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A Nation of Apprentices?

Feb. 28, 2018
A goal of 5 million apprenticeships in the next five years is very lofty considering last year 505,000 people held apprenticeships.

A lofty goal was set in March of 2017 when Marc Benioff, Salesforce CEO, asked President Trump to up the ante and create 5 million apprenticeships in the next five years.

Trump took the bait and included it in his workforce agenda.

While the U.S. might be on the right path, there is a long way to go from the 505,000 people that held apprenticeships last year. (Only 35% of those apprenticeships were in manufacturing.)

But hope springs eternal in the U.S. psyche and so there are studies that predict if only we could reach the same share of its workforce as Australia, Canada and England, the number of apprenticeships would reach 4 million. This is the belief held by Robert I. Lerman, an institute fellow at Urban Institute.

While that sound good, let’s look at the cost of operating an apprenticeship program. Estimates vary from $25,000 to over $50,000 per year per apprenticeship. That’s awfully pricey, especially for small companies. While the argument has been made that the price is lower since other employees would be paid to do those job, there is the question of productivity.

Some companies have seen good returns on their program. A 2016 study by the U.S. Department of Commerce and Case Western University found that Siemens and Darmouth-Hitchock saw a return of 40-50% on their programs.

Then there is the argument that if the state government gets involved for every $1 spend on apprenticeship programs the return is higher than that spent on community college.

Again, it must taken into account that often area businesses are providing the machinery and learning for these programs and so students go right into jobs. While more community colleges are offering these programs, it hasn’t reached a critical mass yet.

The federal government has been bolstering the job creation program. In 2016, $90 million in grants went to apprenticeship programs. And in 2015, that number was $175 million.

 And the federal government has created a Registered Apprenticeship Program under the Department of Labor that is trying to create standards for these programs.  In the United States, there is no single set of apprenticeship standards that all employers and sponsors in the U.S. must follow when designing their programs.

One company that joined this program last year was Dow Chemical. It has used an apprenticeship program for over 40 years in Europe and has over 100 programs in the U.S. the company wanted to obtain the U.S. Department of Labor registration for its U.S. program.

The company is a big supporter of this method to fill its talent pipeline.

“Apprenticeships are a tried and true workforce development strategy,” said CEO Andrew N.Liveris. “Employers that utilize apprentices report higher productivity, higher retention rates and a substantial return on investment. The program supports Dow’s growth in the U.S. by building a talent pipeline in difficult-to fill technical roles.”

Another U.S. has been on the apprenticeship. In fact just this past week Huntington Ingalls Industries, announced this week that it graduated 148 from its Apprenticeship School at Newport News Shipbuilidng. The Apprentice School accepts about 225 apprentices per year. While that’s not a huge number they have been doing this 1919.

So it’s safe to say that many companies are active in providing apprenticeships and many more might encouraged as government programs offer capital and structure for creating a program.

It’s one of the most valuable tools for filling the ever-shrinking pipeline of manufacturing talent. I’m just not sure I’d put money on 5 million apprenticesip over the next five years.  

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