Indiana’s ambitious plan to boost apprenticeships ‘will be challenging,’ report says

As Hoosier education leaders lean deeper into a statewide model that emphasizes work-based learning, a new report from the Indiana Fiscal Policy Institute cautions that while apprenticeships are widely considered to be a “gold standard” of workforce training, scaling the programs to meet current needs ”will be challenging.”

Employer demand for workers continues to outpace Indiana’s supply of individuals looking for work, said IFPI President Stephanie Wells, who authored the policy brief. Like many other states, Indiana is now seeking to create robust youth and adult apprenticeship programming.

Those learning opportunities allow high school students — as well as adults re-entering the workforce and those who are currently employed but want to increase their skills — to earn necessary experience and credentials through firsthand career exposure that is directly tied to an industry or employer.

State and local organizations have repeatedly emphasized apprenticeship programs and work-based learning in recent years. Indiana lawmakers are also buying in, so far establishing new Career Scholarship Accounts — which provide $5,000 scholarships to pay for apprenticeships or career-related coursework — and funding initiatives like youth apprenticeship grants.

But achieving a lasting apprenticeship model that can adequately train up large numbers of Hoosiers won’t be an easy feat.

The IFPI brief, published last week, recommended that state lawmakers simplify the regulation and oversight of youth and adult apprenticeships to “make it easier for employers and intermediaries to navigate the system.” State-funded incentives to pay for workforce training and education, plus subsidies for apprentices’ wages through grants or tax credits, is also “especially recommended.”

Access to better apprenticeship data, at both the state and national levels, will be critical, too.

“Scaling apprenticeship will take time, investment, and leadership,” Wells wrote, noting that “sustainable and scalable” programs in the U.S. have required “consistent marketing, employer incentives, tuition assistance, and ongoing grant funding for intermediaries.”

“Overwhelmingly, the research suggests that scaling apprenticeship will be difficult without more resources to educate employers on the benefits of apprenticeship and also how to establish their own programs,” she said.

Indiana’s employment landscape

According to the U.S. Chamber of Commerce, Indiana has 72 available workers for every 100 open jobs.

In April 2024, Indiana’s unemployment rate was 3.6%, compared to a national average of 3.9%. At the same time, the Hoosier labor force participation rate was recorded at 62.5% — representing the percentage of Hoosiers who are eligible to work and are actively seeking employment. Wells noted in the policy brief that Indiana’s labor force participation rate was at or exceeded 65% for most of the past 40 years, with participation peaking at more than 70% in 1995.

The employment report further showed 32,000 Hoosiers were not in the labor force but would be willing to work now. These are typically adults that have barriers to employment such as lack of affordable childcare and lack of transportation, Wells said.

Combined with those that are unemployed and are actively seeking work, that means that there are 153,506 potential Hoosier workers who are not currently employed.

To address talent needs, state policymakers created the Next Level Jobs programs in 2017, which consist of employer training grants and tuition support for individuals looking for short-term training opportunities.

In 2018, Gov. Eric Holcomb additionally created the Office of Work-Based Learning and Apprenticeship through executive order. And in recent legislative sessions, Hoosier lawmakers have approved multiple measures that aim to make career-centered education available to Indiana high school students.

The U.S. Department of Labor’s job finder currently shows more than 800 apprenticeship opportunities available in Indiana.

Even so, the IFPI brief noted dismal apprenticeship completion rates — nationally, only 35% of students finish a program once enrolled. In Indiana, policies and program design “will need to be implemented with an eye to increasing this completion rate over time and to making the program more available to diverse populations,” Wells said.

Despite low completion rates, research still indicates that participating employers receive a positive return on investment for hosting apprentices.

The brief pointed to data showing that for every dollar invested in an apprentice, the employer earns $1.44 in benefits — a 44% return.

Research also shows that apprentices experience significant wage gains through participating in such programs, particularly among women and people of color.

“However, there is no data that there is sufficient organic employer demand for these programs in Indiana,” Wells said in the brief. “Indiana will need to devote significant resources towards employer recruitment.”

Equity also continues to be a problem in Indiana. Wells noted that 80% of Indiana apprentices are white and 87% are male. As apprenticeship enrollment continues to increase in the state, providing more opportunities for other populations of Hoosiers should be a policy priority, she wrote.

Major education changes on the horizon

Indiana’s top education officials are currently hashing out a massive high school diploma redesign meant to maximize “flexibility” and allow students to personalize learning pathways and experiences, including with college courses taken while still in high school. Internships, apprenticeships, military experience and other work-based learning will also be allowed to count toward graduation requirements.

Paramount to their proposal is an ambitious, statewide youth apprenticeship program modeled after the renowned system in Switzerland, where apprenticeships start in high school.

Switzerland’s dual system combines learning on the job — and being paid a learning wage — with one to two days of theory at school. Nearly two-thirds of Swiss youth aged 16-18 participate in apprenticeships.

Employers invest in the programming, and most recoup their investments while the youth is enrolled as an apprentice. Typical apprentices earn 12% of an occupation’s typical wages, Wells noted in the brief.

Although the model has gained “overwhelming popularity” among the Swiss, Wells cautioned that “there are still challenges.”

“Some parents and policy makers continue to push back on making 14 year-old-students make such important career choices. Also, the Swiss vocational education system, which is the path for many professional occupations in Switzerland, is not as valued outside of Switzerland, where other countries value a higher education degree for many of these occupations,” Wells wrote, adding that, in the United States, “many of the occupations that are apprenticeable in Switzerland are aligned with degree programs in our public and private institutions of higher education.”

If the proposed high school redesign is successful, state officials say the new education model could be a game changer for how employers and educators in Indiana guide students toward career-education pathways — as well as boost labor participation rates.

But if Indiana decides to go “all in” on apprenticeships, “then much attention must be paid to recruiting employers,” Wells said.

“While we know that employers indicate that they are actively seeking talent, there is no evidence that there is employer demand for these programs,” she wrote in the policy brief. “No known evaluation of the sensitivity of Indiana employers to participating in these programs exists.”

In 2024 alone, there are 86,547 high school juniors and 85,133 high school seniors enrolled in Indiana’s public and private schools, according to state data. By those numbers, Hoosier employers would need to enroll over 15,000 students each year if only 10% of students are interested in apprenticeship programming.

“In future years, that means that realistically if employers are expected to provide work-based-learning experiences for high school students, they will have to drastically increase their internal capacity to do so,” Wells emphasized.