With the war for talent raging across the globe and industries, the pressure to add, replace, and retain workers in many career fields is a pressing concern for companies, their managers, and HR teams. While the post-pandemic voluntary turnover (excludes retirees, volunteers, and contractors) trend appears to be easing somewhat from 25% in 2022 to 17% in 2023, down to a recent 13.5%, the days of a manageable low single-digit turnover seems to be ancient history. Companies are grappling with filling skilled positions and increasingly turning to apprenticeships in many professional job families (technology, software, marketing, analytics) to fill their employment rolls.  

The talent shortage directly results from the shrinking working population in many parts of the world, a trend influenced by factors such as below-replacement-level birth rates, smaller family sizes, decreased workforce participation, and net immigration rates. These, along with significant generational retirements and a surge in new business start-ups, all contribute to a crisis in the current employment landscape. 

The U.S. Chamber of Commerce highlights that industries with the highest turnover rates are those with lower pay, limited remote work opportunities, and more physically demanding work requirements. These include food, leisure, hospitality, education, health, and professional services, such as landscaping, cleaning, and waste disposal. The talent shortage is significantly impacting these sectors, making it even more challenging for them to fill their workforce needs.  

For workers seeking better-balanced, higher-paying, and more meaningful careers, the resurgence of apprenticeships offers a beacon of hope. In industries such as technology, skilled trades, software and cybersecurity, financial service, and consulting, which traditionally require college degrees, apprenticeships provide a unique opportunity to train and gain work experience simultaneously.

The re-emergence of a historical job training vehicle

With companies struggling to fill roles in critical positions, many are willing to go back to the 11th century, when guilds started in Europe. Guilds were professional associations for craftsmen and merchants that trained new entrants to the field for several years, after which they could work for a living wage. Once they achieved “master” status (by proving their full range of capabilities with a capstone project), they could open their businesses and train and employ others.  

The modern apprenticeship model is a similarly industry-aligned career path in which workers with the right mix of interest, motivation, and requisite capabilities, such as physical, cognitive, or interpersonal, are employed in a trainee role while being mentored and attending formal education classes. 

Apprenticeships provide a mix of guided on-the-job training and classroom learning. Classroom training is often subject to industry (or government) standards, such as those in the trades. It can be provided by an educational organization separate from but often in partnership with the employer, such as with a vocational program or school. On-the-job training engages mentors trained and guided by the same standards, to which the apprentices will be held accountable.      

The U.S. Department of Labor and many states oversee registered apprenticeship programs whose structure and content are industry-vetted. 

Apprentices are paid a salary or hourly wage well above minimum wage standards but below those paid for fully qualified peers. Typical salaries reported for apprentices range from 40-60% of that paid for their fully qualified peers. Many companies now offer them health and welfare benefits during their training period, which can last from 6-9 months up to 4-7 years, although two years is a typical time span.

Why the “time is right” for apprenticeships

Given the talent shortages that organizations face, having a solid and proven method to augment the workforce in difficult-to-fill positions can be seen as a blessing to recruiters and hiring managers. While low unemployment rates imply that most available and willing workers are employed and workforce participation levels are near capacity, the question is whether a significant portion of that workforce is optimally employed, to which the answer is “no.” Support for that comes in two separate but related facts of life for workers and employers.

Considering the income levels of the working population

Current income levels in the U.S. motivate workers to strive for higher wage opportunities. For example, over 50% of Americans lived in a household with a median income of $74,580 in 2022. Another 38 million people (11.6% of the U.S. population) lived in poverty with a household income of $26,500 or less in 2021.

Think about that. With a median requirement of $26 per hour earnings to afford a two-bedroom apartment and a $36/hour median income ($74,580/year), the typical American spends 72% of their (before tax) income on housing alone.   

The opportunity to bring qualified and motivated workers aboard for training and work that raises their standard of living is substantial. It offers an enormous potential benefit to both them and their employers, with an associated value to the local communities in which they operate.

