While once reserved exclusively for blue-collar trades, Apprenticeships have expanded in recent years to include over 1,200 occupations across 175 industries. This renewed focus on skills-based training is creating opportunities that many companies throughout the country are leveraging to fill vital gaps in their talent pipelines.
Apprenticeships provide a unique and effective way to solve many problems companies are facing today. In this post, we will look into five different ways an apprenticeship can benefit a company outlining the importance of the increasingly popular training method across industries.
1. Improve Company Productivity
Apprenticeship programs are becoming increasingly common as the number of registered apprentices in the United States has increased by more than 200,000 since 2015. Businesses in a growing number of industries recognize that apprenticeship represents an effective alternative to traditional approaches of attracting, preparing, and upskilling talent. And for workers, apprenticeship has been shown to be a viable pathway to higher-skilled jobs, increased earnings, and longer-term job retention.
Recent industry studies have shown that 74% of employers believe that having an apprenticeship program has improved products or service quality, and 78% say that it improved productivity. Apprenticeship programs work to create a healthier and more positive company culture. When workers feel invested in their work, they’ll also want to reinvest back into the company, this means higher productivity, better quality of products, improved company reputation, and happier employees.
Through apprenticeships, many companies have found their workers more motivated, encouraged, and skilled with their staff more likely to contribute to a more productive work environment. New apprentices and trainees become eager to learn and look to develop their skills. Participant enthusiasm for the job can have a positive effect on current workers within the business and inspire them to strive for the same attitude. Apprentices can add an overall wave of enthusiasm and energy to your company which can, in turn, have a positive effect on productivity and engagement.
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2. Reduce Employee Turnover
With skilled workers in high demand and a widening skills gap employers are increasingly worried about recruiting and retaining quality employees. According to the Georgetown University Center on Education and the Workforce, by 2020, the United States is expected to see a shortage of 5 million workers with technical certificates and credentials. At the same time statistics show that about half of U.S. executives at large companies say they are likely to have fewer skilled workers than they need in the short term of the next one to two years.
Apprentices are loyal to the companies that invest in them. Many potential employers may worry about other companies hiring away their new talent after they’ve made significant investments in their education and training. This is not usually the case though as many companies have found that apprenticeship programs actually increase worker loyalty. Research has found that nearly half of U.S. employers responded that they do not worry about poaching, and just one in four say it's a real concern. Even among employers who do view poaching as important, about 85 percent would still recommend an apprenticeship to others.
It is also seen that a significant majority of apprenticeship sponsors report apprenticeships actually raise productivity and worker morale across the board not just among apprentices. This is because all workers benefit from a learning environment at work. According to LinkedIn’s 2019 Workforce Learning Report, 94% of employees say that they would stay at a company longer if it invested in helping them learn and grow.
3. Increase your Bottom Line
A recent report by McKinsey found that approximately 14.7 million U.S. workers may face job displacement due to automation by 2030. Younger workers just entering the workforce have traditionally turned to jobs in retail and food service, and both of these sectors are due to turn toward automation to replace human employees. This means that a significant portion of the population will soon be out of a job.
On average, employers realize an average return on investment of $1.47 for every $1 invested. Additionally, every $1 invested in apprenticeships leads to a public return of approximately $28 in benefits. Researchers covering the apprenticeship industry have found that apprenticeships at companies have the ability to promote,
- 20% more sales
- 25% less labor turnover
- 41% fewer quality issues
- 28% less waste
- 37% less team absence
- 10% better customer feedback
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U.S employers who were surveyed reported that around 60 percent of businesses believe that saving money on wages was a “very important” benefit of apprenticeship. Of respondents 59% report that training apprentices are more cost-effective than hiring skilled staff, with employers believing that Apprenticeships lead to lower overall training costs and as well as reduced recruitment costs.
4. Qualify for Government Incentives
Each year the U.S. Department of Labor announces funding opportunities for apprenticeship programs focused on apprenticeship growth and expansion. In many cases, employers can take advantage of state and federal incentives that make apprenticeships even more attractive to employers. For example in West Virginia apprenticeship programs have the opportunity to claim a tax credit for hiring apprentices in a qualified apprenticeship training program of up to $2,000 or 50% of the actual wages paid during the year.
In Georgia, residents who are attending a public technical college in the state to earn a certificate or diploma are eligible for a grant program that can cover up to 70% of student expenses. Additionally, the State Legislature has established the Hope Career Grant for select high-demand occupations. Additional funding is allocated each year to allow for virtually free tuition for students entering these select occupations.
Pennsylvania Governor Tom Wolf and Department of Labor & Industry (L&I) Secretary Jerry Oleksiak announced more than $6.5 million in PAsmart Registered Apprenticeship Grants to help increase opportunities for workers to “earn while they learn”. The $6.5 million PAsmart Apprenticeship Grants are part of the larger $40 million that Wolf secured for the state. A release states that $20 million will be used to support apprenticeships and more. The other $20 million will be used to expand tech and science programs in schools across the state.
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5. Diversify Your Workforce
With the U.S. expanding its apprenticeship program training nationally, creating a diverse workplace is key to helping companies access all of the nation's talent. In 2016, the Department of Labor released updated Equal Employment Opportunity regulations for Registered Apprenticeship Programs in order to help businesses reach a greater and more diverse pool of skilled workers. When all workers, including women, minorities, and individuals with disabilities, have the opportunity to become apprentices, we tap into our nation's full potential and open new career pathways for workers across the country.
Although apprenticeships can serve as a pipeline to attract new talent, many businesses acknowledge that it is not enough to create an opportunity, because in many cases the playing field isn’t level and not everyone has the same degree of access. Businesses can improve their talent-development efforts by actively taking steps to make apprenticeship pathways more accessible across every step of program delivery. This includes implementing equity into all elements of apprenticeship design, including recruitment and selection, preparation, training, and post-apprenticeship efforts to ensure that journey-level workers who have completed the program enjoy continued success
Apprenticeship is a workforce solution that actively promotes diversity and inclusion in the workplace including race, gender, sexual orientation, and ability. The apprenticeship model is more specifically beneficial to people who are new or just entering the workforce because it opens more realistic pathways that allow them to pursue training opportunities where participants can earn money while they learn, instead of having to choose between the workforce and education.