Absence of conflict of interest.
Citation
Highlights
- The study’s objective was to examine the costs and benefits of an apprenticeship program at sites that included apprenticeships in their workforce development strategy. This profile focuses on the apprenticeship at the Siemens factory.
- The study used internal firm data on production to assess costs and benefits of apprenticeships.
- The study found that Siemens had a positive return on investment from their apprenticeship program for employees.
- The selection of study sites depended on the data available for a cost-benefit analysis. This analysis was based on certain assumptions, so the results should be viewed as estimates and may not apply to the experiences of other employers of apprentices.
Intervention Examined
Siemens Apprenticeship
Features of the Intervention
The Siemens factory began its Machinist apprenticeship program in 2011. The company worked with local community colleges to find applicants. Siemens partnered with a local community college to deliver classroom training to apprentices who successfully completed a summer internship. Over 4 years, the apprentices spent 1,600 hours in the classroom and 6,400 hours in the factory. After finishing the apprenticeship, they receive an associate degree and a journeyperson’s certificate from the state Department of Commerce.
Features of the Study
This study is a cost-benefit analysis of an apprenticeship at Siemens factory in Charlotte, North Carolina. This site was selected because it had available data that enabled the authors to conduct a systematic evaluation of apprenticeship return on investment (ROI). The annual class size at Siemens was 7. At the time of data collection, Siemens had 15 active apprentices, which included 3 Veterans. The data sources for Siemens included an employee hours dataset from 2015 to 2016 and an employee grade level database for the factory. The authors examined the hours each staff member contributed to a project to assess the apprentices' impact on production. This information was then compared to the known costs associated with the apprenticeship program.
Findings
- The study found that the cost for each apprentice in the Siemens program was $187,000, with 96% of this amount going to wages for apprentices and mentors. This is $131,000 higher than the cost of hiring a low-experience worker directly.
- Apprentices increased factory capacity and improved on-time production, leading to an internal direct return rate of 8%.
- Apprentices can do many different jobs in the factory, which gives extra benefits compared to workers trained for specific tasks. This flexibility can lead to an internal rate of return of up to 50%.
Considerations for Interpreting the Findings
This study chose its sites based on specific criteria, focusing on programs believed to have a good return on investment. Also, the ROI analysis only included employers who had the necessary data for the study. This limits the generalizability of the study's findings.