You can always tell a system is broken when you change the inputs and the outcomes don’t improve. Any software engineer will tell you that.
Using this metric, it’s clear the United States’ antiquated higher education system is truly broken. Overpriced and underperforming, the system is failing on two key fronts: addressing racial inequalities and closing our country’s growing tech skills gaps.
For all the changes made to the system to welcome people of color into the classroom, the outcomes in terms of wealth, equity distribution and representation are worse than ever.
On average, Black college graduates owe $25,000 more in student debt than their white peers. Worse still, four years after throwing their caps in the air, 48% of Black graduates owe an average of 12.5% more than they borrowed in the first place.
A labor market built on degree requirements has little hope of correcting course.
While colleges and universities do as good a job as they’ve ever done at preparing students with the cognitive and critical thinking skills they’ll need to be successful in the long run, the college system just isn’t providing the right training for jobs in 2021.
Looking past the college experience, the unemployment rate for Black Americans stands at nearly 10%, compared with 5.5% for white Americans, while the typical Black American family has eight times less wealth than a white family. This is coupled with the fact that Black people make up just 4.1% of Russell 3000 board members -- compared to 13.4% of the population.
This isn’t just a matter of grave injustice. The racial wealth gap costs the U.S. economy $1 trillion to $1.5 trillion in GDP output each year. There is a financial and moral imperative to do something about it.
Then there’s the skills gaps: For all the belated changes made to academic programs and curricula, and while colleges and universities do as good a job as they’ve ever done at preparing students with the cognitive and critical thinking skills they’ll need to be successful in the long run, the college system just isn’t providing the right training for jobs in 2021. Ten years ago, 56% of CEOs were “extremely” or “somewhat” concerned by the lack of talent for digital roles. By 2019, this had jumped to 79%. This is why well over 50% of new and recent graduates are underemployed in their first jobs out of college (two-thirds of whom will be underemployed five years later, and half a decade later).
There must be a better way. A way that empowers young people to achieve in-demand skills while avoiding the decades-long burden of student loans. A way that doesn’t discriminate based on socioeconomic background while exposing talent-hungry employers to a new pool of qualified, driven individuals.
In the explosion of edtech businesses with new approaches, we are in danger of overlooking an established model that can be adapted to solve these challenges. That model is apprenticeships.
The apprenticeship movement
There’s a lingering perception in America that apprenticeships are the province of construction and building trades, or even medieval guilds like smithing and glass-blowing. Well, not anymore. While we’ve been focused on edtech, or despairing over the widening skills gap, apprenticeships have been rebooted. Modern, tech-driven apprenticeships are emerging as a faster, cheaper and more impactful alternative to higher education.
In Europe, tech companies — and nontech companies increasingly hiring entry-level workers with discrete tech skills — are already leveraging apprenticeships to provide a direct route into the labor market for diverse talent. From software engineers to data analysts, the apprentice of the 21st century is as likely to wield a keyboard as a wrench.
Fully employed from day one, apprentices earn a wage while they learn on a program that is entirely free to the individual. Their training is delivered alongside their role, with this applied learning approach ensuring relevant skills are tested and embedded right away.
Part of the challenge presented by the existing system is that college provides a single shot of learning at the start of a career, with a focus on knowledge rather than skills. Instead of time-consuming traditional education models, we should be encouraging companies to focus on training individuals for highly skilled jobs and adapting training as roles shift through a lifelong learning journey.
Against a college system churning out graduates armed with knowledge of limited applicability in the workplace, apprentices have real-work experience and transferable skill sets in the tech and digital spaces.
As we write this, tech apprenticeships represent less than 1% of American apprenticeships , while 78% of apprentices are white. But change is in the air. In recent weeks, the Biden administration has gone out of its way to highlight tech as a growth area for apprenticeships.
The president also announced his commitment to raising apprenticeship standards, starting with casting off industry-recognized apprenticeship programs lacking in quality and training rigor.
These aren’t just words, either. The apprenticeship reboot will be powered by a new National Apprenticeship Act . This proposed legislation commits $3 billion over the next five years to expanding registered apprenticeship programs across a range of industries. If it’s done right, tech will be front and center.
The benefit to businesses
All this is welcome good news for businesses desperate to close skills gaps. As roles evolve at an ever-faster pace, it’s becoming more and more difficult to know what a college degree actually says about an individual’s ability. Yes, they went to a “good” school. But when half of Americans say their degree is irrelevant to their current role, how does prestige translate to jobs, let alone ability to perform in the workplace?
Increasingly operating in the dark, tech businesses and nontech managers hiring for tech roles are competing with each other to poach experienced talent into senior roles. It’s continuing to fish in a very limited, homogeneous pool and an expensive short-term solution.
Professional apprenticeships allow business leaders to be more strategic and proactive in their hiring practices. They can mold apprentices to the roles they actually need to fill while focusing on their organization’s specific requirements. It beats relying on uniform, outdated education models.
Better still, by training apprentices from the start of their career, companies inspire loyalty and eliminate the tricky transition phase recent grads and external hires usually need. Once converted to full-time employees, apprentices tend to persist for twice as long as traditional direct hires.
While skills gaps are created by the future racing toward us, racial inequalities are rooted in our past. Professional apprenticeships help break down entrenched structural barriers to careers in industries like tech.
Most important, they look beyond the degree requirements that screen out 67% of Black and 79% of Hispanic Americans. Because apprenticeships are paid pathways to economic opportunity, they truly level the playing field and allow companies to make genuine advances toward racial equality -- beyond a few neatly crafted Instagram posts. Meanwhile, by tapping into diverse talent pools early, businesses can develop individuals and build real, recognizable routes to the boardroom.
They would be right, too. A 2020 report by McKinsey found companies with the highest diversity earned 35% more than their industry average. Similarly, the share returns of the most diverse companies in the S&P 500 outperformed the least diverse by a staggering 240%.
The time for change is now. According to the National Center for Education Statistics, 41% of grads end up in roles that don’t require a degree. With COVID-19 hitting young workers particularly hard, this figure is set to rise unless we embrace new approaches, including professional apprenticeships. In creating a direct and meaningful career pathway for young adults, they can help businesses close skills gaps and hit their much-vaunted diversity targets.
There’s no single solution to these challenges. But the professional apprenticeship can be education’s biggest contribution.