Posted at 6:15 PM
At today’s White House Summit on Apprenticeship, we were thrilled that Department of Commerce Secretary Penny Pritzker announced that the Joyce Foundation, JPMorgan Chase, and the Annie E. Casey Foundation will support a $450,000 effort to document the return on investment of registered apprentices for U.S. employers. Led by economists at Case Western Reserve University and the Department of Commerce, this study will offer valuable new data that can help interested employers understand how investing in apprenticeship can boost their bottom line and promote more widely shared prosperity.
At the Joyce Foundation and JPMorgan Chase, we believe this effort has the potential to shed light on one possible solution to a challenge that is plaguing too many communities. Many young Americans are unable to find well-paying jobs while employers are reporting that they are not able to find the skilled workers they need to grow and compete.
Apprenticeship can be part of the solution. The training model combines classroom-based learning with paid on-the-job training in high-growth industries. Studies have already quantified the long-term financial benefits of this approach to U.S. workers. Those who complete an apprenticeship earn an average starting wage of $50,000 and go on to earn an average of $300,000 more over a lifetime than comparable workers.
This new study will be the first to quantify the benefit of apprenticeship to employers. From surveys, we already know some of the ways companies benefit from investing in apprenticeships. U.S. employers who sponsor apprentices report that they are able to build a pipeline of skilled workers, boost retention, reduce recruiting costs and improve productivity. That’s why nearly nine in ten (87 percent) of employers who sponsor registered apprentices would strongly recommend apprenticeships to other companies.
We also know that employers in other countries reap a reward from their investment in training apprentices. In Canada, employers receive a benefit of $1.47 for every $1 spent on apprenticeship training. In Switzerland, employers spend around $3.4 billion annually training apprentices but earn $3.7 billion each year from apprentices’ work during training. They also save on recruiting and employee relocation costs.
The Joyce Foundation invests in solutions to pressing economic and social challenges that influence the quality of our lives, the vitality of our communities, and the fairness of our society. This effort is supported through Joyce’s Employment Program, which partners with employers to address workforce challenges while helping underemployed workers find meaningful work. At JPMorgan Chase, this project is part of our New Skills at Work initiative, a $250 million, five-year effort aimed at closing the skills gap.
Our new partnership with Annie E. Casey Foundation, Case Western Reserve University and the Department of Commerce will document U.S. employers’ return on investment for training apprentices. By providing employers with valuable new information on this under-used pathway to middle-class jobs, we believe that we can create new economic opportunities for young Americans, help businesses develop the training programs they need to close the skills gap and strengthen local economies.