Apprenticeships offer alternative source of labor supply, career for workers

Apprenticeships are a valuable workforce training option to help combat Idaho’s current labor challenges. Apprenticeship’s “earn while you learn” method allows for a more financially viable education than a traditional degree by combining classroom and on-the-job training for a more holistic educational experience.

As technology changes how and where we work, apprenticeships have the ability to adapt to changes in employer needs faster than a traditional degree and can be a win-win workforce solution for employees and employers.

Current labor market and future needs of employers

The following graph helps illustrate how the current labor market has evolved since 2015. Before the pandemic, the number of job postings and unemployed persons had a stable trend. When the pandemic hit, the number of unemployed spiked, but returned to its pre-pandemic level fairly soon. Job postings did not fall back to pre-pandemic levels, leaving the demand (job postings) outstripping supply (available workers), creating a current labor shortage of roughly 1.75 job openings per unemployed person in Idaho.

This current labor shortage has turned attracting and retaining employees into a crucial challenge for business development coming out of the pandemic. According to survey data produced by the Idaho Department of Labor, the lion’s share of top business concerns involve labor — supply, or cost of workers, and high labor turnover. Employers and employees understand the current labor shortage is a challenge for employers (both in supply and cost of workers) and allows employees to “shop around” for a higher wage, resulting in high labor turnover.

How can apprenticeships help fix some of these challenges the labor market is experiencing?

Cost effective for participants

The cost of a traditional college education has increased rapidly. Between 1980 and 2020, the average price of tuition, fees, room and board for an undergraduate degree increased by 169%, according to a report from the Georgetown University Center on Education and the Workforce. In addition, the nation’s confidence in higher education has dropped to 36% according to a Gallup poll from June 2023.

Apprenticeships provide an affordable alternative to a more traditional college experience, with classroom learning in addition to paid on-the-job training, making apprenticeships more accessible to much of the population. Apprenticeships are no longer only for skilled trades, with opportunities ranging from health care to tech, to transportation. Apprenticeships are expanding to sectors across the economy.

Benefits to employers

Apprenticeships also bring a variety of benefits to employers:

Cost-effective: According to the Idaho Department of Labor, employers realize an average return on investment of $1.47 per $1 is invested into apprenticeship programs.
Reduces turnover: By building a program that invests in apprentices, apprentices will invest in your business. The Urban Institute’s research highlights the indirect effects of apprenticeship, namely reduced labor turnover, employee engagement and loyalty, and the development of future managers.¹
Tailored training: Creating an apprenticeship program for your organization allows for company specific processes and training, leading to a more efficient and productive employee.¹
Growing the talent pipeline: According to the Urban institute, 60% of employers ranked the growing talent pipeline created by apprentices as more valuable than the productivity gain of the apprentice. Apprenticeships are a talent pipeline solution that is more affordable and generally quicker than a traditional college degree.⁴

Outlook

As technological innovation continues to transform the labor market, demand for emerging skills is growing faster than traditional methods for training students for those skills. For example, apprenticeship is growing in the tech sector as an efficient method of training prospective employees on new skills, creating more skilled employees that require less training once they start the position. Some studies suggest 65% of students entering elementary school will have jobs that do not exist yet.²

Change is happening not just in the tech sector; global supply chains continue to evolve as well. Originating with the COVID-19 pandemic, continuing with the war in Ukraine and increasing trade tensions with China, these changes have led to a nearshoring/reshoring effort to bring domestic manufacturing back to the United States. This effort is being observed in small businesses as well as large corporations.

According to a survey of 300 supply chain professionals, 88% of U.S. small businesses plan to nearshore parts of their supply chain and 45% plan to nearshore all of their suppliers.³ For the past three years, reshoring/nearshoring has created more domestic jobs than foreign direct investment by the United States overseas. The reshoring effort will require a domestic and technically skilled workforce, as infrastructure is needed. And as businesses return to the United States, there will be a sustained demand for many occupations that commonly facilitate apprenticeship programs.

Apprenticeships are an often-overlooked workforce solution that is cost-effective for both employees and employers. As technology is innovating and changing the labor market, apprenticeships are an efficient education method to upskill and reduce inefficiency. It’s also an important solution to current workforce challenges and future changes.

Registered Apprenticeship Program in Idaho

The Idaho Department of Labor and its partners have helped 236 Idaho businesses sponsor registered apprenticeship programs, and more than 1,800 Idahoans are enrolled in such programs. Up to 95% of apprentices are employed after completing the program with an average salary of $77,000.

Apprenticeship coordinators can help businesses learn about the program and provide guidance and support. Information for businesses, resources for educators and apprenticeship openings for job seekers can be found on the Idaho Department of Labor website at Apprenticeships | Idaho Department of Labor.

Sources

Seth.Harrington@labor.idaho.gov, regional economist
Idaho Department of Labor
(208) 735-2500 ext. 3062

This Idaho Department of Labor project is 100% funded by USDOL as part of $695,785 in Workforce Information Grant funds from the Employment and Training Administration.