As your community college looks for ways to serve your community, address your mission, and find initiatives that support or grow revenue streams, registered apprenticeship programming can be an answer. While registered apprenticeship programming at a college can accomplish these goals, it is important to note that each college, community, and registered apprenticeship program is different. AACC has found that when initiating a registered apprenticeship program at your college, it is important to understand the investment needed to develop and implement the program, the benefits your college and community can experience, and the resulting return on investment the college can expect.
A simple formula for calculating short-term return on investment (ROI) is:
Benefits – Costs = Return on Investment
In an example where the benefit is $2 and the cost is $1, the resulting ROI would be $1.
Ex. $2 – $1 = $1
Below AACC has highlighted more complex formulas which can be utilized to determine ROI over a specific period of time and include all of the variables and expressions of a registered apprenticeship program, we believe this simple equation is a great place to start. When calculating the ROI for your college, you must first identify the costs and benefits of implementing such an initiative. This analysis will allow your college to logically and systematically investigate the potential value stream of registered apprenticeship programming. AACC recommends identifying these components in as much detail as possible to fully examine the return of standing up this type of initiative and assessing its growth, profitability, and sustainability.
The costs incurred by a college can vary, depending significantly on the role the college takes in establishing a registered apprenticeship program. If your college only seeks to provide the related technical instruction (RTI) for a program using existing curricular offerings, the costs to your college may be minimal, especially if an employer or another entity is covering the cost of tuition. If your college has selected to be the sponsor or intermediary for a registered apprenticeship program, this might involve creating new curriculum, providing mentorship training, administering the registering of apprentices, and managing and reporting all data for the Department of Labor (DOL).
Your college must consider the full spectrum of costs that may be incurred. These can include:
- Dedicated human resources/talent
- Management and tracking capabilities
- Administrative, faculty, and staff time
- Curriculum development
- Equipment and supplies
- Infrastructure, lab, and classroom space
- Any other costs specific to the program
While colleges are often in the habit of calculating operating expenses such as salary and benefits, overhead, printing, copying, supplies, and other costs, when undertaking a new initiative, there are additional costs that may be pertinent to include when investigating a new registered apprenticeship. These may include:
- Design of registered apprenticeship initiative brand external to or situated inside the college’s current institutional brand.
- Marketing materials for connection and engagement (folders, factsheets, brochures for potential apprentices, companies, and general information).
- A specific website to house information to both potential employers and apprentices. This should not be hidden deep within the college’s current website where it will be difficult to find for companies and potential apprentices.
- Registered apprenticeship management staff and resources, especially as the program grows. This can include part-time or full-time employer outreach personnel to educate and sign up companies to hire registered apprentices.
- Purchase of a customer resource management (CRM) system or time and effort of current and new employees to track and document company/college interactions to meet required DOL statistics and reporting.
- Cost of employees to write new registered apprenticeship programs and act as a liaison to the DOL or state staff, handle DOL or state paperwork for each program, invoice employer partners, and keep all employer, apprentice, and financial records applicable to these programs.
Like costs, the benefits to a college implementing a registered apprenticeship program can vary. These variations can be in part due to the role your college plays in the registered apprenticeship program, the state and location of the college and program, partners and stakeholders involved, as well as other components and factors specific to your college and the program(s) you are seeking to implement. Common benefits to colleges that design and implement a successful registered apprenticeship program are:
- Increased tuition and revenue.
- Increased enrollment of new students.
- Additional opportunities and work-based learning pathways for existing students.
- New talent pools and pipelines for students and the community.
- Increased retention, completer, and graduation rates.
- Increased academic indicators (GPA, attendance, success post degree/program).
- Increased credentials awarded (registered apprenticeship certificates).
- Increased employer engagement (both increased relationships with existing employers and an increase in new employer partners numerically).
- Additional engagement and partnerships with community stakeholders.
Along with these common benefits, your college should determine if a registered apprenticeship program will also help the institution:
- Meet organizational mission and goals.
- Increase community goodwill and growth.
- Increase college brand recognition (locally and nationally).
- Enhance eligibility for apprenticeship and other state or federal workforce grants.
- Provide additional opportunities for employer partnerships (equipment donations, serve on advisory committees, support for college foundation).
- Bring national recognition of registered apprenticeship offerings through U.S. DOL.
While AACC understands that the examples above certainly do not make an exhaustive list, the benefits to a college in implementing a registered apprenticeship program can be numerous. In working with your institution, your employer and community partners, and assessing the possibilities in your area, your college can estimate the various benefits that a registered apprenticeship program will bring and may find additional benefits along the way.
Once your college has estimated the various costs and benefits to designing and implementing a registered apprenticeship program, the estimated return on investment can be determined. When the program is in place and underway, by tracking and analyzing the actual costs incurred and the tangible and intangible benefits received, your college also can calculate the actual, and ongoing, return on investment of the program. Along with utilizing ROI in determining to start a new program, the ROI also helps everyone involved to understand “what is in this for the institution?” as well as “what might be the risks?” AACC believes that utilizing ROI to communicate the value a registered apprenticeship program brings to the institution can also strengthen your college’s strategic decisions and prioritize initiative investments into the future.
ECCA Successful Stories and Promising Practices
- The opens in a new windowU.S. Department of Labor’s Workforce GPS online technical assistance website lists research and studies regarding the Return on Investment of apprentices. This information will be useful in determining the method and model a college should use in conducting their own ROI assessment.
- opens in a new windowNational Apprenticeship.org’s ROI calculator
- opens in a new windowJobs for the Future (JFF) report on the ROI benefits for companies that hire apprentices
- Apprenticeship ROI Research and Statisticsopens PDF file
- An Effectiveness Assessment and Cost-Benefit Analysis of Registered Apprenticeship in 10 States by Mathematica Policy Researchopens PDF file
- The Next-Gen IMT Apprenticeship: A Return On Investment Studyopens PDF file
- The Impact of Apprenticeship Programs in Illinois: An Analysis of Economic and Social Effectsopens PDF file
- Rates of Return on Investments in Apprenticeships: Summary of the Empirical Evidenceopens PDF file