    [House Hearing, 115 Congress]
    [From the U.S. Government Publishing Office]

      WORKFORCE DEVELOPMENT: ADVANCING APPRENTICESHIPS FOR SMALL BUSINESS

    =======================================================================

                                    HEARING

                                   before the

                   SUBCOMMITTEE ON CONTRACTING AND WORKFORCE

                                     OF THE

                          COMMITTEE ON SMALL BUSINESS
                                 UNITED STATES
                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                  HEARING HELD
                                 MARCH 20, 2018

                                   __________

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                Small Business Committee Document Number 115-063
                  Available via the GPO Website: www.fdsys.gov

                                       ______

                         U.S. GOVERNMENT PUBLISHING OFFICE

    28-915                    WASHINGTON : 2018

                       HOUSE COMMITTEE ON SMALL BUSINESS

                          STEVE CHABOT, Ohio, Chairman
                                STEVE KING, Iowa
                          BLAINE LUETKEMEYER, Missouri
                              DAVE BRAT, Virginia
                 AUMUA AMATA COLEMAN RADEWAGEN, American Samoa
                            STEVE KNIGHT, California
                            TRENT KELLY, Mississippi
                                 ROD BLUM, Iowa
                             JAMES COMER, Kentucky
                     JENNIFFER GONZALEZ-COLON, Puerto Rico
                        BRIAN FITZPATRICK, Pennsylvania
                             ROGER MARSHALL, Kansas
                          RALPH NORMAN, South Carolina
                               JOHN CURTIS, Utah
                   NYDIA VELAZQUEZ, New York, Ranking Member
                           DWIGHT EVANS, Pennsylvania
                           STEPHANIE MURPHY, Florida
                            AL LAWSON, JR., Florida
                             YVETTE CLARK, New York
                              JUDY CHU, California
                           ALMA ADAMS, North Carolina
                          ADRIANO ESPAILLAT, New York
                            BRAD SCHNEIDER, Illinois
                                     VACANT

                   Kevin Fitzpatrick, Majority Staff Director
          Jan Oliver, Majority Deputy Staff Director and Chief Counsel
                         Adam Minehardt, Staff Director

                                C O N T E N T S

                               OPENING STATEMENTS

                                                                       Page
    Hon. Steve Knight................................................     1
    Hon. Stephanie Murphy............................................     2

                                   WITNESSES

    Ms. Tammy Simmons, Vice President, Human Resources and Marketing,
      Machine Specialties, Inc., Whitsett, NC........................     4
    Mr. Jeffrey Forrest, Vice President, Economic and Workforce
      Development, College of the Canyons, Santa Clarita, CA.........     6
    Ms. Jeannine Kunz, Vice President, Tooling U-SME, Cleveland, OH..     8
    Mr. Jeff Mazur, Executive Director, LaunchCode, St. Louis, MO....    10

                                    APPENDIX

    Prepared Statements:
        Ms. Tammy Simmons, Vice President, Human Resources and
          Marketing, Machine Specialties, Inc., Whitsett, NC.........    22
        Mr. Jeffrey Forrest, Vice President, Economic and Workforce
          Development, College of the Canyons, Santa Clarita, CA.....    25
        Ms. Jeannine Kunz, Vice President, Tooling U-SME, Cleveland,
          OH.........................................................    32
        Mr. Jeff Mazur, Executive Director, LaunchCode, St. Louis, MO    37
    Questions for the Record:
        None.
    Answers for the Record:
        None.
    Additional Material for the Record:
        ABC - Associated Builders and Contractors, Inc...............    42
        Iowa Brewers Guild...........................................    43
        Statement from Congressman Lloyd Smucker.....................    46

      WORKFORCE DEVELOPMENT: ADVANCING APPRENTICESHIPS FOR SMALL BUSINESS

                                  ----------

                            TUESDAY, MARCH 20, 2018

                      House of Representatives,
                   Committee on Small Business,
             Subcommittee on Contracting and Workforce,
                                                        Washington, DC.
        The Subcommittee met, pursuant to call, at 2:00 p.m., in
    Room 2360, Rayburn House Office Building. Hon. Steve Knight
    [chairman of the Subcommittee] presiding.
        Present: Representatives Knight, Chabot, Evans, and Murphy.
        Chairman KNIGHT. Well, it does say this morning, but since
    we are not in California we will say good afternoon.
        Thank you for being here. Thank you for traveling. I know
    some traveled a long way. Jeffrey, you can feel sorry for me
    now for what I go through.
        The Small Business Committee has heard many accounts of the
    skills gap and its detrimental impact on the small businesses
    and the American economy. To help close the skills gap, America
    needs an arsenal of workforce development strategies that
    balance the immediate needs of employers, long-term goals of
    employees, and the rapid evolution of technology.
        Today, we will focus on apprenticeships, a centuries old
    workforce development practice that combines on-the-job
    learning with related technical instruction. Registered
    Apprenticeship (RA) is one of 40 federal workforce development
    programs spread across 14 agencies. RA has been effective
    because it enables workers to earn while they learn. It is
    flexible to meet industry needs and generates evidence-based
    results.
        Last June, President Trump issued Executive Order 13801,
    which established the Taskforce on Apprenticeship Expansion to
    identify strategies and proposals to promote apprenticeships,
    especially in high-growth sectors where apprenticeship programs
    are underutilized.
        I am looking forward to hearing more about these programs
    from our panelists. Specifically, how can RA programs be
    customized to combat the skills gap at the community level
    while still meeting strict national standards. What roles do
    small businesses play in the apprentice system? What kind of
    incentives can we offer to encourage greater participation in
    the RA system? I think we can also add there how do we get more
    folks to know what there is out there? I think what we talk
    about here sometimes is getting the message out, whatever we
    are talking about, for people to understand that there are
    maybe a program out there or there are things that can help you
    do what you want to do.
        So I really appreciate everyone coming today, and I look
    forward to hearing what you have to say.
        And now I yield to the Ranking Member Murphy for her
    opening comments.
        Ms. MURPHY. Thank you, Mr. Chairman.
        While our economy has improved in the past decade, small
    business owners continue to face challenges finding skilled,
    qualified workers. By 2020, it is estimated that our economy
    will have approximately 55 million job vacancies. About 40
    percent of these jobs are expected to be new openings, while
    the remaining 60 percent will be jobs left vacant by workers
    from the baby boomer generation.
        This is a staggering projection. When viewed in combination
    with the current workforce skills gap, it underscores the
    importance of enacting policies to ensure that our country
    produces skilled workers capable of performing the jobs of both
    the present and the future.
        One way we can do this is to expand the use and improve the
    quality of apprenticeship programs across the country. The
    apprenticeship model allows individuals to work for employers,
    earn a salary, and get valuable on-the-job training while also
    receiving classroom instruction specific to that occupation.
        Apprenticeships provide individuals with an opportunity to
    work towards a credential or certification in their chosen
    profession. In return for their investment, employers benefit
    from having employees who can hit the ground running and have
    the specialized skills necessary to do the job well.
        Since 2011, the number of apprenticeship programs in the
    United States has increased by nearly 30 percent. Nevertheless,
    apprenticeships are still underutilized and their value is
    often insufficiently understood, especially by small businesses
    that may lack the resources or knowledge to take advantage of
    the opportunities that apprenticeships offer.
        The Federal Government is partly to blame, having rolled
    back investments in, and oversight of, private sector
    apprenticeship programs and other workforce development
    initiatives.
        Naturally, as technology continues to advance, our
    workforce needs will continue to evolve. In order to ensure
    that our economy can remain globally competitive, it is
    critical that we create incentives for apprenticeship programs
    that will lead to the creation of good jobs, better wages and
    salaries, and higher economic productivity. At the same time,
    we must remain standards of quality assurance so that
    apprenticeship opportunities are available to all workers,
    including veterans, women, and minorities.
        Today's hearing offers us the opportunity to better
    understand these challenges and explore solutions to help our
    nation's job creators prosper. I look forward to hearing from
    our witnesses on how apprenticeships can help revitalize our
    workforce and ensure America's small businesses are empowered
    to move our economy forward.
        I thank the witnesses for being here, and I yield back the
    balance of my time.
        Chairman KNIGHT. Okay. Thank you very much.
        I wrote down baby boomers because I think that is one of
    the terms that we are going to use quite a bit. And I think
    Congresswoman Murphy hit it on the head that we are always
    looking at the baby boomers as the ones who are retiring out,
    but I am the next generation. I am 2 years outside of the baby
    boomers, me, and I have friends that are now looking to retire.
    So now the next generation, I do not even know what you call
    us, are starting to think about retirement or thinking to maybe
    move out of what their career is and maybe do something else.
    So it is going to be a big, big problem, not just for baby
    boomers but, you know, it is starting to really affect.
        So we have a couple rules. You get 5 minutes to speak. And
    first, if Committee members have an opening statement prepared,
    which I do not see any, I ask that they be submitted for the
    record.
        The lights are going to go on. You are going to get green
    until you get to 4 minutes. And then you are going to go to
    yellow. And then you are going to go to red. So at the end of 5
    minutes, if you see that red, just start to work your way out
    of the conversation.
        Okay. Let's see. We have some long introductions.
        We should probably get less qualified people coming in here
    so we can get smaller bios.
        Okay. Now, I would like to formally introduce our
    witnesses.
        Our first witness is Ms. Tammy Simmons, Vice President of
    Human Resources and Marketing at Machine Specialties, Inc., in
    Whitsett, North Carolina. Her business runs a Registered
    Apprenticeship program for skilled manufacturing positions.
        Thank you for joining us today.
        Let's see. Our second witness is Mr. Jeffrey Forrest, Vice
    President of Economic and Workforce Development at the College
    of the Canyons in Santa Clarita, California, right in the heart
    of my district. He is the cofounder of the Strong Workforce
    Apprenticeship Group (SWAG), which is also a great acronym.
        Thank you, Jeffrey, for being here today.
        Our third witness is Jeannine Kunz, the Vice President and
    Director of Training and Development of Tooling USME in
    Cleveland. U-SME, is that right? Or U-SME? Okay. Out of
    Dearborn, Michigan. Very close. Tooling U-SME delivers a
    customizable competitive-based learning and development
    solutions to the manufacturing community. Ms. Kunz is an expert
    in manufacturing and workforce development and serves on the
    executive committee for America Makes.
        Thank you for being here.
        And now I am going to yield to Ms. Murphy to introduce our
    last witness.
        Ms. MURPHY. Thank you, Mr. Chairman.
        It is my pleasure to introduce Mr. Jeffrey Mazur. Mr. Mazur
    serves as the Executive Director of LaunchCode, a nonprofit
    organization that is focused on building a skilled workforce by
    creating pathways for individuals seeking careers in
    technology. Mr. Mazur previously served as the Executive
    Director of the Missouri-Kansas Council of the American
    Federation of State, County, and Municipal Employees, and prior
    to that he was a Senior Advisor to Missouri Governor Jay Nixon.
    He holds an undergraduate degree from the University of
    Missouri, and a law degree from Georgetown University, which I
    might also add has a great graduate program in Foreign Service.
        Welcome, Mr. Mazur. Thanks for being here today.
        Chairman KNIGHT. Okay. And we will start with Ms. Simmons.
    You have 5 minutes, and we look forward to your testimony.

