How Tech Companies Can Fill Jobs, Drive Economic Growth and Win the War for Talent and Diversity
Jenny Dearborn, MEd, MBA, Executive Vice President, Human Resources, SAP
This is the first in a three-part series examining the potential of apprenticeships to close the vast and growing gap between tech jobs and workers with the skills to fill them.
One of the greatest challenges facing the tech sector is the large and growing gap between available IT jobs and workers with skills to fill them, globally, and in the U.S. and in California. Six of the 25 fastest growing occupation categories in the home state of Silicon Valley are in IT, estimated to generate 45,000 new jobs by 2024 – that’s nearly all the U.S. computer science majors who graduated from college last year. Where will tech companies find workers to fill these openings?
Complicating and widening these gaps, technology is changing so rapidly that future jobs and skills needs are unknown. And a short-term fix common in the tech industry, “importing” talent, is getting harder given growing restrictions on immigration and H-1B visas.
Yet many tech companies make matters worse through “degree inflation”: requiring a degree for jobs that can be performed without one. This can seem like a convenient shortcut when faced with a large talent pool, but actually makes it harder to fill roles, and employers end up paying a premium for college graduates, often with little gain.
Most employers pay between 11 and 30 percent more for college graduates, yet on a recent survey, many reported that non-graduates with experience perform nearly or equally well on critical dimensions like time to reach full productivity, time to promotion, level of productivity and amount of oversight required. And hiring over-qualified employees can increase the likelihood of low engagement and/or attrition.
With additional talent-related challenges like attrition and lack of diversity, and plenty of roles that require no college degree, tech enterprises of all types and sizes here can benefit—as do many of our European counterparts and a growing number of leading IT businesses across the United States—from recruiting and training workers who have a high school diploma and the motivation to acquire new computing skills, through apprenticeships.
Apprenticeships enable companies to equip workers for hard-to-fill roles and individuals to have stable, meaningful careers without a college degree. Apprenticeships across industries, including a growing number in the tech sector:
- Combine employer-provided on-the-job training with role-related classroom instruction, typically conducted at local community or technical colleges but increasingly also at coding and other “boot camps”
- Are customizable to a company’s needs, enabling businesses to quickly adapt to technology changes
- Require time-based and/or competency-based standards for completion (workers completing federal programs called “registered apprenticeships” gain nationally-recognized credentials)
- Pay workers throughout, with wages that increase as skills are mastered, providing an economically viable career path to stable, high-demand occupations – up to a $250,000 increase in lifetime earnings
The potential benefits to Silicon Valley and other companies are significant. Employers consistently report high satisfaction with graduates’ skills, performance, and reliability, and 97 percent of US registered apprenticeship sponsors say they would recommend hiring an apprentice. More than 90 percent of workers who complete an apprenticeship stay with their sponsoring company.
In this country, many believe a college degree is the most worthwhile path to a meaningful career. That’s simply not true, and it hurts our workforce, companies and economy to ignore alternatives. Tech companies are united in understanding that our most valuable resource is our people. We can only innovate if we have the right talent with the right skills at the right time. Apprenticeships offer an unmatched opportunity to forge our own destinies by tailor-making programs that fit our talent needs now and into the future, while delivering life-changing benefits for American workers.
The time is now for our industry to seriously consider the significant short- and long-term rewards of designing and launching apprenticeship programs, with Silicon Valley taking the lead.
SAP is co-sponsoring the first Silicon Valley Apprenticeship Summit on Tuesday, August 28, 2018 on our campus in Palo Alto. I urge my colleagues at forward-looking companies to join us to learn more about how to build or advance apprenticeships. For more, visit svapprenticeshipsummit.squarespace.com or contact Lauren.Fernandez@SAP.com.