There’s a New Pipeline to White-Collar Jobs. It Starts With Apprenticeships.

Harper College

Rebecca S. Lake has been getting lots of calls.

The latest was a lengthy chat with a technical college in Kansas. Administrators there, like the others, wanted to know how they could join the two-year colleges that are exploring apprenticeships, including in white-collar fields.

Similar questions have come in from across the country. Lake, dean of work-force and economic development at Harper College, a community college in Chicago’s northwest suburbs, keeps an annotated map of the country handy during calls, to reference states’ apprenticeship policies.

“It got so bad that finally my staff talked me into having our first national conference,” Lake said. About 175 people from 100 community and technical colleges gathered last fall to learn how they might start programs like Harper’s. The second conference is planned for October.

Lake, and the Chicago area generally, are at the forefront of a small but growing movement that is changing how some students enter white-collar jobs. Apprenticeships, most often concentrated in manual trades like construction and manufacturing, are nothing new. But some companies are starting them in fields that traditionally require four-year degrees.

About four years ago, Harper College became one of the first community colleges to sponsor apprenticeships, sending students to the insurance company Zurich North America. In the past two years, Harper’s program has doubled to 45 employers and 154 apprentices, Lake said. Now she’s spreading the gospel to her peers.

Across town, the City Colleges of Chicago system has funneled some students to consulting and finance firms like Accenture and Aon. The companies lead the Chicago Apprentice Network, a group of two dozen firms, including McDonald’s and JPMorgan Chase, that has created more than 400 apprenticeships, up from 75 in 2017. It plans to reach 1,000 by the end of next year.

The approaches take many shapes. Some, like new tech apprenticeship programs in Maryland and Utah, directly connect job seekers and employers. Other companies, like those in Chicago, may work through community colleges, determining which departments need new hires and outlining curricula with administrators and faculty members. The firms may pay $16 an hour where they once paid $20, Lake said, spending the difference on training and education — a package that one company has told The Chronicle runs $50,000 a year for a student’s wages, benefits, and tuition. Other companies, like Accenture, scout graduating two-year students for three- to 12-month apprenticeships.

One new program, in Jersey City, N.J., is sending five high-school graduates to work at a local manufacturer. After five years of part-time coursework — at Hudson County Community College and remotely in a specialized architecture-manufacturing program at Pittsburg State University, in Kansas — the students get a tuition-free bachelor’s degree and a $70,000 engineering job.

Firms like Accenture and Aon had never hired from City Colleges before, said Juan Salgado, the system’s chancellor. “You’re creating entirely new pathways and pipelines.”

Accenture started its first class of five apprentices in 2016, in its Chicago IT department. By the end of this year, it will have trained 450 across 10 cities, in fields like cybersecurity, app development, data analysis, and software engineering.

“We realized we are in a space where there are more job openings than available workers,” said Pallavi Verma, a senior managing director who leads Accenture’s Midwest operation and the apprentice program.

The state of the job market led the company to start scaling back its degree requirements for entry-level jobs. That, she said, taps into new talent, opens opportunities to those who haven’t had them, and makes for loyal hires. (While some firms and researchers cite wage savings, too, Verma said that’s not a motivation for Accenture.)

The apprentices are, of course, a tiny fraction of the mammoth firm’s 477,000 employees. But the program is here to stay, Verma said.

Apprenticeship programs, long common in Europe, likewise represent a small fraction of the American work force. But they have swelled in the past decade. There were 585,000 apprentices in the country last year, an increase of 56 percent since 2013, according to data from the Department of Labor.

Some labor analysts have argued that more fields should take advantage of that growth. A 2017 report estimated that with more public support, apprenticeships could grow from 27 “core” occupations — carpentry, pipe-fitting, metalworking — to 74, filling 3.3 million job openings. Why have four-year-college graduates manage databases, adjust insurance claims, or design graphics, the thinking goes, when you can train less-credentialed people at lower cost?

While white-collar apprenticeships remain sparse — still in single-digit percentages compared with those in traditional industries, according to federal data — “that’s where the increase has been,” said Eric M. Seleznow, a senior adviser at Jobs for the Future, a work-force-development organization.

“There’s more than one way to the middle class other than a four-year degree,” he said. “And companies are starting to realize that.” The paths now include apprenticeship programs, too, he said.

‘A White-Hot Job Market’

Research using data from Burning Glass Technologies, an employment-analytics firm, shows that many employers follow the job market: As unemployment rises, they can raise requirements for positions. When there are jobs aplenty, as now, companies hungry for workers start to look where they haven’t before.