     STATEMENTS OF TAMMY SIMMONS, VICE PRESIDENT, HUMAN RESOURCES
    AND MARKETING, MACHINE SPECIALTIES, INC.; JEFFREY FORREST, VICE
     PRESIDENT, ECONOMIC AND WORKFORCE DEVELOPMENT COLLEGE OF THE
      CANYONS; JEANNINE KUNZ; VICE PRESIDENT; TOOLING U-SME; JEFF
                 MAZUR, EXECUTIVE DIRECTOR, LAUNCHCODE

                       STATEMENT OF TAMMY SIMMONS

        Ms. SIMMONS. Thank you, and good afternoon. Thanks for
    having us.
        So I am the small business that you talked about that have
    been struggling. Machine Specialties is going to celebrate 50
    years next year, and we have high school positions in welding,
    C&C setup machinists. We produce parts that go on the F-35, F-
    15, the B-1B bomber, a lot of helicopter parts. We also serve
    the medical industry with hip and knee replacement parts,
    surgical instrumentations, as well as parts on the satellites.
    So our growth is limited to the amount of skilled employees
    that we can have to make those very precise parts that are
    going to be shot up into space or that are going to fly our
    aircraft.
        For years, we have tried to think outside the box and go
    and recruit more employees. The positions that are the most
    skilled, and our positions are, like you said, in the baby
    boomer generation. So what are we going to do now to not only
    replace the ones that we have that want to retire but also to
    grow our business and take on new customers?
        We first heard about apprenticeships through another
    business in Charlotte, North Carolina, that had been doing it
    for 22 years. And they offered a youth apprenticeship model.
    And when I attended the meeting I was a little bit skeptical.
    We had never recruited youth into our business. We have about
    170 employees, and we looked for the most skilled and the most
    talented people that we could find that had years of experience
    to make these parts. But because they had been so successful
    and they had a really interesting model that by recruiting
    young talent before they decided to go off maybe and not sure
    what they did. You know, we all hear the statistics about how
    many students go to college but then do not finish and try to
    find their way. They went into the high schools and found
    students that were very interested in building and creating and
    making things with their hands that were very successful in the
    CTE types of programs, and were smart, were good in math. They
    had some criteria that kind of spoke to us. They looked for an
    unweighted GPA of 2.5 because the students in the
    apprenticeship programs also earn a 2-year degree. They look
    for five absences or less because as employers we have to have
    employees who attend work every day. So we correlated
    attendance in high school with attendance in the workforce.
        We looked at, like I said, the math grades, because a lot
    of the positions that we hold require a lot of thinking, logic,
    and reasoning. So that kind of led to a good, successful
    candidate. And that they were already taking electives in their
    school. So that as a business appealed to me that you had some
    criteria that you set up.
        Also, they talked about being in a consortium of other
    small businesses and medium size businesses or large
    businesses, but you got some buying power when you did this. So
    when we went to the school system, it was not just one company
    like myself knocking on the door at the local high school near
    me saying can I talk to your drafting students who might be
    interested in working for me? When we went as a consortium, our
    consortium no has 26 companies. We had the superintendent of
    our school board sitting in on meetings with us because she is
    very interested in growing and promoting this program. So we
    had buying power with the school system. So we got a chance to
    talk to the educators and to the kids in the high school that
    we wanted to recruit.
        We also got a little bit of buying power with the community
    college system. One of the key attributes to the type of
    program that we have is that our students go to community
    college to earn their 2-year degree 1 to 2 days a week, and
    then they are in our facilities the remaining part of the week.
    So as a business owner, it is very hard to think that you are
    going to have people coming in all day long. By blocking the
    classes for us so that maybe they only go to class on Mondays
    and having them in our facilities from Tuesday to Friday to
    earn those on-the-job training hours really spoke to me as an
    employer. I thought that this is something that we could
    implement and utilize.
        So when we first started, we had six advanced manufacturers
    who wanted to participate in the program in our first year. We
    recruited 14 years. It was such a success that our president,
    our vice president of operations came into me one Saturday
    morning and said this apprenticeship program is a home run. The
    kids are learning so fast, much faster, more productive than we
    ever thought they would be at this early stage, and they are
    willing to learn. You know, we always talk about this younger
    generation, the work ethic, and what that is going to be like,
    but studies show, and New America has done a study that shows
    that apprenticeships have much more loyalty with their employer
    when they start as a young apprentice. The turnover rate that
    they quoted is like 90 percent after 3 years of finishing an
    apprenticeship and that is huge. That is much stronger than
    anything I can do when I hire outside the door.
        Our company has continued to stay in this. We now have 15
    and we are looking to recruit 25 more apprentices this year.
    Also, our consortium has grown. We went from six companies the
    first year to 11 the next year to 26, and over half of those
    are small businesses. We have also reached across the state,
    the county lines, and we have helped other programs just like
    us launch, get in touch with their school systems, with their
    community college as the formal education provider, and work
    it. So it is employer led. The employers are the customer. They
    are the ones that are going to be hiring these students and
    training them on the job. So once you have a partnership like
    that it kind of spreads the workload around. So that is how
    that one employer can go out and be part of a consortium, get
    really good talent into their workforce, have them educated,
    and kind of share that work burden.
        And my time is almost running out.
        I have so many stories that I could tell you about not only
    what it has done for our business. That was the first stage.
    When we got in the first year, like this is great for us. So
    then I wanted my other business employers--I am on a
    manufacturing committee--to know about this. So that was
    exciting. But then I also became so engaged with the students.
    I had students the first day of college say I never thought I
    would have the opportunity to go to school. I never thought
    that I would have a career. Once they received their letter
    they said I finally feel like I have a direction in my life.
        So then that got me more impassioned trying to help more
    students get opportunities and in different areas. So our
    consortium is now not only advanced manufacturers, but it is
    field service technicians, and those are like electricians and
    HVAC.
        I am finished.
        Chairman KNIGHT. Okay. We will go on to Mr. Forrest from
    the great community college of College of the Canyons.

