The labor market has been pretty loose since the 2008 financial crisis, with this underpinning a considerable rise in credentialism that has seen employers demanding four-year degrees for even entry-level jobs. This has resulted in the most expensive form of education society currently has on offer being elevated above alternative routes, such as apprenticeships or so-called “STARS”, which are people who are skilled through alternative routes.

“Credentialism runs wild in slack labor markets, ratcheting up qualifications well beyond what is genuinely needed to do a job,” explains Johns Hopkins University’s Katherine Newman in her recent book Moving the Needle: What Tight Labor Markets Do for the Poor. “Today, for instance, most administrative assistants have a college or two-year degree.”

I wrote recently about the way in which skills-based recruitment can help employers find people who might not have the credentials that are traditionally sought but who are otherwise perfectly capable of performing a good job. With the labor market tightening, it’s clear that such alternative routes are urgently required.

Alternative routes

That is supported by a recent report from Harvard Business School that explores the role apprenticeships can play. The researchers highlight that working alongside one’s studies can provide not only valuable skills to students but also a clear pathway into work at the end of their studies. Indeed, they find that around 75% of employers are happy to recruit their trainees at the end of the process.

“Employers see a real benefit, and participants end up pursuing an option that is correlated with different pathways to success,” the researchers explain.

Despite this apparent success, apprenticeships remain a relatively rare phenomenon in the United States, with the majority consigned to the building trade. As the recruitment market remains extremely challenging, however, employers are being forced to consider avenues they would not otherwise consider, including apprenticeships.

Reducing stigma

The greater attractiveness in the labor market is also reducing some of the stigma associated with apprenticeships. The researchers explain that some parents are concerned that young people are being tracked and highlighted as not college material by pursuing an apprenticeship.

There has also been stigma from the employer’s side, with concerns persisting around the red tape involved and whether the investment in the skills of young people might not generate a sufficient return for them.

The report suggests that these concerns are largely without basis, and the authors cite the success of the CareerWise apprenticeship program developed in Colorado as an example to follow.

Changing direction

The last 30 years or so have seen a considerable push toward a college education, with enrollment expanding considerably in this time. This helps to create the narrative that college is the only pathway to success available to young people and that you’re a failure if you don’t follow that path.

This ostracises a great many people, with just 34% of American adults having attended a four-year school. Even among 18-year-olds, this figure is just 40%. What’s more, the report suggests that college enrollment is actually in decline, with the student population falling by nearly 10% since the start of the Covid pandemic, with the debt levels students graduate with a big factor in this decline.

The researchers analyzed data from CareerWise and found robust evidence to the fact that apprenticeships can provide students with an effective transition into a wide range of careers, including in IT, finance, and manufacturing.

The researchers tracked a few hundred apprentices on the CareerWise program during 2017 and 2018 and found that 20% of those who completed the program secured a role with their current employer. A further 17% found work with another employer, with a further 49% going on to further education at either college or high school. Just 5% of those who completed the program were not in either work or school.

What’s more, the program also worked for employers, as they surpassed productivity benchmarks during the program that was established in Switzerland, which has long been seen as the gold standard for apprenticeship programs.

Achieving good results

There were some differences between participants, however, suggesting that some apprenticeship programs were more effective than others. For instance, participants were especially successful when completing federally registered apprenticeships. They were also boosted by programs with a dedicated and supportive supervisor.

Success also appeared most likely in areas such as IT and financial services, with these disciplines far more successful than apprenticeships in healthcare or business operations. The researchers believe this might be due to the clear tasks assigned to participants in those disciplines.

The data also revealed that participants from poorer backgrounds were more inclined to drop out in the first year, which highlights the importance of wrap-around support.

The success of apprenticeships has prompted CareerWise to expand into areas like Washington DC and New York, and the researchers hope that their findings will also encourage greater acceptance of apprenticeships in both the workplace and among students.