Training becoming more digital in companies

The digital transition requires new content and methods in vocational education and training.

38.5 percent of German companies now form part of the "training companies 4.0" group. This increases the need for continuing education among training personnel, while the laggards have a wide range of needs when it comes to guidance.

Many areas of business and society are now digitalised. In 2021, 60.9 percent of companies here in Germany used digital services such as cloud services and 43.4 percent used digital distribution channels. As many as 14.1 percent of companies are now looking to the potential provided by big data analytics, which has increased significantly over the recent years. Digital technology is primarily used in industrial companies: 8.6 percent of companies used additive manufacturing processes, while 12.0 percent used the Internet of Things. Digitalisation increased in particular in 2021 in networked communication within, but also between, companies.

Digitalising existing processes, where appropriate, not only ensures economic connectivity, but can also contribute to climate protection. For the use of the technologies, companies need skilled workers with appropriate competencies. Training and continuing education aligned with the requirements of digitalisation are needed in order to make available and continuously develop these technologies.

Advances in digital education and training

Since 2019, the German Economic Institute (IW) has conducted a survey once a year for the "Training Company 4.0" index as part of the "Network Q 4.02 project. The index includes statistics on the use of digital learning formats, the delivery of digital skills, the continuing education of trainers, and on the extent to which digitalisation is systemically embedded in the training provided by a company. The eight-point index classifies companies as "digital laggards" (0 to 2 points), "second movers" (3 to 5 points) and "training companies 4.0" (6 or 7 points). The information used in the index is not recorded on an industry-specific basis.

A clear trend has emerged since the initial survey for the index in 2019. The proportion of digital laggards has fallen from 23.5 to 20.4 percent, while the proportion of training companies 4.0 has risen significantly from 29.8 to 38.5 percent. This means that four out of ten companies are now digital innovators when it comes to vocational education and training. 

However, virtually no company can rest on its laurels. The digital transition continues to advance and with it the need to continuously adapt skills to new requirements. This is also already affecting companies with a comparatively high level of digitalisation, and which are in fact identifying a greater need for further development than the digital laggards. 

Companies are also identifying increased needs in terms of skills. In 2020, 78.8 percent anticipated additional skills requirements within the next five years, with 45.2 percent even expecting new areas of occupational activity within the company. If this trend, driven by the pressure to act in the area of environmental transformation, continues to gather pace, then training will also have to embrace much more readily the innovations which come along with this.

It is therefore no surprise that companies are highly motivated to provide digital training. Three quarters of all training companies assume that providing digital training will make them more innovative and ensure that the skilled workers of the future have the necessary competencies. Human resources policy considerations are also key: 80.5 percent of companies acknowledge that digital training makes them attractive as a training company and will make it easier for them to find new trainees. This shows that companies are aware of the power and benefits to be gained from digitalisation. However, for digital laggards in particular, there is a considerable distance to travel between recognising the need for action and implementation. This needs to be addressed quickly and with commitment to avoid being left further behind.

Identifying and removing barriers

A look at barriers to digital training reveals that many organisational hurdles exist. Companies are not sufficiently aware of the relevance of the new content for final examinations. Administrative processes with competent authorities are not digitalised. Both of these barriers are independent of the extent to which training in companies is already digitalised. Digital innovators and laggards also differ significantly in their assessment of other barriers. For example, trainers in “laggard” companies acknowledge the benefits of digitalised training much less frequently and have much less time to address the digitalisation of training. This shows that a commitment from company management and a sufficient time budget are fundamental for moving forward with the digital transition. These factors in the success of digitalisation can also be applied to the partner vocational school in the dual system of vocational education and training. 

Providing guidance

When asked about the need for support in the digitalisation of training, it is evident that the innovator companies rank more offers as helpful than the digital laggards (Risius, 2022). The reason for this may be that digital innovators are much better able to assess and specify their needs, while laggards often still lack the necessary guidance. Innovators, for example, are primarily seeking continuing education offers for their trainers, while second movers and laggards – in particular among small companies – would like to have closer contact with the vocational school. Common to all companies is that they would like to learn from others, whether that is through sharing experiences – which second movers are looking for, or best practice examples – which innovators are particularly interested in.

There is also a need for guidance when it comes to teaching digital competencies. This concerns innovations for example which are already established in the training regulations. Starting points for this, for example, can be found today in the increased number of elective and additional qualifications and in the "Digitalised world of work" standard occupational profile introduced in 2021. Training regulations have been formulated to be open-ended in terms of technology and design and this provides companies with huge scope in terms of implementation. The lack of knowledge regarding whether these new digital skills are relevant for the examination and which skills these are, are among the biggest barriers to the digitalisation of training (Risius, 2022). Three quarters of laggards but also half of training companies 4.0 are uncertain in this regard.

This also applies to the implementation of innovations, such as the occupational profile "Digitalisation of work, data protection and information security" which was introduced in the metal working and electrical occupations in 2018 (Becker et al., 2022). While large companies are often already teaching the skills anyway, Small and medium-sized enterprises with fewer digital facilities need to check whether and how they can deliver all the skills needed themselves, or whether they can work with external partners such as vocational schools, and inter-company training arrangements or by training in affiliated groups. 

There is also a long-term need for guidance with regard to future skills requirements. Although many companies anticipate growing skills requirements in the future, in 2020 just under four in ten companies were adopting a systematic approach to determining their training requirements. To be able to also train the right skilled workers in the future, it makes sense to have a forward-looking human resource policy which takes into account the requirements of digitalisation. Academic findings relating, for example, to future skills or evaluating modernisations in training may help in identifying skills required in the future and in initiating relevant measures.

Source: (website of the German Economic Institute), revised by iMOVE, September 2022