Manufacturing Talent: The Future of Apprenticeships
As the rapid pace of technological change reshapes the global economy, the historic alignment between educational experiences and economic opportunity, credentials and careers, is being called into question. Individuals are boxed out of job opportunities by requirements for degrees they don’t have, or on-the-job experience they can’t get. Companies increasingly report that “the jobs are there, but the skills are not.”
Amid growing national, state, and regional skills gaps, employers struggle to identify and attract workers to fill high-demand roles. At the same time, recruitment and training costs are rising due to increased churn and falling retention rates. The challenge is exacerbated by endemic equity gaps that artificially constrain the talent pool and leave entire segments of the population feeling locked out of opportunities in the workforce.
And as the labor market tightens, the problem is becoming even more acute. It is estimated that while 53 percent of American jobs are middle-skill, only 43 percent of workers are trained to the middle-skill level. A recent workforce report from LinkedIn found that the Bay Area, Washington, D.C., and Austin have the largest skills gaps among major cities. Among entry-level workers, the average tenure ranges from nine months in the restaurant industry to 18 months in healthcare.
Employers, in turn, play what has been characterized as an “expensive zero sum game,” doubling down on online job postings and poaching talent from their competitors. But does it have to be a race to the bottom? How can employers shift their practice in ways that help them both identify talent and boost retention?
Addressing this challenge in today’s economy may require applying lessons we learned decades ago: One of the best ways to succeed in the workplace is to combine education and training with learning — and mastering — skills on the job. Modern-day apprenticeships can do that for workers and employers. For the past 80 years, millions of Americans U.S. have been trained for good jobs with good wages through apprenticeships. Over 150,000 employers in more than 1,000 occupations have used them. Today, apprenticeships are gaining traction as a way to prepare individuals to succeed in skilled work and help employers meet the needs of the future of work. And as employers learn more about soft skills that help individuals succeed on the job, new technologies are helping to scale training programs and close persistent skill gaps across sectors.
Consider the case of Adobe’s Digital Academy, which provides scholarships for low-income individuals to participate in tech training programs with an array of accelerated training providers. Successful students move on to three-month paid apprenticeships in technology jobs, and the highest performers are hired by Adobe full-time.
But today’s renaissance in apprenticeships is not limited to the high-tech fields that hog the headlines.
Manufacturing, engineering, and other areas that offer family-supporting income can benefit from the development of on-the-job training programs that provide some mix of technical training and soft skills development that employers increasingly crave. Furthermore, the rise of online learning is enabling new and emerging hybrid programs. Education providers that operate independently or in conjunction with the traditional educational ecosystem can deliver apprenticeship training at scale and in tight coordination with employers providing on-the-job training.
Penske Truck Leasing, needing to hire 2,000 additional technicians by 2018, joined forces with Penn Foster to provide on-the-job certification programs for technicians — and found that employees who got certified were 50 percent more likely to stay with the company than those who did not. Employers are learning that when they invest in talent early, they not only expand their talent pipeline, but also develop workers that are more likely to stay with them for the long haul.
Similarly, A. West Enterprise, an electrical contracting firm in Georgia that specializes in medium voltage electrical work, recently registered a four-year Electrical Apprenticeship Program through the US Department of Labor. The program included 8,000 on-the-job man hours, coupled with Penn Foster’s online training, and enabled A. West to retain 86 percent of workers who completed the program.
As apprenticeships continue to gain both labor market currency and bipartisan support, policymakers and employers are becoming increasingly involved in making apprenticeship programs integral to the success of the country’s economic bottom line.In a bipartisan effort earlier this year, Congress significantly increased the federal appropriation for apprenticeship to $145 million and the Department of Labor’s Apprenticeship Task Force submitted its final report to the Secretary with a range of recommendations from business and policy leaders to expand work-based learning programs for all Americans.
Apprenticeships are a win-win for workers and employers alike. Individuals get access to training in critical and relevant skills without the challenges of time and money that often accompany the pursuit of a degree — and employers benefit from higher productivity, increased retention rates, and a substantial return on investment. It’s a “grow-your-own” strategy that better aligns the needs of employers with the interests of the workforce. Apprenticeships may have been around for centuries, but employers, training providers, and policymakers alike are rediscovering their value in advancing the future of work.
Collin Gutman is head of the Skilled Trades Division at Penn Foster. Eric Seleznow, formerly the acting Assistant Secretary for the U.S. Department of Labor’s Employment and Training Administration, now serves as a Senior Advisor at Jobs for the Future.