New Labor Department apprenticeship rule can help American businesses build workforce

Running a business and need more skilled workers? If you’re not considering apprenticeships, then you’re behind the curve. Top American companies, including IBM, CVS Health and Lockheed Martin, now rely on apprenticeships to attract and train workers. A rule issued Tuesday by the U.S. Department of Labor will help even more American businesses use apprenticeships to develop a skilled workforce that supports long-term growth.

Apprenticeships are paid positions in which workers master a new skill or trade through a combination of on-the-job training, mentoring and an educational component. Completion of an apprenticeship typically results in a credential certifying the expertise the worker has acquired.

Apprenticeships are common in some United States industries, under a program the Labor Department has run since the 1930s. The rule issued by the department today provides for Industry-Recognized Apprenticeship Programs, or IRAPs, to give employers, trade associations, educators and unions additional flexibility to develop apprenticeship programs tailored to the needs of the current workplace and our dynamic economy.

For employers, this is an important opportunity: The rule is a means for a company to gain public recognition for crafting a training program that teaches the skills that it and other companies need on the factory floor, in the laboratory or in the office. The apprentices the business attracts will be learning the company's own processed and adding value to the company from day one, while earning a living and acquiring skills — and ultimately, a credential — with broader market applications.

The rule offers this flexibility by authorizing new accrediting bodies to recognize high-quality apprenticeship programs, much like private accreditation of universities. These accrediting bodies, called Standards Recognition Entities, or SREs, can be set up by trade associations and business groups, community colleges, unions and other organizations that have firsthand knowledge of the skills needed in the job market. The apprenticeship programs recognized by the SREs can be tailored to particular employers’ needs, while carrying the seal of approval of the recognizing SRE — making the model attractive for industries such as health care, cybersecurity and artificial intelligence.

If you head a local manufacturing association, community college or small or large business looking for a more systematic way to develop a skilled workforce, I challenge you to work with others to establish an SRE. And the Labor Department stands ready to offer assistance on how to develop a set of standards and procedures for recognizing when a company training program successfully confers the skills needed in your industry.

Expanding apprenticeships through this flexible, industry-led approach will meet an urgent need: With today’s near-record low unemployment, American employers are scrambling to find workers. At the end of last year, there were 670,000 more job openings than people looking for work. Wages are rising as employers compete to attract skilled workers. And many employers are finding that college-educated workers lack the skills they need.

Apprenticeship is a proven model for developing a skilled workforce. Apprentices comprise 3.7% of the workforce in Germany and Australia, and 2.7% in the United Kingdom. Historically in the United States, though, apprentices registered with the Labor Department have accounted for only 0.2% of the labor force.

In recent years, apprenticeship programs have gained powerful and broad support among United States businesses, educators and government leaders who recognize the higher-level skills being demanded by jobs in the current United States economy — leaders who recognize that a four-year college degree often isn’t the best means of gaining those skills. Community colleges, businesses, trade associations and others have begun to issue a range of their own credentials to certify when a worker has mastered a valuable expertise. Apprenticeships often fill this need perfectly.

Since January 2017, more than 700,000 apprentices have started working nationwide. This new rule — together with the Registered Apprenticeship Program the Labor Department already has in place — will be instrumental in supporting that growth.

Expanding apprenticeships is not only important to President Donald Trump’s vision for developing the skilled workforce needed for an expanding United States economy — it also is a key component of his plan for providing economic opportunity for all Americans during the current “blue collar boom.” Apprentices who complete Registered Apprenticeship programs earn an average starting salary of $70,000. And they can do so without taking on any college debt.

Programs funded by the Department of Labor have already opened doors for many Americans to become apprentices, particularly veterans, women and minorities. But government alone cannot equip the American workforce for the jobs of tomorrow. The private sector must lead. The Labor Department’s new IRAP rule is an invitation to do so.

Eugene Scalia is U.S. Secretary of Labor.

This story was originally published March 14, 2020 at 5:00 AM with the headline "New Labor Department apprenticeship rule can help American businesses build workforce."