By David Rockower
Credit: Pennsylvania College of Technology
If you haven’t read about the labor shortage, you’ve more than likely experienced it firsthand at your favorite location restaurant or retail store, or even in your own firm. During a recent webinar sponsored by The Ben Franklin Learning Center, Shannon Munro shared details about what’s causing the shortage and how some companies are easing the pain by focusing on employee retention through apprenticeship programs.
Munro is the Vice President for Workforce Development at The Pennsylvania College of Technology. She oversees departments that deal with training across business sectors such as manufacturing, healthcare, consulting and testing for plastics companies. She also manages the college’s Apprenticeship Center. Though Munro’s job duties are multifaceted, she said the majority of her work is dealing with companies who need support for continuous upskilling of their employees.
“Last year we trained about 5,000 people. That number ranges from 5,000-8,000 people each year. Last year we touched over 500 companies with our services. So, there’s a demonstrated need for training people that are currently working,” Munro explained.
“For every dollar a company invests in apprenticeship, they see $1.50 in return. Retention becomes one of the best strategies. It’s much more cost effective to recruit and retain than to retrain. We need to create pathways to extend careers and retain a workforce,” said Munro.
“Where are all the workers?”
“The most common question that we are asked by employers is ‘Where are all the workers? We would love to train them, but where are they?’ This has been a question over probably the last five years,” said Munro.
Part of the answer starts with a decrease in population. For the current population to be replaced, on average, women would need to give birth to 2.1 people, but the fertility rate has been below the replacement rate of 2.1% since 1971. “During the pandemic, everybody thought we were going to see a bump in births but that did not happen. This is a problem that is going to persist for a very long time. This is not just an issue in the United States. It’s definitely a global issue,” said Munro.
Other factors in the workforce shortage
According to The Demographic Drought, a 2021 report from Emsi, over the next 25 years we will see the country’s largest transfer of wealth. Baby boomers will be leaving large sums to children and grandchildren leading young people to live at home longer and start working later. “13 % of millennials did not get their first job until they were over 20 years old. Comparatively, only 6.3% of boomers did not have a job until they were over 20 years old. In 2014, for the first time since 1880, more men (25-34) were living with their parents than with a spouse. 25% of 25-29-year-olds were still living with their parents,” said Munro.
In the meantime, the number of baby boomers leaving the workforce has accelerated. Prior to the pandemic, two million baby boomers retired each year; during the pandemic, that number rose to 3 million.
Yet another factor is that more people are choosing part-time work, causing the low unemployment rate can be misleading. The unemployment rate is the number of people who are not employed and actively looking for work. It is not a true reflection of working age people. “The labor force participation rate (people who are actually working or actively seeking work) is at 62.1%. That means that nearly 40% of our current available workforce is not working or looking for work right now. The combination of low fertility, low workforce, and longer lifespans means that two-thirds of the US population could be financially dependent on the remaining one-third by the year 2100,” explained Munro.
Shannon Munro speaks about apprenticeship programs. Credit: Pennsylvania College of Technology
Recruit & retain strategy pays off
There is no one-size-fits-all solution, according to Munro. She noted that millennials—currently the largest segment of the workforce—exhibit specific traits that make it worthwhile for employers to focus on employee retention. Millennials, she said, like having a career pathway, being part of a solution, and are likely to engage in employer-sponsored training.
Munro defined apprenticeships as “a program that combines a paid work experience and training with classroom instruction to prepare workers for a highly skilled career.” Sometimes businesses balk at the idea because they are hesitant about the expense. But Munro shared some key data: “For every dollar a company invests in apprenticeship, they see $1.50 in return. Retention becomes one of the best strategies. It’s much more cost effective to recruit and retain than to retrain. We need to create pathways to extend careers and retain a workforce,” said Munro.
Common misconceptions of apprenticeship programs
There are several misconceptions about the idea of apprenticeship in the business world. “People say they want to hire an apprentice. Actually, the person who becomes an apprentice is already working for them. It is someone the employer identifies to move into an apprenticeship program,” explained Munro.
In 2014, for the first time since 1880, more men (25-34) were living with their parents than with a spouse. 25% of 25-29-year-olds were still living with their parents,” said Munro.
“Some employers also think they will send an employee to us and Penn College will train them and they will come back to work with the skills they need, but that’s not how it works. It’s a partnership between the company and the training provider who will be delivering the training services; employers have a big stake in making the program work and providing guided on the job training,” she said.
Apprenticeship students on the campus of The Pennsylvania College of Technology. Credit: Pennsylvania College of Technology
The components of apprenticeships
Munro explained that there are two types of apprenticeship programs: hourly-based and competency-based. Penn College uses a competency-based program; these vary in length from eighteen months to four years. She pointed out that there are five components to an apprenticeship:
Apprenticeship programs are highly customizable. Munro noted that they work to mitigate any disruption to the company and have been able to deliver much of the training remotely. They’ve also created a pathway to credit, so if an individual enrolls in an 18-month (on longer) apprenticeship, they get credit and can finish an Apprenticeship Technology associate degree at Penn College.
Penn College is an approved sponsor for seven different registered apprenticeship programs:
“Any company can start their own apprenticeship program. I think one of the challenges is getting started and figuring out how to make this happen within the company. We have tried to alleviate that entry point for a lot of companies. We do a lot of the paperwork that needs to be filled out for a registered apprenticeship program and we currently have grant funding to cover a portion of the cost of instruction. We take on that burden for companies and help with the paperwork and all the phases of implementation,” said Munro.
Emsi. How The Approaching Sansdemic Will Transform The Labor Market For The Rest Of Our Lives. Moscow, ID, 2021. Accessed 23 Aug 2022.