Why Employers Should Consider Apprenticeships to Address the Tech Talent Gap The talent shortage in…
The Wall Street Journal recently reported that many high school seniors are choosing apprenticeships instead of attending four-year colleges. That’s a noteworthy shift away from the status quo. Why is this happening, and why now?
College enrollment has steadily declined over the past 10 years, even as tuition costs continue to rise. In 2022, the average cost to attend a four-year, public college for one year was $27,940 (in-state) and $45,240 (out-of-state); the cost was $57,570 for a private, four-year school, according to the College Board Trends in College Pricing and Student Aid report. Those costs are out of reach for many students, particularly those from underrepresented demographics and disadvantaged or low-income families. What’s more, for many college graduates, the earnings potential of a four-year degree isn’t what it used to be. At a third of U.S. colleges and universities, more than half of enrolled students earn less than high school graduates 10 years later, according to research from Georgetown University’s Center on Education and the Workforce.
Moreover, the Covid-19 pandemic “prompted a historic disengagement from school,” according to the Journal. As a result, there’s been a shift away from the traditional American “‘college-for-all” model. Instead, younger generations are embracing the fact that they have options for their future: go to college or pursue vocational training, including apprenticeships.
According to federal data and statistics from The Wall Street Journal:
- Currently, colleges and universities across the U.S. enroll about 15 million undergraduates.
- The number of active apprentices nationwide was 581,110 for federal fiscal year 2023.
- College enrollment has declined by around 10% in the past decade.
- The number of apprentices has increased 64% since 2012.
- Registered Apprenticeship (RA) programs are increasing, both “in number and variety.” About 40% of apprenticeships are outside of the construction trades, an industry that has historically supported them.
- Industries such as banking, cybersecurity, and consulting, and companies including McDonald’s, Amazon, and JPMorgan Chase are embracing Registered Apprenticeship as a viable pathway to employment.
For some high school graduates going to college is no longer the dream, or the priority. Many more don’t have the option to attend college at all, as the cost of obtaining a postsecondary education is simply too high. Registered Apprenticeships provide an alternative pathway to higher-paying careers with portable skills for those who aspire to them. It is also an opportunity for employers to retain existing workers, enhance their company’s workforce diversity, and lower employment costs.
With apprenticeships on the rise and expanding beyond traditional trade occupations, and with increasing numbers of high school graduates foregoing a traditional college education, now is the time for employers to reimagine how they source and hire talent. Registered Apprenticeship programs is one solution for employers that are finding it challenging to meet the outsized demand for digital skills talent through traditional pathways such as higher education, visas, and poaching employees from competitors.
Traditional talent pools alone do not provide enough candidates to fill the skills gap. 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. And in many cases, poaching is both a costly and unsustainable source of highly skilled talent. Alongside more traditional pathways, Registered Apprenticeships provide a secondary system employers can tap into to source qualified, diverse talent and develop a highly skilled workforce.
Why Consider Apprenticeship?
Hiring apprentices provides employers numerous benefits, including:
- A cost-effective workforce: Employers can select and develop a qualified workforce at training wages. As a result, it’s less costly to fill skills-based roles.
- Tailored training: Employers have an opportunity to tailor apprentices’ training programs, both in the classroom and on the job, to meet their specific needs. This means apprentices are trained in the skills and knowledge that are most relevant to their roles and the employer’s needs.
- Increased loyalty and retention: Apprentices recognize that their employer is making an investment in their future. Therefore, they are more likely to stay with a company long term. Retention is high on the employer side, too. According to Apprenti, which delivers Registered Apprenticeship programs to bridge the tech talent and diversity gaps, 88% of apprentices are retained by employers post-apprenticeship.
- Reduced recruiting costs: Hiring apprentices saves companies recruiting and turnover costs—88% of Apprenti apprentices are retained vs. 75% of employees recruited from higher education institutions. Additionally, funding is often available to offset training fees, and employers may be able to claim training expenses as a federal tax credit. What’s more, apprenticeships 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.
- Improved productivity: As apprentices gain experience and skills, they complete tasks and projects more efficiently while contributing more meaningfully to an organization over time.
- Increased diversity and flexibility: Apprenticeship creates a diverse, flexible pool of talent that is trained with specific skills that are needed in the workplace. For its part, Apprenti focuses on women, people of color, Veterans, and disabled individuals; 92% of its apprentices are from underrepresented groups.
- Fresh perspectives: Apprentices can bring a wealth of life and career experience to the table, enabling them to contribute new, creative ideas in the workplace. These fresh takes can be especially beneficial for employers focused on growing and scaling their businesses.
Apprenticeship is not a new idea, but it is time to modernize the model to fit emerging and unique workforce needs. A time-tested career-pathing model that’s been in use since the Middle Ages, primarily in trade occupations from blacksmithing to construction to plumbing, apprenticeship is crossing over into “white-collar” occupations, such as software development, cybersecurity, coding, and other technical roles. As a result, Registered Apprenticeship programs are coming to the fore in national policy conversations, and growing numbers of employers are embracing these and other alternative talent pools to expand their ability to hire for highly skilled roles.
Apprenti can help you navigate these trends and create a workforce that’s uniquely trained in the digital skills your company needs to grow and succeed. Get in touch with us and let’s explore solutions together.