[00:00:00] Debbie Goodman: Welcome to On Work and Revolution, where we talk about what’s shaking up in the world of work and Edtech. I’m your host, Debbie Goodman. I’m CEO of Jack Hammer Global, a global group of executive search and leadership coaching companies. I’m also an advisor to venture backed Edtech founders. And for those of you in Edtech who are hiring, we have launched a fractional leaders offering.

I’ll put the link in the show notes. My main mission with all of my work is to help companies and leaders to create amazing workplaces where people and ideas flourish. And so today I’m really excited to have Ryan Craig as guest on the pod. Ryan is a true veteran and expert in the education and training sector in the US. He’s currently managing director at Achieve Partners and he was formerly an MD at University Ventures.

Previously, he led the education and training sector at Warburg Pincus, and he founded and built Wellspring, a national network of boarding schools and summer camps. So he’s done the full gamut of all the things. He is also known as an outspoken commentator on what’s happening in education and workforce.

You can read his commentary in the Gap Letter, Forbes, and Inside Higher Ed. He has authored Apprentice Nation, hold on a second. This is a long title. So listen, it’s called Apprentice Nation, How The Earn And Learn Alternative To Higher Education Will Create A Stronger And Fairer America. Also, he’s authored A New You, Faster Plus Cheaper Alternatives to College.

That sounds like every parent in America should get hold of that one. And his first book was College Disrupted, The Great Unbundling of Higher Education. Ryan is a co-founder of Apprenticeships for America. A national nonprofit dedicated to scaling apprenticeships across the US, and he is a senior fellow at the Progressive Policy Institute.

And today we are going to be talking to Ryan about, you guessed it, apprenticeships, but in particular, the challenges to the growth funding and the invest ability of the apprenticeship segment of workforce in the US. Welcome, Ryan.

[00:02:20] Ryan Craig: It’s great to be here. Good to see you.

[00:02:22] Debbie Goodman: Okay, let’s dig right in. You are a massive advocate of apprenticeships as a way for people to earn and learn, meaning on the job, learning and training and being paid for their work as a pathway to economic opportunity without the burden of student debt.

Versus the bias in the U. S. towards a college centric system. You go to college, you graduate with debt, and then you try and find a job, which is often not aligned with your studies, and you spend the rest of your life paying off your student loan. So it sounds like a no brainer. yet, while apprenticeships seem like the most obvious way to start one’s career, there’s still a real bias in the U.

1. towards traditional college education first. So, why is this?

[00:03:12] Ryan Craig: Well, I think it’s shifting pretty quickly. If you look at polls and you look at many of the challenges that higher education institutions are facing, I think up until, you know, a decade ago, you’d look and you’d say, Oh, there, we have a problem with completion rates, right? Only about half of students who matriculate into a degree program end up, uh, actually completing that program.

So that was a problem. And then we had this little issue of affordability. a

[00:03:38] Debbie Goodman: issue.

[00:03:39] Ryan Craig: Well, but that little issues become a gigantic issue now to the point where in the Biden administration, really, you could say that the sole focus, from a post secondary education standpoint has been a backward looking debt forgiveness, uh, rather than any sort of positive or constructive, forward looking view, uh, on where a higher education needs to go.

 so, that has, become a full blown, crisis and definitely contributed to the decline, in favorability, that higher education is experiencing across the spectrum. Uh, and now you add, employability, concerns. So we’re seeing Strata, came out with, a new report a couple months ago showing that 52 percent of college graduates.

So, you know, let alone those who don’t complete, but those who actually go through the trouble and, you know, four or five, six years, completing a bachelor’s degree. And graduating 52 percent are now graduating into underemployment.

[00:04:35] Debbie Goodman: goodness

[00:04:36] Ryan Craig: what’s gone, what’s on here. So, right. Like if everyone graduated into a 60, 000 a year job, everyone, right.

The level of debt that students are carrying, um, given the affordability crisis would be sustainable, but, 52 percent graduating and under employment. So if you actually add, students who, matriculate and start a degree program and don’t complete to those who, complete and graduate into underemployment.

The negative outcome is you’re probably at about 70 percent 7 out of 10 students who, pursue a degree program are experiencing negative outcomes in some, in some capacity, meaning they’re not completing. Or yeah, or they’re graduating into a job. And we know that if you’re underemployed in your first job, 2 3rds of the time you’re underemployed, 5 years later, half the time you’re underemployed a decade later, which makes sense, right?

