According to the NFIB’s most recent Small Business Optimism Index, 44% of all owners reported job openings they couldn’t fill. Businesses can continue to try recruiting as they usually do or seek referrals to find the employees they need. Or, they can try some alternative methods to develop the employees they want: apprenticeships and internships.
Apprenticeships are paid on-the-job training and were common practice starting in the middle ages. In 1937, the Fitzgerald Act was created to regulate apprenticeships and on-the-job training programs. Then, in 1977, the National Apprenticeship Act, which amended the original act, directed the U.S. Department of Labor to promulgate regulations for a national apprenticeship program.
Today, apprenticeships are in the spotlight because many green energy provisions from the Inflation Reduction Act give additional tax write-offs to businesses that comply with apprenticeship requirements.
What you need to know.
If you decide to use apprentices, remember that federal law prohibits discrimination in recruitment, selection, employment, and training of apprentices. Special rules apply to registered apprenticeship programs—those approved by the U.S. Department of Labor Office of Apprenticeship—in a wide range of industries, including construction, financial services, healthcare, and information technology. Such a program may qualify for federal funding. Under a registered program, the apprenticeship typically lasts 3 to 5 years, with the sponsor (employer) providing a structured training/mentoring program that is usually combined with classroom education. You can learn more through ApprenticeshipUSA. Short of having a registered program, you can still create on-the-job training programs to suit your situation.
It’s been routine for many businesses to engage students as summer interns. But there’s no reason why interns can’t be used year-round for:
- Doing work for the company. If you haven’t been able to hire a permanent worker, an intern can fill your labor needs at least temporarily.
- Testing talent for future openings. A frequently cited statistic attributed to Monster.com is that 85% of companies use internships to recruit for full-time roles (I couldn’t track down the original source). You can see if the intern is a fit for your business in terms of skills and company culture. The intern can also see whether he or she would have an interest in working for you.
- Filling in for employees who are out. Whether it’s vacation, sick days, or leave time, your regular employees may leave a labor gap that interns can fill.
- Increase diversity in your company. Bringing student-interns on board provides added depth to age diversity in your company. Employees in different generations can learn from each other. But age isn’t the only diversity aspect that can be addressed with interns, so look around.
- Provide mentoring experience for your staff. Your existing employees can hone their mentoring skills by working with interns.
What you need to know.
Interns aren’t automatically free help. Under the Fair Labor Standards Act (FLSA), you must pay your intern at least the minimum wage. This is the higher of the federal or state minimum wage rate.
The only way to have an unpaid intern is to meet 7 tests listed by the DOL. For example, the intern’s work must complement, rather than displace, the work of a paid employee while providing significant educational benefits to the intern. The internship must be tied to a formal education program (integrated with coursework or the receipt of academic credit). The tests taken together require you to essentially be a teacher rather than obtaining services from the intern, an arrangement that may not be suitable for your company.
Depending on the type of intern you’re engaging (and assuming you don’t meet the 7 tests for an unpaid intern), you may need to pay considerably more than the minimum wage rate. As a general rule, internships in engineering, programming, finances, and certain other disciplines warrant higher pay. According to Zippa, for 2023, the average student internship salary in the U.S. is $31,256, with an average hourly rate of $15.03.
Former CEO of Porsche said: “Hire character. Train skill.”
Consider engaging good people to be apprentices and interns and then train them to be a fit with your company.