Why Employers Should Consider Apprenticeships to Address the Tech Talent Gap The talent shortage in…
Half of the global workforce will require reskilling or upskilling by 2025, according to the 2020 Citrix Talent Accelerator report. The outsized demand for talent and the resulting skills shortage is a trend that will persist without rapid and lasting change. Employers have no alternative but to invest in alternative pathways to create talent, rather than simply consuming it via the traditional routes of college, visas, and recruiting from peers. Working independently will not scale a solution. Registered Apprenticeship Programs (RAPs) are an effective public/private partnership that provide a viable solution for creating standardized and portable talent while building a consistent pipeline of qualified candidates.
Apprenticeship is a significant topic in the national public policy spotlight at present as legislators consider ways to address workforce development and reduce unemployment in America. There’s no question that apprenticeship is seen as a viable and valuable pathway to higher-paying careers for Americans who might not otherwise have access to the necessary education and training to acquire the skills they need to be successful. At issue, however, is the approach our nation should adopt as the so-called “gold standard”: Registered Apprenticeship Programs vs. Industry-Recognized Apprenticeship Programs (IRAPs).
Apprenti is a Registered Apprenticeship Program (RAP) that empowers employers to bridge the pervasive talent and digital skills shortages by building their own pipeline of highly skilled, highly motivated, and diverse tech talent. We believe RAPs are a better solution because they can scale across companies and industries; produce more consistent employment outcomes; and enable companies to create more diverse, equitable, and inclusive workforces.
Solving for the Digital Skills Shortage
Employers who’ve engaged in hiring tech talent are aware of the talent shortage plaguing the United States. Particularly when it comes to digital skills, such as software developers, cybersecurity analysts, and Cloud operations, there simply aren’t enough skilled workers to fill these roles. In 2021, 900,000 tech jobs in the U.S. went unfilled.
College and high-skilled worker visas are the primary pathways to high-paying careers, but neither produce enough talent to meet market demand. Higher education produced only 325,000 graduates in all STEM fields, most of which are not directly related to the skills required; and Congress grants just 85,000 H-1B visas annually, a program that allows U.S. employers to hire workers from other countries on a temporary basis. Though these are meant to serve all industries, the tech industry consumes the lion’s share of those visas each year. However, the program is highly competitive, rendering it unreliable. It is also cost-prohibitive for many employers: A recent study showed a 20% premium paid for H-1B workers, making it an expensive solution even if it were expanded.
Additionally, there are millions of tech-related vacancies across industries and sectors that can’t be filled with people who are skilled enough to do the work. This presents an opportunity for companies to invest in reskilling, which is teaching Americans new skills unrelated to their current job or career so they can advance to a new job or industry. For instance, a service worker can be trained and receive accelerated classroom training combined with mentorship and on-the-job experience via the Registered Apprenticeship system and become a software developer at a Fortune 500 company.
Comparing Registered Apprenticeship and IRAPs
Apprenticeship has existed since the Middle Ages; it is a time-tested method for employers to recruit, build, and retain a highly skilled workforce. Workers gain paid, relevant, on-the-job work experience while acquiring real-world skills and credentials employers value. Despite their longevity, when most Americans think about apprenticeship, they relate it to trade vocations such as masonry, construction, and plumbing. However, the apprenticeship model is broadly applicable in all sectors, including technology, healthcare (residency), legal (clerking), and financial services, as demonstrated globally.
While some have advocated for a “non-registered” approach to apprenticeship (IRAP) to reduce perceived barriers like compliance, government engagement, and paperwork, RAPs are both nimble, because they are defined by industry, and provide national consistency, credentials, and portability of our joint investment. In addition, RAPs have significant, fundamental and systemic benefits that impact companies’ ability to recruit, train, reskill, and retain qualified and more diverse candidates.
RAPs were created under the National Apprenticeship Act of 1937 (also known as the Fitzgerald Act). Previously, apprenticeship programs were largely unregulated; the National Apprenticeship Act put control of apprenticeship and on-the-job training programs under the Secretary of Labor, created an Office of Apprenticeship within the Department of Labor (DOL), and established a proven model for the DOL to support workforce development in highly skilled occupations. RAPs also offer incentives such as technical assistance, tax credits, and federal resources to enable employer-based mentorship for apprentices.