                      STATEMENT OF JEFFREY FORREST

        Mr. FORREST. Thank you, and good afternoon, Chairman
    Knight, Ranking Member Murphy, and to the distinguished guests
    who are here with us today. Thank you for this opportunity to
    provide testimony today on how the Strong Workforce Apprentice
    Group supports small business along with recommendations on how
    to fund and expand apprenticeship to sustain our growing
    economy.
        College of the Canyons is under the leadership of
    Chancellor Dr. Dianne G. Van Hook, and we are committed to
    working with employers, students, community stakeholders to
    develop innovative solutions that promote equity, skills
    attainment, and economic growth in the region.
        Recently, the Bureau of Labor Statistics reported that in
    the month of February, nonforeign payroll increased by 313,000,
    while the unemployment rate remained at 4.1 percent. And while
    these numbers are encouraging, behind these numbers there looms
    a crisis, and it is the shortage of skilled labor, and it poses
    one of the greatest threats to our Nation's ability to sustain
    its economic growth.
        And no entity is more impacted by this crisis than our
    nation's small businesses. They comprise more than 99.7 percent
    of all businesses in 2016, and they are the backbone of the
    United States economy. Because of their limited resources, our
    small businesses are not able to compete with the large
    companies for talent, and they lack the operational capacity to
    attract, train, and develop their own workforce.
        So what small business needs today is a model of
    apprenticeship that allows them to: (1) upskill their
    workforce, and (2) be able to implement easily and efficiently.
        In response to that need, the Strong Workforce
    Apprenticeship Group was formed, referred to as SWAG. The
    Strong Workforce Apprenticeship Group was founded by myself and
    Tracy DiFilippis, Apprenticeship Coordinator with Goodwill
    Southern California. The name SWAG is taken from strong
    workforce and doing what matters for jobs in the economy, a
    California community college initiative that was developed by
    Van Ton- Quinlivan, Executive Vice Chancellor, Workforce
    Digital Futures for the California Community College
    Chancellor's Office.
        SWAG helps our small businesses by doing the following:
        First, we partner with them to recruit, attract, and place
    individuals into apprenticeships. We also provide instruction
    to incumbent workers to create a pipeline of talent to fill
    critical positions.
        Second, we handle the administrative heavy lifting
    associated with managing an apprenticeship, making it a more
    attractive option for small companies. Bill Boden, General
    Manager of Repairtech International says this about SWAG: ``We
    could not imagine doing this alone. The high level coordination
    frees our organization to move in new levels of productivity
    and efficiency.''
        Third, SWAG provides curriculum that is relative and up to
    date through our partnership with Tooling U, a leader in online
    education in the field of advanced manufacturing. In addition,
    we are working with the National Institute for Metalworking
    Skills, known as NIMS, to integrate their certifications into
    our training model. SWAG is currently funded through the
    California Apprenticeship Initiative. The goal of this program
    is to incentivize partnerships between community college
    employers to develop apprenticeships.
        I am proud to say that in the 7 months that SWAG has been
    launched, we have acquired more than 50 apprentices and over 75
    percent of them come from underserved communities, veterans,
    minorities, women, and other underserved population segments.
        And while we are the fastest growing model of
    apprenticeship in California currently, what we know is this:
    without access to a consistent funding stream, SWAG, like the
    many other initiatives that came before it, will end up in the
    workforce development graveyard.
        Which leads us to offer the following suggestions on how we
    can fund and grow apprenticeships to continue to support our
    small businesses.
        First, we must fix the funding. Tax credits and similar
    incentives can go a long way in helping small businesses
    embrace apprenticeship as part of their employment development
    strategy.
        Second, simplify the Workforce Innovation and Opportunity
    Act. Ladies and gentlemen of the Subcommittee on Contracting
    and Workforce, meet your 399 pages of single-spaced 10-point
    font legislation. Hidden somewhere in these pages is funding
    for Registered Apprenticeship for on-the-job training.
    Navigating this legislation is tedious at best. We have got to
    find a way to streamline it. We need to also look at
    incorporating some provisions of the Prosper Act, such as the
    25 percent cap on private sector employment from Federal Work
    Study Program. Eliminating that along with the provision to
    access apprenticeship. We need to strengthen the Department of
    Labor by personnel funding, upgrades to technology, and helping
    it in updating its existing work processes so they can continue
    to provide the critical services needed by the workforce
    development community.
        We must also look at competency-based education and
    celebrate and support those educational institutions, like
    College of the Canyons, that are working to integrate it into
    their educational framework. And then in working with small
    businesses, dozens of them, what we have learned is this:
    effective apprenticeship demands strong partnership. Our
    workforce development system must come together if we are to
    remain a competitive force in the global economy.
        In conclusion, we wish to thank the members of the
    Subcommittee on Contracting and Workforce for allowing us to
    share how SWAG supports small business and your leadership and
    your commitment in creating prosperity for all Americans, and
    we look forward to addressing any questions you may have.
        Thank you.
        Chairman KNIGHT. Thank you.
        And all the way from Dearborn, Michigan, Ms. Kunz.

                       STATEMENT OF JEANNINE KUNZ

        Ms. KUNZ. Thank you. Thank you. Thank you, Chairman Knight,
    and Ranking Member Murphy, and the guests, for the opportunity
    to provide some insight around this important topic of
    apprenticeships and how small businesses are using
    apprenticeships to solve the skills gap.
        For 85 years, SME has been dedicated to the health and
    competitiveness of the manufacturing industry. We do that
    through developing the workforce and promoting advanced
    technology. And as you have heard from the other witnesses
    here, it is a very significant threat that the skills gap has
    on the manufacturing industry right now and we have been doing
    a study for the last 5 years and it has not changed. It is
    getting worse. And when we ask manufacturers the question of
    how difficult it is to find skilled labor, we find that 88
    percent are saying I am having a difficulty finding skilled
    labor to do the work I have in my organization now let alone
    into the future. When we ask a little more into that research,
    what is that doing to your business, they are telling us it is
    affecting their productivity, their innovation, quality,
    safety, profitability. Right? These are all very key things to
    running businesses here in manufacturing.
        And so when we look at that and we look at the fact that
    Jeffrey brought up about that 90-some percent of all
    manufacturing businesses are small, we know that small
    businesses need to thrive in order for manufacturing to be
    successful as well.
        And small businesses, unlike large businesses, have a
    little bit added challenge. Right? We all know the CEO is
    wearing the HR hat, is wearing the custodial hat and the plant
    manager hat. Small businesses cannot always provide the same
    kind of benefits and packages that large companies can. So
    these added challenges really put pressure on the small
    businesses I think as well articulated by Tammy.
        So when we look at how do we help those small businesses,
    we certainly look at something like apprenticeship. And it is
    not a ``one size fits all.'' We certainly know that. There are
    lots of things, and I think Chairman Knight, you talked about
    the arsenal of tools that are needed to address the skills gap.
    But there is no doubt that apprenticeships is a key part, and
    Jeffrey and Tammy did an excellent job I think articulating
    that. And what we are seeing is the number of retirees and the
    baby boomers that you referred to that are exiting the
    manufacturing industry. Those skilled laborers, those
    journeymen, those apprentices that have all that knowledge,
    unfortunately manufacturing historically has not done a good
    job building up that pipeline. It has not done a good job
    building structured, sustainable programs. It is a little bit
    of follow me and watch what I am doing on the job. Well, that
    does not work. We really need a very strong, structured,
    sustainable program for onboarding and on-the-job training of
    which apprenticeship programs very much have.
        SME supports the nationwide Department of Labor
    apprenticeship programs with a competency-based approach.
    Right? That is the change from the past where it was much more
    time based, it was more about how much time you put into a
    program. Now we are able to look at programs much differently,
    look at the knowledge and skills that are required to perform
    in the jobs today, and look towards how people can be assessed
    towards those knowledge and skills so we are more oriented
    towards a competency-based program versus time, which also
    reduces the amount of time it takes to get people in the jobs,
    doing effective things that move the organizations forward.
        As Jeffrey articulated, we are a good strong partner here
    with SWAG, and I think you did an excellent job talking about
    your program so it is not one I will mention here. But I think,
    and it was interesting to hear Tammy talk about the consortium.
    A couple things that we are noticing because we get the
    opportunity to work across the country, so we get to work with
    the small, the mid, and the large companies, but we are seeing
    that these organizations and these consortiums are coming
    together to really help represent multiple small organizations.
        One I would like to mention through our partnership is with
    a group called MACNY. And it stands for the Manufacturers
    Association of Central New York. And they basically represent
    300 manufacturers. A lot of small to mid-size manufacturers
    across central and upstate New York. And when they were talking
    to those members, like we would expect, those members were
    struggling with, you know, hiring and finding people, finding
    the right skills. So MACNY went about how do they go and create
    these partnerships, these collaborations with the schools,
    organizations, organizations like SME, where we could look at
    the knowledge and skills and then start to drive towards what
    is needed 80 percent of the way and then help the companies be
    able to have the flexibility to drive it to their own
    particular needs.
        One interesting thing that MACNY also did was look at a
    pre-apprenticeship. So it was working with the high schools,
    dislocated workers, veterans. So again, now that we are looking
    at apprenticeships inside these small companies, how do you
    start to look at again the pipeline of even getting those kinds
    of people into the system? So a pre-apprenticeship program in
    the high school. We have some good examples where some
    companies are looking at how to take those pre-apprenticeships
    into an apprenticeship program and then into a career pathway
    into a college degree program. Many great things are happening
    in those kinds of examples.
        In summary, the health of small businesses is vital to
    manufacturing success. The largest OEMs in the world are
    relying on these small businesses, and all too often or not, I
    cannot even tell you the number of times we hear businesses say
    that they are having to turn down orders, delay their expansion
    of their business because they cannot find the right people,
    just things that we do not want to see continue.
        So apprenticeships is a proven and needed piece of a
    company's workforce development strategies. It helps the
    businesses build a pipeline, grow internal talent, reduce
    recruiting costs, and improve productivity.
        We thank the Subcommittee on Contracting and Workforce for
    taking the time to address this very important and clear issue
    that we have in front of us as a Nation. Thank you.
        Chairman KNIGHT. Thank you.
        Mr. Mazur, you are up.