Because careers are path dependent and your 2nd employer is going to care a lot about what your 1st job was. Maybe more about that than, where you went to college or even whether you went to college. So, um, and then, and then add to that the fact that, many of the reasons, we’re seeing this level of underemployment is that the economy has shifted, right?

Digital transformation has changed almost all good jobs. Right. That a college grad would want, and it’s not enough to have the durable skills or cognitive skills, problem solving, communication, critical thinking skills that colleges I think are doing as good a job as they’ve ever done at equipping young people with. Employers are also looking for digital skills, platform skills, business skills, and increasingly experience.

So let’s just hold on the skills for a second. Those are skills. Those digital skills are harder to learn in a classroom than they are by doing right. You can only learn so much in a classroom to be a Salesforce administrator before you actually have to work on Salesforce as a Salesforce administrator to do it.

So that’s where an earn and learn option, or apprenticeship, would be preferable, for learning those skills. So from a skill standpoint, apprenticeship is more important now than ever. But then you add in the experience gap that we’re seeing. So increasingly, we’re seeing entry level jobs that college graduates are seeking and that

you know, a decade or even five years ago were accessible to them are now explicitly asking for six months, 12 months, 24 months of relevant work experience. some of them even saying internships don’t don’t count.

[00:07:01] Debbie Goodman: right.

[00:07:02] Ryan Craig: in that

[00:07:03] Debbie Goodman: So, um, so the thing is that, I mean, you’ve just mounted the case even greater than I could have done in my introduction as to why apprenticeships make so much sense and yeah, and yes, there may be some level of shift, but I read some data that said that currently the U S invests about 500 billion in higher ed.

Versus less than 400 million in apprenticeships. And granted that may be give or take a few million

[00:07:32] Ryan Craig: I hope that’s right because that’s from my book.

[00:07:34] Debbie Goodman: Okay. Right. So that’s from you. Um, I read somewhere. Okay. I, I, um, so if that in fact is the case. And let’s say things are shifting the difference, the disparity in government funding for what seems like a no brainer way for, high schoolers to start getting on the path towards a first job and being able to support themselves and earn a living.

I mean, it’s just a, an unequivocal, case that you have for why apprenticeships make so much sense. And yet massive disparity in certainly government funding. Um, why is that? Is somebody in government like not yet on the ball with this? Right.

[00:08:20] Ryan Craig: uh, look, if every other country had that disparity, uh, it’s like, fine. That’s the way the world works and no one’s doing it better. But if you actually look at not just the, apprenticeship giants of Central Europe, Germany, Austria, Switzerland, but countries that aren’t, identified as apprenticeship, leading countries, countries like the U.

1. Australia, France, Canada. Those countries are now 8 to 10 times better than we are in terms of apprenticeship, apprenticeships per capita, right? They have. They’re in order of magnitude better than we are. And a generation ago, they weren’t a generation ago. They look a lot like the U.
2. Very small apprenticeship sector. Vast majority in the building trades, very little outside the building trades in areas like tech and finance and healthcare. And now in those countries, it’s very common to launch a career in all these sectors as an apprentice. So, uh, what changed, and how did those countries do it?

And that’s really what I talk about in the book is, how to truly charting a pathway for how we can become an apprentice nation, because as you say, the case for it is, not only unequivocal, it’s one that appeals to, I have, I speak with progressive Democrats, I speak with, maggot Republicans, everyone agrees.

 this is a good idea. And I would like a choice for my child. That is, something other than college or Chipotle. That’s sort of the options we’re giving our kids today are, you can invest in a, almost unbearably risky pathway for many, particularly for those who most need it, or, just take an unbearable job, but with very little in the way of upward economic, mobility.

assuming that, everybody’s on board, but nevertheless, the funding, from government is still, not quite there by a long way, actually, and what are some of the misconceptions perhaps that exist, around apprenticeships? So we’re looking for employers as well as third parties to promote these, to increase the number of apprenticeship platforms and opportunities.

[00:10:26] Debbie Goodman: Where do the misconceptions lie?

[00:10:28] Ryan Craig: Yeah, well, you know, there are a bunch of them. one is that,which is sort of fair is that apprenticeships are only for the building trades. Right. Um, for plumbers and roofers and welders. Uh, and that is sort of fair in the U. S. 70 percent of the, of apprenticeships are currently for the registered apprenticeships.

At least are in the building trades. But we know from looking internationally that that doesn’t have to be, that doesn’t have to be the case with, with smart policy. Right. As I said, in the UK. Very common to launch a career in financial services, healthcare, and tech as an apprentice.

And you can do it right out of, high school. So, that’s, uh, you know, both fair and, not fully representative of the potential of, of apprenticeships.

