“This is a business decision that is the right format, at the right time.”
Pinnacol Assurance had been actively seeking ways to reinvigorate its talent acquisition strategy. During a trip to Switzerland to see first-hand the country’s youth apprentice model, Pinnacol’s CEO was challenged to think differently about his hiring approaches. Soon after, Pinnacol was the first to join CareerWise Colorado, a new statewide modern youth-apprenticeship system that borrows key elements from the Swiss. Today, Pinnacol hosts CareerWise’s largest cohort of high-school apprentices, considers its investment a competitive advantage—and is in it for the long haul.
Intersecting Needs of Business and Young People
In 2015 Pinnacol had evaluated its workforce demographics as part of a reorganization. One outcome was the realization that by 2019, the company would be facing a retirement boom as one-third of its more experienced staff members would begin to exit the workforce.
Coupled with those forecasts were lower numbers of individuals graduating with risk management degrees, only a fraction of students indicating a high interest in insurance careers—and an ever-present need to train even college graduates from the ground up.
Pinnacol’s CEO, Phil Kalin, found striking gaps between what the education system produced and what businesses need.
“I was convinced that the use of a Bachelor of Science was not a good proxy for the skill level we need, and we have a deep need for new talent coming in,” Kalin said.
CareerWise intrigued Kalin as an innovative approach to developing Pinnacol’s talent pipeline. He was willing to dive headfirst into the uncharted program.
As a result, in 2017 Pinnacol welcomed a cohort of 20 apprentices, the largest in CareerWise’s portfolio. “We are taking a risk,” Kalin acknowledged, “but in order to see the kind of payoff we want, we need to do it at scale.”
Pinnacol’s apprentices support 23 work teams—primarily in claims, underwriting, customer service and information technology—and the company already sees a return on its investment through the apprentices’ support of daily operations.
“They are taking on roles and responsibilities that free up full-time, salaried staff to focus on the more technical aspects of their jobs,” said Mark Tapy, Pinnacol’s apprenticeship program manager. He estimates that from a strictly hourly standpoint, the company recoups about 80 percent of wages paid for the work produced. And that’s just one year into its three-year program.
While the apprentices’ work does not yet directly offset the overhead costs of training and mentoring, CEO Kalin predicts that, “By halfway through the program, the benefit to Pinnacol will outweigh the costs. At the end of three years we should be break-even.”
In the meantime, the company sees other hard-to-measure returns, such as leadership and mentoring opportunities for staff, and the infusion of young energy that has some teams interested in the apprentices as future full-time employees. “The program is sprouting some arms in our organization that we were not anticipating. Their added value to the company is undeniable,” said Tapy.
Tapy predicts a value-add outside the company’s walls as the apprentice model grows to scale: “There will be a much better-prepared workforce in the state. As more companies produce high-caliber talent, the whole industry benefits.”
Broadening the Notion of Apprenticeship
Tapy had some nervousness about how he would make the program work. “It’s a big undertaking, with many unknowns,” he said. But CareerWise’s deep support and involvement have taken the questions out of the equation.
“The CareerWise team is helping us create a program that benefits everyone, hits the mission of our workforce development and ensures an optimal return on our investment,” Tapy said.
Executive buy-in isn’t a problem. Kalin, an outspoken advocate for CareerWise’s modern apprenticeship model, says he is “very bullish on the program.”
“It dramatically broadens the notion of what an apprenticeship is. It becomes not only a pathway to a great middle-class job, but is a launching pad that can take young people in any number of directions, whether it’s a job or higher education,” said Kalin.
Nonetheless, Kalin carefully notes that Pinnacol’s involvement is not simply altruistic. He admires the apprentices for being smart, motivated, curious and energetic—and enthusiastically supports them. But at the end of the day, “This is a business decision that is the right format, at the right time.”
Company Profile: Pinnacol Assurance
Industry: Workers’ compensation insurance
Staff: 650 employees
Location: Denver, Colo.