DOC Study Finds Apprenticeships Beneficial for Businesses, Employees

Ninety-one percent of apprentices find employment after completing their program with an average starting wage above $60,000, according to a new report from the Department of Commerce’s Economic and Statistics Administration (ESA). In The Benefits and Costs of Apprenticeships: A Business Perspective, ESA researchers performed a case study analysis of 13 apprenticeship programs launched by businesses and intermediaries from a variety of occupations, industries, and regions. The study focused on identifying answers to three questions:

• What motivated them to create apprenticeships?
• What are the costs and benefits?
• And, if not apprenticeships, how else would they fill their workforce needs?

The authors report that companies found value in the program and identified benefits that more than justified the costs and commitments (financial and otherwise) they made to the apprentices. Areas that benefited from the apprenticeship model included:

• Production – Companies gained the value of output by apprentices and later by apprentice graduates, plus a reduction in errors.
• Workforce – Companies experienced reduced turnover and improved recruitment, gained a pipeline of skilled employees, and developed future managers.
• Soft skills – Apprenticeships led to improved employee engagement, greater problem-solving ability, flexibility to perform a variety of tasks, and a reduced need for supervision.

In addition to the effectiveness of the model, companies also highlighted its flexibility to adapt to the specific needs of the business or region. As a result of this flexibility, apprenticeship programs vary significantly in length, with those in the study lasting from one to four years, and costing between $25,000 and $250,000 per employee in addition to other startup costs. The major cost for all companies was the apprentices’ compensation with other costs including program startup, tuition and educational materials, mentors’ time, and overhead.

ESA reports that the least expensive programs for employers were mostly driven by public-private partnerships with local public school systems or institutions of higher education – especially in states that have efforts to connect their career and technical training programs with apprenticeship opportunities. Since few companies involved in the study calculated a financial return on investment before the study, ESA developed a roadmap to help employers measure the benefits and costs of apprenticeship programs. Read the report…