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Career education is a vital pipeline to high demand jobs in the workforce. Students from all walks of life benefit from the opportunity to pursue their career education goals and find new employment opportunities. Join Dr. Jason Altmire, President and CEO of Career Education Colleges and Universities (CECU), as he discusses the issues and innovations affecting postsecondary career education. Twice monthly, he and his guests discuss politics, business, and current events impacting education and public policy.
Jason Altmire (00:04):
Welcome to another edition of Career Education Report. I'm Jason Altmire. We spend a lot of time on these podcasts talking about the skills gap and workforce demand. And today, we're going to really focus on a narrow issue related to solving that problem in a big way and that is apprenticeships. And we have one of, if not the nation's foremost experts on how to use apprenticeships to solve the skills gap, and that is Ryan Craig. He is Managing Director at Achieve Partners. He formerly was Managing Director at University Ventures. He's written books, most recently, Apprentice Nation: How the "Earn and Learn" Alternative to Higher Education Will Create a Stronger and Fairer America. That book came out in 2023. He is the co-founder of Apprenticeships for America, which is a national nonprofit dedicated to scaling apprenticeships across the US, and he is a senior fellow at the Progressive Policy Institute. Ryan, thank you for being with us.
Ryan Craig (01:06):
Jason, good to see you.
Jason Altmire (01:08):
Tell us a little bit about the book Apprentice Nation. What was the motivation behind writing it and what do you cover?
Ryan Craig (01:15):
For those of you who follow my work, I wrote a book about nine years ago called College Disrupted about the coming unbundling of the college bundle, and then followed that up four years later with A New U: Faster and Cheaper Alternatives to College, which is kind of a guided tour of this new last mile training boot camp landscape. But it became clear to me that the most effective model that we were seeing in our work at Achieve Partners, as well at Apprenticeships for America, was apprenticeships because apprenticeships, they're jobs. They're not just training programs. It's not just train and pray. These are full-time jobs that pay a living wage from day one with built-in, on-the-job, and formal classroom training, as well as pay increases. And they do wonders for both the employer, has very strong ROI, and obviously for the job seeker, student, or candidate.
(02:15):
The ROI is virtually infinite because they're not paying tuition. The question that the book asks is why haven't apprenticeships spanned across the economy in the US the way they have in other developed countries? And it provides a roadmap for doing that.
Jason Altmire (02:30):
Yeah, I think one of the things you talk about, before getting into the international comparisons, is you talk about the origins of the student debt crisis and partially the admission scandals that we've seen in recent years. Talk about what the connection is there.
Ryan Craig (02:45):
Yeah. Well, I think in general, the point I try to make is that colleges are relatively closed off from the economy, that the programs that traditional colleges offer are fairly indistinguishable from the programs they offered a generation or two ago, the departmental structure. Who's teaching it? Faculty members who have terminal or doctoral degrees who've probably never worked outside higher education, lack of accountability, in part, due to boards of trustees who aren't focused on student outcomes either in terms of completion or what students are actually learning, or employment or economic outcomes for them, and accreditors who don't hold institutions accountable for those things either. And so that's allowed cost and debt to mushroom.
(03:37):
And at the same time, what we've seen is a dramatic change in the economy to the point that now, a report came out just a couple of weeks ago, 52% of new and recent college graduates are underemployed. And so what's happening is that employers are increasingly looking for skill sets, increasingly digital skills that colleges aren't providing or aren't training on. And it's not to say that the sort of core cognitive skills problem-solving communication skills aren't valuable. It's just that that's kind of penny ante now. Employers are also looking for distinct digital skills that they're not finding. And they're also now looking for experience that a college graduate who has never worked is going to have a very hard time fulfilling. So you have this crisis of affordability and employability at the same time. And so apprenticeships are needed more now than ever, especially because the skills that employers can't find are actually harder to learn in a classroom than they are by doing.
Jason Altmire (04:45):
Do you feel like guidance counselors in high school, and just observers of the higher education world, have a better understanding that the four-year degree is not necessarily the best path for everybody and there really is a strong role, both for the student, but for the country, in putting forward alternatives to the four-year degree?
