Could Apprenticeships Help Create a New On-Ramp to Jobs?

Unemployment in the US is declining—5.8 million people are unemployed—but there is still a massive number of jobs to be filled. According to the Bureau of Labor Statistics, there were around seven million job openings available by the end of September 2019, the most recent month for which data is available. While this represents a decline of over 270,000 jobs from August, there is still a noticeable gap to bridge between open jobs and the unemployed.

In addition, technology is transforming work across many sectors, which has caused many workers to be left behind with antiquated skills. There are over 500,000 open jobs in technology today, and universities are not graduating enough people to help fill that demand. Technology is also expected to grow at exceedingly high rates, and traditional universities may not be able to keep up.

One solution to the widening skills gap has attracted the attention of young workers, employers, and policymakers: the apprenticeship. Policymakers have been talking about apprenticeships for years. President George H.W. Bush proposed a youth apprenticeship program in 1992, and President Obama invested heavily in apprenticeships throughout his term. Trump has also expressed an interest in funding new apprenticeship programs. Apprenticeships have gained support from both sides of the aisle.

Apprenticeships have been around in the US for a number of years. However, after the rise of college and increases in access to financing for higher education, many people have pursued academic paths, rather than traditional vocational routes. The stigma around vocational education, as well as the fear of “tracking” young people also inhibited the growth of the apprenticeship model.

In 2018, only 238,000 individuals entered into the apprenticeship system, according to the Department of Labor. This number may seem large, however, 3.7 million students are expected to graduate from high school in 2019; apprenticeships only comprise a small percentage of training paths for young people. In the UK, which has a substantially lower population than the US, 814,000 people participated in an apprenticeship during 2017/18 in England alone.

Training Young Workers

It is no surprise that apprenticeships are popular in countries like the UK and Germany. The idea behind the apprenticeship is that a young person will work for a company for around one year, and learn on the job. Half of the time spent in an apprenticeship is often instruction and learning the vocation—often at a local vocational school—and the other half is spent working for the company. Whereas in college, skills cannot be directly applied to employment, apprentices can reinforce their skills immediately after they have learned them.

Young workers can benefit from apprenticeships in a number of ways. Apprenticeship programs in the UK and Germany usually offer a salary to their employees—albeit small—which allows young people to learn while they earn. For a young person, having a stable source of income while training can help them acquire the skills they need and save up capital for later. In college, on the other hand, young people must pay tens of thousands of dollars to learn.

Apprenticeships also allow young people to bridge the gap between their education and employment. In an apprenticeship, young people can gain direct experience working in a professional environment, which will go a long way toward helping them transition into the labor market. They will learn valuable employment skills (for example, how to communicate with coworkers) which can help set them up for future success. This is crucial because, even after young people graduate from high school or college, they may still struggle to find a job and transition into the labor market. But apprenticeships solve this problem: young people can learn how to do a specific job, and get paid at the same time.

The benefit to a young person’s career is not limited to the employer hiring them. The young person will, as part of their apprenticeship, be trained by an experienced worker in the industry. For example, a mechanic apprentice may be trained by the head mechanic at an auto shop; a carpenter may be trained directly by the business owner. This helps the apprentice master the exact skills they need to go far in their careers in a certain industry.

Often, apprentices are hired to help a business improve its talent pool: they can directly train and nurture a young worker, who could go on to have a large impact on their business. This means that, after graduating from an apprenticeship program, a young person may be offered formal employment with their employer, thus further aiding their transition into the labor market. For a young person with no professional experience, apprenticeships act as an on-ramp to good jobs: they’ll be trained and could become a full-time employee if they demonstrate potential during the apprenticeship program.

Hiring an Apprentice

Hiring an apprentice can have a number of positive impacts on a business. Apprentices can act as a strong source of talent for a business, allowing them to build good relationships with young people who are still starting their careers.

An apprenticeship may be the first work experience a young person gets, a fact which the young person will remember when their apprenticeship is over. If the employee has succeeded in their apprenticeship, the company may decide to extend them an offer of full-time employment, and the employee will be more likely to accept. This, in turn, helps businesses retain the best talent who can inject new life into their business.

