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‘The Skills Shortage Dilemma: Buy Or Build?’ – Forbes

Forbes
Photo by Bernd Weissbrod/picture alliance via Getty Images
picture alliance via Getty Images

Article by Nicholas Wyman.

The past few years have been good ones for the U.S. economy, with year-over-year expansion, record low unemployment, healthy profits and stock market prices exceeding expectations. But all this good news masks a nagging concern for employers: a shortage of skilled labor, particularly “middle-skilled,” the type generally developed through two or more years of post-high school education or on-the-job training. And that shortage could put the lid on an expanding economy.

The U.S. Department of Labor estimates that seven million job vacan­cies now exist in the American economy, confirmed by a near-universal complaint from business leaders, “We can’t find enough people who can do the job.” Of surveyed employers:

  • 75% across industry sectors reported a shortage of skilled workers.
  • 60% were dissatisfied with the preparation of entry-level job applicants.
  • 90% reported the skills shortage is negatively impacting productivity and employee satisfaction, and is exacerbating staff turnover.
  • A survey among U.S. manufacturers indicated that the positions most difficult to fill are often essential to their growth plans.

This bad situation is getting worse as experienced baby boomers drift off into retirement, which they are now doing at a rate of 10,000 per day! 

To buy or build

How can employers get the skilled people they need when the supply/demand situation is so tilted against them? In some respects, it’s a typical buy-or-build choice. An employer can either “buy” skilled people direct from the labor market or “build” them by training personnel in-house to meet the unique needs of the business.

You might think the “buy” strategy is quicker. But American policy makers are just starting to focus on revitalizing career technical education (CTE) and boosting community college systems. It will take years before job-ready graduates come into the labor market. In the meantime, you’re competing in a very shallow pool for available talent.

So what can companies do to get the skilled employees they need more quickly? A growing number of U.S. firms are choosing to “build” with apprenticeships. For these forward-looking companies, training costs are investments and lengthy training periods are opportunities to develop required skills and organizational knowledge. There are other benefits. Apprenticeship training enhances subsequent innovation at the host firm, lowers long-term recruitment and training costs; and only a small percentage of apprentices will go elsewhere after they complete training.

With these benefits, it’s worth taking a closer look at apprenticeship.

What is an apprenticeship?

An apprenticeship is a work-based training program set up by an employer to train an individual for highly skilled work that meets industry standards and the unique requirements of the sponsoring company.  

Modern apprenticeships are characterized by:

  • customized, on-the-job training
  • in-house mentoring
  • wages that rise in step with increasing productivity; and
  • related technical classroom instruction.

Apprenticeships are also flexible, accommodating recent high school graduates, college graduates, military veterans and mid-career adults. Most modern apprenticeships vary in length from one to four years. Successful apprentices receive a nationally-recognized credential and, in many cases, college credits leading to an associate or bachelor’s degree. In 91% of cases, these newly-skilled individuals are offered and accept full-time jobs from their employers along with a pay hike.

Who uses apprenticeship?

Apprenticeships have long been associated with carpentry, plumbing, electrical work, machining, masonry and other hands-on trades. And that is where most apprenticeships are found today. However, a growing number of employers in finance, IT, hospitality, health care and other fields are turning to apprenticeship to close the skills gap that has left so many important positions unfilled. Some companies already invested in apprenticeship include Adobe, Mailchimp, Dartmouth-Hitchcock Medical Center, LinkedIn, JPMorgan Chase, Amazon, Dow Chemical Company, Salesforce Software, Interapt, Peterson Automotive Collection, CVS Health and Black Oak Casino Resort.

Adobe uses apprenticeships to fill its ongoing need for talented software developers, and has found it’s also a good way to diversify the workforce, purposely recruiting women and minorities for apprenticeship opportunities. And the company investment is paying off with 96% of program completers have stayed with Adobe.

CVS Health is using an apprenticeship program to tackle its pharmacy technician shortage. According to a company spokesperson, apprentice training brings people up to full productivity more quickly than alternatives. Low turnover is an added benefit. After one year on the job, turnover among apprentice-trained employees is only 15%, far below the 50+% common for entry-level personnel in a retail environment. Since the cost of recruiting and training a single CVS pharmacy technician is approximately $30,000, the company is reaping sizable cost savings. Some of these newly-skilled employees will enter management as they mature and gain experience. Others will continue their formal education and become licensed pharmacists. All to the benefit of CVS Health.

What’s the downside?

Of course, as any business person knows, benefits must be weighed against costs. For apprenticeships, there are three major areas of concern:

  • The cost of investment in training
  • The time required to bring a new employee up to the desired level of productivity
  • A possibility that competitors will “poach” employees in whom substantial time and money have been invested. No one wants to be a training ground for competitors.

In my next post, I’ll talk in more detail about the costs and benefits of apprenticeship, looking at the results of cost/benefit studies done in Europe, Australia and the United States. 

