Joe Fuller: The US faces some serious challenges in workforce development and secondary education.

Business leaders say they can’t find qualified, job-ready candidates. Postsecondary programs often leave students deep in debt and fail to deliver the practical skills needed to secure a good paying job.

Welcome to the Managing the Future of Work podcast. I’m Harvard Business School professor and visiting fellow at the American Enterprise Institute Joe Fuller.

Today I’m speaking with Noel Ginsburg, founder and CEO of CareerWise Colorado, a nonprofit apprenticeship program that combines work-based with the classroom. CareerWise places high-schoolers in industries ranging from advanced manufacturing and high tech to healthcare and finance. Students complete their high school degrees while in a work-based learning environment, earning salaries and college credit.

Noel founded CareerWise after struggling to find qualified middle-skills workers for his manufacturing firm. Drawing on the apprenticeship model he witnessed on a visit to Switzerland, he set about to create a system appropriate to the American context, which has taken the form of CareerWise.

Well, welcome to HBS, Noel and Ashley.

Noel Ginsburg: Thanks for having us.

Ashley Carter: Thank you.

Fuller: When we look at programs that relate to developing skills and talent in the United States, they’re disproportionally out of the social sector. They are disproportionally not for profits, very often educationally related. Can you talk a bit about how, Noel, as an employer, you started to think about this problem and how that’s influenced the evolution of CareerWise Colorado?

Ginsburg: Well, my history is in manufacturing. So after spending 39 years in that sector in Colorado, which tends to be a desert for a high degree of manufacturing, talent was always an issue for us, whether we had 10 employees or 300. The challenge for me was to find that place where we could really be impactful in partnership with education, which is somewhat unique. A lot of times, business just sits there as an adviser or critic to the education system, and not actually a participant.

Fuller: Now, the evolution of the program in Colorado was related to a visit that a group of leaders, including you, took to Switzerland, where you start seeing how the apprenticeship system in Switzerland made those connections between employers and the education system. Could you just talk about that trip and how it informed what you’re doing now?

Ginsburg: Well, it really came in two parts. The first part, I was invited to go to Switzerland to a program called CEMETS [Center on the Economics and Management of Education and Training Systems] at ETH University. The purpose was to learn about the Swiss apprenticeship system. When I got there, what I realized is a strategy that, frankly, I’d been looking for decades, was right there before me—a system that served a majority of the Swiss, and in the US we leave basically untouched. Seventy percent of their population goes through an apprenticeship. I reached out to our governor and invited him to lead the delegation back to the country. He said yes. Six months later, we found ourselves in the country with 48 business leaders from Colorado as well as the head of the community college system, the university president, the superintendent of a public school, the board president of our largest school district. What went from, on the first day of that, or the first day and a half, business people saying, “This is Switzerland, it makes sense for them, but I’m not sure this would work in Colorado,” by the last day, we spent two and a half, three hours of those same people saying, “This is the best thing they’ve ever seen.” They all made commitments and, to a person, they kept those commitments and enabled us to found CareerWise six months later.

Fuller: What were the biggest myths that got exploded on that trip? You’re saying it’s been this way for Switzerland for 100 years, but we can’t match it. What scales had to fall off their eyes?

Ginsburg: What they saw over that four-day period is young people in professional environments rise to the occasion, and, more importantly, they were providing real valuable impact to those businesses. It was in no way a social program in Switzerland. It was a talent-development initiative that really permeated their economy. The second piece is, early on they thought, well, the Swiss aren’t very diverse and that’s why this works. By the end, they saw a fair amount of diversity—about a quarter of the Swiss population are immigrants—so that myth was busted. The third was really around their role. Rather than being disconnected from the education system as we tend to be in the US—providing input but not actually engaged—they saw a real role around being producers of talent as well as consumers from the education system.

Carter: Noel, another thing I believe they saw during that trip is that apprenticeships can be a valuable training strategy in a wide variety of industries, sectors, types of businesses. I think there’s a perception here in this country that apprenticeships are only something that you see in the trades. We had leaders from the financial sector, from banking, from IT on that trip who all agreed, “Wow, apprenticeships can be a really solid strategy for me in my environment.”

Ginsburg: One great example, one of the participants on that trip runs a company with about 600 employees in the insurance industry. When I asked him before going to Switzerland, how many apprentices he might take, he thought about it and said, “One.” Today, he has over 28 apprentices. He’s moving to 38 in this next year. What he realized is the requirement they had around a degree, if you were to work at their company, fell away. It became much more focused on competency and skills. Then, he viewed this as a key strategy to address the retirement cliff that they were facing as a company.

Fuller: As you came back and started to think about launching CareerWise Colorado, what were the design parameters you set out?