For a handful of white-collar firms, that means snapping up two-year students and other job seekers without bachelor’s degrees. What the companies save on lower wages can go toward training, including programs that pay for an associate degree or other credentials.

The trends follow years of debate about a “skills gap” purportedly caused by colleges’ failure to equip graduates with job-ready skills — which, in turn, has prevented companies from filling open positions. “Earn and learn” programs for tech and administrative jobs have cropped up to fill the gap, though experts have questioned whether they can produce enough candidates to replace manufacturing as the route to the middle class.

“We all know this is a white-hot job market right now,” said Matthew Sigelman, CEO of Burning Glass and an author of the 2017 report on new apprenticeship industries. “In a lot of cases, these are companies that are growing their hiring significantly,” he said. But “their accustomed pools of talent are running dry.”

There’s a good chance white-collar apprenticeship programs can continue to spread, Sigelman said. And once a company starts a program, it tends to find that keeping it going makes economic sense.

“It’s like Lay’s potato chips,” said Lake, at Harper College. “Try one, you might be back.”

Community colleges are uniquely positioned to build these programs, Lake argued. When they work, it’s a “win-win-win”: Students get a subsidized education and a middle-class job; employers diversify their recruiting and may lower their costs as workers grow scarce; and community colleges achieve their missions.

While more of those colleges are interested in apprenticeships, their involvement remains small. Community and other colleges manage just 151, or about 1 percent, of registered apprenticeship programs, according to the Labor Department. But those connections are growing: The department announced in January a project to create 16,000 apprenticeships through community colleges over three years.

Apprenticeships help employers and colleges in other ways. Apprentices are less likely than other students or bachelor’s-degree holders to leave their programs, according to the Labor Department and program leaders. Colleges can attend to their bottom lines.

“We’re always looking for additional revenue streams” as trends like population decline threaten enrollment, Lake said. Of Harper’s nine apprenticeship fields — some in traditional manual trades, others in banking and finance — eight offer associate degrees.

And different regions have different needs. “Not every community college is near a JPMorgan or a Zurich,” said Allison S. Beer, a senior policy analyst at the Association of Community College Trustees. The bulk of programs remains in traditional industries, she said.

South Carolina, for instance, has registered 30,000-plus apprentices over more than a decade through its technical colleges. The system expects to see some growth in fields like health care, hospitality, and cybersecurity.

But most apprenticeships have remained in advanced manufacturing and will probably stay that way, said Tim Hardee, the South Carolina system’s president. Programs that do shift into nontraditional fields come not from new companies looking for employees, he said, but from longstanding partner companies like Boeing tweaking their hiring.

Hardee sees high-school graduates getting into line for high-paying jobs early instead of joining those holding the current $1.5 trillion in student-loan debt. “They’re 21 years old, and they own their home, and they own their car, and they have no student debt,” he said. “That’s a pretty good model for a citizen in the state of South Carolina.”

Popular Policy

The appeal of apprenticeships has gained traction with policy makers across party lines. Following efforts under Presidents George H.W. Bush and Bill Clinton, growth in apprenticeships was sluggish until President Barack Obama advocated for and funded them with $175 million in grants during his second term, said Seleznow, who was a labor official in the Obama administration. Harper College was among the first grantees.

President Trump signed an executive order in 2017 aimed at expanding apprenticeships to new industries and demographics, which the administration later said was funded with $150 million. He signed another order last year, convening a group of high-profile companies to announce more apprenticeships and job-training programs, many of which had already started such efforts.

Meanwhile, the country’s worker shortage has grown. There are 7.4 million unfilled jobs, and just 5.9 million unemployed people to fill them, according to the Labor Department.

For now, advocates and researchers say apprenticeships arranged through community colleges don’t threaten four-year-degree programs. And although some of the benefits of a college degree have eroded somewhat in recent years, they remain a “good investment for most people,” according to a recent analysis by researchers at the Federal Reserve Bank of New York.

“There’s nothing that limits or stops our students that are in these apprenticeships. They can take these degrees they’re earning and go off to four-year universities,” said Salgado, Of the City Colleges of Chicago. Students don’t have to make the “false choice” between technical programs and four-year college, he said.

Some observers ask, in fact, if there’s not room for other parts of academe to join in. “I wonder why four-year colleges don’t take up apprenticeships more, honestly,” said Seleznow. “They’re starting to do that in Europe.”

Follow Steven Johnson on Twitter at @stetyjohn, or email him at steve.johnson@chronicle.com.