[00:11:10] Debbie Goodman: And, and it seems like a model actually exists for, non artisanal, work, or construction work. The model actually exists for apprenticeships elsewhere, just not so much in

[00:11:20] Ryan Craig: Totally. And it’s interesting you use that term artisanal. Um, you know, I mean, what these new apprenticeships, have in common with the older, uh, apprenticeships is that an apprenticeship is a great way to learn to use a tool or tools and in a digital economy where everything is done on software platforms, these are tools that we need to learn to use as well.

There are different kinds of tools, and you’re not going to get injured using them or misusing them, but, but they are tools. The biggest misconception, though, I think is that apprenticeship is sort of just simply one of a number of workforce development and training. Um, Programs, that, is, is available and workforce development.

Uh, Kevin Carey just did a nice piece in the Atlantic, on, uh, why workforce development has a bad reputation. because, you know, most of what is funded, most of what government funds and workforce development, or what I call train and pray programs that, uh, don’t lead anywhere. And if they lead anywhere, they’re putting, uh, you know, it’s a

three week training program for a truck driver, right? These are not sort of high skill, uh, positions and as a result, uh, the outcomes are poor and the way the federal government funds apprenticeship now is it’s all out of the same Department of labor bucket effectively. So you have apprenticeship funding.

You have other workforce development funding and it’s not viewed as, uh, separate. There’s no separate funding stream. Every other country that I’ve cited here, they fund apprenticeships separately because they recognize that apprenticeships are not training programs. They’re jobs, right? An apprenticeship first and foremost is a job.

It’s a full time job. That happens to have built in training, both formal and informal, training. But what, where an apprenticeship is different is it requires a willing employer to hire and invest in training a new worker, whereas none of these other workforce development programs have an employer involved.

And so that’s why apprenticeships have such a high return on investment, because there’s no question about the job. The job is the prerequisite for the, for the apprenticeship. And so that’s why the UK and Australia and France, they fund apprenticeships differently. They don’t put it in the bucket of workforce development programs, and it’s not lost there.

Right now, apprenticeship funding in the U S is a rounding error relative to overall workforce funding, which is a rounding error relative to post secondary education funding. So it’s being lost, we need to separate it out and recognize it for what it is, which is a probably the most effective workforce development and economic mobility tool, uh, in our tool set.

[00:13:59] Debbie Goodman: Okay. Um, and so you’ve picked on one piece of this, which is also willing employers. what are some of the concerns or issues that and we’re talking usually about bigger corporations, although certainly small businesses can get onto this bus too. Why is there, is there a dearth of willing employers?

Is this seen as too much hassle? What’s the roadblock? What’s the stumbling block there?

[00:14:23] Ryan Craig: The other the great segue because of the other big misconception, is the fact that, apprenticeships are created by the end employer, right? Nowhere where apprenticeships thrives, not, not in Germany, not in the US building trades are they thriving, because employers in those countries or sectors are more benevolent in terms of being willing to hire and pay for a worker who’s not going to be productive for a period of time or more farsighted or more patient.

That’s not why apprenticeships are thriving in those, uh, in those countries and sectors. They’re thriving because there are intermediaries who are doing the work of setting up and running these programs for Employers and for apprentices. So what do I mean by intermediary? So in Germany, it’s not, you know, BASF and Adidas, uh, who are running their own apprenticeship, programs, it’s chambers of commerce, these powerful regional chambers of commerce who are actually required by law, to do the work of setting up and running these programs for, employers.

 and they’re, and they’re funded to do so, uh, by the government, but they’re the ones it’s their responsibility and they do it in partnership with unions. But it’s the Chamber of Commerce primarily who are the intermediaries. Now, we don’t have that same sort of Chamber of Commerce infrastructure

 that the Germany has, uh, we have, we do have chambers of commerce, but. Uh, you know, the Munich chamber of commerce, for example, has 400, 000 members. you literally cannot be in business without being forced to be a member of the chamber of commerce. And when the chamber of commerce says jump, you say how high.

 so, it’s very different, but neither did the UK or Australia. They didn’t have chambers of commerce either, but they recognize the central role played by intermediaries who do this work of setting up and running programs and in many cases, hiring the apprentices until they become productive, serving as the employer of record.

And so the UK and Australia provided performance based formula funding for these intermediaries to get HR services companies, staffing companies, non profit organizations into the business of being an apprenticeship service provider. So now, In the UK, you have this robust ecosystem of about 1200 apprenticeship service providers who are in the business of setting up and running apprenticeship programs for employers, and they’re running around knocking on doors of every employer in the UK offering to set up and run apprenticeship programs for them.