For their part, IRAPs were established in 2019 via a DOL-proposed amendment to the Labor Standards for the Registration of Apprenticeship Programs. The DOL announced the final rule on IRAPs in March 2020. However, new IRAP programs were rendered defunct in 2021. IRAPs were created to provide flexibility in how each company structured and administered apprenticeships individually. IRAPs would have been overseen by third party accreditors known as Standard Recognition Entities (SREs), which evaluated and recognized these programs, and were still governed and documented by DOL regulations.
Employers who participate as hiring partners in a RAP have the advantage of being able to pay their apprentices a federally protected training wage and benefit from state and federal subsidies and investment. In contrast, employers who go the IRAP route would still be subject to state and local laws and cannot benefit from any tax incentives or government investment.
Here’s how that works in practice. Let’s say an employer recruits two individuals, a college graduate and an apprentice, to do the same job. The apprentice signs on for a year of apprenticeship and learns that the college graduate is earning 30% more for the same role. Under a RAP, the employer is protected from being sued for wage discrimination because the apprentice has agreed to be paid a training wage while they’re earning and learning. In an IRAP, however, those protections wouldn’t exist. In states where salaries must be disclosed legally, an apprentice could challenge the pay disparity in court.
Funding variances are another noteworthy difference. In a Registered Apprenticeship system, Congress grants money to states to support training costs. In many cases, that means the company subsidizes the cost of training for the apprentice to ensure the individual is ready to do the job. In an IRAP, it wouldn’t work that way. Either the company would pay 100% for the training, or be forced to search the open market and hope they could find people to do the work. Additionally, the company would still have to do more onboarding when the candidate got there. Operating the apprenticeship would fall exclusively on the company staff; in addition, there’s no incentive provided to the company to offset or support talent creation internally. This applies to all apprentices, industries, and sectors.
Understanding the Value of RAPs
Considering all of this, what is the value of the Registered Apprenticeship model for employers? First, it provides national standardization, as roles and expectations are defined by a consortium of companies that define the skills needed to be retained, which are then “approved” by the U.S. DOL. This applies to the documentation process used to determine core competencies for apprentices, to the classroom training that prepares them, to the industry language used in job descriptions and interviews, and to the work being done on the job.
Additionally, Registered Apprentices receive a credential at the end of their training that lets employers know they are fully competent in a given role, and they can perform that set of skills at most companies. This makes the apprentice easier to recruit for future positions because they’re able to do the work and understand the universal language and industry standards that apply to that role. They can easily demonstrate that knowledge during the interview process. It also makes Registered Apprentices more retainable, because they’ve invested their time and effort into learning the skills required to provide maximum value to the employer. In this way, Registered Apprenticeship creates a holistic ecosystem of talent that is scalable, sustainable, and portable—across state lines, industry verticals, and companies.
By contrast, non-registered programs, such as internships and IRAPs, lack standardized structure, paperwork, training, and language. Therefore, individuals in those programs don’t have the same learnings and credentials to ensure they meet the minimum requirements to stay in the job and keep doing it long term. That means they are not sustainable and that HR departments have no discernable way of qualifying non-college educated, non-traditional candidates against the applicant pool. Thus, it actually creates more work for companies, not less.
The case for RAPs vs. Degrees
At Apprenti, 11% of our apprentices graduate early—they complete the program and are retained ahead of schedule, meaning under one year of work experience. This means 89% still need the full term of a year on the job to assimilate fully into the role and be retained. Most IRAPs are considerably shorter, and with lower retention. RAPs are a long-term talent development pipeline—not a short-term solution meant for appearances.
Additionally, not everyone has access to a college education. With only 30% of Americans going to college and 25% graduating, what happens to the other 75%? Europe and Asia have it figured out—the answer is apprenticeship. America has been a little slow to adopt that proposition, and there is still this prevailing belief that college is THE pathway to a successful career.
However, it’s important to consider the capacity of the college system—STEM degree programs aren’t lacking in enrollments. There is no way financially or systematically to quadruple the output of the college system without eroding fidelity in the outcomes, and if we are learning anything right now from the student loan system, there is less and less appetite by the American public to sink into debt to attain a degree—so investing in that capacity may not yield the results we claim to need.
The time has come to meet the talent on the field and negotiate a way forward together. Not all jobs require a degree. We need to stop treating all jobs equally and allow for alternative training to support our systems. We need to invest in a system that can scale with the industry’s growing tech needs. For those who are serious about creating inclusive work environments, the apprenticeship system is the best opportunity we can create to kill both birds with one stone.