Creating opportunities to attract workers and increase talent pools

Considering the current state of employee engagement, with Gallup reporting an 11-year low, with only 30% engaged and 16% actively disengaged, the opportunities for organizations to bolster their talent pools are substantial. Given that high turnover rates are generally an issue related to advancement and development opportunities, offering a formal pathway to learn and grow accompanied by increasing pay and benefit levels is an attractive narrative for many.  

Many fields and industries with high “quit rates” (turnover) fall into either lower-paying or more challenging work environments. Consider the long hours and emotional toll a healthcare worker takes in a hospital, the physical demands of a construction worker, and the repetitive tasks of the manufacturing worker or transportation driver. Add to that fewer growth and advancement opportunities due to the highly specialized work performed by many in those jobs, and the attraction to new challenges that stretch their skills and allow for more regulated (temperature, safety, comfort) work environments can be hard to ignore.  

Industries with high quit rates (that could serve as recruiting pools for new apprentices) include retail, banking and financial services, healthcare, leisure and hospitality, manufacturing, transportation, construction, and social assistance. Consider that some of these have workers with transferrable skills and varying levels of education that could be leveraged for more successful completion of an apprenticeship program.

Apprenticeships align well with current talent management trends

As we will outline later, numerous examples exist of organizations using the apprenticeship model to upskill non-traditional workers and provide them with advancement opportunities while augmenting their enterprise staffing requirements. The move benefits the roughly 62% of U.S. workers who don’t have a degree and opens up the available labor pool significantly as a result. Estimates have non-degreed workers who are considered to have skills equivalent to their degreed peers (referred to as “STARs” or “skilled through alternative routes), accounting for over 70 million U.S. workers.   

This thinking has resulted in recognizing that college is not a technically superior way to develop the critical skills needed to perform many jobs. An emblematic and essential element of this is the dropping of college degree requirements by as many as 55% of companies for many entry-level and mid-level roles and 45% who say they will do more this year.  Research by Intelligent.com found that 75% of surveyed companies are comfortable with certificate programs, 68% valued associate degrees, and 61% saw online degrees and apprenticeships as suitable replacements for bachelor’s degrees in many jobs.  

Part of this goes to organizations stretching the possibilities of meeting their staffing requirements through reliance on a more extensive set of staffing models. For example, as we have discussed and promoted for several years now, the “6B’s” of talent acquisition and retention that was introduced by Dave Ulrich and the RBL Group proposed that organizations fill their staffing needs through a mix of “buy, build, borrow, bound, bounce, and bind” tactics. The apprenticeship model combines “buy” and “build” approaches to developing new workers.  

Another talent trend supporting the adoption of apprenticeships is the movement by major corporations towards a skills-based approach that acknowledges the changes in the makeup of jobs due to increasing automation, robotization, and intelligent technologies (e.g., AI). Research provides a substantial rationale for this trend, with McKinsey reporting that hiring for skills is five (5) times more predictive of future job success than education.

Advantages to employers and apprentices

Organizations

• Discover often-overlooked talent pools with the core skills and abilities to perform needed work. 
• Expand the pool of potential candidates who would not otherwise apply for posted jobs due to outdated college degree requirements. It provides access to more diverse workers than from traditional sources.
• Generate a workforce segment that is tailor-made and prepared using an organization's unique work and problem-solving methods, tools, business priorities, and culture. 
• Receive tax credits for hiring and training each apprentice in most states. 
• Fill talent gaps related to the shrinking labor force and ever-rising competition for talent.
• Hire and retain critical talent early in their careers by training and enculturating them with significantly higher (90% post-completion) retention rates.
• Fill more advanced entry- and mid-level jobs, enabling the advancement and mobility of other employees into higher-level roles.
  
  

Workers

• Learn new career skills while gaining critical job experience.  
• Opportunities for full-time employment upon successful completion of the apprenticeship program. 
• Access to better wages, increased financial security, and (often) paid benefits while working and learning. They also have a $300,000 earning advantage across their lifetimes over those without this unique blend of training and experience. 
• Freedom from student loans for many apprenticeships, which provide “earn while you learn” access and often avoid increased personal indebtedness. 
• Awarded with industry-recognized credentials for many programs upon completion, validating required skills and abilities that can be used for future job and advancement opportunities.
  
