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Why new collar apprenticeships are a solution for America’s tech skills crisis

This is the fourth in our series of posts based on our 2020 Executive Workforce Study.

In our previous posts we have gone some way to set up the fundamental driving force behind the need for apprenticeships:

  • Digital transformation is maturing

  • Explosion in need for a new paradigm of skills that require training

  • Insufficient supply of new talent from education system

  • The negative business impacts of not having the right talent available

Today’s business leaders have little option but to innovate in order to solve the problem. Easily said, so what does innovation look like?


Do employers need to require a four year degree?

Traditionally US employers hiring for middle or highly skilled roles require four year degrees.


There are an increasing number of Fortune 500 companies no longer stipulating this requirement - including Google, IBM, Apple, Google, Tesla, Intel, & GE Digital.


What is it that these tech companies know that we all don’t?


One thing they all have in common is that they hire a high volume of tech talent, and they already know how hard it is to find those skills in the labor market.


We often hear of the ‘tight labor market conditions’, but in plain-speak that just means if you want to hire, you either can’t or you have to pay over the odds. This phenomenon has resulted in many more employers expanding their recruitment criteria over recent years.


In a survey of 600 US HR leaders published on the SHRM site, 66% of employers say they are open to non traditional pathways.

This is great!

Clearly this helps employers expand their available candidate pool and identify individuals with valuable practical experience, or alternative qualifications such as coding bootcamps.

Bootcamps are great but they are not enough


When it comes to tech skills, we highlighted in our June 19th blog post on America's STEM education pipeline that the pool of individuals reported as learning to code via ‘boot-camps;’ is in the region of 23,000. This may not reflect the entire pool of self taught, or online course / boot-camps graduates, but the fact remains that it is still nowhere near the volume required to address labor market needs.


In other words, to have a pool of proactive individuals gaining skills in these ways is fantastic, but it is not sustainable as a talent pipeline, and given demand for talent is 10x supply, it is not filling the gap!.



The rise of new tech companies has brought about the new collar career path


America’s largest employers nationwide (and globally) are maturing in their digital transformation journeys and continue to evolve into the Fourth Industrial Revolution. As a result, hiring for tech skills outside of the tech sector entering a phase of rapid growth, we expect demand to continue to exceed supply.


These new tech employers have a growing need to hire for jobs that need very specific ‘tech’ skills. There are roles in coding, data analysis, IT, and automation that represent a new era of middle skills jobs increasingly referred to as “new-collar”.


Ginny Rometty at IBM coined the term "new-collar jobs" as a way to identify tech-based jobs that are valuable in today's economy but don't require a four-year college degree.


IBM partnered with the one of the worlds leading centers for industrial innovation: The Consumer Technology Association. At CES 2019, IBM & the CTA took the stage to launch the CTA Apprenticeship Coalition - a collaboration of large US tech employers dedicated to solving the growing skill gap impacting their businesses. Through this coalition, new tech companies like Ford, Walmart and Bosch join tech industry mainstays like Sony, IBM & Amazon to champion best practice and share experiences. We have been lucky enough to be one of the early members of the coalition, and been able to contribute to building confidence and capability in developing and delivering Apprenticeship solutions.



The growing demand for new-collar jobs can be met with Apprenticeships


These new collar jobs have brought about a major evolution in workforce development. As the demand for talent exceeds supply by over 10x, forward thinking employers have innovated on the age-old workforce development tool of Apprenticeships and applied the on-the-job occupation focused training to the technical jobs these new tech employers have need to fill. New collar apprenticeships offer occupation based training for this new sector of jobs - where the technical learning is focused on the skills required for the job.


Expanding hiring criteria, employers can hire candidates with potential to do these roles and train them on the job, versus hiring those who have existing qualifications or experience.


Beyond the technical skills for the role, Apprenticeships offer an opportunity to build broader competencies across valuable soft skills that help develop a well rounded employee.


Employers today already can’t hire the tech skills they need, but often when they do hire, the top complaints are missing technical skills, and missing soft skills! Which usually implies a need to train - which in turn incurs cost.


This is where the structure and focus of an apprenticeship can help holistically solve the talent requirements.