Ryan Craig (05:07):
I think the only people who are aware of that are those of us who spent our careers focused on it. I would say the general public is not aware. We're 60 years now into this college-for all-experiment, where the US is really the only developed economy in the world where the only pathway to economic opportunity and socioeconomic mobility lies through four years of college. Not to say that you can't progress with a two-year degree or some sort of industry-recognized certification, but I think the sort of broad expanse of the public, their view is that that is the pathway and that's the pathway they want for their child. That's the socially acceptable pathway. But unfortunately, as I said, the economy has changed and colleges have not. The best way to change public awareness and the public attitude is just to build the infrastructure that we're lacking. Other countries have built out a much more developed earn and learn infrastructure for career launch. We have not. We are relying on one pathway, which is a tuition-based, debt-based, four-year pathway to economic opportunity and we really need to have our eggs in other baskets.
Jason Altmire (06:21):
I think that the most eye-opening point of your book was you do get into an international comparison, look at what other countries are doing, the value that they place on apprenticeships. And you go into great detail, in your book, that the United States is far behind other countries. You say we are a distant last compared to other countries. Why is that?
Ryan Craig (06:44):
Yeah. Well, first, just some numbers. We have about half a million apprentices, 500,000. That may sound like a lot, but it's only 0.3% of the workforce and 70% of those apprentices are in the building trades. Now, your listeners won't be surprised to learn that the sort of apprenticeship giants of Central Europe, Germany, Switzerland, Austria, they do 10 to 15 times better than we do. So instead of 0.3% of the workforce, it's 3%-4% of the workforce. But you probably will be surprised to learn that the UK, France, Canada, Australia, countries that, a generation ago, looked a lot like the US in terms of having a very small apprenticeship sector almost all in the building trades, today those countries are doing eight times better than we are per capita. So instead of 0.3% of the workforce, it's 2% to 3% of the workforce in those countries. And it's very common in those countries to launch a career, whether you have college or not, in financial services, healthcare, tech through an apprenticeship program. But in the US, it's quite uncommon.
Jason Altmire (07:49):
And what is the impetus behind it in countries that have successfully grown their apprenticeships? Is it the trade unions, is it the employers themselves, or is it the government?
Ryan Craig (08:00):
The dirty little secret of apprenticeships is that where apprenticeships flourish, whether in Germany or in the US building trades, they're not flourishing because in those countries, employers are more benevolent or more farsighted. They're flourishing because in those countries, there are intermediaries that are doing the work of setting up and running these apprenticeship programs for employers, and they're either required to do it or they're incentivized to do it. And I laugh because it seems like every month I read a story about some state junket going over to Germany, drinking the Riesling, eating the Schnitzel, and looking at their apprenticeship program and coming back to say, "Wow, we should really do that." And yeah, we should. But we can't because in Germany, it's these massive powerful, well-funded chambers of commerce that are actually required by law to run apprenticeship programs for the benefit of their members and employers. We don't have anything like that in this country. We have Chamber of Commerce in my town, but they keep the town green clean. That's what they do. So they're not going to run hundreds of apprenticeship programs.
(09:01):
A better example to follow is the UK and Australia, which didn't have that sort of Chamber of Commerce infrastructure that recognize the centrality of intermediaries to do all of the work of running apprenticeship programs. Let me just say a moment on this. There are about 10 things that an employer is not doing today that they would need to do if they wanted to run an apprenticeship program. So an intermediary is an organization that does many or most of those, sometimes all of them, and really lessens the burden for employers. The hardest thing for an employer to do, of course, is to hire and pay a worker who's not going to be productive for a period of time. That's kind of antithetical to the direction of travel for employers only wanting to pay for productive labor. And that's been the direction we've been traveling so it's a heavy lift to ask an employer to launch an apprenticeship program and hire apprentices. That's not something we should expect and it's not how it works in other countries.
(09:56):
In other countries, as I said, it's intermediaries who are doing that work and, critically, intermediaries who are doing the work of selling and marketing apprenticeship programs to employers. So because the UK began providing formula funding for apprenticeships, today you have this robust ecosystem of 1,200 intermediaries knocking on employers doors. So in the UK, you're not going to find a larger, mid-sized company that hasn't been approached by half a dozen apprenticeship service providers seeking to set up and run an apprenticeship program for them. This doesn't happen in the US. In the US, Apprenticeships for America, the organization I'm part of and that actually just had a very successful first summit last week in Washington, DC with a 100-150 attendees, there are about 200 intermediaries in the US today operating outside the building trades, but they're small. And based on the size of our workforce, if we were doing what the UK or Australia was doing, we should have over 4,000 apprenticeship intermediaries.