  

Apprenticeships are increasingly used in non-traditional industries

Estimates of current apprentices in the U.S. range from 650,000 to 800,000, more than double those as recent as 2014. Congress has funded these to boost the available labor force in key industries, including finance, technology, and manufacturing. As recently as July 2024, the federal government created $244 M in funding for these programs. They have also started registering them to provide industry and national standards for skills and capabilities that support the needs of the most vital industries.  

In the recent semiconductor and inflation reduction bills, congress approved funding for apprenticeships in fields as diverse as advanced manufacturing, agriculture, construction, energy, education, cybersecurity, hospitality, healthcare, financial services, transportation, telecom, and information technology. 

The list of companies with formal apprenticeship programs counts an impressive group of industry leaders, with examples that include:

Technology:  Intel, Google, Amazon, IBM, Microsoft, Salesforce, LinkedIn, Pinterest

Financial Services: JPMorgan Chase, Nationwide Insurance, Wells Fargo, Bank of America, Barclays 

Consulting: Deloitte, Accenture 

Advanced Manufacturing: Boeing, Lockheed Martin, Dow, Tesla, BASF

Hospitality: AirBnB, McDonalds 

These organizations use apprenticeship models for roles in manufacturing technology, marketing, data science, artificial intelligence, cybersecurity, product design and management, cloud computing, software engineering, and project management.  Amazon’s program is unique, as it is designed for its current employees working in its lowest-level jobs, providing enhanced opportunities for career development, advancement opportunities, and longevity.

Challenges to overcome when adopting an apprenticeship model

Before creating a model for employing apprentices, organizations should be aware of critical barriers and best practices/enablers to create a successful program. Analysis and planning are required elements to address and overcome these.

1. Stigmatization

Unlike in countries where the model has proven to be a historically significant pathway to middle-class (and higher) careers and earning power, in the United States, apprenticeships are viewed as applicable only to skilled trades (e.g., electrical, plumbing, HVAC) that lead to careers with less social status. They thus can be viewed as inferior to college education. Parents might also dissuade or discourage their children from pursuing such a path. With major employers now promoting these for well-paying careers with well-known employers in technology, healthcare, and financial services, the stigma should be significantly less.

2. Lack of awareness by traditional career advisors

Many people unsure of their career paths rely on school career counselors, classroom instructors, government employment services advisors, and other trusted advisors who may not be aware of these programs and are thus ill-equipped to recommend them as career development and placement options. Companies employing apprentices should be prepared to promote the opportunities and requirements within the local communities they are targeting. Organizations should also look into certifying their apprenticeship program with the federal and state authorities for credibility, promotion, and candidate attraction purposes.

3. Required expenses may be cost-prohibitive

Some programs may require apprentices to purchase their equipment (laptop, software, personal safety), tools (physical or digital), internet access (for remote learning or work), and transportation (to non-local training or work locations). Other costs relative to child (or elder) care and meals (during classes or work shifts) that are common to all workers may exacerbate the affordability question.  In general, organizations should be prepared to consider augmenting pay to broaden candidate access to the programs with such requirements.

4. Acclimation to a structured and possibly novel environment

Apprentices entering a new field may need special mentoring and support to understand the expectations of white-collar training regimens, jobs, and work environments. Work hours, appropriate dress “codes,” receiving coaching and work direction, and performance evaluation processes may require structured and compassionate guidance from educators and supervisors.

5. Over-specific job skills training

In educational programs created and administered by (or in partnership with) individual companies, apprentices may learn specific task methodologies and processes or subjects that deny them a broader view of possible approaches to conducting their subsequent work. Companies should consider using certified or industry-standard education with company-specific on-the-job mentoring and guidance to allow their apprentices to become aware of alternate approaches that can be leveraged in subsequent process improvement once on the job.

