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Congress could trigger demand for apprenticeship software

In the face of workforce shortages, lawmakers may increase funding for job training, something that could boost apprenticeship software needs.

U.S. lawmakers are considering a multi-billion dollar expansion of apprenticeship programs to meet workforce needs. If the expansion wins approval in Congress, it may generate interest in apprenticeship software for compliance, time and applicant tracking, and other management aspects of apprenticeship programs.

At a U.S. Senate Subcommittee on Employment and Workplace Safety hearing Wednesday, lawmakers praised the apprenticeship strategy while citing the need for skilled workers. Apprenticeship programs combine on-the-job training with high school or college classroom work.

Firms are having trouble filling positions, said Sen. Mike Braun, R-Ind., something he hears from businesses in his state. "Workforce was the No. 1 issue," he said.

Braun said the apprenticeship topic is generating one of "the most bipartisan discussions I've seen here in the Senate." But he also noted the divide between Democrats and Republicans about how to approve the funding.

Earlier this year, the U.S. House approved the National Apprenticeship Act of 2021 that included $3.5 billion over five years, or $700 million a year, a nearly fourfold increase in annual federal spending for the training. That bill is pending in the Senate. The U.S. Department of Labor budget called for $185 million in 2021 to support apprenticeship programs.

The pending $3.5 trillion budget reconciliation process also has a multi-billion appropriation for apprenticeship programs, but that potential funding source is on shaky ground because Republicans oppose this broader spending bill.

Apprenticeship software

If Congress does increase apprenticeship program funding, it may jolt the niche market of apprenticeship software providers, said Trevor White, an analyst at Nucleus Research.

The major HR vendors will either expand or add apprenticeship software capabilities to their own product line, or offer support of third-party vendors to make their use more plug-and-play, White said. 

If I can address both my staff shortages and then also get money from the government to do it, it's a no-brainer for the end-user organization.
Trevor WhiteAnalyst, Nucleus Research

White said he believes user demand will drive HR vendors to act.

For employers, "if I can address both my staff shortages and then also get money from the government to do it, it's a no-brainer for the end-user organization," White said.

The U.S. is behind other advanced nations in apprenticeship programs. For instance, in 2018, the U.S. had 238,000 new registered apprentices. But if the U.S. "had the same share of new apprentices per capita as Germany, we would have 2 million new apprentices per year; if we had the same share as the United Kingdom or Switzerland, that number would be 3 million," reported Annelies Goger, a fellow at The Brookings Institution, in a report last year. 

Noel Ginsburg, founder and CEO of CareerWise, a Colorado-based nonprofit that acts as an intermediary between employers and schools, provided testimony at the hearing. The 4-year-old organization is now operating in Washington, New York, Indiana and Michigan.

"There is a way to blend the learning that takes place in the classroom with the power of the learning that takes place in the workplace," Ginsburg said at the hearing.

Patrick Thibodeau covers HCM and ERP technologies for TechTarget. He's worked for more than two decades as an enterprise IT reporter.

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