Ginsburg: Well, in Colorado—and I think across the country—there’s been a lot of focus over the years around internships, which tend to be episodic. For high school students, it is a nice thing to do for businesses, they look at it as a social good. In this model, they’re making a three-year commitment. It’s not just having someone look over your shoulder for a summer, but actually to become a productive member of your team. Our design parameters were more than just asking companies to do this, but also supporting them with the design of competencies that they could train to, and providing the support they would need to bring a young person into the workplace. Then, secondarily, with most internships, which is very different than apprenticeships, they’re really force-placed into a company. They show up, and they do what they do. An apprenticeship, we created a market place so students could apply to business opportunities, but then the business, ultimately, would do that interviewing. We also developed coaching for those businesses so they could know how to bring in and onboard a young person.

Fuller: In countries like Switzerland, there are industry groups that work together, that set specifications, and, of course, the whole practice of recruiting and adopting and training and apprenticing is integral to their HR systems, their Human Resource systems. That’s clearly not the case with the businesses you’re partnered with. What do you have to do to get an employer ready to bring an apprentice on board and manage that experience for them so they have a reasonable prospect of success?

Carter: I’ll just say that it’s, first of all, most important that a business see the apprentice as an employee of that company. They will invest the most in the training and development of that individual if they really are seen as a true employee. At the same time, we have to do some preparation with our business partners around what it’s like to work with these young people who are developing critical soft skills as part of the apprenticeship. As you were alluding to, a critical part of what CareerWise provides as an intermediary in the system is standardization of competencies and credentials for each of the occupations that our students participate in apprenticeships in. Or they can take those same skills with them and step foot into a similar job in another business environment.

Fuller: So, Ashley, you’re providing, essentially, some guidance to the employers as to what are some fundamental, or backbone, skills that you want to make sure that every apprentice is developing on the job?

Carter: That’s exactly right.

Fuller: Certainly, our researches shows that the deficit in what you describe as soft skills—the skills of workplace etiquette, spontaneous communication, empathy with understanding someone else’s circumstances, being able to work in unfamiliar groups with unfamiliar people—are an incredible impediment to people moving from school to work.

Ginsburg: In the US, we’ve looked at soft skills as something that the schools train. What research will show is that soft skills are better taught in the workplace with a young person.

Fuller: We also know, of course, that some kind of work-based experiences in your teenage years is co-indicated with everything from matriculating into higher education situations to impendent household formation, lots of great outcomes socially. Let’s now talk about the apprentices themselves. They are active students in their school district. How do they get recruited? What’s the pitch to get them excited about this? How do school districts accommodate them actually being off premises, working, and moving toward getting their high school diploma?

Ginsburg: One of the obstacles that I thought would be our biggest challenge bringing this model to the US is, would schools be willing and able to let their students out in the junior and senior year two days a week, then three days a week in the senior year, and still get their high school credit and diploma? In fact, that was our least challenge. Recruiting, though, is a challenge, for the schools and for us. It’s a challenge because, what do we tell all young people in this country and their parents to be successful? You have to have a four-year degree. So when we built our design here at CareerWise, we did it with college in mind—so that you can start with an apprenticeship and end with a PhD. Even more importantly, what we’re trying to impress upon parents and students, that this pathway, whichever you choose, has equal dignity. What we had to do is, through the design of our model, set the expectation that college is an option. In fact, our apprentices earn college credit as part of the apprenticeship, so it makes college more affordable. We’re emphasizing the fact that this is a pathway that all students can, and frankly should, take.

Carter: The idea of earning $30,000 total over the course of three years as part of their apprenticeship is something that excites a lot of our students, in addition to the great opportunities for college credit along the way.

Ginsburg: With that, I’d have to also add, for many of our kids—particularly those in the inner city—who might be making a decision to stay in school or help contribute to the family income, that $10,000 is not just a nice thing, it’s what might keep them in school and ensure they stay connected to the opportunity that is there for them and their future.

Fuller: What are the types of questions you get from parents? Because parents are strongly affected by this cultural meme, Noel, you mentioned, of you got to go to college to make it in America.

Ginsburg: Well you can typically see them get very attentive when you start talking about earning college credit while in the apprenticeship. But just the fact that we’re making college more affordable for parents is really what gets their attention. In terms of objections, that’s the biggest one they have: “This for my neighbor’s kid, but not my kid, because my kid’s going to college.” So once we take that down, that’s the principle objection.

Carter: We certainly hear objections like that. On the other side of the coin, we often hear parents who say, “Man, I wish I had this when I was younger,” because they recognize that pairing that workplace learning experience with the theoretical academic training that they received either in high school or college would’ve benefited them quite a bit before making huge and costly decisions about what to study while they were in college, while never having had any work experience to inform those decisions.

Fuller: So you’re a couple of years into this now. What have you learned? What have been the surprises, pleasant and unpleasant?

