Apprenticeships: Are they worth the cost?

Illustrating the success of apprenticeship programs, Putman Media intern Alexandra Ditoro interviewed Melody Whitten, director of development for 58 Inc., a part of Shelby County Alabama's Economic Development Committee, to learn how its apprenticeship program is helping local manufacturers build their own talent pipelines.


Amanda Del Buono: Welcome back to Manufacturing Tomorrow's Workforce. I'm Amanda Del Buono.

Although many manufacturers may be putting hiring on hold due to the coronavirus crisis, it wasn't very long ago that they were struggling to hire trained personnel. Throughout this podcast, many guests have cited apprenticeships as a solution to this problem. To illustrate the success of these programs, Putman Media intern Alexandra Ditoro interviewed Melody Whitten, director of development for 58 Inc., a part of Shelby County Alabama's Economic Development Committee working to help manufacturers build their own talent pipelines through apprenticeships.

Here's their interview.

Alexandra Ditoro: Thank you so much for joining me, Melody.

Melody Whitten: Thank you for having me. I appreciate the invitation.

Alexandra: Yeah, of course. To start out, could you tell me a bit about how 58 Inc. was started and how 58 Inc.'s apprenticeship program works? From what I understand, you partner with local manufacturers to provide these programs. Is that right?

Melody: That is correct. So, a little bit of background on 58 Inc. 58 Inc. was birthed about two and a half years ago. Prior to 58 Inc., Shelby County had a typical economic development entity that focused primarily on industrial development. The director of that entity was looking at retirement, and the county thought that might be a great opportunity to, maybe, take another look at how they were approaching economic development and, instead of looking at just industrial recruitment, to take a more comprehensive approach and look at not only industrial recruitment but industrial expansion within our own business and industry makeup, but also adding a commercial development component, a retail development component, and a workforce development component.

So, 58 Inc. is fully funded by our county government and we cover all facets of economic development from industrial development and recruitment, commercial development, retail development and workforce development.

The way the apprenticeship program started is we actually got a call from our local career center—I don't know how that is referred to across the nation, but in Alabama it's the Alabama Career Center System—most people may think of that as the state employment office. It's kind of the one-stop-shop for people that are either looking to find a job or find training or for companies to go to that entity to find employees. So, I received phone call from the business services rep at the career center in Alabaster, telling us that they had met with some companies recently that were struggling to hire machinists. And they asked if we would come, meet with those companies and talk through any solutions that we may have.

And so, they set up a meeting, and we went and met with three companies that day. To make a long story short, we basically figured out that we were experiencing a really strong economy and we had a shortage of skilled machinists in the region, and I think that tends to be a nationwide problem right now. Most machinists are aging out and reaching retirement, and because there has been such a national push on sending kids to college, we have lost our focus a little bit on skillsets that are found in advanced manufacturing or construction. So, there tends to be a shortage in those areas.

When we were talking through that with the companies, I explained to them, "Obviously you've tried everything to hire machinists." They had gone through employment services and utilized LinkedIn and headhunters, and they just were not having any success. And so, I said, "I think what we're going to have to do is basically grow them, and the best way to do that is through a USDOL Registered Apprenticeship Program." And so, we basically had those companies excited about that option and they bought in. That's how the program was birthed.

Alexandra: Wow, that's awesome. It sounds like something that's really beneficial to the community in the area that you're in.

Melody: It has been way since that time have grown the apprenticeship program. We now have three apprenticeship models. We have one for machinists, one for welding and one for industrial maintenance. Our apprenticeship program is fairly unique in that we set it up as a consortium model.

Normally, if a company were going to pursue a USDOL apprenticeship program for their plant or their employees, the company themselves would negotiate the standards with the U.S. Department of Labor, and all the standards framework for what has to be completed through the apprenticeship program in order to successfully complete the program. So, the standards outline the curriculum and the related training that has to be taught within the apprenticeship, but it also outlines the OJT hours that have to be completed by the apprentice at the employer's site. And those two components simultaneously makeup the apprenticeship and are outlined in what is called the standards.