Apprentices also come with a fresh perspective which a business may not be able to access elsewhere. Young people, even with no professional experience, can help a business refresh their perspectives on various issues. A young person in a marketing apprenticeship, for example, could help the business understand younger demographics; a young mechanical apprentice could help introduce modern business practices into an auto shop that they learned in school. Indeed, the perspectives of a young person could help a business increase its productivity and its long-term growth prospects.

Further, while apprenticeships in countries like the UK are regulated to some extent, businesses have a vast array of discretion over how they teach a young person. Thus, the employer can ensure that young people get exactly the skills and knowledge they need to become productive employees within the business. This will help a business meet their exact needs, and also ensure the apprentice can have a strong impact on an organization.

Apprenticeships are all about allowing companies to cultivate the type of employee they want to hire and poise their workforce for long-term growth. The skills a young person learns from an apprenticeship could lead to a full-time job within a business and set them up on a good track within the business. Over time, their familiarity with the business—and the fact they spent months learning the exact needs of the business—will help them become a more productive worker. This benefits both the employee, in terms of self-esteem and professional growth, and the employer, in terms of output.

The Apprenticeship Model

Despite apprenticeships being a promising prospect for opening up new job opportunities for young workers, there are a couple of barriers that would need to be overcome. Firstly, the word “apprentice” often evokes images of hard labor and difficult work—a result of the industrial apprenticeship model—which has created a stigma around the idea. Further, young people are often expected to go to college and attain a degree, which may affect some young people’s choice to pursue an apprenticeship program.

However, the idea of an apprentice has changed a lot since then—most apprentices are not working long hours in a leather factory. Today, apprentices are treated as professional workers: they are not just blue-collar workers.

Apprentices are given a good salary, commensurate with their lack of professional experience but high potential, and are often given responsibility within an organization from an early stage. This, in turn, allows a young person to learn in an environment almost exactly like what they would face as a full-time employee. Apprentices are also no longer seen in just factories and woodshops. Companies in the energy, technology, logistics, and transport sectors are all hiring apprentices.

Apprenticeships also come at a large cost. In countries like the UK and Germany, where apprenticeships are more established, apprentices can still cost tens of thousands of dollars per year. In the UK, apprentices must be paid at least the minimum wage rate, which is over $5 per hour, but that only represents a small fraction of the costs. Companies need to spend time training an employee—which will cost their employees time—and will also have to cover the costs of any errors they may make (considering they are new employees, trainees are likely to make a few mistakes).

In addition, because the US does not have an established apprentice system, firms may have to pay more to hire apprentices. Employers may also be on the hook to pay for a young person’s technical training—in the UK and Germany, the government pays—which will raise the total cost of hiring one apprentice. In the US, where short-term financial gain is often prioritized by businesses over long-term growth, hiring apprentices may prove to be impractical, at least without a few changes to the model. 

There are also national standards set forth in countries like the UK and Germany which dictate how apprenticeship programs may be run. In the UK, there are guidelines around apprenticeship contracts, how much apprentices should earn, and there is also government financing available to help companies subsidize the cost of hiring an apprentice. These guidelines ensure consistency across programs and give young people more security. In the US, however, there is no such standardization among apprenticeship programs, and to establish such a framework would be difficult and time-consuming.

That said, it would not be impossible for the US to adopt an apprenticeship system. The stigma around vocational training, while still prevalent, has not prevented many young people from pursuing vocational paths.

According to the National Center for Education Statistics, trade school enrollment rose from 9.6 million students in 1999 to 16 million in 2014. Further, given the expected increase in jobs in the manufacturing, infrastructure, technology, and transportation industries, companies are looking to explore alternative training options, which could include apprenticeships.

The allure of apprenticeships is clear for young people, employers, and the government. Young people have the ability to access a new on-ramp to good jobs: they can learn while they earn, and come out with professional experience which can help improve their future job prospects. Employers can access a new talent pool and hire workers who can be trained in specific business operations. Governments can use apprenticeship models to promote economic growth and help bridge the gap between school and education.

An apprenticeship system in the US is likely to look very different from those in the UK and Germany, where apprenticeships have been a common career path for many young people for years. But such a system could exist soon. Many technology companies are starting to look into apprenticeships in more depth, and the federal government has renewed interest in the idea. Whether or not a cohesive, national apprenticeship framework like the one in Germany will arise, though, is a different question.