The Tech Labor Shortage Is Only Set to Grow. These Companies Think Apprenticeships Are the Answer

White collar industries are just starting to embrace the apprenticeship — and some businesses say it’s the future of entry-level employment.

Apprenticeships have long been associated with trade industries, like manufacturing and construction. Now they’re growing in popularity in the tech field, where recruiters are struggling to fill open roles. β€œIn the past year, there’s been a lot more momentum,” as companies face labor shortages in key technology jobs, and apprenticeships offer a means for cultivating in-house or entry-level talent, says Jennifer Carlson, co-founder and executive director of Apprenti, a Seattle-based business that helps companies roll out their own apprenticeship programs.

Apprenticeships have a different structure than internships, and they can reach a different audience, too. For an apprentice’s term — typically a year — they receive paid on-the-job training, usually working with a mentor who helps them through the ins and outs of their position. At the end of their term, they’re brought on into a full-time, entry-level position. “The company gets to hire folks that they already know, and the investment is less than the cost of going out and finding new people,” Carlson says. The majority of apprentices are early in their career, and may or may not hold a college degree; a smaller percentage, according to Apprenti’s data, are career changers that are looking to become re-skilled.

Apprenti launched in 2015 and its first cohort of apprentices graduated into full-time positions in 2016. Today, it works with 114 companies — nearly double the number of clients it had 12 months prior. The relationship between Apprenti and its client companies varies: Sometimes it fully manages the apprenticeship programs at a business, while other times, it assists with specific components of an otherwise company-run apprenticeship, like recruitment and onboarding.

There’s growing competition in the space. Multiverse, a London-based startup founded by Euan Blair — the son of former UK Prime Minister Tony Blair — in 2016, made its US launch in January 2021. Today, it works with 15 companies in the US, including ClassPass and Verizon , and over 300 globally. Multiverse’s model of apprenticeship is designed to make it an easy lift for businesses. The company oversees every component of the apprenticeship programs it rolls out for its clients, even providing employees with a coach — a Multiverse employee — who ensures they stay on track with their training. It has raised $194 million to date.

While Multiverse mostly works with large companies, Blair says that the apprenticeship model can be successful in both mid-size and small businesses, too. “One of the reasons we target Fortune 500 companies is that it’s good social proof,” he says. “Where Google and Meta have gone, others will follow.”

OneSignal, the San Mateo, California-based customer communications company, brought on its first apprentices in 2021. “Because we’re a startup, we have a ‘let’s build it ourselves’ attitude,” says Brett Thomas, head of infrastructure engineering, who oversees the company’s in-house apprenticeship program and spearheaded the program. “It helps that we have a culture of not overworking people to begin with, so mentors have been able to take the time they need to train the apprentices.” Since launching its apprenticeship program, OneSignal has graduated two apprentices into full-time positions. It is currently training three apprentices, and has 115 full-time employees.

To source its apprentices, OneSignal looks toward bootcamp programs like those offered by the women-focused engineering school Hackbright Academy. These types of programs typically give students of all different backgrounds the opportunity to receive training in technical skills such as coding and UX design.

To close the tech-labor gap, however, companies may need to look beyond these self-selecting pools of candidates, Blair says. Multiverse, for instance, has a diversified outreach strategy: The company works with charter schools, colleges, and nonprofits, in addition to posting on social media channels like TikTok.

Once candidates apply to become apprentices, the company assesses their existing skills to determine the role they’re best suited for. “Most people aren’t always clear on what they want to do,” Blair says. “But we can see that someone who has a reasonable numeracy score on our assessment may be suited for a career in data, while someone with great interpersonal skills may do well in sales.”

Having a third-party administrator like Multiverse or Apprenti conduct a skills assessment also helps businesses avoid unconscious bias in the onboarding process — and as a result, helps to diversify the workforce. Apprenti’s apprenticeship candidates take an online skills assessment that asks basic math, logic, and critical thinking questions. Through an interview phase, Apprenti’s recruiters gain a better sense of what they bring to the table in terms of experience.

This, Carlson says, is where bias can traditionally rule out candidates who might be well-suited to apprenticeship positions. “If a Burger King manager applied for a position at a tech company, the company might ask why,” she says. “But then we show all the skill sets that person has, like supply chain, project, and people management. Then the company says, ‘Oh, this is a great candidate.’ It’s a huge cultural change for companies.” Instead of passing along traditional resumes to its clients, Apprenti sends companies the candidates’ initials, their assessment score, and a list of their top skills — not their previous job titles.

Blair believes that companies are willing to pay for this kind of service, and not just in the short-term, as industries across the board continue to experience a tight labor market. Prices for Multiverse and Apprenti’s services vary depending on the needs of each client; Carlson shared that Apprenti’s fees are a maximum of $3,500 per apprentice, and companies are responsible for paying each apprentice’s wage. Multiverse declined to share its price range.

“Businesses are always going to be willing to pay for something that’s useful, and we’re solving a pain point,” he says. The cost of onboarding talent, apprenticeships aside, is already high, Blair points out, and not only do apprenticeships make employees more loyal to their company — 85 percent of Multiverse apprentices stay with their company once graduating to an entry-level position — It also fills a gap in the tech job market.

Since expanding Multiverse into the US, Blair has found a market for his business that’s even more salient than what he first observed in the UK Student debt in the UK totals about $185 billion, while in the US, that number is around $1.75 trillion. The return on the college degree in US has diminished, and many young people are looking for the alternative — and employers are taking notice. “The thing that surprised me the most about the US is how little pushback there’s been,” Blair says. “We’ve had to do less convincing than we thought we might have to.”

At Apprenti, growth has also been swift. It’s in the early stages of raising a $25 million funding round, which the company says will support its goal of placing 5,000 apprentices per year over the next five years.

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