The Home Depot, the US’s largest home improvement retailer, announced last Thursday that it would donate $50 million to a decade-long project to train 20,000 Americans, including veterans, returning military service members, high school students, and disadvantaged youth, as construction workers, USA Today reported. The donation is part of the company’s corporate social responsibility efforts, but there’s also something in it for Home Depot:
Sales at the nation’s largest home-improvement retailer are dampened if contractors and partners can’t find enough workers to undertake projects. Sales to plumbers and other tradespeople comprise 40% of the company’s revenue, [Home Depot CEO Craig] Menear says. The initiative, he says, also builds on the company’s donation of $250 million through 2020 to provide housing to veterans. Soldiers and veterans will make up about 15,000 of the 20,000 construction workers turned out by the training program.
They could make a noticeable dent in a big problem. There were 158,000 job openings in construction in December, up from 140,000 a year earlier. Eighty-four percent of contractors surveyed by the National Association of Home Builders (NAHB) and Wells Fargo in December cited availability of workers and cost as their most significant problems last year, along with rising materials prices.
The announcement comes at a time when many large US employers are taking high-profile steps toward developing the workforce of the future. Lowe’s, the main competitor to Home Depot, recently announced a partnership with Guild Education to help its employees complete training and apprenticeship programs for skilled trades such as carpentry, plumbing, and appliance repair—fields in which the labor market is expected to face a gap of 500,000 workers by 2026.
Home improvement retailer Lowe’s has announced a partnership with Guild Education to offer up-front tuition payments for employees to enroll in training programs for skilled trades such as carpentry, plumbing, and appliance repair, Amanda Eisenberg reports at Employee Benefit News. According to the Bureau of Labor Statistics, the rate of demand for these types of services is growing faster than the supply of talent, with a gap of around 500,000 skilled tradespeople projected by 2026, Eisenberg notes.
The program, which will launch with a four-city pilot in March, will offer employees up to $2,500 to enroll in pre-apprenticeships for those crafts. During that period, ranging from six to ten months, they will have access to a field mentor; afterward, they will have the opportunity to be placed in full-time paid apprenticeships within Lowes’ nationwide contractor network. The company’s Chief HR Officer Jennifer Weber told Eisenberg more about the program, which is called Track to the Trades:
“The trade profession is a high-demand, high-opportunity field for the next generation workforce, and today, there is a massive unmet need,” She said. … “With Track to the Trades, we are providing unique career alternatives for our associates while also building a pipeline for the next generation of skilled trade workers.”
In its 2017 Young Workers Index, PwC surveyed the economies of the 35 OECD member countries, creating an indexed ranking of the countries’ expected productivity from younger workers. Switzerland, Iceland, and Germany, were the top three, while the US finished 12th and the UK landed in 18th: both moved up two spots from last year’s rankings.
Germany’s result is probably the most impressive given that it also has the fourth-highest GDP in the world. The US has the world’s largest GDP while the UK is fifth in the measure of economic productivity. France, which stands sixth in GDP, was ranked 29th in the Young Workers Index while Canada, with the world’s 10th-largest GDP, was ranked sixth.
The study also looked into the effects automation will have on job prospects for workers in this age cohort. It found that 39 percent of jobs for US workers aged 15-24 are at risk of being lost to automation, compared to 24 percent in Japan, 28 percent in the UK, and 38 percent in Germany.
One of the metrics tracked in the Young Workers Index, the NEET (not in education, employment or training) rate, is identified as a key metric for overcoming the risks of automation and driving growth. The study claims that if all 35 of the OECD countries lowered their NEET to that of Germany (9.3 percent), it would lead to $1.2 trillion in GDP growth. For the United States, it predicts a $428 billion, or 2.2 percent, rise in GDP by lowering NEET from 15.8 percent down to Germany’s level.
