: Swiss firms’ training consideration in a changing skills landscape

The demands of the labor market are changing rapidly and as a result, skill shortages are becoming more common across various industries. In countries with a collective skill formation system, where vocational education and training (VET) is a well-established part of the education system, firms play a crucial role in providing training and producing skills needed on the labor market. However, providing training and hiring apprentices is costly and demanding for firms, whereas the option of poaching graduates from other firms, or to hire experienced skilled workers may be more attractive. In this paper, we examine which firm types choose to opt out of, or to stay in, VET and what factors contribute to their decision. Using novel survey data from over 2’500 Swiss training firms, we identify the factors associated with likelihood of consider remaining in or leaving VET. We find that hiring difficulty being a strong factor associated with opting out, whereas low hiring selectivity, high retention rates and stronger institutional embeddedness are associated with a consideration to stay. We propose a framework that categorizes firms into four groups that inform our understanding of where the risk of opting out is high: “Selective strugglers”, the “Loyal veterans”, the “VET opportunists” and the “VET flagships”.