                        STATEMENT OF JEFF MAZUR

        Mr. MAZUR. Thank you, Mr. Chairman, Ranking Member Murphy,
    for the opportunity to appear today.
        Again, my name is Jeff Mazur, and I am the executive
    director of LaunchCode. LaunchCode is a national nonprofit
    founded a little over 4 years ago, designed to help fill the
    tech talent gap. There are about 600,000 unfilled tech jobs in
    the U.S. today according to BLS. The number is going to be
    about a million by 2020. So there is a lot of gap to fill in
    the tech industry.
        We try and do this in a few different ways. One way that I
    will not spend a lot of time talking about is by providing
    free, accessible job-focused training in coding. We teach
    people to code to a level where they are ready for an entry
    level role as a developer.
        The other pieces that we do that I will spend a little more
    time talking about today is job placement, in particular, the
    apprenticeship in the software development space. Over the
    course of our 4 years of existence, we have helped more than
    1,000 people start their careers as junior software developers,
    computer programmers, and we think that apprenticeship, as with
    my colleagues at the table, is a really powerful tool in doing
    that and helping those people start those careers.
        And so part of what I wanted to share today was a little
    bit about what our learnings have been as we have tried to
    build a program that really utilizes apprenticeship in a space
    and in industry and in job types that typically it has not been
    used a lot in.
        And so four sort of principles or items that I wanted to
    point to that we have kind of distilled through our learnings
    in working with last year more than 124 employers to place
    entry level junior developers. One of those things is
    flexibility. It is easy to imagine a job posting and a training
    program for a welder. We sort of know and understand what a
    welder's job is and that is kind of probably standard across
    many different employers in terms of what the core skillset is.
    And when we think about a job posting for a software developer,
    it could be that there are dozens or hundreds even of different
    languages or frameworks that may be at play there. And so
    having an apprenticeship, in our case an apprenticeship with
    standards of apprenticeship--we serve as an intermediary--we
    have those standards that are flexible and it can accommodate
    the many different needs of different sorts of employers is
    really critical to success and adoption by those employers.
        The other piece that we found is essential is integration
    of apprenticeship into existing processes of hiring and doing
    business that our employers have. One of the things that is a
    sure fire way we found for an employer not to want to work with
    us to use apprenticeship to bring developers into their system
    is if they have to build substantial new infrastructure in
    order to accommodate those people. And so having, again, an
    intermediary-based program where that infrastructure can live
    outside the walls of their company, outside the walls of their
    institution and still build people with the sorts of skills
    they need is really critical for them to adopt and use
    apprenticeship in bringing new software developers onto their
    teams.
        The third piece, I want to echo what many others have said,
    is really around the notion of competency-based programs. And I
    want to particularly identify two key threads here in the way
    we braid competency-based notions into our program. The first
    being that people should get ``credit'' for competencies that
    they are bringing to the table at the front end. If people have
    already developed and we have a common way of measuring and
    understanding what someone's skill is as they come to the
    table, then they ought to get credit and not have to compete as
    much in terms of the related technical instruction. And so,
    again, that is a mechanism both for having these things be
    based really on the skills that are necessary and also
    abbreviating the time that one may spend in an apprenticeship
    before they are ready for work.
        The second piece of the competency-based component that we
    focus on, again, is that rather than having a time-based
    approach to a time and program as a function of when someone
    has completed the program and is ready for journeyman status,
    is instead focusing on competencies. And in our case, we try
    and build a program that is very focused on making sure that
    employers themselves, hosting employers are saying that these
    are the competencies that we need this person to have achieved
    in order for them to have successfully completed this program,
    and then with assistance, allowing them to judge when someone
    has completed the program rather than have it being a rote
    function of time and program.
        And so we found that to be a key thing not just for
    adoption, not just for building our program but for employers
    to really feel like this is a process that works for them.
        And the final piece that is sort of tied with the
    competency-based piece is that these things should be
    accelerated, particularly when technology changes so quickly,
    the skills that you are learning today may be obsolete 6 to 9
    months down the road. And so if it is a 2-year program, you may
    have people spending lots of time learning something that they
    are never going to actually get to deploy in the field. And so
    designing a program that in our case may have 20 weeks of
    classroom instruction and 90 to 120 days in an on-the-job
    focused programming situation is a way that allows us to get
    those people quickly the skills they need and get them quickly
    into the workforce because employers in tech need those jobs
    now if they are going to fill that gap.
        I am again grateful for the opportunity to appear today and
    I am delighted to answer any questions.
        Chairman KNIGHT. Well, thank you all.
        I know Stephanie and I write a lot of notes up here. Hers
    are probably way better than mine. But I typically write notes
    on what you are saying and what I think you are saying. So when
    I hear ``integration,'' I hear you have got to give me a puzzle
    piece that fits. So you have got to give me somebody that can
    come in and can work and I do not have to do something special
    there. They are just going to come in and work. When I hear
    competency based, what can you do? Are you ready to do the job?
    If you are, then I want you. You do not have to have 4 years of
    schooling if you learned it in 1 year and I can have you in my
    business and you can be working. And fast is always what small
    business talks about is how fast can we do something? How fast
    can we turn the wrench or whatever we need to do because that
    is how I get paid?
        So I am going to go into just a couple questions. You know,
    the first one I think I alluded, how do we get the info out?
    How do we get it to small businesses across the country? I am a
    huge proponent of our community colleges and of trade schools
    and tech schools as kind of a conduit to do something that
    maybe you can do fast. I know College of the Canyons or many of
    the other community colleges across the country, they can move
    and they can be agile. And so if you need something to work on
    an F-35 as a supplier, you might go to them and say these are
    the people, these are the skills that we need. They need to
    have basic schematic skills. They need to have basic math
    skills. Then we can move them in to where we need them but they
    need to have those before I can even look at them.
        We have a program in Palmdale that is called the AFAB right
    now, and Northrup Grumman came to us and so we went to the
    community college out there and they built an 8-week program.
    And at the end of 8 weeks, those kids have a 96 percent chance
    of getting hired. I do not know what the other 4 percent are,
    but that is what they told me, 96 percent. And they are hired
    at a good rate. They are hired into a great company and they
    are on their way to a career.
        That was just working with a community college and saying
    can you do this? They said, yeah, we can do this, and they did
    it.
        So apprenticeships, that is what I see, and that is what I
    think we are going to have to have over the next 30-40 years.
    There are going to be these holes that if we do not fill them
    quickly then we are going to lose those jobs or they are going
    to be outsourced or something that is not going to be what we
    want.
        So my first question is, about 74 percent of kids that
    graduate high schools today are not eligible to go into the
    military. So the military always comes to us and says only
    about one in four kids can go into the military. For various
    reasons. There might be a medical reason, there might be
    something else, but several of the reasons I push back on and
    say, you know, you should probably relook at these. But a lot
    of those kids you are looking at, too. If those 24 percent are
    now looking at colleges or looking at something else, you are
    trying to grab them. So I think that is kind of my first
    question, is how do we reach out to the high school kids?
        And then my second question is how do we reach out to the
    junior high kids and say what do we need to get them into kind
    of a skilled learning so that they can do the jobs maybe in the
    community. Maybe it is for automotive manufacturing. Maybe it
    is for something else. And how do we get them involved at maybe
    a seventh or eighth grade? And I know we have got VEX and we
    have got robotics and we have got all kinds of programs to kind
    of push STEM, but we really have to make sure that kids know
    that, you know, here are the jobs in the community. How do we
    get you looking at that? It does not say we do not want you to
    go to college or it does not say we do not want you to do other
    things. It just says these are skills based. These is a skill
    that you can learn and you can look to be hired at some of our
    jobs here.
        And we had the Chairman of the Full Committee on Small
    Business, Mr. Chabot. Mr. Chabot, are you just going to sit
    there or do you want to chat?
        Mr. CHABOT. I will wait until you are done with your
    questions and the other side.
        Chairman KNIGHT. Okay.
        Mr. CHABOT. Yeah. Thank you.
        Chairman KNIGHT. Okay. So, anyone, we can go right down the
    line.
        Ms. SIMMONS. So we also think that messaging is a huge
    problem with I guess the awareness of apprenticeships. We
    thought that just going into the schools and letting the
    students hear some of the opportunities would be our biggest
    avenue, but I feel like we have to reeducate the educators of
    what a great opportunity these apprenticeships are. And the
    careers that we are all talking about here, they make well over
    $55,000, $65,000, $70,000. Some of them will punch a clock and
    make over six figures. The jobs are in high demand and they are
    going to be increasing in demand. So the educators have to be
    aware that these are really good opportunities for all
    students, not just the ones that they think cannot go to
    college.
        Also, we have to send a message to the parents that these
    opportunities are out there. I hear parents and they are like,
    I never knew this was there. Do you have apprenticeships for
    adults? How can we get in this? So part of the thing I think is
    a huge marketing campaign on just awareness of what
    apprenticeships can do and the career values that they have.
        And also, apprenticeships are a great stepping stone for a
    4-year degree. Our company is looking at in the future only
    hiring engineers that first go through our apprenticeship
    program. We think they are going to be much stronger and we are
    going to help educate them and get the 4-year degree after we
    pay for their 4-year degree.
        And I forgot to mention that our apprenticeship programs
    are valued at $125,000. The students receive benefits and
    401(k), and they are actually paid for the class time that they
    are sitting in college earning that degree.
        When you talked about going into the middle schools, yes, I
