With a growing skills gap and increase in technical knowledge required for today’s jobs, companies are looking for better ways to find qualified employees. Some are developing apprenticeship programs in which employees learn while they earn. These programs have long been overlooked in the U.S., but that is changing. Here’s a glance at today’s state of apprenticeships by the numbers.
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As of the last quarter of 2016, there are 505, 371 active apprenticeships in the U.S. This is the result of strong growth in recent years. In fact, between 2010 and 2015, apprenticeships grew by 80%. (See another growth chart published by the Department of Labor here.)
The Department of Labor runs the Registered Apprenticeship program which serves two basic functions. It provides standards and guidelines to ensure that graduates receive safe, quality training and develop core competencies for their chosen careers. They receive a nationally recognized credential of their skills.
Over 1000 career areas offer apprenticeships through the Department of Labor. These include “non-traditional” professions like software developers, dental technicians, and insurance agents. In addition to these, the most popular career choices include engineers, pharmacy technicians, telecommunications technicians, aircraft technicians, mechanics, certified nursing assistants, electricians, welders, construction craft laborer, and truck drivers.
The benefits for apprentices
In Germany, with a long tradition of apprenticeships, 60% of young workers choose on-the-job training over formal schooling. In the U.S., only 5% take the apprenticeship option.
While this career paths has been overlooked by most young people in favor of four-year degrees, the benefits can be significant. While working and earning, these learners receive a minimum of 2,000 hours of on-the-job training and 144 hours of related classroom instruction. Many programs include more training and may last between 1 and 4 years.
The average starting wage is $60,000/year and as people move through the programs, their wages increase. And those who complete the programs ear $300,00 more over their careers than those who don’t. All this without the added burden of student loans.
Plus, most apprenticeship graduates have a ready job waiting while only 20% of 4-year degree graduates have a job waiting before they leave school.
The benefits for businesses
Since the recent recession, business have steadily increased their commitment to employee training, and apprenticeships have occupied a small part of that growth. In the U.S., many businesses still think of apprenticeships as more suited for the trades than for more technical, white collar, or service professions.
Like any training, these programs require investment and management. A study by the Economics & Statistics Administration found that outside of initial start up costs, apprenticeships costs companies from $25,000 to $250,000 per apprentice. The biggest percentage of cost came from apprentice compensation, followed by tuition, educational materials, and mentor time.
However, the study found that companies did not lose money on the programs through poaching from other companies. In fact, apprenticeships have been shown to increase employee loyalty. Plus, federal and state programs offer some funding and tax credits for registered programs.
Overall, U.S. businesses have reported a 40-50% rate of return for apprenticeships over hiring from outside.
Closing the skills gap?
As of the first quarter of 2017, 45% of business reported they were unable to find qualified candidates for open jobs, according to the National Federation of Independent Business. There has long been debate over whether we have a true skills gap, but for many companies, the problem is real.
Secondary and higher education hasn’t had perceivable success in better preparing students for work life, and the costs of college education grow heavier. As many industrial jobs become increasingly technical and complex, it’s not clear that colleges and universities can keep up with the change. In addition, people who’ve been squeezed out of shrinking industries need retraining options.
Each state has its own apprenticeship agency with specific programs, funding and tax credits for learners and employers. You can usually find them on your state’s labor website or check out the Department of Labor’s state agency directory.
Icons via Creative Commons from Noun Project: worker by Marie Van den Broeck, teacher by Danil Polshin, coin stack by Babboon, hard hat by Diego Naive, mortor board by parkjisun, tablet by unlimicon, personnel search by Creative Stall, stack of bills by Anton Kalik