New-Collar Apprenticeships Continue to Grow, Even as Tech Roles Take a Dip

Registered apprentices across all jobs grew 6% last year, a steady clip but below what’s needed to hit the kind of scale policymakers hope for.

Apprenticeships continued to grow last fiscal year—hitting a new high of 646K active apprentices and bolstered by big increases in western and sunbelt states like Texas, Colorado, and Alabama. But the overall growth rate, at 6%, fell short of what would be needed to reach the kind of scale policymakers of all stripes say they hope for.

The Biden Administration has set a goal of serving 1M apprentices a year by 2026, and California alone is aiming for 141K by then. It served just shy of 85K last year.

Growth was healthy last fiscal year in traditional apprenticeship fields like the construction trades and newer ones like healthcare, education, and advanced manufacturing. But the previously hot field of tech saw some retrenchment, according to a Work Shift analysis of data from the U.S. Department of Labor on registered apprentices.

Not all apprenticeships are federally registered, but those data provide the best picture of shifts in the system.

  • The number of registered apprentices in tech roles was down 3% last fiscal year, with a 28% drop in new apprentices entering the field. That’s perhaps no surprise given the turbulent couple of years in tech.
  • Apprentices in nursing and other roles across the healthcare industry grew 19%, while teaching roles almost doubled, buoyed by national players like Reach University. And emerging fields like clean energy took off, according to interviews, though it’s hard to parse those specific jobs in the federal data.

The workforce nonprofit IWSI America, for example, worked with a renewable energy group to develop a program that will serve 1K apprentices over two years to prepare them for jobs like EV maintenance technician or project developer. IWSI and its partner have put a lot of effort into explaining the opportunities to learners who aren’t familiar with apprenticeships beyond the trades, says Andrew Sezonov, VP at IWSI.

“Apprenticeship needs to be seen on the same level,” he says. “It’s not, ‘if I don’t get into college, I drop into apprenticeship.’ It needs to be seen as two different pathways on the same level.”

The big idea: Last year’s growth in apprenticeships comes on top of steady increases over the past decade, with the number of annual apprentices doubling since 2014. In that same time period, undergraduate enrollment at colleges and universities has dropped about 12%, according to the most recent estimates—making apprenticeship a proportionally more popular pathway than it’s ever been.

Indeed, interest in apprenticeship programs has grown alongside Americans’ souring views of college and mounting challenges in the labor market. Both Republican and Democratic policymakers see apprenticeship as a way to expand access to good jobs for people without degrees and to bring more workers, especially Black and Latino ones, into growing industries.

“This is how we build the high road to the middle class,” Julie Su, Acting Secretary of Labor, said in announcing the release of $200M in new federal apprenticeship funds last week. “If our workforce system is infrastructure, apprenticeships are superhighways.”

The Road Ahead

However: That vision remains mostly a vision. Traditional higher education, with 15.2M undergraduates this fall, still dwarfs apprenticeship. And it’s a boutique pathway compared to the scale seen in countries like the United Kingdom and France. The UK had 560K apprentices last year with a population less than the size of just California and Texas.

The Labor Department recently proposed big changes to the registered apprenticeship system to provide better outcomes data, streamline aspects of the registration process, and make apprenticeship more compatible with K-12 and college education. The draft rules incorporate a lot of best practices experts have called for for years. The idea, observers say, is to lay the groundwork for the future

But at almost 800 pages, the proposed rule revisions may make too much change at once, with stakeholders and experts across a wide spectrum—from Alabama to Colorado, and Apprenticeships for America to New America—expressing concern that they might dissuade employers and hamstring growth.

“My think-tank brain loves all this,” says Taylor White, director of the Partnership to Advance Youth Apprenticeship at New America. “But given what we know about how much employers complain about the challenges of apprenticeship, I worry that it’s tilted the balance too much.” 

