Federal Grants for Apprenticeships are Shifting the Postsecondary Landscape

By Salvatore Lorenzo – Published June 2, 2021 in Workforce Monitor –  Subscribe to the WFMonitor eNewsletter

In part-one of a two-part series, we examine how recent federal investment and policy is incentivizing colleges, state agencies, employers, and workforce organizations to create and expand robust apprenticeship/work-based learning initiatives. 

Background
Throughout the pandemic recovery, access to well-paying jobs for low-income Americans has been a prominent feature in the Biden Administration’s American Jobs Plan. The proposed plan’s budget includes $48 billion dollars for workforce development infrastructure and the creation of one to two million registered apprenticeship and pre-apprenticeship opportunities for a diverse population of non-degree workers. Further, the plan expands the Registered Apprenticeship Program (RAP), included in the Workforce Innovation and Opportunities Act, and aims to cultivate employer-partnered apprenticeship pathways through standardized and credit-bearing higher education programs designed to financially support and provide future degree attainment opportunities for learners. 

In addition, The National Apprenticeship Act of 2021, passed in the U.S. House of Representatives with bipartisan support, invests $3.5 billion dollars over five years for the creation of registered apprenticeships/pre-apprenticeships and codifies “requirements for apprenticeship agreements and program registration to ensure consistency in quality standards and worker protections.” Specifically, the bill identifies time-based and hybrid instruction models that are required to provide at least 144 hours of apprenticeship training each year to students. These instruction models are led by state-qualified instructors or industry subject-matter experts (SMEs) and they incorporate teaching techniques aligned with career pathways, maintain evidence-based progress and learner evaluation records, and provide progressive wages to apprentices. For more information on evidence-centered program design that incorporates SME, industry collaboration, and streamlined student evaluation, see a recent Workforce Monitor summary that outlines an ETS theory of action for digital literacy learning and assessment development. 

For supporting marginalized populations experiencing barriers to employment, proposed legislation like The Connecting Youth to Jobs Act, highlighted in New America’s Building Back Better: A National Plan for Youth Employment, lays out a framework for increasing youth access to work-based learning programs. The act, designed for youth between the ages of 14 and 24, proposes “a $10 billion competitive grant for providing wraparound services to youth employment program participants and work-based learning opportunities for youth.” The funding targets community organizations, labor unions, tribal organizations, and other non-profits and partnerships to provide housing, health care, transportation, childcare, and digital access support to young workers. Moreover, it “requires the collection of performance data within one year of enactment. It also requires the DOL to review and assess the programs and equity, diversity and inclusion activities funded under the Act and submit a report to Congress.”

How State Agencies Can Expand Apprenticeships and Support Quality Labor Outcomes
To align postsecondary pathways with well-paid careers, state agencies and workforce boards must collect and utilize labor market information. For example, in South Carolina, STEM data collected by the National Alliance for Partnerships in Equity spurred the state to develop new career technical education pathways in AI fields. Also, in Wisconsin, as a result of an $11.8 million federal grant, the state’s Department of Workforce Development created five “apprenticeship navigator” positions to guide individuals to registered apprenticeships in emerging and high-demand sectors like healthcare, information technology, construction, finance, transportation, biotech, and agriculture. 

According to John Schulze, the director of legal and government relations for Associated Builders and Contractors, “schools and employers are working hard to connect young people to jobs in the construction trades, and the ‘stick rate’ is high, in that once someone is exposed to the construction trades and likes it, they usually complete, but the largest barrier is getting students in the door.” In other states, like Kentucky and Michigan, collaboration with local workforce boards consisting of regional industry leaders assists in aligning workforce development planning with employer labor needs. 

ROI on Apprenticeships for Employers
Based on a Brookings analysis, return on investment for apprenticeship programs are generally positive for employers. “Savings on overtime expenses, increased revenue & productivity, and lower recruitment costs” directly benefit employers. According to a report from Lerman, long-term training programs yield higher returns for employers than short-term programs. Furthermore, in the advanced manufacturing industry, U.S. based employers who implemented the Industrial Manufacturing Technician (IMT) Registered Apprenticeship gained $1.48 for every $1 spent on the program. On average, the 18-month, 3,000-hour program compensated participants wages of $18.50 per hour upon enrollment. 

Other reports of positive ROI on apprenticeships for employers include:

  • In North Carolina, a survey from the state’s Department of Commerce’s Labor & Economic Analysis Division found apprenticeships yield, on average, a 170% return on investment for employers. Of the firms surveyed, 70% have five or fewer current apprentices enrolled in their registered apprenticeship programs. 
  • A Case Western Reserve University and U.S. Department of Commerce report noted that New Hampshire health system, Dartmouth-Hitchcock, experienced a minimum internal rate of return of 40% on their registered apprenticeship program. Additionally, “Siemens USA obtains at least a 50 percent rate of return on its apprenticeship program, compared to hiring machinists off the street.”
  • From an Opportunity America and Brookings report, the registered apprenticeship program, Federation for Advanced Manufacturing Education, began as a small, Kentucky initiative and, over a decade, grew into a “national network of nearly 400 companies in 13 states managed by the National Association of Manufacturers’ education and research arm, the Manufacturing Institute.” 

High Demand from Employers for Skill-Based Learning
According to a Society of Human Resource Management survey of 1,343 HR professionals, one in five respondents reported that their organization plans to increase their investment in skills-based learning. Further, four in five respondents said government grants, loans or tax incentives would be important for incentivizing their organization to continue to invest in skills-based learning. Regarding interest in apprenticeships, organizations surveyed in the construction, utilities, agriculture, and mining sectors were more likely than average to offer apprenticeship programs. 

How Workforce Organizations and Employers Can Collaborate with Community Colleges in Developing Registered Apprenticeships
Based on a survey of 38 community colleges, Jobs For the Future identifies four strategies workforce organizations can utilize to support community college-employer partnered apprenticeship programs and improve technical assistance and capacity building efforts:

  • Invest in outreach, recruitment and retention of underrepresented apprentices and build enrollment by engaging with trusted community-based organizations. 
  • “Focus on establishing apprenticeship programs in non-traditional occupations where college interest is greatest, such as IT, banking/finance, and management.”  Intermediaries in these industries can connect employers with relevant community college degree programs to begin development of registered apprenticeship initiatives. 
  • Develop engagement strategies that emphasize the cost benefits of apprenticeships and administrative capabilities community colleges offer. 
  • Build capacity building in community colleges by articulating the value and academic integrity of the apprenticeship model and providing industry-specific knowledge to align apprenticeships with industry-certification programs, enabling community colleges to “leverage renewable program resources, recruit qualified faculty, and respond to individual implementation challenges.”

Conclusion
The cohesive action of federal & state agencies, higher education institutions, workforce organizations, and employers is vital for creating a sustained and quality national apprenticeship infrastructure. The creation of robust apprenticeship pathways that offer well-paying, in-demand careers to postsecondary learners benefits all parties. 

Also see: Brief Overview of Specific Apprenticeship & Pre-Apprenticeship Programs

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