Apprenticeships Aren't Just for Welders Anymore

By Douglas Belkin and Eric Morath Features Dow Jones Newswires

Victor Gutierrez was working his way through community college by balancing two dead-end jobs when he heard about an apprenticeship that would enable him to finish his coursework while earning a paycheck.

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"It fit perfectly," he said.

But Mr. Gutierrez, 18 years old, isn't studying welding or auto mechanics. He is majoring in business management -- and the apprenticeship is in a landmark skyscraper which houses Aon PLC, one of the largest insurers in the world.

In addition to free tuition and training, the Chicago resident earns $38,500 a year. He is among a small but growing number of young people apprenticing in fields that require a suit and tie instead of coveralls and gloves.

President Donald Trump is expected to announce Wednesday a plan to expand apprenticeship programs into nontraditional industries in an effort to fill a record level of open jobs and draw back millions of Americans who have left the workforce.

To help fund the apprenticeship program, the White House aims to use the money from fees paid by companies to bring in foreign workers, according to several people familiar with the plan. The plan echoes Mr. Trump's "America First" campaign. But despite the rhetorical appeal of tying the two programs together, it is unclear how significant the reallocation would be given that some of that money is already directed to job-training programs and given that the visa program's fees are set in law.

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The government has promoted apprenticeships since the Franklin Roosevelt administration. The Obama administration spent $90 million last year intended to expand apprenticeships to nontraditional fields, including restaurants and hotels.

Firms ranging from J.P. Morgan Chase & Co. to Northrop Grumman Corp. to International Business Machines Corp. have embraced apprenticeship-style programs.

The move toward white-collar apprenticeships comes as the number of U.S. job openings hit a record 6.04 million in April and the cost of a college degree has scared off many potential students.

That tightening of the labor market has prompted corporations to increase the amount of money they spend on training. That, in part, is fueling the expansion in apprenticeships, particularly for middle skills jobs which don't require a college degree.

"American companies want to hire," said Labor Secretary Alexander Acosta. "The issue is a mismatch between available jobs and prospective employees' job skills. This skills gap is a particular challenge in some of the fastest-growing sectors of the economy -- health care and information technology."

Traditionally, apprenticeships in the U.S. have been rooted in the skilled trades. More than two-thirds of federally registered apprentice programs are in construction and manufacturing, according to the Labor Department. And many of those are associated with unions, which provide the training to future members. Only 13 of more than 8,000 federal programs are in the finance and insurance field.

The administration sees the model working in fields as diverse as retail, paralegal work and policing.

Unlike most internships, apprenticeships involve training toward a specific job and a promise to get one at the end.

In Germany, roughly half of high-school graduates opt for apprenticeships rather than college degrees. One draw: almost certain employment. In the U.S., 87% of apprentices are employed after completing their training, according to the Labor Department.

In America, however, many high-school students and their parents are reluctant to embrace a career as plumber or welder over a college degree.

Wells Fargo & Co. is rolling out an apprenticeship program this summer, starting with 50 openings for military veterans. Participants' GI Bill benefits help cover the cost of the training and stipend, said Lance LaVergne, a senior vice president of talent acquisition who is helping to launch the program.

"We kind of have our own internal university here," Mr. LaVergne said.

The average starting salary of apprentices is about $60,000 a year, considerably more than most college graduates, Labor Secretary Acosta said. Mr. LaVergne said a majority of the apprentices at Wells Fargo would earn that much depending on the job they trained for. Among those on offer: branch manager, collections manager and financial crimes specialist.

At Aon, which funds the Labor Department certified program itself, Mr. Gutierrez counts himself lucky to be in the first class of apprentices. The program was championed by Bridget Gainer, vice president of global public affairs for Aon, who was tasked with helping to expand the company's apprentice program in the United Kingdom.

That program, which has been around for a decade, has about 100 apprentices at a time. Those who go through the program are more engaged in their work and stay longer at their jobs, she said.

"I thought, 'Why not here?'" she said.

A U.S. Commerce Department report found apprenticeships cost companies between $25,000 and $250,000 a year but the return on the investment is strong for employers because graduates of apprenticeship programs have less turnover.

In Chicago, the Aon apprentices will take jobs that traditionally have been filled by employees with a four-year degree, who are often eager to move on to new positions within the company, says Aon. In addition to a salary, the company offers apprentices benefits, support services and tuition -- which runs about $7,000 a year at Harold Washington Community College, the nearby school from which the students are all drawn. Total cost per apprentice is around $50,000.

"So far they're killing it," Ms. Gainer said, praising the students for their dedication to the two-year program.

Mr. Gutierrez, who works in downtown Chicago, said he doesn't know anyone who has ever worked in any of the skyscrapers that define the city's skyline.

"I had no clue what went on in any of these," he said. "People are lot friendlier than I imagined."

--Laura Meckler contributed to this article.

Write to Doug Belkin at doug.belkin@wsj.com and Eric Morath at eric.morath@wsj.com

(END) Dow Jones Newswires

June 14, 2017 07:04 ET (11:04 GMT)