The stakes: The federal government and states have been investing in growing and diversifying apprenticeships beyond the trades and into new-collar roles, which target high-tech or white-collar jobs that otherwise might require a degree. The hope is that these new-collar apprenticeships widen the range of Americans who can benefit from the jobs being created by major new spending programs, like the CHIPS and Science Act, and to address long-standing worker shortages in fields like healthcare, education, and cybersecurity.

But, while those roles have seen significant growth in the past five years, the total number of new-collar apprentices still sits in the low tens of thousands.

Barriers: One of the challenges, Sezonov says, is that each new program in these new-collar fields is often starting at square one. “Most traditional apprenticeships are already registered at the state level, so employers can pick it up and start tomorrow,” he says. “In new-collar areas, they haven’t been developed or registered yet.”

A lack of incentives and consistent funding is also a challenge. For years, Apprenti, one of the largest tech apprenticeship intermediaries, has had to piece together funding from disparate grant programs and state training dollars to try to cover some of employers’ instructional costs. “It’s not consistent; it’s not persistent,” says Jennifer Carlson, Apprenti’s co-founder and executive director.

The federal Good Jobs Challenge grant the group received in late 2022 was transformational, she says, because while it was still a grant, it provided three years of predictable funding. Of the $23.5M the group was awarded, about $19M is going to cover the training cost for employers. That financial support and the multi-year timeline allows employers to make bigger commitments for hiring, Carlson says.

“Getting employers over that hurdle of long-term planning is big,” she says.

Manny Lamarre, deputy assistant secretary in the Employment and Training Administration, says the Labor Department is aware of that challenge. It ranks right up there with Americans’ general lack of familiarity with apprenticeship as one of the biggest barriers to expanding the model, he says.

“Unlike most other apprenticeship systems, employers tend to bear the full costs of an apprenticeship, including the classroom training portion, with few federal or state incentives,” Lamarre says.

Investments like the $200M the department made available last week to modernize and grow apprenticeships are designed to shift that, he says. “We anticipate annual growth rates to increase,” he says, “and to be on track to reach our goal to serve 1M apprentices a year by 2026.”

Apprenticeship Hybrids Take Off

Path to degree: States are also starting to invest in hybrid models that combine apprenticeships and degree programs, which can allow federal financial aid to cover the cost of class-based training. The programs are mostly run through community colleges, though some bachelor’s options exist.

Zurich North America, a major insurer, runs apprenticeship programs with both a two-year and a four-year degree option. It expects to have 65-plus apprentices this year in general underwriting and specialty fields like cyber and crop insurance. The company was a co-founder of the Chicago Apprentice Network and an early partner as the Labor Department developed its apprenticeship ambassador program.

Zurich NA has remained committed through the pandemic and more recent economic uncertainty because the apprentices meet business needs, says Al Crook, head of HR business partners and executive sponsor of apprenticeship at the company.

“There was some initial push-back around, what are apprentices, and why are we making this two-year commitment and paying them when they’re not even ‘working’ yet?,” he says. “Once we graduated our first apprentices, we didn’t need to sell it anymore. Our managers and our leaders started to see the output of the talent.”

“And no company in the U.S. ever has enough talent to produce what they need.”

Grow your own: Companies are also increasingly looking to apprenticeship as a way to move their own workers into different, high-need roles. That was a major area of growth for Apprenti in what was otherwise a rough year.

The total number of apprentices fell to 500 last year, from 1K the year before. But Carlson expects apprentices to triple this year, due to growth in incumbent worker training and booming interest among employers in aviation, healthcare, and fintech that have a lot of open tech roles.

  • Carlson estimates training incumbent workers will be about 20% of Apprenti’s business this year, compared to 6-7% prior to 2023.

“We’re taking people off baggage lines, ticket takers, and flight attendants and moving them into tech roles,” she says. “Let’s create some upward mobility for folks. We’re not having to source 100% of the talent, but we’re still keeping it highly diverse.”

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