Small and medium-sized businesses (SMBs) face persistent challenges finding and keeping skilled workers in a tight labor market. At the same time, registered apprenticeships—paid, work-based training programs that combine on-the-job learning with related instruction—have expanded rapidly across the United States and demonstrated strong returns for employers. This brief examines how SMBs can use registered apprenticeships to address talent shortages, drawing on lessons from employers in North and South Carolina. Through interviews with business leaders and a review of existing evidence, the brief highlights the benefits of apprenticeships for SMBs and outlines practical approaches to adopting this model.

Why This Matters

Employer surveys consistently show that talent shortages are widespread across industries and regions, and SMBs are often at a disadvantage when competing with larger firms for experienced workers. Limited recruiting capacity, fewer resources for training, and higher vulnerability to turnover can constrain growth and productivity for smaller employers. Registered apprenticeships matter because they offer SMBs a proven strategy to build a skilled workforce tailored to their needs, while also lowering recruitment costs and improving employee retention. Despite growth over the past decade, apprentices still represent a very small share of the overall labor force, suggesting that apprenticeships remain underused—particularly among SMBs that could benefit most from them.

What We Found

We find that registered apprenticeships provide several key benefits for small and medium-sized businesses:

• Expanded talent pools. By removing requirements for prior experience and replacing them with structured training, apprenticeships allow SMBs to hire workers based on potential rather than credentials, broadening who they can recruit.
• Stronger recruitment through partnerships. Apprenticeship programs help SMBs connect with high schools, community colleges, workforce agencies, and community-based organizations, creating reliable pipelines of candidates and reducing hiring costs.
• Improved retention and advancement. Employers consistently report higher retention among apprenticeship graduates, with apprenticeships serving as long-term talent pipelines and succession strategies.
• Flexible program models. SMBs can either start their own registered apprenticeship programs, maintaining control and customization, or join group programs managed by intermediaries that reduce administrative burden and upfront costs. Each approach involves tradeoffs between flexibility and capacity, but both can be effective depending on an employer’s needs and resources.

Employers also emphasized that apprenticeships not only met immediate staffing needs but also strengthened their organizations by supporting internal advancement, increasing diversity, and building long-term workforce stability.

How We Did It

This brief combines evidence from prior research on the employer benefits of apprenticeships with insights from small and medium-sized businesses in North and South Carolina that have implemented registered apprenticeship programs. We drew on interviews with employer leaders and program staff to understand their motivations, experiences, and decisionmaking around apprenticeships, including choices between independent and group program models. This brief provides practical on-the-ground lessons and guidance for SMBs interested in using registered apprenticeships as a talent development strategy.