    realized into our second year that by the time we see juniors
    and seniors, it is almost a little bit too late. Most of the
    time they do not even know about the career opportunities that
    are available or what these jobs look like, what area they work
    in. So we, in our school system, are trying to get middle
    schoolers out into the different industries that have careers
    and have jobs available to them when they graduate. But now
    that I am a third year into it, I am also thinking like the
    German-style model, we also maybe even need to be planting
    those seeds in first and second grade. You know, like what does
    an electrician look like? What kind of tools do they have?
    Where do they work? Just so that when they get into the middle
    school they might have been thinking about that.
        You know, when you talk to a young schooler, most of the
    time they say I want to be a teacher. I want to be a doctor. I
    want to be a vet. I mean, those are the things that they see on
    TV. But educating them maybe even in the grade schools about
    other opportunities, especially the ones that we know are going
    to be in such high demand coming up.
        Chairman KNIGHT. And I am going to go on to Ms. Murphy.
        I agree. I think that you are seeing a transition right
    now, especially when we talk about STEM. If you thought that
    there was going to be a female aeronautical engineer 40 years
    ago, you would have had to search this country for one. Today,
    we understand there is a huge push in the last 10 years in
    college, but we have a lot of that kind of push to get people
    to understand you can do this. These are the opportunities. The
    same thing with males in nursing. Forty years ago you probably
    would have had to search the country. Today males know nursing
    is an opportunity.
        So it is kind of a change, and I think the earlier we can
    get to kids and we can say, look, you absolutely can do
    anything. I am glad you did not say politician in what they
    were looking to be when they grew up. But they absolutely can
    be anything. Sometimes it is not that they do not believe that
    they can; it is that they do not know that that opportunity is
    there. So, okay.
        Ms. Murphy, I have taken plenty.
        Ms. MURPHY. Thank you, Mr. Chairman.
        Ms. Simmons, I found the conversation really interesting
    because I think what you are pointing out is that there is a
    social bias against technical careers and apprenticeships and I
    am interested in hearing some of the other witnesses'
    suggestions on how we break down some of those social biases
    that are maybe preventing the number of students going into
    some of these skills.
        One of the interesting things is I have spent a bit of time
    in my community going to see apprenticeship programs, and
    certainly, the skillset required for a car mechanic, for
    example, is no longer the grease monkey kind of thing. It is
    can you work a computer? Do you know how to program? Some of
    the things that Mr. Mazur talked about.
        And so I would be curious if the witnesses, other witnesses
    had any thoughts on how to address that, the pipeline, the
    demand for some of these programs.
        Mr. FORREST. Well, one of the things that we are doing in
    California is we have launched a campaign in which we have
    taken CTE, career technical education, and we have rebranded it
    and called it career education. And we have launched it into
    the movie theaters in which we show young people in
    apprenticeships, working in careers such as automotive
    technology, and then it is a part of the preview of the movie,
    kind of a commercial, trying to really help change the culture
    and dynamic and narrative of career education.
        Another thing that we do is we host a manufacturing day. We
    actually go out to all of the junior high schools in our region
    and we bring the kids to our campus for a full day of
    understanding what the manufacturing and STEM fields hold for
    them, and we bring in companies that come in and speak to them.
    There are company tours. We also bring in a gentleman who is
    probably one of the most greatest icons in advanced
    manufacturing, Titan Gilroy. He comes in and speaks to the
    young people as well, and we generally bring between 300-400
    individuals along with their parents. And so that is happening.
        But I will say again, I agree with you, Ranking Member
    Murphy, that one of the greatest challenges is changing the
    perception of career education in the minds of both the parents
    and in the minds of the high school and junior high educational
    institutions because the message has to come from them in order
    for it to really have that long lasting impact because they are
    the ones that are going to be with those students in those very
    formative years. And so that would be the critical component,
    is getting our educational institutions to realize that our
    high school and junior high schools, that this is a very, very
    positive alternative for their students, and that not everyone
    was meant to go to a 4-year college or university and that it
    is not a negative thing if they choose a career in a machine
    shop. Whereas, where I started my career at what was McDonnell
    Douglas. And so certainly, that is the thing; we have to change
    the messaging and the perception.
        Ms. KUNZ. If I could add a few things to that. And Ranking
    Member Murphy, you mentioned kind of even getting more
    minorities and women involved in manufacturing in these career
    paths. A couple things that SME is doing I will say on the
    front of--if you have heard of 3D printing, additive
    manufacturing, we do quite a bit I mentioned as an organization
    to help manufacturing. We not only develop the workforce, but
    we try to move technology forward. And we recently launched a
    new apprenticeship program around 3D printing in collaboration
    with the Robert C. Byrd Institute, as well as America Makes,
    one of the Manufacturing USA Institutes. And I bring that up
    because that is an example where sometimes we think of the
    traditional, and I think we have covered that pretty well--the
    welders, the machinists, the maintenance technicians, which is
    all really important, but we also have these new jobs that are
    entering the field which will help us change the image and the
    perceptions of manufacturing around high-tech, high-touch,
    high-challenging jobs that when we have done some workshops
    with young men and women we see the women really gravitate to
    3D printing, kind of this more design, creative, art side of
    it. And so I think there are things like that, too, that are a
    little bit maybe nontraditional, new technologies that will
    also help shape the perceptions.
        Another initiative is also the career counselors. I sit on
    a National Coalition of Career Counselors, a coalition
    regarding career counseling, which is really trying to get at
    the fact that there is not enough funding related to career
    counselors, the number of career counselors, the ratio to the
    number of students, and that they are really not able to do
    career counseling. They are a lot of times dealing with other
    issues--unrelated behavior, whatever it might be. So that is
    also impacting I think what is being told to the students. So
    not only the parents, what is happening in the media, but also
    the career counselors.
        And lastly, I would be remiss if I did not say that I think
    one of the challenges is what is happening actually in the
    schools. There are some schools that have tremendous programs
    that when you go into the school, so now let's say we get these
    kids to think I want to go pursue a career in something
    technical. But if they walk into that school and the equipment
    is 30 years old, the curriculum is old, I am not faulting the
    school. I am saying the funding side. So we are challenged
    there, too. So when the students enter a program that is robust
    and meeting the needs of the manufacturing community today, we
    are in good shape. When we do not, we kind of fall short.
    Right? We got them in the pipeline and now all of a sudden they
    come in and now it is a validation of maybe what they were told
    before. And so we have to do things there. And our education
    foundation does quite a bit to work with local employers who
    really look at the education system as part of their supply
    chain, one of their critical suppliers of people. And those
    employers that decide to actually put their money forward,
    donate it to our education foundation, we go and we work with
    the administrators, with the community, and with the school
    hand in hand to look and audit their program. To look at their
    curriculum. To look at their career consoling. To look if they
    have a middle school camp that feeds into the high school. And
    look at the technology. All of the things. And basically then
    take that money from those corporate donors and make sure it
    goes towards the kinds of things that builds up the program in
    those high schools or those career education programs. Thank
    you.
        Ms. MURPHY. Thank you. I see that my time has expired.
        Mr. MAZUR. I would weigh in just briefly on that same
    question. What we face in the tech and software development
    space is sort of different cultural perception gap, and that is
    this idea oftentimes people have that people have to be born to
    code. That there is some, you know, 5 percent of the people out
    there who have the special coding gene and it is only those
    people who are going to be software developers. And when, in
    fact, that is not true. And so we try to be very clear with
    people that this is an opportunity that anyone who has certain
    foundational skills can take advantage of. Do you have 10th
    grade math skills? Do you have basic proficiency and logical
    reasoning and problem solving? Do you have basic digital
    literacy? If you have that foundation then, you know, really
    almost anyone can build the other pieces that will allow them
    to move on down the road towards a career as a software
    developer.
        And so, you know, in our program, in our experience, in a
    world and a realm where if you look at software developers and
    the demographic makeup of those groups, you know, it is by and
    large still today white men, oftentimes young. We have been
    able to build programs. We have a Coder Girl program. We have
    other programs that are designed to really help people see
    other people who have gone through this experience. I have
    shared story with those folks, and so we have seen our
    education programs, for instance, in 2017, get to a point where
    even though, you know, probably 17 percent of the software
    developers in the U.S. working today are women, 47 percent of
    the people who are enrolled in our programs are women. People
    of color, again, very underrepresented in the field. About 38
    percent of the people who took part in our training and
    education programs in 2017 were people of color.
        So if you can understand, people, what the real challenge
    is and what the opportunities are there, then I think you can
    start to break down some of these other kind of cultural
    concerns and barriers that keep people out.
        Ms. MURPHY. Great. Thank you so much.
        I yield back.
        Chairman KNIGHT. Chairman?
        Mr. CHABOT. Thank you very much, Mr. Chairman.
        Just a couple questions. I think I would start out with
    this one.
        Could you discuss any resistance that you still see perhaps
    in some parents because they do not want their kids necessarily
    to have a job where they are going to get their hands dirty or
    maybe be in the skills trades or--and I see a lot of heads
    nodding. So I will start down this end. What can we do about
    that? Is it an education process? You know, is it kind of like
    realistically understanding what is in this economy and where
    the jobs are or just what would you suggest?
        Ms. SIMMONS. So most of the parents have a view of some of
    the jobs that the students could go into in an apprenticeship,
    the old model. You know, dirt floors, low lighting, and that is
    not what advanced manufacturing in some of these apprentice
    programs look like today. So we require any student that is
    interested to bring a parent or guardian in for a tour to one
