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As Recession Looms, Rethink Your Talent Acquisition Strategy to Include Apprenticeship and Reskilling
A looming recession breeds uncertainty—in the economy, in business, and in the hearts and minds of individuals from the C-Suite to Main Street. While so much is uncertain, one thing is certain: The digital skills gap continues to grow in all industries, including tech.
A new year provides an opportunity for employers to adopt new ways of thinking when it comes to sourcing and recruiting talent. Specifically, now is the time to consider ways to align your talent acquisition strategy with your diversity, equity, inclusion, and accessibility (DEIA) initiatives as you look ahead to the coming year. Registered Apprenticeship is one solution to consider, as it produces a steady pipeline of diverse talent for your organization’s growing digital needs. Additionally, organizations like Apprenti, which creates alternative pathways for employers to access diverse talent, make it easy for both individual employers and workers to participate while vastly lowering hiring costs.
Recession Is an Opportunity to Reskill Your Workforce
Recessions are often synonymous with workforce reductions and pay cuts. Disadvantaged populations, such as racial and ethnic minorities, low-income individuals, and people with disabilities, typically are the hardest hit. During the height of the Covid-19 pandemic, for instance—the deepest recession since World War II—minority households were disproportionately impacted; many more lost jobs and income, were unable to make rent and mortgage payments and were more likely to contract Covid.
The coming recession is an opportunity to do things differently. It is a chance for employers to interrupt the doom and gloom cycle of mass layoffs, lost wages, and widespread hardship by rethinking their workforce strategies and focusing on retention rather than reduction. Reskilling your workforce through Registered Apprenticeship is a proven way to extend job opportunities and economic mobility to underrepresented populations while addressing critical digital skills shortages.
What’s more, building a diverse workforce isn’t about filling quotas or altruism. It’s a competitive imperative. A demographic sea change is coming: By 2045, white people will make up less than half of the U.S. population; the workforce will inevitably follow the same trajectory. Company leaders that recognize this demographic shift is coming and choose to view having a diverse workforce as a competitive tool will be poised to succeed. Those that don’t will face an ever-shrinking pool of qualified, available candidates for employment. This necessitates that organizations embrace new and innovative ways to access a diverse, sustainable, and highly-skilled workforce.
Additionally, not only do you stand to gain a competitive advantage for today and tomorrow by building a more diverse workforce, you gain an opportunity to become an employer of choice. Investing in your existing employees by giving them a chance to learn new skills and explore new career opportunities creates increased loyalty and job satisfaction and enhances your company’s retention and recruitment efforts.
All of the above are reasons to consider reskilling your workforce in lieu of layoffs. And with Registered Apprenticeship, it’s actually easier and more cost-effective than most employers realize.
Why Registered Apprenticeship?
If you’ve needed to hire digital skills talent in recent years, you’ve likely encountered a shortage of qualified candidates. In 2021, 900,000 tech jobs in the U.S. went unfilled. While most highly paid digital skills workers come from higher education or high-skilled worker visas, neither of these sources produces enough talent to meet employer demand. Higher education produces just 325,000 graduates in all STEM fields. Additionally, Congress grants only 85,000 H-1B visas each year, a program that enables U.S. employers to hire skilled workers from other countries on a temporary basis.
These so-called “traditional” talent pools are no longer adequate. Employers require a secondary system from which they can source and acquire talent. Envision a future where employers have two talent development pipelines: the university system and Registered Apprenticeship. Recently, Registered Apprenticeship has emerged in the national conversation as a viable pathway to creating jobs and economic mobility for those who wouldn’t otherwise have the opportunity. Three-quarters of Americans don’t have access to a college education—Registered Apprenticeship programs give them a chance to obtain the training and skills they need to obtain higher-paying careers. Europe and Asia have adopted apprenticeships in multiple industries and continue to reap the benefits. The same opportunity exists in the U.S., so long as employers are willing to embrace apprenticeship as a workforce development strategy.
Apprenticeship is a proven strategy, recognized by the Department of Labor, that enables employers to reduce recruiting and hiring time while saving money by selecting and developing qualified candidates at training wages. It’s no longer confined to trade occupations, such as masons, electricians, and plumbers. A wide range of industries, including tech, financial services, healthcare, utilities, higher education, and insurance, now rely on apprenticeship as a ready-made source of talent to fill digital skills roles.