Normally, a company would negotiate those standards with the Department of Labor themselves, but our companies are not large companies, they're fairly small companies in the grand scheme of manufacturing. So, they did not really want to negotiate with the Department of Labor, those standards. And they really didn't want to go to all that trouble honestly, because some of them were only planning on hiring one apprentice, and they saw that as a lot of work and very time-consuming to only have one apprentice.

And so, we approached our community colleges and said, "Okay, if we have companies that want to put apprentices in your training programs, whether it be machining, welding or industrial maintenance, would you be willing, not only to be the training provider, but would you be willing to be the sponsor?" And the sponsor...and you'll learn through this podcast, there's a lot of terminology related to the USDOL Registered Apprenticeship model, but the sponsor, in this case, is actually the entity that holds the standards that we discussed earlier. So, the colleges, in this case, graciously agreed to be the sponsor. They went to the U.S. Department of Labor and started negotiating what those standards were. Basically, what we had to do was get the job descriptions from the company and compare them to the standards to make sure that what we were actually going to teach in the standards would fit the job descriptions that the companies were trying to sell.

Once we were able to get everyone in agreement as to what that standard would look like, then the standards were executed between the Department of Labor and the community college. So, they are really the frontline with the Department of Labor—the colleges hold the standards, the colleges do all of the reporting and recording, they do the audits, and of course, the Department of Labor will go to them for any information that they need because they're the sponsor. But if there is a situation where a company or an apprentice is not providing the sponsor, which in this case is the college, the information that they need, the Department of Labor can at some point in time go to the company themselves and conduct a visit or conduct an audit. But we haven't experienced that yet. So, currently, our colleges are the sponsors, and our companies benefit from being able to hire those individuals, put them to work, put them in the training program without necessarily having to deal with the paperwork and the bureaucracy that comes with being the sponsor, if that makes sense.

Alexandra: No. Gotcha. And then, with that in mind, how do manufacturers get involved with this? Is it a difficult sell for you or are they coming to you to start these programs?

Melody: A little bit of both. In the beginning, we had companies that were immediately engaged and they were immediately bought into what we were trying to do because they realized the struggle they were having finding those particular skillsets and they knew that what they were doing wasn't working and they needed to explore other options.

By growing your own pipeline, so to know, you're taking an individual that has no skillsets in some cases, no background in manufacturing, and you're basically taking them from Day One and putting them in your plant and putting them through those classes and it takes four years to complete the machining program. So, you're definitely bought into this being a long-term solution. So, some companies knew that that was an answer for them because what they were doing wasn't working. The recruiting aspect wasn't working. They knew they were going to have to, kind of, grow their own.

In other cases, it has been a hard sell for a couple of reasons. First of all, the companies have to commit to paying for the related training. Now, there are grants to offset those costs that we've been able to explore and we've had great success with from the state and federal level, but you can't assume that those grants are going to be awarded. So, we tell the companies immediately when we start speaking to them about the apprenticeship program that you need to be prepared to pay the cost of the tuition. And that cost varies, of course, by program and the length of the program. But we always ask the company upfront in our first discussion, "Are you prepared for mega financial investments? Because if you're not, the apprenticeship model is not for you. Because in the apprenticeship model, the apprentice does not pay for their own training."

So, a lot of companies are hesitant to do that. They're afraid that if they make that level of investment and the apprentice doesn't work out or doesn't stay employed with them for a certain period of time, they're not going to be able to recoup that investment. That has been a concern. And in some cases, simply the standards are not a match. So, you may recall that we talked about...we met with the companies initially and looked at their job descriptions for those positions, and created the standards based on those job descriptions. Because what we want to make sure we do is at the end of the apprenticeship, we've actually taught the curriculum that the employers need their apprentices to know. And so, the other conversation that we have with employers when we first start meeting with them about this model is we show them the standards and we ask them, "Are these standards a fit for you? If you look at these standards and you look at your own job descriptions, would you be able to hire someone out of this program?" And in some cases, it's just not a fit.

