Last year, Governor Phil Murphy released The State of Innovation: Building a Stronger and Fairer Economy in New Jersey. Among other important recommendations, the report called for increasing apprenticeship programs based on German, Austrian and Swiss models.
The Governor, the former ambassador to Germany, presumably had a first-hand view on how apprenticeship could be a vital tool in helping employers narrow the skills gap. As I have posted before, nearly 60 percent of Employers Association of New Jersey (EANJ) members reported in a survey that their major recruiting challenge is lack of skills in the applicant pool. Nearly half reported lack of relevant job experience as an obstacle.
The Office of Apprenticeships has now been established within the state’s Department of Labor and Workforce Development to serve as a single contact for both employers and potential apprentices. The office is charged with developing programs financed with $4.5 million and assisting employers to start or expand a U.S. Department of Labor registered apprenticeships in multi-industry sectors.
In the U.S., fewer than 5 percent of young people train as apprentices, the overwhelming majority in the construction trades. In Germany, the number is closer to 60 percent—in fields as diverse as advanced manufacturing, IT, banking, and hospitality. However, through experience we are finding why there are barriers to simply transplanting the European model to New Jersey. It starts with cost. Each German company has a different way of calculating the bill, but the figures range from $25,000 per apprentice to more than $80,000. It’s likely to be more expensive where firms will have to build programs from scratch, pay school tuition (in Germany, the state pays), and in many cases provide funding to local high schools and community colleges to transform them into effective training partners.
In Germany, most employers are required to participate in an apprenticeship program or pay into an apprenticeship fund. In the U.S., employer participation is voluntary and based on business needs. However, A-3666 passed by the N.J. Legislature in December is now on Governor Murphy’s desk for his anticipated signature. The bill requires every contract subject to State prevailing wage requirements to require each worker employed under the contract to be enrolled in, or have completed, a registered apprenticeship, unless the contractor or subcontractor certifies that the worker is paid not less than the journey-worker wage rate.
Under the bill, a "registered apprenticeship program" is an apprenticeship program which is registered with and approved by the U.S. Department of Labor and which provides each trainee with combined classroom and on-the-job training under the direct and close supervision of a highly skilled worker in an occupation recognized as an apprenticed trade and meets the program performance standards of enrollment and graduation under relevant federal regulations.
Many of the state’s 10,000-plus registered contractors do not currently participate in a USDOL-registered program, and it appears that they would not be able to register/renew their public works contractor registration certificates. However, there is nothing in A-3666 that suggests currently registered contractors will be precluded from continuing to perform prevailing wage work while their current registration is in effect. But my best guess is that think once the bill is signed, regulations will soon clarify that contractors will not be able to obtain or renew their registration unless they are able to certify that they participate in an apprenticeship program.
Contractors that are not currently participating in an approved apprenticeship program but wish to remain eligible for prevailing wage work have several options. First, a contractor could sign with a building trades union. Most of the building trades unions operating in New Jersey maintain USDOL-approved apprenticeship programs. There are, of course, implications beyond apprenticeship that accompany union relationships.
Second, contractors could team up with an association/industry group that maintains USDOL-registered apprenticeship programs. Existing groups like the Associated Builders & Contractors are reported to be awaiting final approval on an apprentice program covering multiple classifications, and new groups with similar plans may be working with the USDOL and may have applied for start-up funds under the state program.
Third, contractors can create their own USDOL-approved apprenticeship program. While maintaining an apprenticeship program is frequently the option offering the greatest flexibility for an individual contractor, as noted above, there may be administrative and/or cost barriers to surmount.
Last year, the USDOL registered EANJ to launch the first private-sector Human Resources Apprenticeship program in the country. Considering that New Jersey is a small-business state, we are attempting to see whether a multi-employer, association apprenticeship model is can succeed in the state. 75 percent of respondents to our survey said they have no talent management plan in place and none considered an apprenticeship program to meet their needs. In other words, the employers that can benefit the most from apprenticeship are the least likely to adopt it. We are trying to crack that code. Under our association-model, EANJ is the "employer" as participating employers act as mentors and customize the on-the-job training experience to meet their business needs. Up to 150 hours of in-class instruction and 2,000 on-the-job hours are required, as apprentices, who are paid, rotate between employers and projects. Caldwell University and EANJ provide the in-class instruction not only seamlessly but cost-effectively.