    of the companies that is offering the apprenticeship so that
    they can see. And a lot of times the students go home excited
    and saying about this opportunity, they are going to pay for my
    education. They are going to pay for me to be in school. And
    the parents are like, it is too good to be true. One thing you
    learn in life is if it sounds too good to be true, it is. But
    once they come in and they see that every piece of equipment we
    have has a computer on it and you could eat off our floors,
    then they want to know how they can get into a career in this
    and they want the opportunity.
        And one other thing is going back to the CDCs in the
    school. Jackie Smith is an apprentice of ours, and right before
    he turned 16, him and his dad bought a car to work on so when
    he could drive. And he realized that that first time that he
    loved working with his hands. And he was good at it. He had
    never been able to take any CTE classes in his high school
    because he had a 4.4 GPA. He was smart. He was on the track to
    go to college. And his career counselors said no. You need to
    be in all these AP courses. He fought his junior year after
    working on the car with his dad to get into an automotive
    class. And at that school he had the opportunity--he never even
    would have had the opportunity to hear about our apprenticeship
    program. He had the opportunity to hear about it. He brought
    his mom and he brought his dad in. And they agreed. And he
    says, you know, if I would have been in college now, I probably
    would have been miserable. I may have dropped out. I would have
    spent a lot of money on it. I am doing something I love and I
    am going to make just as much money had I gone the 4-year
    college route and I am getting it all paid for. He is 19 years
    old. He has a 401(k). He has full benefits, and he is enjoying
    what he does every single day.
        So it is a message to the parents and to these educators
    that these opportunities are great for them.
        Mr. CHABOT. Thank you very much.
        Mr. Forrest, I saw you nodding there, too. So if you
    would----
        Mr. FORREST. Sure. The key is always getting the message
    over to the parents. And one of the ways in which we do that,
    even at the community college and in some high schools, is
    through the creation of a makerspace at those particular
    facilities. And the makerspace provides an environment in which
    these young people are able to go in and explore these careers
    that involve hands-on training. We have a makerspace at College
    of the Canyons, and some of our high schools have makerspaces
    as well. And so that creates an excellent environment for the
    children and their parents to get to see what it is like to be
    in this type of career field firsthand. And so I really
    recommend that most of our educational institutions, especially
    at the high school and the junior high level, consider a
    makerspace relationship, either with one that exists as a
    private-public relationship or try to integrate one into their
    own educational setting. The other is that we do whatever we
    can to make sure that we provide opportunities for these young
    people to be able to build within their own pursuits of their
    own careers the opportunity to do something that is related to
    making something that is part of their curriculum. It has to be
    integrated in there at some point. And once that happens, even
    if they are not good with their hands as some people like to
    say, still giving them that access and that exposure I think is
    critical to getting them involved and excited.
        Mr. CHABOT. Thank you very much.
        Do the other witnesses want to weigh in?
        Yes, sir?
        Mr. MAZUR. Can I say just a few words? We serve probably a
    slightly different age range than other folks at the table
    serve. The preponderance of people we served over time are in
    the 24-to-40 year old age range. And so we have a nontrivial
    number of people who have gone, they have a 4-year degree, and
    they got a degree in English or History or Literature and in
    the couple years since they have been working 18 hours a week
    at the FedEx, Kinkos, or doing other things, never having had
    the opportunity to have that educational experience kind of
    launch them into a career that they found fulfilling. And so
    they find us then and they build a new skill and we place them
    into a career in tech and they go off on their way.
        I think that experience and the experience of those people
    may resonate with the parents of someone who is sort of
    insistent that someone go down the path of a 4-year degree,
    that there are plenty of examples of people who go down that
    path and have a great experience and it is the right thing to
    do; there are plenty of others who do that and it is not the
    dream they thought it was and so that may be an instructive
    lesson for parents and young people out there making this
    choice.
        Mr. CHABOT. Thank you very much.
        Mr. Chairman, my time is about to expire, so I will yield
    back.
        Chairman KNIGHT. Thank you, Chairman.
        I just have two final questions. One was about schools, and
    I know Ms. Kunz said, you know, if you walk into a classroom
    and it has got 30-year-old stuff, it is tougher for the kids to
    get involved. I know I went into a school recently and a
    company had given a lot of this stuff that they had been
    working on and the kids were very, very involved. They were
    very happy. They knew that they were working on equipment that
    was of this generation and they were excited about that.
        But I have also been in classrooms that you have got the
    30-year-old microscope or something and it is a paperweight
    right now. So I do think the connections to the businesses, if
    you are working with a business and you are saying, hey, we are
    going to be your pipeline, you have got to help us, I agree
    that government should be very involved in this, but the
    businesses should be very involved. If we are going to give you
    what your most vital aspect is, and that is skilled labor, then
    you have got to help us get them skilled.
        Ms. KUNZ. Absolutely. I think we certainly are very big
    advocates for the fact that the corporate industry--and we get
    the opportunity to work with a lot of companies which is great,
    but we do make the message very clear that your number one
    asset is human capital. Every company can go buy the same C&C
    machine. Everyone can buy the same materials. A lot of those
    companies have access to the same kinds of technology. What
    makes an organization unique is the people behind the
    technology. It is the people programming and the people
    planning and the people designing, the people maintaining the
    equipment. And so here it is, this number one, you know, kind
    of asset and competitive advantage for an organization, but all
    too often, it is normal, a manufacturer is thinking about
    supply chain of its components. Where it is coming in, the
    quality of the parts, and sometimes the human capital side is
    not thought of. So it certainly is a message we carry forward
    that we all have a role and the corporate industry certainly
    has to look, just like it would if they had a supplier who was
    delivering components that did not have the right quality or
    met the right specifications, right, to build the plane or to
    build the car, whatever it might be. If the students are coming
    out with not the right specifications to meet the needs, you
    have got to go work with your supplier. And that is an
    important part and aspect of the community involvement and it
    is an important part of the development of their own
    organization strategy going forward. So we really encourage
    that organizations build that into their strategic business
    plan is their human capital strategy and how they can work with
    schools I think is a very critical way of doing that.
        Chairman KNIGHT. And Mr. Mazur, you said something, you
    know, and I think Mr. Forrest will say the same thing. A lot of
    these people are not 18 years old. A lot of these folks are 30,
    35. If you go to a community college today you do find your 18-
    year-olds, but you do find a lot of people that look like me,
    and they are looking to get a new skill or transition or their
    job was let go and now they need a skill. Those are very, very
    important aspects, and that is what happens at what you are
    doing. That is what happens at what apprenticeship programs are
    doing or community colleges. So, but you hit on one issue--we
    are voting--coding.
        So when I was a senator in California, I went to a small
    company, Microsoft, and asked them about what they needed for
    jobs. And they had a program called TEALS. And it was basically
    to put computer science into high schools that did not have
    computer science. We actually brought that into our district.
    It is in five high schools right now and that gives kind of a
    pipeline into kids going into college or into apprenticeship.
    And then I talked to them about getting coders. And I said, you
    know, at a community college we can get you a coder, probably
    an 18-month certification, maybe less. We can get you coders.
        Now, some companies in America want a 4-year degree. I get
    that. But I do not get the fact that if you have got 6,000 job
    openings and I can get you them in 12 months or 18 months, why
    would you not take them? So I think that that is where you are
    going is, you know, if you have got the aptitude and we can
    teach you, is that where we are going with what you do with
    coding?
        Mr. MAZUR. Absolutely. And I think it ties into your
    previous question, too, about sort of the notion of the
    responsibility of companies and employers to kind of own that
    process and support it and be advocates for apprenticeship. You
    know, we have placed hundreds of people in apprenticeship. We
    have a registered apprenticeship. We have never received a
    single we owe a dollar in support of our registered apprentice
    programs. We try to build and design a product and an
    opportunity that employers want to pay for. And so our
    apprenticeship, our processes and our program that we have
    built for apprenticeship is all driven by essentially success
    fees, placement fees that our employer-partners give to us for
    providing them someone who has the skill to do what they need
    to do.
        And so, you know, building that product, building that
    opportunity that scratches the itch that employers have, which
    is how do I build a sustainable and continuous pool that is
    growing of junior talent that is going to sustain me as this
    need continues to grow over time, and at the same time, how do
    I create that pipeline in a way that gives employers an
    incentive to actually fund it and make sure that it goes? And
    so, you know, we have not perfect that but that is what we are
    trying to do.
        I was talking with Mr. Forrest beforehand. You know, last
    year in 2017, we are nonprofit so we raise money and we get
    grants and other stuff. In 2017, 54 percent of our total budget
    came from our own revenue stream from employers, and we expect
    that in 2018, that is going to be between 70 and 74 percent.
    So, you know, we are trying to continue on down the road of
    building something that truly has a market niche that employers
    want to touch and grab and that that will help make more people
    successful. It will help make us successful as an organization,
    and it will help fill this growing gap. So, a lot of those
    pieces touch one another. I think it is important we think
    about all of them.
        Chairman KNIGHT. Well, thank you all for coming. We
    appreciate your testimony today.
        Registered Apprenticeship has experienced a resurgence in
    popularity among policymakers on both sides of the aisle. We
    look forward to the findings of the Task Force on
    Apprenticeship Expansion, and we will be eager to hear small
    business participate in RA programs.
        I ask unanimous consent that members have 5 legislative
    days to submit statements and supporting material for the
    record.
        Without objection, so ordered.
        This hearing is adjourned.
        [Whereupon, at 3:27 p.m., the Subcommittee was adjourned.]

