April 12, 2024

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How Apprenticeship Programs Can Help Solve The Talent Crisis

5 min read
How Apprenticeship Programs Can Help Solve The Talent Crisis

Just in time for National Apprenticeship Week, new research reveals just how much we could all stand to gain from on-the-job training and education.

There’s a lot going on in the world right now. Between multiple wars, shifting economic indicators and the ramp-up to the 2024 presidential election in the U.S., it can be difficult to keep up with everything. However, there is one constant thread throughout all these changes: employers still can’t find enough skilled workers to fill their open positions as there are more job openings than workers available to fill new roles.

This continued shortage and related struggle for talent has caused employers to adjust their hiring approach. Case in point: Research conducted by the firm Multiverse on millions of openings posted over the past five years shows a notable 6.5-times increase in the use of terms like “upskilling,” “reskilling” and “on-the-job training” in job ads to attract talent.

In other words, employers have shifted away from trying to recruit employees with promises of increased pay, office perks or remote work and turned to the offer of on-the-job training opportunities instead. And, as the workforce increasingly looks to skills as the proxy for employment over college degrees, apprenticeships have become a bridge between high-potential talent and the vast amount of roles currently open.

“Education has become the newest frontier in the battle for talent,” says Euan Blair, founder and CEO of Multiverse. “For employers that need new routes to find skilled talent, and for workers looking to improve their earning potential and career development, apprenticeships are a strong solution.”

In a nod to National Apprenticeship Week, I connected with Blair over an email interview to discuss what the U.S. can learn from apprenticeship programs in other countries like the U.K. and how additional investments in such programs promise to address our talent crisis—both now and into the future.

Learning from the U.K.

As employers in the U.S. awaken to the potential of apprenticeship programs to solve their employment gaps, they can look across the Atlantic for inspiration on how governments and businesses can work together. Despite having a working population that’s a third of the size of the U.S., the U.K. has 25% more participants in its apprenticeship programs. A big reason for that is that the U.K. government has an Apprenticeship Levy in place to create financial incentives for employers to hire and train apprentices for open roles.

“This ability for employers to subsidize their apprenticeship programs through public financing has helped pave the way to expand apprenticeships into new roles and industries—which were previously unavailable to potential apprentices,” says Blair.

One takeaway is that the U.S. could benefit from similar public investments in such programs, given that some 76% of US workers are stuck in positions with limited opportunities for advancement.

Ready for the opportunity

According to the Multiverse research, there are currently 128 million people split across four main groups of workers in the U.S. who could advance their careers via apprenticeships:

  • 36.6 million workers hold high-churn, low-wage jobs, such as fast food and retail sales positions.
  • 10.6 million young workers are new entrants to the workforce who haven’t obtained a bachelor’s degree, which remains a pre-condition for employment in a wide swath of the economy. “Their careers are limited by ‘the paper ceiling,’” says Blair.
  • 12.8 million underemployed college graduates have a job that does not draw on the skills they acquired with their college education and that offers few pathways to better employment.
  • 68 million mid-career workers are facing limited progression opportunities and would be well suited by pathways to transition into target occupations or upskill within their own fields.

“Each type of worker listed above is well-suited to take advantage of on-the-job applied learning that builds on existing capabilities—the core feature of apprenticeships,” says Blair, whose firm’s research estimates that the U.S. workforce could generate more than 830,000 new apprenticeship opportunities per year, resulting in $28.5 billion more in earnings for apprentices.

Blair says that apprenticeship programs have three important upsides:

  1. They are built on applied learning, meaning that what the apprentices learn in training is immediately tested and embedded on the job.
  2. The apprenticeship model is agile and therefore incredibly focused on the most in-demand and current skills, particularly in tech.
  3. Apprenticeships are equitable. By reconfiguring who pays for learning (i.e., the employer), businesses are optimizing for potential—rather than optimizing for those who can afford to pay for their education.

Not only can apprenticeship programs help employees move out of low-growth jobs and provide employers with strong talent pipelines, but they also have the potential to improve the diversity of the workforce.

“Individuals from low-income backgrounds and communities of color—who tend to be underrepresented among college graduates—are often overrepresented in lower-wage fields with few viable career pathways to quality jobs and careers,” says Blair. “Apprenticeships can increase the number of qualified workers for sought-after jobs, ultimately leading to increased racial and gender diversity and the advancement of equity across the economy.”

A return on investment

While younger-gen workers just starting their careers are perhaps the most obvious to benefit from enrolling in apprenticeship programs, employers can’t afford to overlook the chance to upskill other employees who have already started their careers.

“Our data shows that 68 million workers stand to make significant gains through upskilling opportunities,” says Blair. “If more employers recognized their incumbent workers as an underutilized asset and offered skilling pathways for these workers (most of whom are not college graduates) within the context of their existing jobs, they could advance to higher-wage roles within their company. This pathway to filling new and/or in-demand roles is cost-effective and a huge morale booster—for both the employer and the employee.”

That’s a key point: It’s not just employees who benefit from apprenticeship programs. Another takeaway from the U.K.’s investment in apprenticeship programs is that every £1 invested creates £27 in financial returns. By comparison, in the U.S., the Department of Labor has estimated that for every dollar an American company invests in an apprenticeship program, it generates a return of $1.44.

Talk about a win-win.

As National Apprenticeship Week comes to a close, let’s open our minds to just how much these programs might offer our communities and nation. For the jobs we need to fill and the skilled people we need to fill them, apprenticeships can deliver a compelling solution that employees and employers alike can benefit from.

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