Ginsburg: The challenges we continue to have—and I think we’ll grow as we move to scale and outside of our pilot—is how can we more effectively engage students and parents in schools? Right now, CareerWise takes a big portion of that responsibility. Over time, to get to our goal of 20,000 apprentices per year, the schools actually need to provide that access and that training for students and awareness so that they participate and CareerWise doesn’t have to. So part of our challenge is turning this into not just a program but a systemic way that education takes place in Colorado and that we share out the responsibility that CareerWise has.

Fuller: And make it an integral path of study that’s visible to students and a choice they make as part of their high school careers, as opposed to go to an evening meeting to hear from CareerWise.

Ginsburg: Exactly. On the business side, the challenge there is we’ve always actually led, we’ve had more positions in business than we’re able to fill with students—with students that have the skillsets that are employers are buying—because, again, this is a market, and they’re competing with their peers. And if a business doesn’t find the right talent, they won’t hire them. We now have over 120 companies. Can we get to the 3,000 number that we think we’ll need of businesses to do this? So, to get to that level, businesses need to really understand at their depth, at their core, this is a business-development strategy. And equally important is the reason it is that is these kids are productive and there’s return on investment, such that a company like Plante Moran has students coming in into an accounting firm that they start billing out within 60 to 90 days of that apprentice starting. So it is actually helping them be more competitive in the marketplace, while at the same time these students are getting invaluable experience—practical experience—giving real meaning to what they’re learning in the classroom.

Fuller: What have been the objections or concerns employers have raised, and how have you gone about responding to those concerns?

Ginsburg: They’re different for a large company than they are for a small company. When you go to a large bank, let’s say a national bank, their Human Resources departments, by nature, are risk-averse. They want to make sure that everything they do is correct and right and they’re not doing anything that might violate some regulation or law, put a young person in some kind of danger. So the cycle of a large company adopting this can be one to two years. Some companies say, “Can you really have a 15-year-old in a business?” You can. And we partner with the Colorado Department of Labor, so when there’s a question we can get that answer directly from the Department of Labor. But you have to work through those types of issues. In a small company, they’re really looking at this as, “Is this going to actually help move my company forward?” The decisions typically are made much more quickly because you’re dealing with the decision maker—there’s no legal department between you and them taking on an apprentice. And it’s really just convincing them that the pathways that we are training to at the time fit their business. So the challenge there is, if you go to Switzerland, there’s 270 different occupations that they’re training for. We’re at about 16. So our limiting factor, and for a business could be, “I want to do this but you don’t have that occupation or pathway built yet.”

Fuller: How do you lay out the math for an employer? They’re going to spend X, and they’re going to get Y. What are the variables in that equation, Ashley?

Carter: Right. So when we go out and talk with prospective business partners about the return on investment that they can see by hiring a youth apprentice, we help them look at what the cost will be in terms of wages, what the cost will be in terms of that contribution that they’re making to support the college training that apprentices receive. There’s a cost for some of the credentialing coursework that apprentices also participate in. Then, of course, there’s a cost in terms of the time and the planning that goes into this from their existing staff. At the same time, we help them look at what the productivity of the apprentice will be over the course of the apprenticeship relative to their typical full-time worker. Employers are really starting to buy into this idea that a 16-year-old really can come up that productivity curve quite quickly and provide real value in the workplace.

Fuller: Noel, you mentioned you have a 120 businesses now working with CareerWise. Obviously, it’s a historically tight labor market, where companies are struggling to find applicants; that we have a consistent pattern now of having more posted job openings in the United States than we have people who are nominally unemployed. Any risk that this is, the adoption of apprentices, is just a way around that tight labor market? Is this built to last?

Ginsburg: As an employer—not at CareerWise, but at my own company, Intertech Plastics—what we have learned so far within our business is that these students tend to be equal to or more productive in some cases as degreed engineers. And as a result, the last person that we would want to disrupt in our organization would be our top performers, which tend to be our apprentices. And, because they’re still in the apprenticeship, their cost per hour is lower. So the reality of it is, it’s a win-win. In the tech industry alone, we’re not going to solve the pipeline problem of talent for decades, recession or not. So I think there will be some pathways that will do better in a downturn in the economy, but fundamentally, I think this will last because it’s in the best interest of industry for it to last, and the benefits to the kids are just amazing.

Carter: I just want to add on to one thing Noel just mentioned, which sometimes creates confusion among people: How could a 16-year-old possibly be as productive as a degreed engineer? And what we’ve seen so far in our apprenticeships is that these young people are just so thirsty for knowledge, they want to soak up everything that they can, and so they are learning at such a fast pace, and also don’t come with some of the bad habits that they may have picked up elsewhere in other work environments. So these businesses have the opportunity to really mold their ideal employee from a very early stage. And these are employees who are just so very eager to learn and contribute and be valued by the teams they’re a part of.