(10:56):
One reason for that, of course, is the funding. We spend over $500 billion a year, the federal and state taxpayer dollars, on accredited colleges and universities. Apprenticeships receive less than $300 million so it's well over a 1000:1 ratio. And if you look at the public support that a college student receives relative to an apprentice, for every dollar of public support the apprentice receives, the college student receives $50. So I don't know whether the right ratio is 1:1, 2:1, or 10:1, but I'm pretty sure it's not 50:1 or 1000:1. And I can tell you that every other developed country that's ahead of us on apprenticeship is an order of magnitude or two orders of magnitude higher than we are on earn and learn funding, as opposed to tuition-based institutions.
(11:44):
So that is the major problem. There are other issues as well in terms of how we've been funding it. Funding has increased. The Department of Labor has been increasing the grants that they provide. But as you might expect, a government isn't always good at picking winners and they haven't recognized the difference between intermediaries that actually create apprenticeship programs and higher apprentices and intermediaries that don't. So as a result, almost all of this funding has gone to what I call low intervention intermediaries like community colleges that, for example, will take $10 million from the Department of Labor, develop the curriculum for a hypothetical apprenticeship program, register that program with the Department of Labor, and then sit on their hands waiting for employers to come along looking to use that curriculum. But of course, that's not how apprenticeships work. There's not an employer that would start an apprenticeship program if only they could find the RTI curriculum developed by a community college.
(12:36):
There are 10 things, as I said, that an employer needs to do and that's kind of the least of it. So I looked in my book. I have a directory in the back of all the apprenticeship programs outside the building trades in the US and I started by looking at the Department of Labor RAPIDS Database, and there are about 6,000 listed in RAPIDS. But of those 6,000, only 200 are real, meaning 5,800 are what I call paper apprenticeship programs, apprenticeship programs that only exist on paper because it's the community college that's developed the curriculum, registered the program. And if you go to the website, it's the community college marketing the program to employers, but no employer has actually adopted it.
(13:14):
So part of the problem here is that we've been thinking about apprenticeship in the wrong way. Governments have been thinking about apprenticeship as part of the same bucket as other workforce development and training programs, but it's not. Apprenticeships are jobs. And so the key is to incentivize those employers and, specifically, intermediaries most likely to create apprentice jobs and hire apprentices, and we haven't been doing that.
Jason Altmire (13:43):
You, in the book, get into the topic of fairness and how that would improve. The book says, "An America more focused on apprenticeship would be fairer." What do you mean by that?
Ryan Craig (13:55):
An apprenticeship is truly the pathway to economic opportunity that provides the most level playing field because it doesn't require a student to pay tuition out of pocket or take on debt. It doesn't require them, even in a free college environment. And I live in California where community college is basically free, but students still need to be able to afford to live, to pay for rent and food. Well, apprenticeships solve that because apprenticeships are jobs that pay a living wage from day one. And not only that, but they're addressing the skills gaps and experience gaps that traditional higher education is having a real hard time with.
(14:36):
I make the argument in the book that even if we said apprenticeships would only be available to college graduates, meaning it wouldn't be an alternative, it would be an addendum, it would help amplify and increase the success of college graduates. Due to what we're seeing on the skills gap and the experience gap and AI, which is likely to turn that experience gap into a chasm for college graduates, it would be well worth making the investment in apprenticeships that other countries have done that we have not.
Jason Altmire (15:06):
You've taken an innovative approach to helping solve this problem through your company, Achieve Partners. Talk about what they do.
Ryan Craig (15:15):
Yeah. So Achieve is a investment firm that's sort of situated at the intersection of education and employment. And in our workforce fund, what we do is we look for sectors of the economy where there are massive talent gaps, primarily in tech and in healthcare, but other sectors as well, and then we will seek to acquire a company that's operating in that space. Typically, a business services company, could be a staffing company, could be some kind of solutions business. And we've done this now in software development, data analytics, healthcare, IT, cybersecurity, Salesforce, Workday, etc.
(15:51):
So we buy these companies and then what we do is we build large apprenticeship programs so they become engines of providing new talent for their talent-starved sectors, and that does two things. One is it creates a whole new revenue stream for our business by producing and effectively selling talent into the ecosystem. And second, it draws a lot of attention to our companies and so they can accelerate growth in that way too. And of course, there's a huge benefit for the job seekers who now have a pathway to careers in a sector where there were no pathways before.
(16:25):
So for example, we bought a Workday partner. Workday, of course, is the HR/IS system that's been adopted by half of the Fortune 500. It is now dominating that space. Up until last year when we launched our apprenticeship program, there was no way to launch a career in Workday without relevant Workday skills and experience. In fact, there were as many job postings last year for Workday Pro certified consultants as there have been trained, certified Workday Pro consultants. So there's a huge need for this and we're taking advantage of it and having a huge impact also.
