Apprenticeships and Six Ways They Can Benefit Your Company

Michelle Knierim - Regional Consultant ·

It’s no secret that companies in all employment sectors are facing challenging workforce shortages and gaps. What many companies don’t know is that apprenticeships offer a viable solution for recruiting, training and retaining world-class talent. Apprenticeships are an earn-as-you-learn, flexible workforce development tool and training strategy that can be customized to meet the needs of any business.

Here are 6 ways apprenticeships can benefit your company:

  1. Helps recruit and develop a highly skilled workforce
  2. Improves productivity and the bottom line
  3. Provides opportunities for tax credits and employee tuition benefits
  4. For every dollar spent on apprenticeship, employers get approximately $1.50 ROI*
  5. Reduces turnover costs and increases employee retention
  6. Creates industry-driven and flexible training solutions to meet national and local needs

Apprenticeship programs consist of a combination of on-the-job training and classroom instruction with an affiliated educational partner. This combination, along with the fact that workers in an apprenticeship program earn a full-time wage while they are participating in the program, is a proven recipe for success. According to the United States Department of Labor (DOL), 91% of apprentices that complete an apprenticeship are still employed nine months later.

It goes without saying that apprenticeships are good for business … despite the misconceptions that exist. Apprenticeships have come a long way since the apprenticeship system started 75 years ago in the construction and skilled trades industries. Some people still believe that apprenticeships are only useful for entry-level positions in those industries, but that is a big misconception.

Here are some common myths about apprenticeships:

  1. Apprenticeships are only used in skilled trades and manufacturing industries - While this was once true, today there are more than 545,000 apprentices nationwide in over 1,000 occupations across 170 industries, including Healthcare, Information Technology, Transportation, Logistics, Energy, Fashion, Law, Banking and Defense. The DOL has a comprehensive list of “apprentice-able” occupations on its website, found here:
  2. Only men participate in Apprenticeships - This used to be the case, but numbers are changing. According to the DOL, 20.1% of registered apprenticeships are held by women, minorities and veterans.
  3. There’s limited state funding for Apprenticeships - More than $1 billion for employment and training services is available through the Workforce Innovation and Opportunity Act (WIOA) programs across the country. These programs can provide training funds to support on-the-job training and related instruction, as well as supportive services to help apprentices.
  4. Apprenticeships aren’t used much anymore - There is actually very high demand for these programs. 31,703 people participated in registered apprenticeships in Michigan between 2000-2014. In 2016, more than 206,000 individuals entered the apprenticeship system.
  5. Apprenticeships are for people who don’t do well at school - Apprenticeships are simply an alternative route into skilled employment for those who prefer to undertake career technical training as opposed to academic studies.

Now that you understand how impactful and effective apprenticeships can be, you may be wondering ...

What are the steps I would take to start an apprenticeship program? Once you’ve determined that an apprenticeship program is a great way for your company to build a skilled workforce, partner up!

The first step for an employer is to collaborate with partners such as businesses, workforce intermediaries (such as labor organizations or industry associations), educational institutions, the public workforce system (like EDSI), and other community organizations. The partnership will work together to identify the resources needed, design the apprenticeship program, and recruit apprentices – who could be either jobseekers or current employees.

Next, partners will work together to build the apprenticeship program. There should be five core components: direct business involvement, on-the-job training, related instruction, rewards for skill gains, and completion resulting in a national occupation credential. For each, the partners will develop the details of that component, leverage the resources needed, and decide which partners will carry out that part of the program.

The next common question is usually: Who operates and pays for the apprenticeship program?

Let me share some information about how that part of the program usually works.

Programs are operated by private sector organizations or labor/management “sponsors.” Program sponsors often pay for costs such as tuition and administrative fees as well as wages to their apprentices. As an example, my employer – a workforce development and consulting company – has served as sponsor of several apprenticeship programs, taking responsibility for the administration of the program, thereby reducing the burden on employers. We help oversee the program, establish necessary partnerships, and secure funding to effectively lead your company down a path of self-sustainability.

Employers we’ve worked with say they appreciate apprenticeships because employees who go through the program stay longer. This is confirmed by the Department of Labor who also found that:

  • Nearly 9 out of 10 apprentices are employed after completing their apprenticeship
  • Because apprentices earn and learn, they reduce their need to take on debt

Employers believe the time and money spent educating and training employees and forging a positive working relationship is mutually beneficial in building a skilled workforce, reducing turnover, and increasing productivity, which ultimately creates long-term organizational success.

Worried about out-of-pocket costs to build and run the program?

We have good news: there is government funding available to help offset the costs of your apprenticeship program. If you need assistance, government grants and WIOA funds may be available through your local workforce development programs.

Now that you’ve built your apprenticeship and have funding secured, the last step in getting your program running is to register. Registered apprenticeship programs are those programs that have met national standards for registration with the U.S. Department of Labor. Businesses that register their program can access many benefits, including a nationwide network of expertise and support at no cost, tax credits in many states, and funding and other resources from federal programs.

What is the government’s role? The National Apprenticeship Act of 1937 authorizes the federal government, in cooperation with the states, to oversee the nation’s apprenticeship system. The U.S. Department of Labor’s Bureau of Apprenticeship and Training, in conjunction with State Apprenticeship agencies, are responsible for registering apprenticeship programs that meet federal and state standards, and issuing Certificates of Completion to apprentices in a registered program.

So there you have it. Apprenticeships are a win-win for employers, jobseekers and communities. I think you’ll agree that these statistics are indicative of the positive outcomes created by apprenticeships.

This week, November 8-14 happens to be National Apprenticeship Week (NAW), a national celebration that offers leaders in business, labor, education and other partners a chance to express their support for Apprenticeship. In celebration of this fourth annual event, why not make your company the next to start an apprenticeship program?

*Department of Labor/Apprenticeships

Let us know if you'd like to chat some more about apprenticeships. :)