Ginsburg: And they’re digital natives. So they grew up with a phone in their hand or an iPad, and they know how to use it. And so they bring a level of innovation to a company regardless of if it’s in advanced manufacturing or banking. In fact, when we were in Switzerland, the people at Swisscom said, “We have 800 apprentices here out of 8,000 employees because they enable us to innovate. They look at the world differently, and they infuse that into our business.”

Fuller: What do you see in terms of the barriers to scalability?

Ginsburg: What I emphasized from the very first day is what we’re building cannot just be for Colorado—that, to really have the impact that I felt this could have, we had to build a system that was replicable and scalable, which means we build everything as you build a business that’s built to last. We document everything. We created a digital platform in which we have our operating system, a digital marketplace. We’re developing a digital learning management system. You can share them out, license them out, which makes it easier for other states or communities to do this. You can scale, and we actually have our first proof point with the HERE to HERE Foundation in New York City, which launched in essentially five months from start to students going into the apprenticeship porthole and taking opportunities. They were able to do that because they didn’t have to create everything we did. So one of the challenges in the nonprofit world, which I’ve been involved with for 30-some years, is that we all do it for ourselves—that, in the workforce of this country, we need a systemic solution, and the only way you do that is by sharing knowledge, sharing materials, creating standards which will apply, hopefully, if you go 20 years from now, across this country. Because I believe the challenge we have as a country right now is we don’t have the talent to compete globally. Whether we’re competing with China around manufacturing and engineering, they’re beating us by the amount of engineers that they’re graduating. If we don’t find a way to create a more seamless system of developing talent, we will fail. So I think why we believe CareerWise can scale is we’ve already seen in our first example in New York, they were able to get up and running within four months at about 10 percent of the cost that it cost us, because they didn’t have to develop the product. Will they enhance the product? You bet. And we’re looking for all the communities that we’re working with to learn from them, as well as share our materials so we can build a national system so we’re speaking a single language. That is a unique part of the Swiss system.

Carter: At the end of the day, in order to scale and, importantly, sustain apprenticeship systems, industry will have to be at the table and believe that this is a fundamental talent-development solution for them.

Fuller: If you could just change one or two things in the system, in the attitudes of employers, in the attitudes of educators to try to accelerate the adoption of models like this, what would you call out?

Ginsburg: Education policy, both at the state and federal level, aren’t necessarily aligned, so if you’re going to move the education bureaucracy, their incentives have to be aligned with creating this type of model. They’re not. We’re trying to match the two. We have multiple pieces of legislation in Colorado so that we can move the systemic change forward, and we have a lot more work to do.

Carter: More philosophically, what we’ve seen is that the business side of the equation and the education side of the equation have to trust one another, collaborate, believe that the other has something valuable to offer, and that’s not always an easy thing to accomplish. Our business partners, for instance, have to believe that they can become contributors to producers within the education system, and not just consumers of it. On the other side of the equation, our school partners have started to really see and believe that these businesses care for the young people who they also care deeply about. One of the biggest benefits we’re seeing so far with our youth apprentices is they’re walking away from the experience with an incredibly valuable adult network who will go to bat for them, who will cheerlead for them as they start their early careers. We have one business partner who’s already said to his apprentices, “If you stay here, you’ll have a $60,000 or $70,000 job when you’re 19 years old.” We have told our apprentices who work for us at CareerWise, no matter where you go in life, we will be there to support you, to write references for you, to coach you. And that’s just such an incredibly valuable part of this experience that our school partners are really starting to see and believe and change the hearts and minds about what a business environment can offer a young person.

Ginsburg: Another thing you mentioned a minute ago is kind of the fragmentation. We have a lot of points of light throughout the country, and if you’re going to do this at scale, it requires alignment of all those wonderful microprograms, and turning them or aligning them with the system, whether that is at the nonprofit level or at state government. We’ve been very fortunate in Colorado to have a governor that helped align the state departments to do this work. The second piece I’d add: A lot of those nonprofits are built around remediation. When the education model doesn’t serve everyone, we spend a lot of money in this country on remediation. And usually, it costs ... If you solve a problem early on, learned this in manufacturing, solve the problem at its root, it’s a lot cheaper than when it’s in the warehouse. Well, once a young person was not benefited by the education model, providing the support that person’s going to need as a young adult or as an adult costs 10 times as much. But most of our systems in this country are about remediation, and there’re some great programs. But if we don’t stop the hemorrhage, we’re not doing our job. And so, if you have scarce resources, we’re aiming it in the wrong places. We’re aiming it at the fire instead of the igniter, where the problem started.

Fuller: Well, Noel, Ashley, thank you so much for joining us here at Harvard Business School and sharing the story of CareerWise Colorado, which is probably the most-studied model of work-based learning presently in the United States. We’ll be excited to see how things unfold.

Ginsburg: Well thank you, and thanks for the opportunity to be here at Harvard.

Carter: Thanks for having us.