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The Supervisor’s Apprentice: Developing the Workforce of the Future

Workforce Development

from RSM

Apprenticeship programs are gaining popularity among employers and potential employees across the country. One technical college in the Denver area, for example, has an apprenticeship program that offers training in 14 different construction trades located at 19 different locations.1 Notably, a study by Case Western Reserve University found that nearly two-thirds of all registered apprentices in the United States are in the construction industry. North America’s Buildings Trades’ affiliate unions and their signatory contractors invest more than $1.3 billion annually in apprentice and journey-level training.

The rise of apprenticeship programs

Interest in apprenticeship programs is not due to any single cause or relegated to a single industry. But a number of factors are converging to make such programs appealing, particularly in construction:

  • Aging workforce: The aging demographic can challenge any industry, but is particularly problematic in trades like construction that require physical strength and endurance. According to the Bureau of Labor Statistics, of the more than 10 million workers employed in the construction industry in 2017, forty-five percent are over the age of 45.
  • Attracting and retaining skilled labor: For some time, employers have cited a skills gap—that is, a lack of qualified workers with the skills employers need—as the reason so many open roles go unfilled. Some have noted that fewer high schools are offering shop or other trade classes,2 resulting in fewer skilled workers to employ. Economists have noted little evidence that the U.S. economy is experiencing an unusually large skills gap.3 Nevertheless, the need for skilled workers exists and many employers are having difficulty finding and attracting them.
  • Decline in appeal: Young workers are less interested in construction than they once were and high schoolers are frequently encouraged to pursue a college education over a career in the trades. A 2017 poll by the National Association of Home Builders surveying 18–25 year olds found that 74 percent knew what career field they’d like to enter, but only 3 percent were leaning toward construction. Parents often encourage their children to obtain a college education, a path that may not be for everyone and often is not necessary for a well-paying job in the construction industry.
  • Less investment in training: A report by the ADP Research Institute suggests that a lack of training, combined with a more transient workforce, is among the reasons that companies are facing a skills challenge.4 Middle market companies are beginning to recognize this shortfall, and are investing in training in order to retain employees. But others are slashing training budgets and cutting apprenticeship programs.

Apprenticeship benefits and support

For contractors and other employers, the benefits of apprenticeship are clear and often outweigh the costs. According to one study by the Economics & Statistics Administration, apprenticeships improve overall company performance, reduce turnover, improve recruitment and provide a competitive advantage over other firms.5

For employees, registered apprenticeship programs provide a path to a career, college and high school credit hours, technical instruction, increased wages, and certification as a qualified journeyman, among other benefits.

Registered apprenticeship programs that meet national standards are found in myriad industries, including construction. Unfortunately, middle market companies operating on thin margins may not be able to afford such programs, whose costs can include training, classroom work, training equipment and program management in addition to wages.

“Internships can’t provide what these construction companies need, which is long-term, skilled labor that an apprenticeship program can offer,” says Brandon Maves, a partner and national construction industry leader with RSM US LLP. “Traditionally, unions held the advantage on apprenticeship programs, but many employers are starting their own internal apprenticeship programs to develop their workforces, often in conjunction with local trade associations.”

In the fall of 2016, the Department of Labor (DOL) released grant funds to jump-start state innovation to expand access to apprenticeships.6 Taking its cue from President Donald Trump’s executive order to establish standards for industry-recognized apprenticeships, in June 2017 the DOL announced its initiative to expand apprenticeships in the United States. This was to be accomplished in part with the help of a task force representing companies, trade and industry groups, educational institutions, and labor unions.7 But as of January 2018, the DOL had not announced how it would use the $95 million set aside by Congress for these initiatives to promote apprenticeships.

There are, however, a number of other initiatives and partnerships focused on launching and maintaining apprenticeships, many at the state level. The Associated General Contractors of America website, for example, list numerous apprenticeship programs from Hawaii to Virginia.

Getting the return on investment

According to the DOL, there are some 550,000 apprenticeships across the country, and more than 150,000 businesses have integrated the apprenticeship model into their talent development strategy. Yet this may not be enough to replace those who are leaving the trades. According to a number of sources, for every four people who leave the trades, through retirement or otherwise, only one new person is supplied by apprenticeship programs to enter the trades.

“It is an investment by the company and the employee,” says one employer. Participants must work a full, eight-hour day, and then go to class for three hours two or three times a week for up to three years. Employers need to be engaged with employees and instructors on a regular basis to monitor progress. “Without that commitment by both parties, it’s not going to work.”

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