Earlier this year, we took a look at some US subsidiaries of German companies that were embracing the apprenticeship model of vocational training that has proven famously successful in their parents’ home country. As American employers continue to struggle to bridge skills gaps in a tight talent market, more of them are looking to the German model as a potential solution, with the help of the German-American Chamber of Commerce, Elizabeth Schulze reports for the Wall Street Journal:
“You always hear apprenticeship is for losers, it’s a dead-end road,” said Mario Kratsch,skills initiative director at the Illinois Consortium for Advanced Technical Training, or ICATT, a Chicago-based apprenticeship group that cooperates with the German-American Chamber of Commerce and is trying to replicate the German model in the U.S. …
With ICATT’s help, the German model is gaining traction among small and medium U.S. businesses, like metals manufacturer Scot Forge. The Illinois-based company worked with ICATT to institute an apprenticeship program that uses rigorous German certification standards to address its shortage of skilled workers. Apprentices rotate between the shop floor at Scot Forge’s metals forging facilities and classrooms at local colleges. The company pays their tuition and wages. Apprentices who successfully finish the three-year program graduate with an associate degree, debt-free, and a guaranteed job at the company for two years.
European-style apprenticeships are also being used outside their traditional domain of heavy industry to fill white-collar office jobs, the Hechinger Report’s Matt Krupnick writes at US News and World Report:
The White House is piloting an initiative to allow US employers and training programs to partner with universities to teach students marketable skills, and allow students to receive federal financial aid for such programs, the Atlantic’s Mikhail Zinshteyn explains:
Educational Quality through Innovation Partnerships (EQUIP), as the program is being called, is starting small: Just eight colleges and their non-academic collaborators will take part in the experiment and will educate up to 1,500 students. The program is also not ready to run immediately: The accreditors of the colleges and universities need to approve their plans, meaning they won’t debut until fall or spring of the upcoming school year.
Still, the effort may shed new light on how watchdogs can hold colleges accountable for the workforce success of their students. Unlike current evaluations that measure how well colleges educate their students, EQUIP will measure programs by the jobs students receive and their earnings. Administration officials are framing the trial program as a new tool to address the growing gap in educational attainment and wages in the U.S.
However, Shahien Nasiripour at Bloomberg hears from some experts who question whether the initiative will work:
India’s labor challenges in the coming generation are considerable. With a workforce projected to grow to over 1 billion people by 2050, the world’s second most populous country (which is likely to outpace China as the most populous within a decade) has to create a lot of good jobs to prevent a mass unemployment crisis. Prime Minister Narendra Modi’s “Make in India” initiative is meant to help create a more solid foundation for India’s economy by investing heavily in its high-end manufacturing sector, but as Santanu Choudhury describes in the Wall Street Journal, the initiative is running up against the limited skills of the Indian workforce, requiring a massive effort to retrain and upskill workers by the millions:
More than 80% of engineers in India are “unemployable,” Aspiring Minds, an Indian employability assessment firm, said in a January report after a study of about 150,000 engineering students in around 650 engineering colleges in the country. A lack of specialized courses mean companies have to train their own people from scratch. … “India doesn’t have a labor shortage—it has a skilled labor shortage,” said Tom Captain, global aerospace and defense industry leader at Deloitte Touche Tohmatsu.
At Fast Company, Katherine Newman and Hella Winston discuss how US subsidiaries of German companies are trying to replicate their home country’s successful model of vocational education and apprenticeships:
MTU, whose parent company is in Friedrichasfen, Germany, is just one example. A subsidiary of Rolls-Royce Power Systems, the company manufactures diesel engines in Aiken, South Carolina. In March 2010, MTU took in over 600 applications for the available line jobs. It interviewed 250 people and picked 60—mainly experienced mechanics who’d previously worked in the area’s auto body shops, car dealerships, and Jiffy Lube stations. But after that initial wave of hiring, the company came to the conclusion it had tapped out all of the labor that was skilled enough to meet its requirements.
In Germany, by contrast, MTU would’ve had a long line of apprentices to fill additional jobs. But in Aiken, it had nothing. So the company decided to start an apprenticeship program, modeled directly on the dual program in Germany. Twelve students from five of the high schools that feed into a regional Tech Center compete for six slots every year.