And that’s how you get 10 X where we are and they’re funded to do it. So we haven’t recognized the central importance played, by intermediaries. And even when the Department of Labor is funding, intermediaries, they’re funding the wrong ones, uh, effectively.

[00:16:58] Debbie Goodman: Okay. Cause I was about to say great intermediaries or other organizations, that, but nevertheless, the source of funding is still, Government versus private investment, because I’ve spoken to a number of private equity and venture investors who’ve said that they’ve tried, or that they’ve looked at apprenticeship, offerings, products, companies, intermediaries like this, and the return on investment just is bleak.

So they just can’t see how to have a return on investment through private investment with this.

[00:17:27] Ryan Craig: Well, we, we’ve done it. So my firm Achieve, we sort of, invented this hire, train, deploy model where we’re going into sectors of the mostly tech and some healthcare, going to sectors where there’s a massive talent gap. And, acquiring or a bio firm, we acquire, services companies, that might implement configure or integrate, you know, Salesforce or work day or SAP or supply chain, management technology.

 they’re doing that for clients and now, we buy the company and then we add a big apprenticeship, program. So now they’re also providing a talent. Uh, element of what they do. So our companies become talent engines for these talent starved sectors and it works great because we had a whole new revenue stream around talent, uh, where we’re deploying talent to clients on projects through managed services and through staff, augmentation, and it differentiates the core business, as well.

So Hire, Train, Deploy is a model that works well, but it only works in sectors where the talent gap is just so high that we can bill this new town at a sufficient rates, to, to make it work, that’s probably only 10 percent of the opportunity out there. The rest of it is not going to work without public subsidy because clients aren’t going to be willing to pay, you know, 70, 80 an hour for our newly trained talent in most sectors.

And so that’s where government funding needs to come into to play in the UK when Multiverse, which is one of our portfolio companies goes to Barclays Bank and offers to set up and run an apprenticeship program for them the cost to Barclays is only the lower apprentice wage. There’s no cost. They don’t need to pay Multiverse. Multiverse is able to, uh, their revenue stream is from the government.

[00:19:17] Debbie Goodman: Right. Okay.

[00:19:17] Ryan Craig: where the cost of the training and the cost of program administration is all public.

[00:19:22] Debbie Goodman: Okay. So, I mean, there has to be some form of supplemental revenue stream funding mechanism that comes from government to make this whole thing really work in scale in

[00:19:32] Ryan Craig: what we’ve seen from all these other, all these other countries. And the reality is that if you, you know, look about at the funding disparity that you mentioned at the top, there’s ample, we have ample resources to do it. We think if we, you know, we’re able to move from, you know, 400 million a year to 4 billion, uh, a year,

 we go a long way to, catching up, to these other, you know, Australia and the UK, which would, make a big difference. We’d have at that point, almost as many apprentice opportunities as there are places in freshman classes across the country and that, that’s really the objective, right?

Is if you’re a high school graduate, you should be able to certainly pursue, you know, any number of tuition based, debt based, post secondary, degree opportunities, but you should be able to access an equal number of earn and learn options. You know, we’re not saying that, less post secondary education, less formal post secondary education is advisable.

But what we do think is is the case is, um, lots of young people because they’re confronted with sort of a college or Chipotle binary choice are going to college, and not succeeding, and graduating with that. With debt or not graduating with debt, and they’d be better off, doing an earn and learn, pathway for a couple of years, getting a better sense of their own interests and capabilities, earning money, not going into debt.

And at that point, um, perhaps making a decision as to what post secondary, program they’d like, but they can’t do that today because we don’t have that earn and learn infrastructure, uh, that other countries have developed. We just haven’t invested in the development of the earn and learn infrastructure.

We are over invested in the tuition based debt based career launch infrastructure, we dramatically under invested in earn and learn career launch infrastructure.

[00:21:13] Debbie Goodman: Right. Okay. The thing is that potentially with the existential crisis that, we are potentially facing with AI and the fact that, in the future. The very near future. In fact, the already here future is that grunt work is being done already by AI or some form of automation. Um, new entry level workers are going to need actual work experience before they look for their first job, as you spoke about earlier, and perhaps with this new massive threat.

Perhaps this is going to force the hand or expedite the, transfer or the redistribution of even just, it sounds like it’s a small little bit of the funding pool that exists. What is the likelihood of that actually happening in the nearish future?