Apprenticeships are the 21st century solution we need


A growing list of business leaders including the likes of IBM, Siemens, Bosch, Microsoft, Boeing, Infosys, Facebook, and Google are already embracing Modern Apprenticeships to support talent needs.


If we look more broadly we see more traditional companies like Estee Lauder, Ford, & Pepsi looking to this method to source talent in New Collar roles as their organizations continue their digital transformation journey.


If you’ve not engaged in Apprenticeships for new collar roles, they may feel like a risk. However, many global organizations are finding their colleagues in the UK, Germany, France & Switzerland have very positive experiences.


Across Europe, Apprenticeships have been enjoying a renaissance - evolving from the traditional blue collar roles into a plethora of modern new collar and other roles across business, technology, marketing, healthcare, finance and even leadership.


Building your own talent pipeline is a real commitment, but it is also an acknowledgement of the reality of the labor market. The benefits of taking control manifest in cost savings, improved productivity, custom skilled staff, reduced wage inflation, and reduced staff turnover. What’s more is that taking control of who you hire means you can address diversity, equity and inclusion objectives with real impact.


Many businesses plan to hire more diverse employees, but commonly complain that there is an absence of diverse talent in the labor market. Apprenticeships help you overcome this barrier, and build the talent pool you want to see in your organization.


What is happening in Europe?


With labor markets globally experiencing similar challenges to those here in the US, it’s valuable experience to learn from.


While systems of government & taxation are different in these markets, it is still common for Apprenticeships to be a collaboration between employers national & local government, learning providers and apprenticeship services.


Experts agree that today, the US is about 5 years behind Europe in its adoption of Apprenticeships as a talent pipeline solution.


Tech apprenticeships in the US are certainly growing, with more and more programs appearing all the time. IBM, Sony & Bosch have built their own programs, and taken control of their talent pipeline, whereas other innovations like Colorado's Techtonic have been making an impact with new approaches to building resource capability via a hybrid agency model that trains and places software developer apprentices.


However great this is, it's not enough.


Currently in Germany, the culture is different, and around 1.2 Percent of the population are on Apprenticeships.


To get an idea of scale, in the UK (a market approximately ⅙ the size of USA) there have been over 1.1 million apprenticeships started since Jan 2017. In the US, as of Feb 2020, we have had 705,000 since Jan 2017.


While recent growth in US apprenticeships is to be celebrated, there is a long way to go in order to solve our problems, and support American businesses as they continue the challenge to be competitive and lead on the global stage.


In America, Apprenticeships enjoy support across political parties, and both the current and previous administration diverted significant amounts of federal budget to support Apprenticeships, and fund growth of the Apprenticeship ecosystem to support the creation of jobs.



We believe American Apprenticeships can solve the tech skills gap


It’s our belief Apprenticeships as a solution will become essential here in America, in line with the need for employees to be learning occupation-focussed skills.


The earn-while-you-learn method common to apprenticeships allows businesses to gain skilled labor faster than waiting for academic education pipelines to catch up.


Moreover, with more control over recruitment, Apprenticeships are perfectly set up to address workforce diversity, and to build relationships with local communities, as well as to help employers save jobs where workers might have otherwise been laid off by retraining them on-the-job.


We believe large employers should be building their own custom talent pipeline tailored to fit the needs of their business.


Technology will continue to develop faster than humans can, and so we are facing a future of being life-long learners, and perhaps a world where we have multiple careers in our working life, so workers have to be learning in the flow of work, and re-skilling or up-skilling at multiple points along their careers.


Creating a quality program takes a high degree of collaboration and planning - which is where many organizations bring in the support of intermediaries like us who can help you plan a pilot with everything from organizational alignment and competency mapping, to crafting a brilliant learner experience and accessing government funding.


Once piloted, expanding to scale is an exciting adventure with an initiative that will make a highly visible and impactful difference across your organization.


We believe American Apprenticeships Work.


You can download a free copy of our 2020 Executive Workforce Study here, and do feel free to reach out to us via this website chat or email with any questions.


If you'd like to discuss setting up your own program, or just want to learn more about how Apprenticeships might work for your organization, then get in touch with me on nick@apprentices.work

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