Siemens CEO Eric Spiegel on the Power of Apprentice Programs

November 7, 2013

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Apprentice programs can help mitigate the effects of the the nation's skills gap and move the country ahead of global competition, says Siemens CEO and President Eric Spiegel.

At the Close It Summit this week in Washington, Spiegel reflected on the challenges that he and other top business executives face when looking for recruits to fill positions in a rapidly changing workforce.

“I’m on the Business Roundtable," he said, "which is a group of 200-plus of the largest companies in the country and we did a survey recently to understand more about what this gap looks like and it was interesting: just among the 200 something companies, there were 100,000 jobs that they were unable to fill, or difficult to fill.”

Among the most difficult to fill are IT positions, engineering and production positions for high-tech manufacturing environments, and craft-skill jobs, such as welding, he said. Other nations, particularly China, can fill such jobs by recruiting from legions of graduates with valuable STEM degrees, he added.

“Those are the kinds of degrees that you need, and the kinds of skills being developed. If you take a look at the numbers globally, that puts the U.S. in a difficult position," he stressed.

(See related New Study Shows Americans Fall Behind Other Nations in Literacy and Math)

Apprenticeships Are the Gateway to Business and Global Success

In an effort to overcome the skills gap, Siemens created an apprentice model in the U.S. that has been in practice in Germany for several years.

Siemens recruits about 10,000 people in apprentice programs in Germany, and the company hires about 85 percent of them, he said. “We pay them while they go there, and they work in the plants part-time, and they go to school part-time in these technical schools. We have a constant pipeline of people," he said.

The company recently brought that model to Charlotte, N.C., where it worked with a local community college to develop a training program to recruit about 800 people to work at Siemens’ gas turbine plant, one of the largest in the world.

“We put that apprentice program together and we got a couple of dozen people going through it, and I think it’s been successful pretty early on,” he said. “The [concept] is an interesting one: You hire these kids out of high school, they have a job, they work part-time for us, so they get real experiential based training, and they go to school, so they get a degree.”

Apprentices earn a two-year college degree in mechatronics and a journeyman certificate from the state -- while getting paid.

“Apprentices have no debt, they have a job, they have a skill, a real skill, and that’s just the beginning of their career. That’s the floor; that’s not the ceiling,” Spiegel said.

He noted that hundreds of executives in senior positions around the world started their careers as apprentices. Even an innovative visionary like Benjamin Franklin was once an apprentice, he emphasized.

Gearing Up for Apprenticeship Challenges

Before any business implements an apprentice program, it must anticipate skills needs on a micro level, Spiegel said. “We’ve found that when we’ve put a new plant in (place), you need to draw a hundred-mile radius around the city where the plant is going to be, and you better be able to find the people there, because the mobility of people isn’t very high,” he said, adding that the accessibility of universities, community colleges, and technical schools is another consideration.

Some industries, like manufacturing, find that recruiting apprentices is difficult because of the misconceptions about modern factories.

“A lot of people have this image of old men with lunch boxes, wearing wrenches on their belt, and that’s not what the new advanced manufacturing is, that’s not the kinds of manufacturing that’s coming back to the U.S.,” he said.

One of the biggest hurdles to building a manufacturing apprentice program is convincing parents to encourage their children to enter industrial fields. A report released by The McKinsey Center for Government, for example, highlights how parents have a more favorable view of academic pathways than vocational trajectories when it comes to their children.

“As their children graduate, they say, ‘I don’t want my kid working in a plant like my father had to work in a plant. I want them to go to college and get a job in an ivory tower.’ There’s a real issue in explaining to people what manufacturing is today,” he said, adding that manufacturing jobs start at $55,000 a year, which is more than the average starting salary for a four-year graduate from a liberal arts college.

Another challenge in starting an apprentice program is recruiting high school graduates with the core skill sets. The CEO with thousands of employees on the payroll emphasizes that he only recruits the best high school talent. “One of the young ladies we hired was the valedictorian of her class.”



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