The proof is in the numbers: Apprenti has successfully placed thousands of apprentices nationally since its inception in 2016, transitioning many from low-wage jobs and unemployment or underemployment to successful careers in roles such as software developer, cybersecurity analyst, Cloud operations specialist, game developer, and more. On average, Apprenti graduates earn $86,000 annually post-apprenticeship—a 115% increase in income.
As evidenced by these outcomes, apprenticeship can provide a pathway to economic mobility and increased earnings potential for many. In particular, 92% of apprentices placed by Apprenti come from historically underrepresented groups, including people of color, women, and Veterans; 17% of apprentices identify as individuals with disabilities. In addition, Apprenti has an in-house access team dedicated to providing support to apprentices with disabilities and their employers.
What’s more, the cost savings to employers are significant. Hiring apprentices saves companies recruiting and turnover costs—88% of Apprenti apprentices are retained vs. 75% of employees recruited from higher education institutions. In addition, employers realize a 35% savings in salary with an apprentice vs. an employee recruited through more traditional channels.
Why Reskilling is Relevant
Reskilling is the process of training for a new job by learning different skills. According to the World Economic Forum, “reskilling is one of the major necessities and challenges of our era.”
Reskilling the workforce is top of mind for business leaders—74% say it’s important or very important for their company’s success over the next 12-18 months. It’s no wonder: the WEF estimates that 1 billion people worldwide will need to be reskilled by 2030 as technology continues to transform jobs and how we do them. Despite what the WEF calls a “reskilling emergency,” just 10% of company leaders report they’re ready to address this trend.
Registered apprenticeships can help bridge the gap. They are often successful pathways for upskilling incumbent workers, filling skill gaps across an organization, and planning for skill gaps that can occur due to retirement, departmental layoffs, or mergers and acquisitions. For example, Apprenti has filled middle-skill roles with internal candidates to support the growth of existing employees.
Reskilling via Registered Apprenticeship is an opportunity to retain existing workers, enhance your company’s workforce diversity, and lower your employment costs—without layoffs or pay cuts. It means current employees can grow their careers and remain with your organization; that’s a win-win for you and them. Incumbent employees are a known factor. They’re already embedded in your company’s culture and workflow, and there’s no additional cost of acquisition or onboarding time.
Underrepresented groups tend to leave organizations because they feel marginalized or don’t have a sense of belonging or feel included. Investing in opportunities for career development and learning new skills can help foster loyalty and increased productivity among all employees, and underrepresented individuals in particular, because it shows that you’re committed to helping them grow for the future. That demonstration of commitment speaks volumes when it comes to enticing employees to remain with your organization and potentially make referrals to their network for future hires.
Not to mention the savings that come with lower turnover rates. The average turnover rate across all industries is 57%, accounting for voluntary and involuntary turnover. And the cost of turnover is high: it’s estimated that losing an employee can cost a company 1.5 to 2 times their salary, not to mention lost productivity, missed deadlines, depleted team morale, and potential damage to the company’s brand reputation.
Aren’t Apprenticeship Programs Complicated?
There’s a common misconception among employers that implementing apprenticeship programs is convoluted and complex. Nothing could be further from the truth. Apprenti provides a turnkey, structured solution that makes it simple for employers and individuals to participate while delivering significant cost savings for employers.
With a recession on the horizon and a demographic transformation coming in the workforce, now is the time to rethink your talent acquisition strategies to include reskilling through Registered Apprenticeship. Recession isn’t a time to be in fear; it’s a time to embrace new opportunities. Existing talent pools aren’t enough to bridge the digital skills divide. That’s why reskilling through Registered Apprenticeship is a solution worth considering: It can help you create a competitive advantage and become an employer of choice while building a nimble, 21st-century workforce that’s ready and able to position your company to exit the recession poised for success and stronger than ever.
To learn more about Apprenti and how apprenticeship can help you reskill your existing workforce for the future, visit www.apprenticareers.org/hire.