One of the public secrets to increase the salary is to get more education. Statistically, on average, the more years we study, the more we earn. The funny thing is that our study time over the years dramatically increased and now it could sometimes last even 30 years (more than 1/3 of life!), with all accomplished PhD degrees. It starts to feel that there could be a counter effect of continuously raising demand of academic studies – first, there is lots of theory, which might be irrelevant and second, there is an incentive to study for studying purpose, which leads to graduates being unprepared for real life job market. Lets consider an alternative – a model of apprenticeship.

Before we dive into the details of apprenticeship, perhaps not everyone is well familiar with this concept, so lets first define it. In old old days, when guilds were strong and blacksmiths and goldsmiths were prestigious jobs, the apprenticeship was simply on the job training, when novice learned from the master. The definition later changed a bit and should have looked this way:

“Apprenticeship is a form of job training that involves following and studying a master of the trade on the job instead of in school. Carpenters, welders, doctors, and many other professionals often learned their trade through apprenticeship. The word apprenticeship comes from the Old French aprentiz meaning “someone learning” and the Anglian suffix -scip, meaning “state, condition of being.” An apprenticeship is when someone is in a state or condition of learning from a master in a field.”

In this definition there were three core stakeholders: apprentice, the employer and the parent. Today we have a different definition, since there are two new important stakeholders: academic and governmental institutions and assessor. Plus parents play a less important part. Nowadays:

“Apprenticeship is an on-the-job training that often includes an academic study (periods of theoretical/practical education followed in a school or training centre) and leads to a recognized certificate or license to practice in a regulated profession. Apprenticeships are paid and typically last from 3 to 6 years.”

According to Apprenticeship and Traineeship Schemes in EU27: Key Success Factors, official apprenticeship schemes have several distinctive characteristics:

  1. Apprenticeships are a component of a formal education and training programme, typically at upper secondary level.
  2. They provide systematic, long-term training by combining practical work-related training at the workplace (either company- or school-based) with theoretical education in an educational institution or training centre. Based on a pre-defined training plan, their pedagogical content seeks to help learners acquire over time the full set of knowledge, skills and competences required for a specific occupation.
  3. All aspects of apprenticeships (e.g. occupational profile duration, skills and competences to be acquired, terms and conditions) are often explicitly defined in the apprenticeship contract. This legally binding document, which is typically a fixed-term employment contract, is concluded either directly between the apprentice and the employer, or via the educational institution.
  4. Linked to this, apprentices typically obtain the status of an employee or a contracted/employed apprentice. As such, they receive remuneration, the precise amount of which is either collectively negotiated or set by law.
  5. Apprentices, who successfully complete the scheme are awarded accredited initial vocational education and training (IVET) qualifications or certificates which, in turn, qualify them to work in a specific occupation or group of occupations.
  6. Apprenticeships are more tightly regulated and monitored than other forms of alternance-based education, often with relevant provisions included in education and training-related legislation or regulations.
  7. The involvement of social partners in apprenticeships is, in many cases, extensive.

Having finally defined the term, lets see what the research about apprenticeship shows. According to Apprenticeship and Traineeship Schemes in EU27, completing an apprenticeship increases the probability of being employed. In the case of UK Level 2 apprenticeships, the probability of being employed increases by 7.8 percentage points when this type of programme is completed, relative to having Level 1 qualifications and no apprenticeship; completion of a Level 3 apprenticeship is associated with a 10.7 percentage point increase.

What is more interesting and important, completion of Intermediate (Level 2) and Advanced (Level 3) apprenticeship leads respectively to a 14.7% and 23.6% increase in wages relative to staying at Level 1 without completing an apprenticeship.

Cost-benefit analysis shows that, by taking on apprentices, employers experience a short-term net cost, but in the longer term there is a net benefit. A similar outcome is observed for apprentices, public budgets and society at large; in the latter cases, the calculations presented show a large net benefit, reflecting that apprenticeships are investments with substantial long-term returns for all stakeholders involved.

The results seem to be interesting, a bit not solid in quality, but make common sense. It seems natural that going on an apprenticeship leads to higher employment and more salary, since apprentices gain rich work experience (not just work, but work with training), qualification or license (which takes years to accomplish and thus should generate a value) and subsequently a trust from the employer (after such a long work) and job position.

Interesting to note that for most of the apprenticeship programmes reviewed in different countries, the majority of apprentices secured employment immediately upon completion: the average proportion is about 60%-70%, while in some cases it is as high as 90%. In addition, within six months to a year after completing the scheme, the proportion of apprentices who secure employment increases even further and is often over 80%.

The document summarizes that apprentices achieve better job matches; higher wages (works only for workers with low education and no apprenticeship training, but not when compared to workers having completed full-time vocational education); shorter periods of unemployment before finding a first job; or a longer duration of their first job compared to individuals with low educational attainment or school-based vocational education.

It is however very important that these benefits does not work in all cases: (1) the advantages of apprenticeships compared to school-based vocational paths tend to be stronger at the beginning of working life and then decline or even disappear over the longer term, (2) better employment and earnings prospects for those who received their apprenticeship training in large firms compared to those in smaller firms, (3) the positive effects of apprenticeships on labour market conditions are also related to the quality of the apprenticeship (e.g. training intensity, duration and type of training, occupational field and sector of apprenticeship.