An apprenticeship program is pretty comprehensive and so, it covers a lot of topics and a lot of modules. In some cases, for example, in the machinist apprenticeship, you'll have some companies that will tell you, "I don't need a true machinist. I need a machine operator." They're not going to have to set up the machine and they're not going to have to program a machine. We create the same widget over and over and over, and we just need someone that can put the raw material into the machine and press this button, but they don't have to program it. And that's really a machine operator versus a machinist.

So, we've had some companies that have just said the standards aren't a match and others it's really a cost concern. But we always try to tell the companies that it is an investment, but keep in mind, in the machinist program, it's over the course of four years. So, you're not paying the tuition up front. It's just like when I went to college. You pay your tuition by semester. They only have to pay the tuition every semester, and it's a few hundred dollars every semester. So, if an apprentice is not working out, and they found out six months in that this is not a fit, they haven't spent the full amount of tuition. They've only spent two semesters worth of tuition.

Alexandra: Looking more on it from the apprenticeship perspective, what are the benefits of apprenticeships to both manufacturers and students? Why do you think manufacturers tend to embrace programs like yours?

Melody: Well, the benefit for the company is normally it produces highly trained employees. And that's probably the primary reason is if an apprenticeship works out, then you have been able to take someone and while they're going to school to learn the skill that you need them to know, they've also been working in your facility and learning your culture and your way of producing your product. In the end, you end up with a highly trained employee.

It also creates a pipeline for skilled employees because if you, for example, add an apprentice, if you add maybe one a year or one every two years, then as you have people retiring out of those positions in your plant, you have apprentices that are coming up through the program and gaining more skills and so, there's a pipeline for those skilled employees.

It also reduces your turnover. The U.S. Department of Labor documents that approximately 91% of all apprentices stay with their employer. So, another concern we've had from employers is, "Okay, I've spent the money. I've put this apprentice through school for four years and year five they leave me and they go to another company." That is a concern. It's a valid concern and there's no way you can make an apprentice stay. You can't make any employees stay where they currently are. But the U.S. Department of Labor has tracked retention rates among apprentices and 91% of apprentices stay with their sponsor company. So, it does reduce turnover and it increases productivity because you're training people not only in theory in the classroom but also in application in the plant. They're really learning through the best of both worlds. They're going to school and learning how it should work, and then they're going to work and seeing how it actually does work and be able to apply those theories. And so, it's a great benefit to the employer.

For the apprentice, it provides them, of course, a career pathway. We have several apprentices in our program that were high school graduates. So, they went on industry tours with us their senior year of high school to these machine shops and saw that career path and thought that was something that was of interest to them. And after they went through the interview process and were selected, they started the program and went to work in the fall. So, it gave them a career pathway where before they didn't know what they wanted to do. They didn't know how to pursue a career in advanced manufacturing. Maybe they had never been in an advanced manufacturing plant until they went on an industry tour with us. So, it establishes a career pathway for them. And then, it also gives them progressive wages because throughout the life of a USDOL Registered Apprenticeship Program, apprentices have to experience an increase in wage periodically through the life of the program.

So, that can be at the end of every semester. It can be during a six-month evaluation. It can be annually. But periodically throughout the program, you have to assess the apprentice, how they're doing in school, how they're doing at work, and if all things are going well, then you have to progressively increase the apprentice's wages. So, they're starting out at X and will go to Y and Z throughout the course of the apprenticeship. And then by the end of the apprenticeship program, they should be at a certain percentage of what a journeyman level pay would be. And, of course, that gives the apprentice a higher-quality of life potential because they may be experiencing higher wages starting out than their counterparts. And then they're, of course, getting those progressive wages throughout the life of the apprenticeship program. So, their quality of life and hiring potential is greater.

So, take, for example, the high school students that we have that came to us just as they had graduated, went through the interview process, and went to work. Their starting wage, let's say for example, was $14 an hour. Well, where, as a high school graduate with no other skillsets, could you go and make $14 an hour? And then if you get a raise at the end of every semester or every six months and you're going up to $15 an hour, $16 an hour, $17 an hour. If you take that apprentice and pull a counterpart from his high school class that graduated a year ago, are they in school? Are they getting school paid for at no cost to themselves? Are they making $14, $15, $16 an hour? So, the quality of life potential for those apprentices is far greater.

