What do European employers know that many American employers fail to appreciate? Answer: The value of apprenticeship programs. The title of the Harvard Business School (HBS) study says it all: Room to Grow: Identifying New Frontiers for Apprenticeships. It points out that there were only about 410,000 active civilian apprenticeships in the United States a couple of years ago, compared to 23.4 million job postings that year. That’s less than 2% of the total.
A big part of the problem is that in the United States, apprenticeships are common only in a handful of job categories — typically in the building trades and labor union-represented workers. Yet, there’s little to prevent employers from establishing them in many more fields. Specifically, according to the analysis, the number of “apprenticeship appropriate” job categories could be expanded from the 27 today to 74.
In Switzerland, vocational training is available in 240 job categories, not limited to technical fields. In Germany, the top three occupations for those graduating from vocational apprenticeship programs in 2016 were office management clerk, retail clerk and salesperson.
Not only would expanding apprenticeship job categories unlock higher-value careers for workers, but according to the HBR study, these are also the positions employers find difficult to fill.
This finding was echoed by an Executive Order issued last year by the president tasking the Department of Labor with finding ways to expand the availability of apprenticeship programs. “In today’s rapidly changing economy, it is more important than ever to prepare workers to fill both existing and newly created jobs and to prepare workers for the jobs of the future,” the Order states.
Apprenticeship Job Criteria
The predominate job categories for apprenticeships include construction, extraction (for example, coal mining), installation, maintenance, repair and production jobs. These fields have two things in common: They necessitate having a college degree, and they “require an in-depth ability in one or two specific areas, rather a broad array of skills,” according to the HBS study.
The study went on to identify further criteria for a broader set of occupations suitable for apprenticeship programs. Such jobs:
• Aren’t heavily licensed,
• Require a relatively narrow cluster of skills,
• Don’t require a bachelor’s degree,
• Have above-average worker stability and
• Pay at least $15 per hour.
The study also subdivided them into two categories:
1. Expanders — jobs with educational requirements exclusively at the sub-bachelor’s degree level, and
2. Boosters — jobs “for which the educational requirements are relaxed,” possibly requiring only some level of college education.
Although the “expander” category is dominated by manual labor jobs, it also encompasses many administrative positions such as medical secretaries and tax preparers. The “booster” group includes many more “office” jobs such as billing clerks, computer user support specialists, graphic designers, insurance underwriters, human resource specialists, purchasing agents and paralegals.
In Europe, most of the jobs in the “booster” category are filled by employees who have gone through apprenticeship programs or some other form of work-based vocational education.
One of the impediments to expanding the scope of apprenticeships is what the study deems “college inflation.” This is the prevalence of college degree requirements for jobs that, in reality, don’t need a college education given the job’s actual skill or knowledge requirements. The study notes that a “college for all” drive in the United States (which isn’t present in Europe) has driven many people to obtain college degrees — and incur mountains of debt — without economic justification.
From the employer perspective, “Creating a pipeline of talent by providing practical training to apprentices could be an attractive proposition for employers caught in the trap of degree inflation,” the study states. “Instead of restricting their available applicant pool to college graduates — the portion of the population with the lowest unemployment rate and highest wage expectations — employers can widen their access to workers who are just as productive and far less likely to leave for a competitor.”
Conversely, insisting on college graduates for jobs that could, with apprenticeship training, be performed without that diploma brings tremendous costs to employers. First, they generally pay higher wages for college graduates. And second, they still incur the cost of training them.
Also, there’s a misperception that the kinds of jobs that don’t require a college degree lack advancement potential. That isn’t necessarily the case, the study asserts, citing a job such as tech support. A front-line computer support specialist job is “the classic first step into an information technology career that can lead into management as well as advanced fields such as programming or cybersecurity.”
Apprenticeships aren’t without cost to employers, of course. There’s the expense of the training itself. However, apprentices don’t necessarily have to be paid during instructional periods, such as when they’re in a classroom setting.
In addition, employers shouldn’t expect to pay rock bottom wages to those who complete apprenticeships, though programs certified by the U.S. Department of Labor can lift federal minimum wage requirements. To prevent frustration and disappointment, give participants a clear idea of what kind of job and initial wages they can reasonably expect upon finishing the program.
Worth a Look
Whether an apprenticeship program makes sense for any given employer depends, of course, upon its unique needs. But the first step in making that assessment is recognizing that apprenticeships aren’t just for future electricians and bricklayers.
© 2024 CPA Site Solutions.
Disclaimer of Liability
Our firm provides the information in this article for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other competent advisors. Before making any decision or taking any action, you should consult a professional advisor who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this blog are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability and fitness for a particular purpose.