                                A P P E N D I X

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                      SME

                          MAKING THE FUTURE. TOGETHER.

                           Written Testimony

                      Committee on Small Business

               Subcommittee on Contracting and Workforce

           ``How Small Manufacturing Companies Are Utilizing
                Apprenticeship to Fill the Skills Gap''

                 United States House of Representatives

                            Washington, D.C.

                       Delivered by Jeannine Kunz

                    Vice President of Tooling U-SME

                       (training division of SME)

                             March 20, 2018

        Thank you, Chairman Knight and Ranking Member Murphy, for
    the opportunity to provide some insight into why and how small
    manufacturing companies are utilizing apprenticeship to fill
    the skills gap. I am representing SME and its training and
    development division, Tooling U-SME. For 85 years, SME has
    dedicated itself to ensuring the health and competitiveness of
    the manufacturing industry by developing the workforce and
    promoting advanced technologies. For the past decade and into
    the foreseeable future, the skills gap threatens the progress
    of this important sector in our country. According to the 2015
    census, small businesses represent 89 percent of manufacturing
    establishments in the United States, and most don't have the
    resources capable or dedicated to building strong structured
    workforce programs from the ground up. These businesses,
    employing 44 percent of the manufacturing workforce, are often
    experiencing extreme challenges to the operation and growth of
    their organizations, which ultimately threatens our economic
    progress as an industry and nation.

        In response, we have worked with manufacturers, educators
    and workforce organizations throughout the country to build
    training programs that support workforce learning initiatives
    and offer a national perspective with localized solutions.
    Hundreds of thousands of individuals from more than 5,000
    companies and 600 educational facilities partner with us to
    strengthen the knowledge and skills of today and tomorrow's
    manufacturing workforce. Now more than ever, manufacturing is
    in critical need of help to combat challenges facing the
    industry at unprecedented levels.

        As many already know, the skills gap is widening due to
    several factors colliding at once. The retirement of millions
    of experienced and knowledgeable workers is creating a
    worrisome vacuum. Other factors, such as the introduction of
    new technologies and misperceptions about the image of
    manufacturing, contribute to a shortage of workers entering the
    field. In fact, over the next decade, nearly 3.5 million
    manufacturing jobs will likely need to be filled. Because of
    the skills gap, 2 million of those jobs are expected to remain
    unfilled.

        Yet, the industry is not prepared. Tooling U-SME's
    Workforce 2021 Assessment, a five-year study, reveals companies
    are falling dangerously behind when it comes to addressing the
    manufacturing skills gap. Nearly nine out of 10, or 88 percent,
    say that their company is having problems finding skilled
    workers in manufacturing. And small companies, on average, are
    more challenged to find skilled workers than larger companies,
    as they have additional disadvantages when it comes to factors
    such as health and benefit plans. Small businesses often cite
    the challenge of hiring and training an employee, only to have
    the larger company down the street recruit that employee away.

        Since the workforce and skills gap challenge runs deep,
    there is not a one-size-fits-all solution for small businesses.
    Rather, they need an arsenal of several accessible, interwoven
    options, so they can address various needs as they arise and
    evolve.

        There is no doubt that the small-business arsenal should
    include apprenticeship, a positive solution with a measurable
    return on investment. Small businesses in manufacturing are
    known for informal, tribal knowledge-driven approaches that do
    not validate the transfer of skills to new workers. This puts
    their organizations at significant risk, especially with the
    retirement of baby boomers. Manufacturers must have formalized
    programs in place for onboarding and on-the-job training, such
    as formal competency-based apprenticeship programs.

        As manufacturers struggle to find qualified workers, they
    are tapping into an age-old training approach with a modern
    twist. Around for generations, apprenticeships--which allow
    employees to earn while they learn--are seeing a renaissance as
    the industry addresses the skills gap. By establishing
    apprenticeship programs around industry-wide standards, U.S.
    employers who sponsor such programs can more quickly build a
    pipeline of skilled workers, boost retention, reduce recruiting
    costs and improve productivity.

        We believe that training and professional development is
    the key to the future success of manufacturing. Additionally,
    we believe that forward-thinking technical schools and
    community colleges are our critical partners in this effort.
    Manufacturers are the keepers of vital knowledge and
    technologies, but this knowledge will be lost through
    transition and a retiring workforce unless it is passed on. We
    have developed an extensive, diverse catalog of manufacturing-
    specific content and innovative learning tools to help
    manufacturers bolster their expertise and leverage their people
    to successfully compete in today's economy.

