National Apprenticeship Week: Why You Should Take Another Look

Have you ever considered taking on an apprentice for your business? Probably not. Perhaps apprenticeship makes you think of ironmongers and cordwainers of the Middle Ages. Or you might believe that only labor unions and multi-national corporations could benefit from apprenticeships today. But if you struggle to find well-qualified employees who fit your corporate culture, celebrate National Apprenticeship Week by having another look.

What can an apprenticeship do for your business?

While these programs are relatively uncommon in the U.S., other countries have been investing in them as a way to grow economies and lower youth unemployment. And the U.S. government has recently increased support for apprenticeships, granting $175 million to 46 programs over the last year.

Businesses who run the programs report advantages from improved productivity to measurable return on investment. The Brookings Institute notes that in a survey of 900 U.S. employers, 87% would strongly recommend apprenticeships to other businesses. Here’s why:

• Steady supply of qualified employees. One retail pharmaceutical and health care company credits its apprenticeship program for developing a “pipeline of talented and skilled employees needed to fill current and future roles.” (From a report by Deloitte and the Aspen Institute)
• Better-qualified employees. Apprentices learn the unique skill set required for your business and build their professional networks at your company. They end up with the exact qualifications you’re looking for.
• More innovative workforce. According to a study of German companies, there’s a clear relationship between the extent of in-company training and subsequent innovation.
• Competitive advantage. In the UK, 77% of employers surveyed felt that apprenticeships make them more competitive by providing a cost-effective path to highly qualified employees. Customers also prefer to work with companies who run apprenticeships.
• Higher employee loyalty. Although many companies cite poaching as a reason to avoid apprenticeships, the Brookings Institute reports that 3 of 4 companies surveyed have not experienced poaching as a problem. In fact, most apprentices become loyal and engaged team members.
• More diverse teams. Internal training programs give you the freedom to hire for diversity or desirable personality traits, such as willingness to learn or flexibility. 

Are apprenticeships too expensive?

As a business owner or manager, you may not see the fiscal advantages of hiring someone who isn’t qualified for your industry, but remember that you don’t pay apprentices the kind of salary a more experienced employee would require and even while they’re learning, they’re contributing. Also, without the pressure of a large salary, you can hire for cultural fit before you invest a lot of cash.

In fact, recent data suggests you can actually make money from apprenticeships. According to a 2009 report of Canadian programs across different industries, the companies saw an average benefit-to-cost ratio of 1.47 over 4 years. And a Swiss study found that employers spend around $3.4 billion annually training apprentices but earn $3.7 billion each year from apprentices’ work during training. According to a UK study, 59% of businesses surveyed report that training apprentices is more cost-effective than hiring skilled staff, with 59% believing that apprenticeships lead to lower overall training costs and 53% feeling that they reduce recruitment costs.

Why not get some interns?

Many companies bring in interns to help out with basic tasks, but interns don’t commit to your company long term. Apprentices sign on with the understanding that they’re training for advancement within your business, not just grabbing experience between college terms. According to Brad Neese, director of Apprenticeship Carolina, “College degrees and internships don't produce the same quality of worker as intensive, on-the-job apprenticeships.”

Businesses like internships because they’re relatively easy to set up and run while apprenticeships take commitment and planning. But apprenticeships don’t have to be unwieldy. You just need an employment agreement that outlines everyone’s responsibilities for training, participation and pay raises based on acquired skills. Brad Neese points to a one-man pest control company he’s worked with that brought in an apprentice to assist while learning all aspects of the business from chemicals to accounting.

Aren’t apprenticeships for trades and crafts only?

While apprenticeships are more common for trades like electricians or auto manufacturing, other industries have begun to realize the advantages of long-term training. Apprenticeships are good for IT, healthcare, manufacturing, hospitality, tourism and more. For example, Washington state’s SEIU Healthcare NW Training Partnership has recently started a Home Care Aide Registered Apprentice pilot program to develop home care professionals for an industry that is expected to grow by 50% in the next decade. The U.S. Department of Labor lists 1,164 industries currently offering apprenticeships.

What are the risks?

While these programs have proven advantages, they’re not a panacea. If you’ve never run an apprenticeship program, you might want to get some help setting one up. Without proper planning and follow-through, apprentices will drop out before the program is finished. Other employees may get frustrated if they have to take on mentoring responsibility without adequate support or resources. And without proper organization, accountability and recognition, the training quality can suffer. However, these risks come with any training program.

Also, because apprenticeships are uncommon in the U.S., there’s not a proven blueprint for setting one up. You may need to start with a pilot plan and experiment to find what works best for you, which could delay your benefits. But that’s what innovation is all about.

How can I get started?

If you’re considering creating a program for your company, check to see if your state has any support resources. You might even be eligible for tax credits. The Department of Labor maintains a list of state and federal resources that can help you. Also, the DOL offers guides for starting programs, but these focus on registered apprenticeships, which may not be right for you.

Other resources include books like 21st-Century Apprenticeship by Jeffrey Cantor, and Upskill America, a coalition of business, education, training and human resource organizations designed to identify areas where educators and business can work together to help students master the skills businesses need. If appropriate, contract a training consultant to help you set up the program and get it running.

Although apprenticeships in the U.S. are still not common, businesses are starting to recognize their value. In fact, over 340,000 Americans participate in apprenticeships. And there are 55,000 more positions available today than in 2014. Also, new learning management tools are making apprenticeships easier than ever to run. No one program will solve all the training and hiring problems out there, but apprenticeships are a smart way to get bright young employees – the superstars of tomorrow – on your team today.