New analysis shows exactly how apprenticeships benefit employers and workers
Independent evaluation of federal grantee programs includes ROI and earnings data, and the results are eye-opening
A new comprehensive evaluation of registered apprenticeships in the U.S. makes the case for further expansion of the programs across industries where labor markets remain tight, including healthcare. (I wrote about the recent surge in healthcare apprenticeships during National Apprenticeship Week, which you can read here if you missed it.)
The study by Urban Institute and Abt Associates included an extensive review of apprenticeship programs initially funded in 2015 by $175 million in grants under the Department of Labor’s American Apprenticeship Initiative.
And, look, when I say “comprehensive evaluation,” I am not simply feeding you the “official government-ese”; in fact, I’ve never seen any evaluation of any federally funded program as comprehensive as this one. The research included four sub-studies: an implementation study, an outcomes study, an employer ROI study, and an assessment of a demonstration to encourage employers to adopt apprenticeship. Three reports comprised the implementation sub-study. In addition to the sub-study reports, the AAI Evaluation included five topical issue briefs.
You can view the various reports, infographics, and guides for employers at this link: https://www.apprenticeship.gov/evaluation-american-apprenticeship-initiative-aai.
TLDR: Apprenticeships pay off for everyone
As part of the evaluation, researchers surveyed 68 employers affiliated with AAI grantees, ultimately generating two measures of benefits to employers: Return on investment of apprenticeship, and net benefits of apprenticeship.
“The typical AAI employer experienced a positive return on investment,” the report states. “The median ROI of the apprentices’ productivity was 144.3%, which means that every $100 an employer invests in the registered apprenticeship program generates $144.30 in total benefits.”
Insert eye-popping emoji here. Tell me again why apprenticeships haven’t really caught on in the United States?
The below graphic, from the AAI evaluation report, illustrates employers’ feedback about the indirect returns on their apprenticeship investments:
The researchers also surveyed thousands of apprentices who were still in or had already completed their grant-funded apprenticeship programs. They found that earnings increased for all apprentices between the year before their apprenticeship began and the year following its conclusion, regardless of their occupational sector and demographics.
Apprenticeships also resulted in higher long-term earnings for those who completed their apprenticeship programs, the report said. The wage gains were highest for apprenticeship participants in the manufacturing, healthcare, and IT sectors, according to the study.
Key findings:
61% of AAI apprentices were from an underrepresented population, compared to 46% of all U.S. registered apprentices in the Registered Apprenticeship Partners Information Data System.
90% of AAI pre-apprentices were women, people of color, or veterans.
Three-quarters of AAI apprentices enrolled in nontraditional occupations, including manufacturing (46%), healthcare (14%), computer/IT (5%), and other occupations, such as finance, transportation, and logistics (11%).
A larger share of women participated in healthcare apprenticeships (52%), while a larger share of men participated in manufacturing apprenticeships (55%).
Manufacturing also was the most common occupation for all racial/ethnic subgroups, and construction was the most common occupation for pre-apprentices.
At the time they responded to the survey, about 80% of AAI apprentices had completed or were on track to complete their program on time.
On average, annual earnings across all AAI apprentices grew by 49%, rising from $35,408 in the year before the program to about $52,876 one year after program exit.
Annual earnings for women grew by 65% from pre-program levels.
Other Race or non-Hispanic apprentices had the highest earnings growth (86%).
Computer/IT and healthcare were the shortest apprenticeships, on average lasting 1.4 and 1.2 years, respectively.
Apprentices in all occupations had higher earnings growth relative to comparable workers. Between the year prior to starting their apprenticeship programs and 2.5 years after starting, the average quarterly earnings of AAI apprentices grew 43%, while those of comparable workers grew 16%.
Another report says U.S. needs to catch up on apprenticeships
In a separate report released last week, the Thomas Fordham Institute notes that although 92% of Americans view apprenticeships favorably and 62% say they make people more employable than going to college, the “U.S. lags behind many nations in using apprenticeships for workforce preparation.”
“Moreover, around 70% of U.S. registered programs are in construction trades, such as carpentry and plumbing … unlike other English-speaking nations like Australia and the United Kingdom, where most government-supported apprenticeships are in fields like healthcare, logistics, technology, and the financial sector,” TFI said in its report.
State and federal support are growing for apprenticeships, as we’ve shared in several previous issues of the Healthcare Workforce Report (here and here). TFI noted that apprenticeship-boosting programs enjoy bipartisan backing in states as politically diverse as California, Colorado, Tennessee, and Texas.
Federal spending for apprenticeships in the Labor Department’s Employment and Training Administration has more than quadrupled over the last seven years, from $90 million in 2016 to $185 million in 2021, and another $220 million invested since 2021.
The TFI report includes links to grant information and an explanation of the “apprenticeship intermediary, a new third-party structure at the center of U.S. efforts to expand apprenticeship programs.”
Find DoL resources and grant information for apprenticeship programs at https://www.apprenticeship.gov/employers/explore-apprenticeship.
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