Read more articles on Forbes by Nicholas Wyman

Building Tomorrow’s Naval Fleet And Future Career Success – Forbes

Forbes
The 680-metric ton lower bow unit was joined to the other keel sections that comprise the aircraft carrier Gerald R. Ford (CVN 78) today. It is one of the heaviest superlifts to be placed on the ship.
(Photo by Ricky Thompson)

| by Nicholas Wyman | Forbes.com |

Just 11% of would-be students are accepted into this school. Sounds like one of America’s most selective colleges, doesn’t it?

It’s not actually that new either. This year, the school celebrates its first century and it’s produced more than 10,000 highly skilled graduates so far. None of them carry a debt. While they were studying, each student pocketed full-time pay and comprehensive benefits.

This year, for example, around 850 students are enrolled, and their hourly rate is approaching eighteen dollars an hour for both work and classroom hours.

Sounds like this is only for school leavers? Not so fast. It’s much broader than that. Take one of its current students – former history teacher Osman Erdogan. He emigrated from Turkey to the U.S. in 2000. Then he had two goals: to find secure employment and further his education. He started working at his brother’s ship repair company in Virginia and enrolled in ESL classes at a local community college. In his spare time, Osman toured area museums and was drawn to U.S. maritime history exhibits.

In 2011, Osman was hired as a contractor at Newport News Industrial (NNI) Shipbuilding, a subdivision of Huntington Ingalls Industries (HII). After a few years of hard yards, he became a salaried employee. By chance, he saw a booklet in the staff room advertising night school.

Osman says: “It had so many classes that I was interested in like ship design and systems, shipyard operations, mechanical drawing and architecture. I wanted to sign up on the dotted line then and there to take all of the classes. I was so hungry to learn.” 

He got in. Before long, Osman’s mechanical drawing teacher noticed his dedication and passion for learning and encouraged Osman to enroll at HII’s Apprentice School at Newport News Shipbuilding.

You’d be forgiven for not knowing about this dynamic tough-to-get-into school. HII is the largest military shipbuilder in America. Since its inception, the skills taught at its Apprentice School have continued to evolve along with technological advances in the industry. New recruits are working with master shipbuilders to build an all-digital U.S. Navy fleet. Designers and engineers are working on the first-ever all-digital, paperless build of the USS Enterprise, the U.S. Navy’s next aircraft carrier.

Stan Best, the School’s resident historian, training manager, and instructor of Business and Communications, says: “Back in 1945, out in Los Alamos, they exploded the first atomic bomb. Within 15 years, we were building ships that run on nuclear power.

“So, my job as an educator is to prepare my apprentices for a form of technology that I don’t know exists right now. You cannot sit on what you’ve learned today.” 

Stan, who joined the program as an apprentice in 1985, admits he was initially apprehensive.

“When I was in high school, if you would have told me I was going to The Apprentice School, I would have thought that was a loss. I was afraid that it would pigeonhole me and reduce my opportunities for continuing my education.” He’s not alone there. This is a common misconception among students and parents, especially when traditional college is pushed as the only path to success and financial security. But Stan’s fears of reduced opportunities proved unfounded. He went through HII’s Apprentice School qualifying in 1988, became a shipboard electrician then a nuclear test engineer. Further apprenticeship training led him to a 15-year career as a test engineer. Stan’s education didn’t stop there. While testing reactors, he got associate’s, bachelor’s, and master’s degrees – all tuition-free, thanks to Newport News Shipbuilding’s tuition reimbursement program. He started teaching at the School in 2004.

“I figured it was my duty to give back a little bit,” he says. “The apprentice school has opened up a window of education for me and an opportunity for me to be a lifelong learner.”

One of his students is Osman, now a married father of twins, and in his second year of training for pipefitting. He says he’s optimistic about his family’s future and thrilled about the doors that apprenticeship has opened for him.

“As a person that came from a thousand miles away with a broken accent, I found that if you work hard and show honesty, sincerity and integrity, you can succeed here. I never feel any discrimination at work or at school. My coworkers are so friendly, so helpful. I consider myself a very lucky person.

“I tell my young peers here that they don’t know how lucky they are. I tried to study my whole life, but there was always some obstacle I had to overcome. What can be better than someone offering you a job and free school? I didn’t know that such a program existed in the world. I knew I couldn’t miss this opportunity. I had to take it.”

The Apprentice School is just one form of modern apprenticeship on offer in America. There’s got to be one out there that’s a perfect fit for you. What path will give you traction to a great career or two?

View on Forbes: https://www.forbes.com/sites/nicholaswyman/2019/07/16/building-tomorrows-naval-fleet-and-future-career-success/3/#2fe28602f167

‘Millennials: You Can Afford To Change Your Career Even With Student Debt’ – Forbes

Let’s not let history repeat itself.

Looking back at the school-to-work transition for Millennials, many were given a promise. They were told that if they got a college education, they would exit into a sea of job opportunities. All they’d have to do is pick one and from there, enjoy rewarding work and a long, successful career. A decent salary would support a comfortable lifestyle and, in a reasonable amount of time, dissolve their student debt.

We failed them.

Many Millennials did their part. They went to college and got their “golden ticket,” only to find that in the light of day, their degree didn’t take them very far. Meanwhile, degree or not, there was the debt.

