How Apprenticeships Can Benefit Small Businesses and Workers

In recent years the position of “intern” has gotten a bad reputation. According to some critics too many internships took advantage of young college students or recent graduates by accepting their free labor without holding up their end of the deal and teaching them valuable skills. Thus it seems the days of interns are ending, leading to a renewed interest in apprentices.

This isn’t to say that apprenticeships are a new concept — far from it. However many businesses of all sizes are now seeing the benefits of such arrangements as are local governments. Let’s take a closer look at apprenticeships and what they can offer to small businesses.

What is an apprenticeship?

Simply put apprenticeships are when small businesses hire employees with the explicit intention of training them on the job. In most cases they involve some actual classroom (or online training) time as well. Unlike some internships, apprentices are always paid for their labor, although the starting pay may be lower than more experienced workers are receiving. Apprentices will typically see increases as they reach new milestones. While associate apprenticeships within certain skilled industrial trades, such as construction and electrical work, have existed for years, apprenticeships are now gaining popularity in many other lines of work including the culinary arts and in the service industry. There are also different kinds of apprenticeships: ones registered with the Department of Labor and more casual on-the-job training arrangements.

How workers benefit

In many cases apprenticeships are seen as alternatives to higher education. For that reason they may be attractive to high school graduates who want to jump right into their career and avoid expensive student debt. That said, such programs are also beneficial to those who are seeking a change in career or who just want more hands-on experience in their field before committing to a career.

How legislators are incentivizing apprenticeships

A big reason why apprenticeships have caught on in recent years is due to the aging of the current workforce. As more Baby Boomers near retirement, it’s in many companies’ best interest to start training the up and coming generation. In fact some governments have also found that preparing tomorrow’s workforce is also necessary for maintaining a strong economy and have worked to incentivize companies accordingly. 

One example of this is the state of Montana where a proposed bill would offer businesses tax credits for hiring apprentices. House Bill 308, sponsored by Representative Casey Schreiner and endorsed by Montana Governor Steve Bullock, would give a $1,000 tax credit for each apprentice a company hired through Montana Registered Apprenticeship program — $2,000 if the worker was a veteran. Meanwhile, across the pond, the United Kingdom recently issued a levy that will require all businesses with payroll over £3 million a year that will be used to invest in apprenticeships starting in May of this year. 

Other benefits for employers 

Admittedly running an apprenticeship program does require an investment of both time and money on the part of the business. After all, you will need take a considerable amount of time training your workers and you’ll have to pay them at the same time. However apprenticeships give small business owners an opportunity to build a strong team of workers that are trained to their standards. Additionally apprenticeships have been found to reduce employee turnover rates, which saves companies money on training in the long run, while also improving their efficiency.

Finding workers and building your program

If you’re considering starting a registered apprenticeship program, the Department of Labor offers a helpful toolkit with tips and guidance. Registering your apprenticeships will make it easier to attract workers but you are also free to build your own unregistered program to fit the needs of your business. Another way to reach potential workers is at local job fairs — especially at high schools or community colleges — where you’re likely to find those wanting to start a career in your field. 

While the term “apprentice” might sound outdated, the modern version of the concept is actually growing in popularity as internships fall out of fashion. Although apprenticeship programs might not be right for every business type, they could prove beneficial to entrepreneurs looking to grow a strong, dedicated team while also giving back to their community and helping their local economy. For those reasons it’s easy to see why employees, businesses, and legislators are taking a greater interest in apprenticeships these days. 


Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded in 2015 to focus on personal finance and the emerging FinTech markets.

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