        SME supports nationwide Department of Labor apprenticeship
    programs with a competency-based approach to traditional
    apprenticeship models. In the past, apprenticeships have
    involved completing Related Training Instruction and On-The-Job
    Training hours to attain journey worker and journey-level
    status. However, today's apprenticeships differ from earlier
    iterations. Informal, time-based programs are being replaced by
    formal, competency-based programs. SME believes that
    competency-based learning and development programs are
    essential to successful learning of specific job roles. Our
    Apprenticeship Acceleration Framework examines the necessary
    knowledge and skills that support common apprenticeship job
    functions. This is especially important for small businesses,
    as they typically don't have a Human Resources Department or
    Learning Officers to create these programs from scratch.
    Instead, they must rely on government and associations to
    provide a framework, standard or structure to work within.

        Through our partnerships, SME has seen how well the
    apprenticeship model has worked for small businesses. For
    example, the Manufacturers Association of Central New York,
    known as MACNY, represents more than 300 manufacturers and
    business organizations across Central and Upstate New York.
    These small- to mid-sized companies have the same challenge as
    bigger companies--a rapidly retiring workforce. But unlike
    bigger companies, they don't have the resources, time and money
    to start their own training program and address their workforce
    needs.

        MACNY is part of a bigger organization called the
    Manufacturers Alliance of New York State, which brings smaller
    associations together for statewide economy of scale on issues
    such as working with the government, taxation, workers'
    compensation, understanding new processes and grant funding.
    Martha Ponge, Director of Apprenticeships for MACNY, said, ``As
    a group, we realized that not only did we need to raise up the
    middle skills for manufacturing, but that entry-level positions
    were in jeopardy. Collaborating to solve the problem gave us
    positive results and a pathway for expanding our growth.''

        MACNY partnered with Tooling U-SME to define the standards
    of apprenticeship for its program, and to deploy training and
    measurement tools to both develop and assess apprentices.
    Tooling U-SME facilitated multiple workshops with MACNY
    stakeholders and representative employers to finalize the
    knowledge and skill requirements of each occupation.

        MACNY is also collaborating with Working Solutions New
    York, a Workforce Investment Board that serves as a connector
    between the U.S. Department of Labor and American Job Centers.
    Working Solutions was awarded American Apprenticeship
    Initiative grants, and turned to MACNY to provide the Tooling
    U-SME competency-based outline for apprenticeships in seven
    occupations. In addition, Tooling U-SME was asked to design a
    pre-apprenticeship program so Working Solutions could provide
    companies that were not quite ready for a full apprenticeship
    with an alternative to begin their workforce education and fill
    their pipelines. This program is focusing on high school
    students, dislocated workers and veterans. MACNY is in
    discussions with leadership to take that pre-apprenticeship
    program and implement it in the Syracuse Public School system
    in 2018.

        Another superb example of how apprenticeship can positively
    affect small business is Cox Manufacturing in San Antonio,
    Texas. For more than 60 years, Cox has been a maker of
    precision cut metal components. Since 2010, Cox has grown from
    70 employees to 140 employees. Sean Althaus, training
    coordinator for Cox, said,

              ``It's difficult to grow in manufacturing without the
            right people in place. Companies need to have
            apprenticeship programs in place for the long run. I've
            been able to see, firsthand, the apprenticeship program
            grow to a state-of-the-art model that can compete with
            other businesses and programs across the country. The
            biggest advantage for a company is related to culture
            and retention. Turnover has been on a downward trend
            the last two years. It's an investment in the future.''

        Sean went on to say that apprenticeships are a risk-free,
    debt-free way for people to gain skills and education.
    Apprentices get paid by their companies to perform normal
    duties and earn while they learn. The key component is that
    they come out with Department of Labor credentials, which are
    objective third-party credentials recognized at any facility.

        Cox and other small companies are having a lot of success
    pursuing an apprenticeship strategy that helps build an
    appealing culture and the talent pipeline. There are cost
    savings, too. According to the 2014 Accenture Manufacturing
    Skills and Training Study, the average manufacturer can lose 11
    percent of annual earnings due to the skills shortage.

        One last example of how small businesses are using
    apprenticeship to fill the skills gap is the Westside
    Industrial Retention & Expansion Network, also known as WIRE-
    Net, based in Cleveland, WIRE-Net, a nonprofit economic
    development organization, has been supporting local
    manufacturers since the late '80s. The organization had heard
    from many manufacturers who were ready to invest in
    apprenticeship programs in order to grow their talent base, but
    did not have the time and expertise to implement them.

        To address this, WIRE-Net created an apprenticeship program
    for a consortium of smaller companies, called the Northeast
    Ohio Manufacturing Apprenticeship Consortium. With this plug-
    and-play approach, local manufacturers rely on WIRE-Net to
    handle the administration and logistics of establishing an
    apprenticeship program, removing a major barrier to
    implementation. WIRE-Net also negotiates with educational
    providers on behalf of the consortium, and provides expert,
    structured, on-the-job training for the apprentice mentors at
    each company.

        The consortium approach translates into buying power. It
    also helps persuade trainers to be responsive to the needs of
    consortium members, especially in terms of scheduling technical
    course work. This ensures apprentices meet standard credentials
    such as those of the National Institute of Metalworking Skills.
    WIRE-Net also identifies sources of training dollars to keep
    training costs affordable for small- and medium-sized
    manufacturers, working with both local and national partners.

        In summary, the health of small businesses is vital to
    manufacturing's success. The largest OEMs in the world rely on
    the supply chain of small businesses. All too often, we are
    hearing of small businesses turning down orders or delaying
    expansion because they don't have the right talent in place.
    Apprenticeships are a proven and needed piece of a company's
    workforce strategy to combat the skills gap. They help small
    businesses build a pipeline of skilled workers, grow internal
    talent, retain employees, reduce recruiting costs and improve
    productivity. Undoubtedly, support of small businesses needs to
    be at the forefront of our conversations about strong economic
    and workforce development. We thank the Subcommittee on
    Contracting and Workforce for taking the time and care to
    better understand the role apprenticeship plays, and to stress
    its importance as part of a strategic and multi-pronged attack
    on the skills gap.

        Thank you.

     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Knight, Ranking Member Murphy, and distinguished
    Members of the Committee:

        On behalf of the Iowa Brewers Guild, I'd like to express my
    appreciation for the opportunity to share our experience
    working with the Registered Apprenticeship system to establish
    our program.

        The Iowa Brewers Guild is the trade organization for the
    growing craft brewing industry in Iowa, and along with
    promoting and protecting Iowa beer, one of our primary goals is
    to improve the quality of beer brewed in the Hawkeye State. To
    that end, we offer workshops and an annual technical conference
    to our members and the general public.

        A few years ago, we watched as brewery after brewery opened
    and expanded across the state, and we became concerned about
    the skillsets necessary for continued success. On the surface,
    brewing beer seems a fun occupation--and it is. But it is also
    dangerous work that requires scientific precision for success.
    If our breweries were to compete in the broader beer scene, we
    would need to take steps to have well-trained brewers available
    in our state.

        Enter the Registered Apprenticeship Program.

        We were surprised to learn that no apprenticeship standards
    existed for a professional brewer. As there are very few
    brewing schools or training programs across the world (and none
    in Iowa), our Board of Directors elected to pursue an
    apprenticeship program of our own. Along with members of our
    Education Committee, I researched the process and appropriate
    criteria, and engaged the Office of Apprenticeship in Des
    Moines.

        Everyone I encountered in the process was helpful and
    supportive as we worked to construct our Standards of
    Apprenticeship, and we were pleased to learn that our plan was
    approved by the Department of Labor a few months later.

        Due to the small size of our Iowa breweries, we've known
    all along that we would run very few apprentices through our
    program. (At present, we have only one apprentice in the
    program at Firetrucker Brewery in Ankeny--the experience is
    going well for all parties.) However, there is much interest
    from those looking to become professional brewers, and I have
    many applications on file (from Iowans, out-of-staters, and as
    far away as Brazil) ready for a position to open up. Beyond
    potential apprentices, I've received queries from colleges,
    brewers guilds, and Workforce Development offices from other
    states looking into the idea of creating a program of their
    own.

        Iowa has long been known for having a strong educational
    system, and so regardless of how many apprentices our breweries
    are able to engage in the coming years, we feel great
    satisfaction in knowing that the Iowa Brewers Guild forged a
    path to make Professional Brewer a Department of Labor-approved
    apprenticeable occupation. We are hopeful that other businesses
    or organizations will take our framework and apply it to
    training programs in their own states and communities.

        We believe the apprenticeship process is a respectable
    means to job training and a valuable credential for job seekers
    to carry, especially in an occupation such as ours. We are
    proud of our part in designing a program from which others
    around the country may also benefit, and I am pleased to report
    that our experience with both the Office of Apprenticeship in
    Des Moines and the Department of Labor in Washington, DC has
    been positive and professionally rewarding.

        Sincerely,

        J. Wilson

        Minister of Iowa Beer

        Iowa Brewers Guild

      [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                     [all]