A deep dive on tech apprenticeships—who pays for them, who benefits, and the ROI for participants. Also, details on Google’s $100M take on outcomes-based student financing, and expanding microcredential offerings from SUNY and the University of Texas System.
A Training Program and a Job
Google’s new $100M tech training fund is the latest in a series of substantial investments by big tech in education programs that are aimed at recruiting and preparing workers for millions of unfilled, well-paying jobs in tech.
The new spending typically includes a focus on improving the industry’s severe lack of diversity.
For example, Microsoft last fall rolled-out a campaign to partner with community colleges to help train 250K people for the U.S. cybersecurity workforce, where one in three jobs are open and more than 82 percent of workers are men and 80 percent are white.
Most of the companies are using their own credentials and course content for the training programs. AWS, for example, is offering free training courses in cloud computing and discounting the cost of its certifications, which 92 percent of IT workers report holding.
At the same time, big tech increasingly is working with nonprofit groups to find students and to offer them the wraparound supports they need to complete. Merit America and Year Up are playing this role for the Google Career Certificates Fund project. Many of the new training announcements, like those from Microsoft and AWS, also feature ways for students to earn college credits.
“What we’ve learned over the past five years is what can be accomplished when private sector companies like ours come together with public sector institutions and nonprofit partners,” Sundar Pichai, CEO of Google and Alphabet, said last week.
To make sense of this fast-moving space, Work Shift is publishing four explainers on emerging education and training options for tech jobs.
The series begins today with a look at apprenticeships, focusing on who pays for them, who benefits, and whether apprentices complete and land good jobs. Subsequent explainers will cover degree pathways, on-ramps and bootcamps, and employer-based training.
Many of the jobs in the new tech economy are still being filled like they were in the 1990s. But that’s starting to change. We take a look at new and growing pathways into good tech jobs.
Expanding Opportunities: New federal data analyzed by Work Shift showed a substantial increase in tech apprenticeships:
- Federally registered apprenticeship programs in tech fields grew by 41 percent between fall 2020 and 2021, and the number of apprentices grew 28 percent.
- Last year 1,200 programs were serving 4,100 active apprentices.
Researchers and industry insiders say the pandemic may be forcing shifts in tech training and hiring, both because of the labor market chaos and increased awareness about the industry’s equity woes. The action isn’t limited to big tech, as many large companies are struggling to fill IT jobs while the definition of a “technology company” expands.
“We’ve seen a change in the calculus for employers in the tech industry in ways that we wouldn’t have seen five years ago,” Angela Hanks, acting assistant secretary for the Employment and Training Administration at the U.S. Department of Labor, told Work Shift.
Most tech apprenticeships take one year to complete, and feature a blend of paid work, on-the-job training, and academic coursework. Many learners start with a pre-apprenticeship or other basic training before the apprenticeship, which begins with months of curriculum-based learning.
Once tech apprentices complete that training and become full-time employees, they earn an average of at least $20 per hour, according to the Labor Department.
Federal data on this form of apprenticeships are incomplete, and do not include New York, North Carolina, and a handful of other states. As a result, it likely undercounts the growth in registered tech apprenticeships.
Even so, a few thousand tech apprenticeships are a drop in the bucket for an industry with 8.2M workers and massive projected growth.
The urgency to develop and expand tech apprenticeships is real, however. And some providers are reaching a respectable scale. Apprenti, for example, runs registered tech apprenticeships for 60 hiring partners, with a focus on women, veterans, and people of color. The Seattle-based nonprofit expects to graduate and place 1K apprentices this year, and hopes to ramp that up to 5K in coming years.
The Kicker: “Taking time out of the labor market to get a pricey credential just isn’t possible for someone who has to put food on the table,” says Hanks. “One of the things that’s appealing about a registered apprenticeship is that it’s a training program, but it’s also a job.”
Work Shift Explainer: Apprenticeships grow into tech — workshift.opencampusmedia.org
The pandemic and racial reckoning of the past two years have dramatically increased interest in apprenticeships.
Financing for Scale
Google describes its $100M certificate fund as a new, outcomes-based approach to student financing. And the no-interest loans the project plans to grant to 20K learners will be structured as a twist on an income share agreement.
Participating students will have no up-front costs as they pursue Google certificates in fields such as data analytics, IT support, project management, and UX design. The fully online programs are offered on Coursera’s platform. They can be completed in 3-6 months.
The nonprofit Social Finance will manage Google’s $100M investment and distribute funding to Merit America and Year Up, which will provide students with coaching, interview prep, job placement assistance, and living stipends.
“For the past two decades, philanthropy has largely funded these wraparound supports, but nonprofits have only been able to serve a small fraction of the population in need,” says Justin Steele, director of Google.org for the Americas.
Steele says the new fund’s financing model “will enable it to sustainably upskill Americans with the certificates at scale that has thus far been unattainable.”
Students will be on the hook to pay back no-interest loans for the training program if they secure jobs that pay at least $40K in annual wages. Payments will be flat over the loan’s five-year term. A borrower earning $40K would owe about $100 per month, Social Finance says.
The average living wage in the U.S. is $16.54 per hour, according to MIT’s living wage calculator. Steele says that means the program’s $40K annual salary threshold, which is $19 an hour, tops the average living wage.
“If a learner is no longer employed in a job that meets the salary criteria at any point during the five-year term, then payments will be paused,” he says. “We will look at current market conditions and their impact on learners and re-evaluate the minimum income threshold as needed.”
