Part II: The Urgent Case for Apprenticeships in Silicon Valley

Jenny Dearborn, MEd, MBA, Executive Vice President, Human Resources, SAP

How Tech Companies Can Fill Jobs, Drive Economic Growth and Win the War for Talent and Diversity

Second in a three-part series examining the potential of apprenticeships to close the vast and growing gap between tech jobs and workers with the skills to fill them. Read Part I.

A large and growing gap between available IT jobs and workers with skills to fill them threatens the global economy: in the US, more than half a million computing jobs are open yet only about 50,000 computer science graduates entered the workforce last year. And while this should certainly alarm every tech company leader, employee and shareholder, especially here in Silicon Valley, 67 percent of computing jobs are outside the technology sector.

Apprenticeships can help companies fill these gaps while boosting employment for workers without a college education. The tech sector is well-suited to “middle skills” jobs, which require more training and/or education than high school but less than a college degree. According to the US Department of Labor, high-demand IT apprenticeship occupations include:

• Computer Operator
• Computer Peripheral Equipment Operator
• Computer Programmer
• Information Management
• Telecommunications Technician

Given that college education has more than doubled in average real cost in the past 30 years, and with student loan debt now totaling more than $1.5 trillion, many individuals and families are looking for alternatives to this growing financial burden. In fact, only 42 percent of Americans say that a college degree is necessary for success in the workforce, a 13 point drop from 2009.

Yet US high school graduates are nearly three times more likely to be unemployed than Americans with college degrees. For them, apprenticeships can mean a golden opportunity to develop middle skills, gain steady employment and earn up to a $250,000 increase in lifetime earnings. And unlike high- and low-skill workers, which outnumber available jobs, there are more middle skills jobs than workers, both in the US and California, home of Silicon Valley.

Source: Third Way, National Skills Coalition

Apprenticeships are structured, earn-while-you-learn programs that combine work and a course of study. Here’s a very general overview of how they work:

1. Program creation: Employer with hard-to-fill job partners with an educational institution (a community or technical college, vocational school or, increasingly, coding “boot camps”) to develop apprenticeship curriculum and standards to teach the skills for that job.
2. Identifying candidates: Employer and/or educational institution partners with workforce intermediary (which matches employers with workers and sometimes facilitates skills acquisition) to identify candidates.
3. Work and study begin: Candidates accepted after an application process begin work, on-the-job training and mentorship at the employer and course of study at the educational institution.
4. Earning while learning: Apprentices receive wages, which increase as their skills grow, from the employer, which also pays the educational institution for tuition, books, etc.
5. Completing requirements: An apprentice may begin full-time employment after achieving certain time- and/or competency-based milestones.* More than 90 percent of workers who complete an apprenticeship stay with their sponsoring company.
6. Long-term mutual benefit: The employer gains a worker with the right skills, and the worker gains a potential lifetime of living wages and a meaningful career.

*Apprenticeships registered with the US Department of Labor require 2,000 hours of on-the-job training, 144 hours of classroom learning and demonstrating key skills to the employer.

Apprenticeships are widely used around the world, especially in Switzerland and Germany, where most young people get on-the-job training through national apprenticeships (70 percent and 60 percent, respectively), leading to skilled, well-paying jobs. Despite this, apprenticeships lag in the US. In 2014, there were 43 apprentices per 1,000 employed individuals in Switzerland, 40 in Germany and 39 in Australia and just three here. This can’t continue if we are ever to fill this country’s computing jobs.

Technology apprenticeships can change the destiny of both companies and workers. Enterprises in Silicon Valley and beyond must urgently adopt apprenticeships as a key talent strategy that will strengthen our economy and communities as well as our bottom line.

SAP is co-sponsoring the first Silicon Valley Apprenticeship Summit on Tuesday, August 28, 2018 on our campus in Palo Alto. I urge my colleagues at forward-looking companies to join us to learn more about how to build or advance apprenticeships. For more, visit svapprenticeshipsummit.squarespace.com or contact [email protected].