6. Apprenticeships infer a long-term commitment

Like college, any future career development engages the learner in a personal pledge to a particular training program, career, and (presumed) future employer. In the case of apprenticeships, “changing majors” is not as easy as in college. It can be challenging if the apprentice fails in the classroom or work environment, finds the field or work unattractive, or cannot balance the work with their personal commitments. Companies should apply consistent standards and criteria for hiring and provide a vivid and realistic preview of the demands placed upon apprentices during training and work as employees in the first and subsequent years.

7. Confirming that the local area has a sufficient talent supply

Some geographical locations may not be suitable for producing an appropriate supply of interested and qualified workers. Similarly, the work location(s) might be close enough to a population center to enable easy commuting between potential applicants’ homes, education providers, and the company's work location. Companies should assess their talent supply needs and work with the local Chamber of Commerce or review U.S. Department of Labor data on the availability of workers from which apprentices can be drawn.

8. Picking a suitable education partner

If the educational portion of the program is to be conducted in partnership with an external organization, there are numerous options. Many educational institutions and private providers offer certificate or associate degree programs. Alternatively, some conduct “boot camps” that are popular for coding, software, systems, cloud, and related topics. Research educational providers include technical or vocational education programs, community colleges, government labor and worker program agencies, U.S. Department of Labor or state outreach and referral agencies, and industry associations with formal apprenticeship programs. Remember that educational partners may not be prepared or willing to meet a specific company’s specialized educational needs for developing company-specified skills and capabilities. Still, the work elements of the apprenticeship can provide those.

9. Screening candidates carefully

Given the discussion above of candidates making the appropriate choice, companies should help them by conducting standardized and comprehensive evaluations. Develop a success profile of high performers in those roles, with a keen focus on non-discriminatory selection criteria. Evaluate widely available and validated aptitude and ability tests for capabilities predictive of success in the classroom and on the job, including cognitive ability, critical thinking, mechanical reasoning, and attention to detail. Use screening interviews role/task simulations to assess resilience, willingness to learn, self-management, communication, problem-solving, and other attributes deemed necessary for longer-term success on the job. Select candidates based on their passion, overlapping interests, and transferrable skills for the trainee and future employee role.

Relevant Practices & Tools

Advanced Workforce Planning Practices that Provide Dynamic and Targeted Supply and Demand Insights. >

Advanced workforce planning practices help evaluate and make projections of employee supply and demand at a role level, creating a more refined view of talent needs and availability... more »

Leveraging Workforce Planning and Analysis to Assess the Current State of Key Employee Segments. >

In its most basic form, a workforce planning effort builds an estimate of future headcount supply and demand for roles in the organization, with a subsequent gap analysis... more »

Advanced Career Development Practices that Create a Culture of Mobility and Expand Employee Career Horizons with Technology. >

Advanced Career Development creates and manages a culture of career mobility by building a structured foundation for comparing jobs with overlapping capability requirements... more »

Creating Informal Learning and Experiential Development Opportunities for Cost-effective Delivery. >

Informal learning is broadly defined as any learning activity that is not learned in a formal class, has no set goals or objectives, and focuses on the enhancement or addition of knowledge... more »

The Critical Role Headcount Demand Tool: Generate Estimates for New Staffing Requirements in Critical Future Roles. >

Conducting a meeting of top functional executives and experts responsible for a particular critical role(s), a facilitator leads a discussion that covers all strategic actions foreseen... more »

About Wowledge

Wowledge is the expert-driven platform for lean teams building strategic HR programs. Members enjoy access to up-to-date best practices, step-by-step guides, tools, templates, and insights to accelerate the design and implementation of all key HR programs and processes.

Since each organization has unique characteristics, needs, and aspirations, Wowledge's practices are developed utilizing an exclusive stage-based approach – from Core to Advanced to Emerging – that reflects distinct levels of sophistication to meet our members where they are.

Build strategic HR programs with refreshingly easy-to-follow best practices.

Get started for FREE! Learn more.