The Benefits and Costs - ed

The Benefits and Costs of Apprenticeships: A Business Perspective

NOVEMBER 2016

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Foreword

If our country is to out-compete and continue to lead the rest of the world, we must prepare our workforce for the jobs of the 21st century. Yet, in meeting more than 2,000 CEOs as Secretary of Commerce, the one challenge I hear over and over again is difficulty finding skilled workers.

Neither Government nor business alone can solve today's skills shortages or prevent new shortages tomorrow.

By building regional partnerships with education, workforce, and social service institutions, businesses and government can create training programs that connect workers with middle class careers. That approach is a hallmark of President Obama's workforce policy agenda.

Since the President issued the call to expand apprenticeships in his 2014 State of the Union, the U.S. has added more than 125,000 new apprenticeships, the largest increase in nearly a decade. Apprenticeships have gained new prominence as a proven training model for workers; but for businesses, apprenticeships have not necessarily been an easy sell.

This report harnesses the stories of 13 businesses and intermediaries that shared their experiences with apprenticeships. Through a careful analysis of their programs, it makes the case for apprenticeship from the business perspective. The cost of creating the programs varied from company to company, but all found that an investment in apprenticeship pays off.

Many of the companies in this study had open positions in their factories, medical centers, stores, and offices that they were persistently unable to fill. By turning to apprenticeships, they were able to broaden their pool of candidates and fill critical vacancies. Over the long run, the companies have found that developing talent through apprenticeships results in a more dedicated, flexible, loyal workforce that is poised to rise into leadership positions and make the companies more competitive.

The 13 case studies also suggest that, despite the clear payoff from apprenticeships, companies tend to give secondary attention to apprenticeships rather than embracing it as their first option for talent development. Companies use apprenticeship as a vehicle for developing workers for a few, hard-to-fill positions; they do not typically adopt it across their operations. This report provides evidence that should encourage more companies to consider starting or expanding apprenticeship programs in both traditional and new occupations.

I encourage all business leaders to read this report carefully. It makes it clear that apprenticeships are good for business.

Penny Pritzker U.S. Secretary of Commerce

NOVEMBER 2016 | OFFICE OF THE CHIEF ECONOMIST | ECONOMICS AND STATISTICS ADMINISTRATION

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