Apprenticeship programs re-emerge with stronger ROI for companies
The U.S. still lags behind other nations concerning apprenticeships. But can it catch up?
Around the U.S., companies are waking up to the ROI potential that such programs offer. While apprenticeships have traditionally focused on blue-collar occupations, there are a growing number of industries that are focused on training the next generation of skilled professionals. In a labor market where job skills are lacking in many industries, it makes sense that apprenticeships could supply a strong source of qualified labor.
The U.S. can learn from a growing international community of apprenticeship programs
America has lagged behind Europe in terms of apprenticeships for the last few decades. According to a report from the Brookings Institution, apprentices make up 0.2% of the total workforce in the U.S., while other nations like Germany (3.7%) and Canada (2.2%) have far higher numbers of apprenticeships. In fact, Germany leads the world in apprenticeships because half of all students in their system receive a structured vocational training that blends employer-provided training with classroom learning – providing access to jobs upon graduation.
Australia has long promoted apprenticeships too, with their vocational education training (VET) program. VET graduates who undertook their training as part of an apprenticeship had an 84.1% chance of staying employed six-months post training completion, as compared to 74.2% who were trained through other channels, according to the Australia Department of Employment.
Promoting apprentice programs in the U.S.
The U.S. government has provided ample incentives for employers to offer apprenticeship programs, reports Steve Bates. “In 2015, the White House shared details of a joint effort between employers, labor unions and foundations to expand apprenticeships around the nation,” he wrote for SHRM. In April of 2016, the U.S. Department of Labor announced the ApprenticeshipUSA State Expansion Grant competition to release over $50 million in support of apprenticeship program development.
What industries are experimenting with apprenticeships
The Center for American Progress reports that companies in the automotive and advanced manufacturing industries are already testing apprentice programs. Siemens, a leading supplier of systems for power generation and transmission, combines an apprenticeship program with classes at nearby Central Piedmont Community College to help new graduates earn a college degree while they work in their Charlotte, NC plant. Robert Bosch and BMW are working with colleges in South Carolina in progressive apprenticeship programs, and Volkswagen Academy is partnered with Chattanooga State Community College in Tennessee to train new grads.
With candidate shortages in the technology sector, organizations in the Seattle, Washington area are also getting on board with apprenticeship programs. Katherine Long reports at the Seattle Times that, “Seattle Central College and the Washington Technology Industry Association (WTIA), a trade association, will use on-the-job training, via apprenticeships, to teach coding and other tech skills.” One of the participating organizations, LaunchCode, a St. Louis nonprofit, has a DOL approved apprenticeship program that trains people to code software in 90 days, with a 90% hire success rate.
Overcoming obstacles to apprentice programs
Aaron Michel, co-founder and CEO of PathSource, career navigation and education software, advises that there are two potential barriers to apprenticeship programs. First, he says, there is a general, “lack of awareness and misperceptions about apprenticeships that they are limited to low-skilled, manual labor jobs, middle class lifestyles.” This is simply not the case, and as more companies get on board, especially those in higher salary brackets in the technology and engineering fields, these ideas will fade.
Secondly, Michel mentions that, “apprenticeships can be expensive to business.” He adds that, “Companies have to make a decision on what to invest in, and it can take time to run employees through apprenticeships – some programs are as long as 5 years.”
Generous ROI for companies who invest in apprenticeships
There are not a lot of data points that indicate that apprenticeships work, other than European and Australian figures, so these are often viewed as barriers in the American workforce. However, there are some promising statistics and the fact that the DOL supports apprenticeships speaks volumes.
Michel advises that, “ROI depends on how much your company puts into the apprentice program.” According to Nicholas Wyman, the CEO of Institute Workplace Skills & Innovation, “Employers can earn a 36% return on their investments in apprentice training — higher than just about any investment a company can earn on its capital and far higher than the 10 percent typical among S&P 500 firms."
Despite these findings, the American labor market has a long way to go towards providing equal opportunities for men, women, and minorities in apprenticeship and other on-the-job training programs. As more attention is brought to such programs, employers will want to keep a watchful eye on trends surrounding apprenticeships to figure out if they will be right for their companies.
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