[00:22:03] Ryan Craig: Yeah, well, I think, I think you’ve just summarized what is an existential threat, which is that career launch, goes from being, 48 percent of possibility to a 10%, right? It’s like we have a 90 percent under employment rate for young people, because, as you say, it’s going to dramatically change the nature of entry level work and employers are going to expect that entry level workers are doing higher value work from the start, which you’re not gonna be able to do without prior work experience.

You know, so, we absolutely need these apprenticeship pathways because apprenticeships are jobs where you’re not expected to have the skills or experience. You get those on the job, and that may need to become the primary pathway for, every young person. Uh, I do think that, we’re never gonna Scale apprenticeships, at the rate that we need to, to address that issue because that issue is already upon us.

So, I do think that it’s gonna be a function of, apprenticeship for sure, but also, internships, coops, work, integrated learning. You know, every college and university within a few years is going to understand that they cannot responsibly graduate a student without having, uh, orchestrated in some way, real, in field, and hopefully paid work experience, um, because that that graduate is not going to be competitive for a good job otherwise.

And so that’s going to require another sort of seat change. And frankly, we think the emergence of a whole new set of intermediaries to help coordinate these work based learning programs for students.

[00:23:43] Debbie Goodman: I think there’s also a cultural shift that needs to happen at high school level. I have high schoolers and there’s absolutely no talk about what happens after graduation other than going to college. That is the avenue. Of there’s then there are no other options are presented as viable options to get into a good job at some point in the next five years after you graduate.

 and so where I grew up, in South Africa, it was considered completely appropriate to have a gap year. After high school and go and volunteer or do some, uh, some kind of work and travel and pay your way and learn a skill or do something before you go to college. And that seems to be like a preposterous idea here in, in the U S where it’s not presented as one of the things that people do.

 and so I’m just wondering like, what, what has to happen at high school

[00:24:36] Ryan Craig: Yeah, you’re absolutely right

[00:24:38] Debbie Goodman: Yeah.

[00:24:40] Ryan Craig: school and middle school career and technical education and career discovery have withered on the vine and that’s exactly what you would expect would happen in a system where it’s college or Chipotle. And so it’s college for all, basically, uh, and it’s college for all.

Then there’s no point in pursuing career and technical education. Everyone is on a college track. Everyone’s on an academic track. Uh, everyone should be pursuing honors and AP courses, uh, because, that’s how you get the higher weighted, GPA. You would never wanna take a CTE class because it’s a, it’s a, on a 4.0 scale as opposed to a 5.0 scale.

So those, those programs have absolutely withered on the vine. I think the key to, rejuvenating, CTE and career discovery is that we need a. A vessel, a destination for them to go. It’s other than college and Chipotle, right? There has to be, you know, hundreds of job opportunities that, 1819 year olds can pursue and earn and learn.

Right? We’re not saying that they’re, you know, go right and go and go right into full time, career, career development. Path jobs, but earn and learn apprenticeship type programs. And once we have that then and career discovery makes sense again in high school and middle school.

But until we build that earn and learn infrastructure, it’s just going to continue to be, kind of a, a, a.

[00:26:03] Debbie Goodman: A dead duck.

[00:26:05] Ryan Craig: Yeah.

[00:26:05] Debbie Goodman: Okay. Ryan, amongst all the challenges, and there are so many, and I can see your vision and it makes so much sense. So it must feel like, come on people, why is this not happening sooner, quicker with more energy and more money, but nevertheless, what is the glimmer of light?

What are you feeling most excited and optimistic about for the

[00:26:26] Ryan Craig: Yeah. I think it’s at the state level. Uh, at the state level, we’re seeing uh, you mentioned apprenticeships for America. we’re working with a number of states who are absolutely getting it absolutely recognizing the importance of apprenticeship and the importance of, uh, getting a work experience in, before students are looking for good jobs.

And so funding, apprenticeship intermediaries, states like California, Colorado, Ohio. Uh, requiring, work experience before graduation. Virginia is heading in that way. I think that in a, within a, a few years, we’re going to have sort of a template for, what a, plausibly working system, connecting education and workforce are going to look like.

And you’ll see a scramble of states to try and catch up. And then I think at that point, You know, national, reform is, is possible, but look for it first at the state

[00:27:13] Debbie Goodman: Right. Okay. Well, if you can just hurry up, please, my kids are going to soon be finishing high school. And I’d like this to be in place soon. Thank you so very much for joining me. This has been an absolutely fascinating conversation, and I will definitely be watching the progress of all your work. So thank you, Ryan.

[00:27:30] Ryan Craig: Thank you, Debbie.