Jason Altmire (17:06):
And I think to the point of apprenticeships, one of the things I found most interesting is you have the Achieve Workforce Fund, which is related to the Apprenticeship Pathways, trying to find ways to increase that. And one paragraph in there that I read that I thought was very interesting, I'm going to ask your opinion of it and I'm just going to read what you have under the goal of Achieve Workforce Fund. "We believe that candidates aiming at good jobs and sectors where there's clear talent gap should not be asked to take on any financial risk in order to gain the requisite skills and experience." And then you say, "Any education or training provider that asks them to pay tuition either has a bad business model or an unimaginative business one because there's a very willing payer for that upskilling, the end employer who can't find the talent." That's an interesting statement so maybe explain a little bit more about that.
Ryan Craig (18:05):
Some of your members would probably dispute that, but I would say if there's truly a talent gap, then you do have hundreds or thousands of employers willing to pay for talent. And so the model that we've kind of pioneered, which I talk about in the book, called Hire-Train-Deploy is one where instead of charging tuition and putting up a barrier, hire them. Hire them from day one. And what you find is the level of talent you get in the door is so much, so much higher obviously. I mean, I'll tell you. When one of our portfolio companies launches a new apprenticeship cohort, we get hundreds of applicants for every seat in that cohort so we can be extremely selective. We're selective on problem-solving skills, communication skills. We're selective on their level of interest and their readiness to learn. We're selective on diversity as well. Most of our cohorts are majority an underrepresented minority because our portfolio companies can help their clients diversify their typically non-diverse tech workforces.
(19:05):
And our companies hear from clients that they've never seen this level of talent in the space before because candidates are receiving a paid pathway and a guaranteed job. They're hired from day one. And so it takes the financial risk, takes the employment risk out of it. What's different, of course, is it's harder to execute. Obviously, being a accredited higher education institution is no small task, but this requires a whole new dimension, an employer-facing dimension that institutions will have a career services function. But this is really more like a staffing function, a sales and marketing effort if you're building out that employer-facing function. But I know it's possible. I mean, I'll tell you.
(19:50):
Last month, I got a call from a university in Texas, a traditional university, telling me that they'd read the book and they were launching a Hire-Train-Deploy model in partnership with the local aviation business. I know that CECU members have great connections with employers in their sectors and that, certainly, this model requires a higher level of working capital. Our companies are investing up to $30,000 per candidate before we begin to see the benefit, but I'll tell you. It works and it more than pays for itself if you're truly operating in a sector where there's a talent gap.
Jason Altmire (20:29):
Talk more about how that process would work. So let's say you're a career school focusing on allied health or truck driving or cybersecurity, one of these careers where there's huge workforce demand, and there is a gap in skills available. So what would be the role of the career school, in that case, through a model where they're not charging tuition?
Ryan Craig (20:53):
Well, the career school could do one of two things. It could actually hire these candidates as their own employees from day one, or it could allow them to go through the program for free and then promise to hire them if they complete the program or if they achieve a certain level of achievement in the program. But at the end of the day, the key is to have built out a sales and marketing infrastructure so they're essentially pre-selling cohorts of candidates to employer partners. And what that might mean is that the employers or clients are paying a placement fee or, and this is the way most of our companies work, our company remains the employer of record for up to two years and they're staffing them out to employers so that the employer has the opportunity to try before they buy. So you might be paying that apprentice $25 an hour, but you're probably billing them out at $50 or $60 an hour for up to two years and that more than covers the cost of your investment in that candidate. So that's Hire-Train-Deploy.
Jason Altmire (21:56):
We could go on for a long time about this. This has been very fascinating. If somebody wanted to learn more about Achieve Partners in particular, how would they do that?
Ryan Craig (22:05):
So yeah, achievepartners.com. And I have a newsletter that goes out every other week to a big group in higher ed. It's called The Gap Letter, gapletter.com.
Jason Altmire (22:15):
And the book, as I mentioned, is Apprentice Nation: How the "Earn and Learn" Alternative to Higher Education will create a Stronger and Fairer America. Ryan Craig, thank you for being with us.
Ryan Craig (22:27):
Jason, great to see you. Thanks.
Jason Altmire (22:33):
Thanks for joining me for this episode of the Career Education Report. Subscribe and rate us on Apple Podcasts, Google Play, Spotify, or wherever you listen to podcasts. For more information, visit our website at career.org and follow us on Twitter at @CECUED. That's @CECUED. Thank you for listening.