But it’s not too late for Millennials to find meaningful, well-paying work. And many want to move on from their current positions. According to the 2019 Deloitte Global Millennial Survey, “more Millennials than we have ever surveyed—49 percent—would, if they had a choice, quit their current jobs in the next two years.” This number, very close to one-half of the almost 13,500 Millennials responding to Deloitte, is a reflection of the instability of today’s workforce.

Modern Apprenticeship offers opportunities for Millennials as well as those just entering the workforce. And bodes well for employers – reduced turnover and increased employee loyalty are hallmarks of this skills-building model.

Options exist to find meaningful, well-paying work.
Getty

Modern Apprenticeship is a customized workforce development framework that blends classroom learning and work-based training to prepare individuals of any age to meet sophisticated skills needs. Equally important, Modern Apprenticeship:

  • Produces pipelines of well-prepared workers from the ground up and can also move existing employees further along in the ranks.
  • Applies to almost any industry, from technology and engineering to advanced manufacturing, health care and finance.
  • Is in sync with Millennials’ philosophical approach to the world of work, including innovation and creative problem-solving, making a positive impact, and emphasizing diversity and inclusion.

The American Staffing Association’s Workforce Monitor reports that Millennials are particularly open to apprenticeships. A majority (54%) says it is likely to consider these learning opportunities in the next two years—significantly more than any other age group.

Depending on the source, the oldest of Millennials are now approaching 40. Many would love to make a shift into more meaningful work, but they believe it’s too late. They wonder if they have the right skills to make the transition and are able to keep up with the technical competencies and soft skills necessary to succeed in the 21st century workplace. In Deloitte’s Millennial report, only about one in five respondents believe they are prepared for the future of work in Industry 4.0. In fact, “70 percent said they may only have some or few of the skills required and will need to evolve their own capabilities to increase their value.”

Millenials also feel stuck in place, saddled with earlier college debt alongside day-to-day living expenses. How can they possibly start over?

For millennials, however, Modern Apprenticeship brings good news.

  • Apprentices earn while they learn, and typically move into lucrative employment upon program completion.
  • Much of the time, they graduate without additional student debt.
  • Professional mentors play a critical role, helping Millennials feel “caught up” with the modern workplace — from practical job skills to essential team building, communications and critical thinking skills.
  • Many also achieve a highly regarded industry credential and associate degree during their Modern Apprenticeship.

Employers win with Modern Apprenticeship, too. Not only does Modern Apprenticeship go hand-in-hand with strong employee loyalty and retention, but also a company-specific skill set is an invaluable component.

For many Millennials, post-college reality has not matched with the fairy tale offered by older generations. But all is not lost. People in all stages of working life can find opportunity in Modern Apprenticeship. It’s a solid, substantial, no nonsense pathway to a better life.

Read this and similar articles on Forbes

About the Author

Nicholas Wyman

I’m the CEO of IWSI America which is a global enterprise, committed to skills and workforce development in today and tomorrow’s workplace.
I have spent the last 20 years, consulting, writing, speaking and leading the conversation toward helping organizations and individuals map a pathway to a more secure and prosperous future. I am the author of Job U: How to Find Wealth and Success by Developing the Skills Companies Actually Need. I am a Winston Churchill Fellow, hold an MBA and have studied at Harvard Business School and the Kennedy School of Government.

Leading by Example: Public Sector Apprenticeships in Kentucky

By Robert I. Lerman, John Marotta and Myca San Miguel.

While the US government sector employs about 15 percent of nonfarm workers, federal, state, and local governments have not made substantial use of apprenticeships to enhance the skills of their workforce, increase productivity, and widen access to government positions. This report examines steps undertaken by Kentucky to build talent for state government through apprenticeship.

The early outcomes are promising: departments can adopt and register apprenticeships quickly, employers are pleased with the productive contributions of apprentices, and apprentices recognize they are gaining valuable skills. The success of departments adopting apprenticeships bodes well for the expansion to other areas.

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‘A modern take on apprenticeships is working for businesses’ – HRDive, Online

Dive Brief:

  • Employers are finding success with modern apprenticeships, according to a new report from Institute for WorkPlace Skills & Innovation America (IWSI).
  • With U.S. employers reporting challenges finding skilled workers, many are adopting programs that combine classroom learning and on-the-job training. Employers such as Mailchimp, Adobe and CVS Health have demonstrated the effectiveness and versatility of apprenticeships in, health care, cybersecurity, engineering and more, according to the report.
  • Workers seem to be benefiting as well: The average starting wage for apprentices is more than $60,000, IWSI said, and apprentices mostly complete programs debt-free.

Dive Insight:

A majority of adults believe an apprenticeship program has a better chance of landing them a job than a four-year degree, a recent American Staffing Association survey revealed. And based on IWSI’s report, they may be on to something. From the food industry to insurance, apprentice programs are emerging as a way to train employees and generate a talent pipeline.

Apprenticeships are nothing new, of course, but businesses today are looking past the traditional trade-oriented offerings to develop programs in unexpected disciplines, like cybersecurity. Employers are increasingly developing structured, work-based learning programs.

Apprenticeships are seeing a push from the Trump administration, too, with funding and discussion groups planning initiatives to update these avenues to employment.

View Original Article on HRDive