With many small business owners struggling to find qualified workers, the Trump administration is stepping up to expand apprenticeship programs.
According to the August NFIB Small Business Economic Trends report, 27 percent of small business owners said finding qualified workers was their single most important business problem. To solve the challenge, NFIB’s Employee Training Survey reports that 22 percent of small businesses that hired for their most-skilled position lowered minimum job qualifications, with 42 percent opting to have existing staff help train new employees.
But while the annual out-of-pocket costs for training remain relatively low for many small business owners, 33 percent report finding time to train new and current employees to be a serious or significant challenge.
Enter industry-recognized apprenticeship programs. In June of this year, the Department of Labor issued a proposed rule to advance the development of high-quality, industry-recognized apprenticeship programs. A total $183.8 million will go toward the development and expansion of apprenticeships for educational institutions partnering with companies that provide a funding match component, and an additional $100 million will go toward expanding apprenticeships and closing the skills gap.
Once certified, these entities will create standards for training and curricula for relevant industries.
How Will the Programs Work?
Although the Department of Labor currently administers apprenticeship programs through the Registered Apprenticeship Program, critics say it is unpopular due to burdensome administrative requirements. While registered Apprenticeship Programs will remain, the industry-recognized apprenticeships will serve as an additional resource for small businesses.
“Paperwork and regulations are barriers for small business owners in all capacities,” says Holly Wade, NFIB’s Director of Research and Policy Analysis. “Our members continually tell us federal regulations are a big hardship, and paperwork is always a problem. The accumulation of burdens hurts small businesses.”
By removing government bureaucracy from the equation, accredited entities will have significantly more leeway in setting up their own programs and adapting to changing workforce needs. For example, local community colleges will be able to pair in-class work with paid on-the-job training at local businesses.
When Will the Rule Be Finalized?
Comments were to be submitted, in writing, on or before Aug. 26, 2019, but several members of Congress have requested an extension date of Oct. 25, 2019. Once comments are in, a final rule is expected to be released.
Despite the clear benefits for business, not everyone is happy with the proposed rule. Labor unions, which are concerned that resources might be diverted from their apprenticeship programs, denounced the proposed rule, claiming that expanding oversight of apprenticeships will lower standards and wages.
“About 43 percent of small business owners report that their most skilled position requires some type of certification or credential,” says Wade. “Two-year degrees and apprenticeships are valuable for small businesses that need skilled workers, and those type of programs are very specific. Most small business owners are looking for those with skills in their industry and are willing to help train employees in-house.”