More than half of those who leave school to undertake industry training drop out of the programme, according to Ministry of Education research.
Education Minister Anne Tolley announced yesterday that some industries were experiencing completion rates below 10 per cent and said addressing that was a high priority.
The research indicated about a third of industry trainees and modern apprentices had completed their training within five years of starting. The rate was similar among students completing certificates through polytechnics.
Jeremy Baker, chief executive of the Industry Training Federation, said the fact that polytechnics had a low success rate showed it was not just industry training that had a problem, but vocational training overall.
The low completion rate related to the people who were attracted to the courses - applicants were typically young with few school qualifications.
But it also related to the way data was collected, he said.
Each time an apprentice changed jobs they were recorded as a "drop out" and each time they started a new job and picked up a new apprenticeship they were recorded as a "starter".
Modern apprenticeships, which were introduced by the Labour Government in 2000, are targeted at school leavers with low levels of literacy and numeracy.
Each candidate receives up to $2200 each year from the Government which goes towards the extra training and mentoring they receive. This does not have to be repaid.
In 2003 most new modern apprentices were aged between 15 and 21. Of the 3693 who started the apprenticeship, just 33 per cent had completed the course five years later.
John Blakey, chief executive of Competenz, the engineering, food and manufacturing industry training organisation, said his figures showed a 1 per cent difference in completion rates between traditional and modern apprentices.
He said the new research presented questions as to whether the extra government funding was a valuable investment.
"In some cases it does actually help the apprentices stay, come to work regularly and succeed in the qualification; in other cases it does not have as high an impact as the Government would have liked."
Mr Blakey said qualifications taught tradespeople how to learn and made them more productive - that was why so much was invested in apprenticeships.
The Government invested $3200 per year in training an apprentice full-time, but for an employer, the total cost of employing an apprentice would be closer to $20,000, Mr Blakey said.
Money going into industry training needed to be better spent.
"Trades training is absolutely critical to the country - these are the people with the skills that build the economy," he said.
Most trade trainees drop out early
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