Now lets return to the first paragraph. I was not fully correct to dramatize an increase in schooling years for two reasons. First, life expectancy constantly increases, giving us more years for the things to do. Second, we should study all life, constantly upgrading our knowledge, not just few years till we grow up. To reflect a little bit about the first moment, while life expectancy in 42 years increased by 10 years (+14.6%), the median school years completed grew by 5 years (or +64%), from 7.5 years in 1980 to 12.3 in 2013.

Lifeexpectancy-abroadship.org

Lifeexpectancy-abroadship.org

Education, as mentioned before, is a very powerful tool. According to The Department for Business, Innovation and Skills, working-age graduates in 2015 would earn an average of £32,500 compared with £22,000 for non-graduates. This is a huge gap. In addition, studies show that 60% positions in London will require a degree. There is no doubt that studying pays off.

However, study could be even more valuable if it is complemented by the model of apprenticeship. We know that apprenticeship increases an employment and salary for those who accomplish apprenticeship comparing with those that do not, plus, the higher is the level of apprenticeship, the better probability of employment and the higher is the salary. We also know that there is no such effect for the apprenticeship versus university education. It means that apprenticeship without academic education is insufficient, but what if we combine both fields?!

There are no studies to illustrate the effect, but it makes sense that a combination of studies with apprenticeship would yield the best result in terms of the employment, salary and job match. UK already started to implement apprenticeships in the higher education, suggesting programmes of Degree apprenticeships that would involve longer studies to include apprenticeship. We also should consider following factors:

  • It is quite healthy to take a gap from the twelve years of continuous study in school and do something practical. One option is to go volunteering, another great option would be apprenticeship.
  • It is not advisable to live on constant extremes – either to be too theoretical or practical. Studying theory in the school for many years demands a practical task to use of knowledge.
  • It is important to have a reality check, which is easy to do by working in a field of a choice. Apprenticeship allows to work straight in the field of one’s desires and that could be a great possibility to know whether job suits the needs.
  • While less than a 1/3 of job roles are expected to be graduate positions by 2022, recent research from City and Guilds showed that 2/3 of young people are planning on going to university, despite a third of them not knowing what they are going to study. This data is not consistent with before mentioned 60% need for graduates in London, but perhaps London as metropolitan city demands more theoretical and less manual labour workforce. Another worrying figure mentioned is that 1/3 of people font know that are they going to study! Better to take an apprenticeship rather than study randomly.
  • Here comes the key moment and topic of the essay: Earn While Learning! Apprenticeship provides an amazing chance to earn some money while studying, rather than spend money for studying.
  • It leads to another advantage – no student loan and no debt. A typical student on a three-year course outside of London might expect to graduate with around £35,000-£40,000 of student loans. The good part for the student is that repayments are calculated on how much you earn, not on how much you borrowed. If you’re funded via Student Finance England and studying full-time, you only start paying back your loan when you are earning above £21,000. If, after leaving university, in any one year you’re not working or earn less than £21,000, then you don’t have to pay anything back on your student loan. After you graduate, you’ll repay 9% per year of whatever you earn above £21,000 – regardless of whether your total loan is £22K or £50K.
  • Lots of famous and wealthy people started working early on. Learning the craft or trade early provides with valuable real-life lessons and if it is combined with a formal scheme (like apprenticeship), it might be a game changer.
  • Another moment is that education has never been more accessible than today. We have huge libraries, we can study online in the best universities through Coursera, edX, listen to the lectures at TED and many others channels. Our opportunities to self-educated are outstanding, just take it!

Lets look at the current dynamics of the apprenticeship programmes in UK. In the picture bellow we can see that the scope of apprenticeship programmes increased significantly since 2008. This was mostly as a result of the change in regulations that apprenticeship became available for people over the age of 24. Great initiative.

Apprenticeship - Earning While Learning - developingmoneyideas.com

Apprenticeship – Earning While Learning – developingmoneyideas.com

Apprenticeship - Earning While Learning - developingmoneyideas.com

Apprenticeship – Earning While Learning – developingmoneyideas.com

As mentioned before, UK has now introduced Degree Apprenticeships, which allow to get a degree and get a training on the job. The new degree apprenticeship model has a number of benefits for employers, prospective apprentices, and universities: (1) Employers can attract new talent, particularly high-calibre school-leavers who are keen to earn a full bachelor’s or master’s degree in a work-based environment. It will allow them to acquire the graduate/post-graduate level skills they need, where the training costs, including the degree, are co-funded by government; (2) The apprentice, like any other apprentice, will be employed and paid a wage throughout, will gain a full degree (bachelor’s or master’s), and gain a head-start into their chosen profession compared with many of their counterparts; (3) Universities can strengthen links with local employers and offer more degree programmes that meet employer needs and are accredited by professional bodies, while also having a new product to offer to prospective applicants.

Apprenticeship - Earning While Learning - developingmoneyideas.com

Apprenticeship – Earning While Learning – developingmoneyideas.com

Apprenticeship - Earning While Learning - developingmoneyideas.com

Apprenticeship – Earning While Learning – developingmoneyideas.com

Most the apprenticeships were offered in the Business, Administration and Law sectors and Health, Public Services and Care. Apprenticeships are mostly associated with manual work, but it makes a sense for the model to work in all the sectors. Under the current system, there are over 200 different types of apprenticeships in UK.

Apprenticeship - Earning While Learning - developingmoneyideas.com

Apprenticeship – Earning While Learning – developingmoneyideas.com

To conclude, it make a lot of sense to add work practice through a model of apprenticeship in our lives, it is just important to define the best practices. Apprenticeships differ widely between companies and countries.