Recent Report Validates Room for US Apprenticeship Expansion

Can Market Facts Change Market Perceptions?

A recently released report from Harvard Business School and Burning Glass Technologies validates the fact that there is opportunity to expand US apprenticeships into new fields of occupations.   Room to Grow, Identifying New Frontiers for Apprenticeships analyzed the Burning Glass job postings data and discovered:

Ø  The number of occupations using apprenticeships could be expanded from 27 to 74;

Ø  The number of job openings filled by apprentices could grow from 410,000 to roughly 3.3 million;

Ø  Many of these new fields pay more than current apprenticeship occupations, with up to a $20,000 salary premium; and,

Ø  Many of these occupations are difficult for employers to fill using current channels.

All of this data comes on the coattails of the Trump Administration’s goal to create 5 million new apprenticeships in the next 5 years.  To meet the 5 year growth objective, the current number of active apprenticeships – 505,371 in the last quarter of 2016 – will need to increase almost tenfold.

The report analyzed the largest concentration of US apprenticeships today (Core Apprenticeship Occupations), and identified two additional groups of occupations (Expanders and Boosters) that fit the apprenticeship model as logical candidates for program expansion.

Clearly, there is significant growth potential in the US apprenticeship system.  Expansion means greater career options for individuals to gain employment, and greater recruitment and training alternatives for employers to develop skills, retain talent, and remain competitive. As such, the challenge for the US to reach its goal should just be a common sense win?  Right?

Unfortunately, it is not that simple.

Many employers lack the willingness to change their current systems; and many parents and young adults lack the awareness to change their current beliefs.   American’s maintain a jaded perception of apprenticeships – one that is outdated and devoid of fact.

Employers: Perception vs. Fact

Perception:  Apprenticeships are expensive.

Fact: In countries where apprenticeship programs are more widespread, apprenticeships have reduced hiring costs by providing a streamlined channel of new talent, have reduced attrition by building a common loyalty between company and employee, have reduced business losses by filling vacancies with skilled labor, and have increased productivity.  In the UK, for instance, 72 percent of businesses report improved productivity as a result of employing an apprentice.

Perception: Apprenticeships are not suited for degree positions.

Fact: According to the study, employers are trapped in “degree inflation.” Many positions that “prefer” or “require” a bachelor degree involve skills that can be accomplished by non-degree workers. While performance metrics cite equal achievement from both degree and non-degree workers, degree workers are shown to have higher salary expectation, higher turnover, and less job satisfaction.  

Apprentice programs scale salaries as skill completion is satisfied, and are known for high retention and job satisfaction.

Perception: A degree candidate will have better soft skills.

Fact:  Payscale surveyed hiring managers and asked them to weigh in on the critical soft skills gaps found in their recent grad talent pool.  Those cited as the top deficiencies include: critical thinking, problem solving, attention to detail, and writing proficiency.

Apprenticeship programs foster and develop soft skills as a primary course of study. Soft skills, by nature, are situational and best learned in the field, as opposed to the classroom.

Parents and Young Adults: Perception vs. Fact

Perception: Apprenticeships are mostly lower income, trade positions.

Fact:  The study indicated opportunities beyond Core Apprenticeship Occupations for apprenticeship programs in the Expanders (+21) and Boosters (+26) categories, with the Boosters category as the most compelling avenue for middle-class earnings.  Apprenticeships also provide fertile ground for the newly emerging jobs of the 21st century. My post Congressional Bill Announcement: The CHANCE in Tech Act outlines the initiatives underway to help solve the IT skills shortage that we face as a nation.  IT jobs, as example, are known to be high-income level entry opportunities in areas of emerging growth.   

Perception: Apprenticeships are a second rate alternative to the gold standard of a 4 year degree.

Fact: The 4 year degree is no longer the gold standard of education.  Much of today’s college curriculum does not cover areas of study that are required in the emerging job market, and often includes areas of study that are not relevant to career outcomes.

Apprenticeships provide occupational and employer-specific education suited to match the skills employers need to grow and remain competitive.  Apprentices, as they work through a development plan, can also develop a wider variety of skills that can lead to a more fulfilling, successful career.

Perception:  Investment in a college degree will pay off.

Fact: Unfortunately  Accenture Strategy 2016 U.S. College Graduate Employment Study shows underemployment for recent grads is the current reality: 51% of 2014/2015 graduates report working in jobs that do not require their college degree, a steady increase of 10% since 2013. While those numbers keep climbing, so does the average student loan debt. Edvisors reports an average of $35,051— the highest in history.

Apprentices earn while they learn. An apprenticeship also provides a pathway into a career with higher earnings, without the need to incur gobs of debt.  The ability to work with mentors and focus specifically on the job at hand leads to faster advancement into positions with even higher wages.

Yes, there is room for expansion of US apprenticeships. I have only touched on a sampling of the flawed perceptions in the market, today.

Until we can replace outdated perceptions and continue to educate the market with current facts, the American Apprenticeship Movement will remain a challenge.  Thank you, Harvard Business School and Burning Glass Technologies, for taking on this study to help tackle that challenge!