Then, of course, it gives them a nationally recognized credential because U.S. Department of Labor credential is portable and it's recognized across the nation. So, once these apprentices do complete their program and they do choose to leave their company, maybe their family gets transferred out of state and they want to be close to their family, so they move to Texas. They could take that journeyman-level credential to any place that hires welders. And that is automatically recognized as a credential that is portable and they could go to work anywhere with that skillset.

Alexandra: That's a great opportunity for people, especially just getting out of high school. I mean, that's perfect.

This last question is something that you have touched on earlier on, but I still want to ask it just in case there's anything that you want to add. What types of apprenticeships have you established for members of your community and what different skills can they learn or types of jobs are they able to acquire when they're done with the program?

Melody: The three apprenticeship programs that we offer are the machining program, the welding program and industrial maintenance. And individuals that are interested in getting into those programs can apply with us and interview for those positions.

Ideally, an apprenticeship are working and going to school simultaneously. So, for the majority of our apprentices, they go to work full-time during the day and they go to class two nights a week. And that has worked out for us over the course of the past two years with the apprenticeships that we've started.

However, there is a movement underway by some companies to say, "I'm still not sure I'm ready to invest initially." So, what we may be exploring moving forward is frontloading the instruction, and what I mean by that is the apprentices will interview for an apprentice position to get into the school and to access the classes and actually begin classes and go fall and spring semester, then interview with the companies in the summer. And so, by doing it that way, you front-loaded one year of classes so, by the time they interview with the company and the company perhaps hires them, they are more productive their first day at the plant than they normally would have been if you had hired them without any instruction yet.

So, there's two ways of doing it and we are probably going to explore that avenue this next year because COVID-19 has obviously impacted some of our manufacturers. They are not in hiring mode like they once were, but we all feel like the economy will bounce back and they're going to be ready for employees at some point. But we think COVID-19 may make an impact on those immediate hiring decisions. So, we think for fall semester we are going to be working with our applicants to go ahead and start school and be in the apprenticeship curriculum and be pursuing this instruction, and then next summer interview for the positions with the companies. And so, they'll have one year of instruction completed by the time they start the OTJ component.

Alexandra: Gotcha, gotcha. No, that makes sense. COVID-19 is definitely flipping everything around for sure. Great. Thank you so much, Melody. Thank you for joining me and talking with us about your program and I really appreciate it.

Melody: You are so welcome. I would like to touch on one other thing, if we have time.

Alexandra: Yeah, of course. Of course.

Melody: One thing I mentioned that seems to be a deterrent for some companies is their concern about making that financial investment, and I just want to let your listeners know that through their own career centers, whatever those are called in their state, they can access programs that will perhaps offset some of the cost. So, there are through the Workforce Innovations and Opportunities Act, that is federal legislation that comes through the U.S. Department of Labor, and it allows for individuals to qualify for funds that can pay for training, and the apprenticeship program obviously falls into that category. Also the WIOA, as it's affectionately called, the Workforce Innovations and Opportunities Act, WIOA has several different pots of funding that is funneled through those career centers. And so, I would encourage any of your listeners that are exploring the apprenticeship model, not only to speak with their colleges, of course, for the related training piece, but also to reach out to their career centers because there may be some grant opportunities available to offset those costs.

Alexandra: Great. Thank you so much.

Melody: Sure. You're welcome.

Amanda: That was Alexandra's interview with Melody Whitten, director of development for 58 Inc. Stay tuned for the next Manufacturing Tomorrow's Workforce. If you haven't yet, like, and subscribe to the podcast on Apple Podcasts, Google Play, or your favorite podcasting app. Also, don't forget to continue the conversation on our Facebook and LinkedIn channels. Until next time, stay safe.

For more, tune into the Manufacturing Tomorrow's Workforce podcast.

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