Google says it hopes the fund’s take on financing encourages other companies to follow suit with affordable training options.
“Social Finance will reinvest repayments back into the program for several years to enable future learners to benefit,” Steele says. “This is key, as it enables the fund to create more opportunities for new learners as successful outcomes are achieved.”
Experts say the devil is in the details of the still-emerging program. Consumer advocates ask whether inflation or a recession could pose risks to borrowers, or to the wraparound support groups. Some will be watching for more specifics on borrower rights and protections.
Ethan Pollack, who directs JFF’s Financing the Future Initiative, says creating a sustainable pot of money with a one-time payment is the Shangri-La of philanthropy. And a big part of the allure of income share agreements is their potential to stretch funding, as a 2019 paper from the Federal Reserve Bank of Philadelphia found.
As a result, Pollack says the new Google fund is an important proof of concept for financing short-term training. “You can induce a lot of co-investment if you can show this works.”
Income share agreements face serious political and regulatory challenges. For example, the Consumer Financial Protection Bureau ruled last year that an ISA provider misrepresented its offerings to students and failed to comply with laws for private student loans.
A key problem for ISAs is that they typically claim to not be a form of loan. Consumer groups and the CFPB disagree. But Google and its partners describe the new fund’s financing as a loan.
“Implicitly, it is accepting the legal treatment of loans,” Pollack says, while also being “very similar to an ISA in concept.”
Microcredentials in New York and Texas
Two of the nation’s largest four-year university systems recently announced plans to expand their industry-relevant microcredential programs.
The State University of New York has created more than 400 microcredentials across 60 areas of study and 31 SUNY campuses. Each one is designed to have labor market value and, in most cases, to offer the option of being stacked together with other microcredentials to meet SUNY requirements for a credit-bearing certificate or degree.
Students can demonstrate the skills they earn in these programs through a digital badge or their transcript. And 64 percent of the microcredentials feature academic credit. All of them are clustered in high-demand fields, including healthcare, business, education, clean energy, IT, criminal justice, and advanced manufacturing.
The expanded portfolio of microcredentials can be earned in one or two semesters. They are aimed at both current SUNY students and working learners, according to last week’s announcement from Kathy Hochul, the state’s Democratic governor:
“The microcredential program will enable New Yorkers of all professional backgrounds to gain the skills and knowledge that employers are looking for, more immediately and flexibly than a traditional college course-load allows,” she said.
The University of Texas System also is developing a range of new microcredentials as part of a recently launched pilot project funded by the Strada Education Network.
Working through its Texas Credentials for the Future project, the UT System will incorporate new, industry-recognized microcredentials and skills badges into bachelor’s degree curriculums at eight system institutions. The focus is on humanities majors that typically lead to lower salaries and that enroll a disproportionate share of undergraduates who are people of color.
The idea is for humanities students to build skills in tech or business, and to give them a leg up in the job market. An example could be pairing a bachelor’s in communications and a certification in data analysis, with an eye toward tech-adjacent jobs in digital marketing.
The Texas Higher Education Coordinating Board is helping to fund the program, reports Olivia Sanchez of The Hechinger Report. The system’s goal is for 3,700 undergraduates to pursue a microcredential this year.
More from Work Shift
Opinion: Achieving the (almost) impossible on for-profits — workshift.opencampusmedia.org
Few issues are more contentious than the role of for-profit colleges in higher education, write Sandy Baum and Jorge Klor de Alva. But, they say, consensus is both necessary—and possible.
The Texas Workforce Commission will spend $15M on registered apprenticeships in healthcare. The state faces a projected deficit of 57K registered nurses over the next decade. The new apprenticeship funding is designed to encourage earn-and-learn pathways for healthcare professionals to earn stackable credentials and college credit as they pursue certification as registered nurses or for other healthcare roles.
Low-income parents were much more likely to lose both childcare and income during the Omicron wave than their wealthy counterparts, according to an analysis of federal data by The Washington Post. That’s because when daycares closed, lower-income families were more likely to quit jobs or take unpaid leave. And only a third of the country’s lowest-paid workers had access to paid sick leave.
Childcare workers lack professional development options, which may be impeding the industry’s long-term growth, according to a new report from the Education Trust and the U.S. Chamber of Commerce Foundation. These workers are among the nation’s lowest-paid. And Black, Latino, lower-income, and rural families have little access to high-quality childcare.
Employers and people who work in higher education largely agree on the importance of students having critical thinking and written communication skills. But they have different takes on teamwork, oral communication, and digital literacy, according to a national survey conducted by the American Association of Colleges and Universities. Digital literacy, for example, ranks high for employers but last among campus respondents.
Microcredentials for Athletes
Louisiana State University has partnered with Kaplan to offer industry-recognized credentials to its student athletes. LSU will offer Kaplan Credegrees, alternative credentials that are designed to give students a job-readiness and marketability boost, across more than 15 areas, including digital marketing. LSU said the move is aimed at helping student athletes make the transition to life after sports.
The U.S. labor force participation rate has remained flat after a steep decline early in the pandemic, which is contributing to a near-record 11M job openings with only 6.5M unemployed workers, according to a new report from Emsi Burning Glass. Earn-and-learn opportunities can help this crisis of disengagement. But the report says colleges, workforce boards, and employers lack alignment while focusing on different parts of the problem.
Let me know what this newsletter should be covering? Thanks for reading. —@paulfain