Can We Get to 5 Million “Apprenticeships” in 5 Years?

It looks like the White House has caught apprenticeship fever, and that’s great news for millions of Americans who need access to good jobs and employers looking for talent. Calls for expanding apprenticeship are coming from both sides of the aisle and even from CEOs of America’s most innovative companies. Just last month, Salesforce CEO Mark Benioff called for creating 5 million apprenticeships in just 5 years.

Silicon Valley is known for “moonshot” goals, and this one certainly fits the bill. Should the Trump Administration decide to embrace Mark Benioff’s challenge, one of the first questions they will have to tackle is what they count as an apprenticeship. In particular: are they talking about Registered Apprenticeship?    

If you are wondering what Registered Apprenticeship is and why it matters for this conversation, you are probably not alone. The answer, in a word, is government - and the question boils down the role government plays in defining what counts as an apprenticeship.

What counts as an apprenticeship?

While the concept of apprenticeship is familiar to many Americans, the policy details are not. And there are a lot of details. In fact, there are a host of federal and state policies dating back to the Fitzgerald Act of 1937 that define what an apprenticeship is (and is not). These same policies outline the process through which programs are formally recognized by the government. That process is called “Registration”, and it ensures that an apprenticeship program meets a set of mandatory requirements governing the relationship between the employer and the apprentice.

The core requirements include proof that the apprentice will 1) participate in structured, on-the-job learning with a mentor, 2) engage in a minimum of 144 hours of related classroom instruction with qualified instructors, and 3) earn a wage that increases as he or she masters new skills. Apprentices who complete a Registered Apprenticeship program are awarded a nationally-recognized certificate by the U.S. Labor Department.  

But the registration system doesn’t mean the government can keep anyone from calling their training program an apprenticeship, which is why stakeholders in the apprenticeship community distinguish between “registered” and “non-registered” apprenticeships. The former meets a set of legal requirements set out by the Fitzgerald Act designed to protect apprentices and ensure the quality of the education and training they receive. The latter is a wild west of programs of highly variable quality. Some non-registered programs may look almost identical to a registered apprenticeship, just without the government recognition. In other cases, though, the term apprenticeship can be used to refer to anything from  an unpaid  internship to job-shadowing.

As the White House thinks seriously about expanding apprenticeship, they will need to be clear on whether or not they're referring only to Registered Apprenticeship. As they deliberate, they can expect to get an earful on the problems with registration - namely, that it's a barrier to growing apprenticeship. While some of that criticism is well-earned, there is another side to the story and the Administration should think very carefully before throwing Registration out the window in a rush to get to 5 million. 

Registration and its discontents

As with just about anything government does to ensure quality and protect consumers, registration has its tradeoffs. On the positive side, it is the only tool we have for ensuring that programs advertising themselves as apprenticeships meet basic standards of quality and that the apprentices enjoy basic labor protections. It also allows us to ensure public investments like state tax credits and federal student aid only flow toward quality programs. Finally, it is the only way to collect accurate data on the size, scope, and performance of our national apprenticeship system. Without registration, we would know very little about who our apprentices are and how they fare after their programs.

As with just about anything government does to ensure quality and protect consumers, Registration has tradeoffs.

But here’s the tradeoff: the process of registering a program can be time-consuming and cumbersome for employers, particularly for small and medium-sized firms. It can also require significant changes to how a company recruits and develops its employees, including new HR processes and staffing policies. Those changes will likely be beneficial in the long-term, but that doesn’t make them easy. Finally, registration processes can sometimes seem ill-suited to new and emerging industries, like information technology, that are less familiar with apprenticeship. Here, occupations and skills demands may change rapidly and competencies, not seat-time, are increasingly the coin of the realm. In short, the registration process – particularly the first time around – can be a big lift  for businesses.

Luckily, there are a number of ways that policymakers can make registration more appealing and less cumbersome. First, policymakers can sweeten the deal for employers by linking registration to financial incentive such as tax credits and tuition assistance. The federal government already does that with a number of higher education and workforce programs including the Pell grant, Federal Work Study, the GI Bill, and the Workforce Innovation and Opportunity Act. States and cities can use a variety of local programs and procurement policies toward similar ends.

Second, federal and state apprenticeship agencies can reduce the burden simply by taking steps to streamline the process. Today, the federal government registers programs in half of all states; in the rest, state apprenticeship agencies do it on the federal government’s behalf.  More standardization and shared best practices across states can offer a better customer service experience and ensure companies operating in more than one state don't have to register twice. Federal and state apprenticeship agencies could also better leverage technology in order to reduce paperwork, streamline communication with employers, and open-source registration forms and national program templates so that no employer has to start the registration completely from scratch. 

Finally, federal and state policymakers can create more incentives for employers to join forces and develop programs together. It is possible to register a single apprenticeship program for multiple employers at once. In fact, that’s generally how small Swiss and German companies develop their apprenticeships, precisely to avoid the cost of each doing it on their own. Industry associations, community colleges, and workforce boards are starting to show they can play a helpful role in this space, developing shared curricula and helping pool resources to pay for the related classroom instruction.

If Registration works here, it can work anywhere

Over the last ten years, South Carolina has combined all the above measures with great success. Since 2007, the state has managed to grow the number of federally Registered Apprenticeship programs by more than 700 percent – and this in a state where business is famously wary of the federal intrusion. They did it by introducing a small apprenticeship tax credit that employers could access only if they registered their program, and by creating an office within their technical college system dedicated to promoting apprenticeship and helping companies register their programs. They also helped companies network with one another, share resources, and build a community of practice. The tax credit was the bait, but if you ask folks in South Carolina what made the effort so successful, you will invariably hear that it was the marketing campaign and hands-on assistance for employers with program development and registration that made the difference.

Ideas for Moving Forward (Yes, talking about Registered Apprenticeship...)

No matter how much government streamlines the registration process, the first time around is likely to be a heavy lift for some employers. That’s not because registration is too onerous, but because implementing an apprenticeship program can require significant changes inside a company. Companies need help, and the government can be their partner.

Moving forward, a simple goal for federal and state policymakers should be to make it easier for companies to register their apprenticeship programs. Calls to eliminate registration altogether, under the pretext that it imposes too much of a burden on companies, are simply not credible. Too many companies – including very small ones – navigate the registration process successfully to support the claim that it's holding the field back. Learning from South Carolina, federal and state apprenticeship agencies should continue to build needed capacity on the ground - part sales team and part customer support – to help companies register their programs with as little fuss as possible. In 2016, Congress appropriated $90 million to fund states and industry associations to do just that. Continued Congressional funding can help ensure such efforts continue and succeed.

Learning from South Carolina, the federal government and states should continue to partner and build needed capacity on the ground - part sales team and part customer support – to lower start-up costs, and help companies register their programs with as little fuss as possible.

A second clear goal for policymakers should be to make registration not just easier, but more responsive to the needs of new and emerging industries. The Department of Labor is already exploring how competency-based approaches to training and certification can be better integrated into existing registration processes so that programs can be shorter and nimbler. These efforts should continue and be expanded.

The process of registering an apprenticeship program can seem time-consuming and meddlesome to some employers, but it provides a crucial lever for government to ensure programs are high quality, that apprentices are well-protected, and that our apprenticeship system is connected to larger efforts to strengthen America’s workforce and economy. Like most things the government does, registration can certainly be updated and improved – and that should be the focus moving forward.