Millions of Americans work in low-wage jobs that don’t offer learning opportunities to advance on to more skilled roles. At the same time, millions of jobs remain unfilled across the country because employers can’t find people with the right skills. This dichotomy has led to what Jaime Fall refers to as the “upskilling movement.”
Fall serves as director at The Aspen Institute’s UpSkill America, a network of businesses and organizations that promotes training and advancement practices that help people progress in their careers and move into better-paying jobs.
Read our interview with Fall, who discussed what’s behind the upskilling movement, the return-on-investment (ROI) companies have seen by upskilling their workers, and how businesses and educators can work together more closely to develop upskilling partnerships and programs that work.
The day after President Obama’s 2015 State of the Union address, he called on employers to come together and focus on what they could do for frontline and entry-level workers to make sure they have more opportunities.
This was the beginning. The first real convening of the group was in April of 2015, when about 150 employers and educators came together at a White House summit. Since that time, our network has grown to well over 6,500 businesses and organizations that really care about this issue.
There are a number of reasons. First, with an unemployment rate of less than four percent, it’s getting continually harder for employers to attract and keep frontline and entry-level workers. Companies are realizing that when they invest in these workers, it really helps with retention and recruitment, and that’s good for their bottom line. In fact, lots of surveys show that if millennials and Gen Z workers don’t feel their employers are investing in their education, training, or development, they’re not going to stay.
Also, there are growing expectations for companies to get involved. This past January, the CEO of BlackRock Investment wrote in a letter to several thousand companies that if you want us to invest in you, you’re going to have to invest in your workers. And then there are the recent tax cuts, which have given companies money that isn’t necessarily committed to anything right now; a number of organizations and individuals are looking at companies to see how they’re spending these tax cuts and whether some of the money is going back into their workers.
Finally, there’s a general appreciation of how much society really needs upskilling. As a nation, we need an educated workforce and a workforce that’s going to continue learning.
“We define upskilling as any education, training, or development program that prepares workers with the knowledge or skills that they need to move up in their careers.”
Accenture did a study for Lumina Foundation on five different companies, and each of the five found that when they invested in education programs for their workers, they received a positive ROI.
The highest rate of return was from Discover Financial Services. The study showed the company received 144 percent return on their investment in a $7.4 million tuition assistance program, as a result of avoided costs related to retention and recruitment.
But one of the really important findings was that when Discover invested in management and helped managers further their education, they received a 7 percent ROI; but when they invested in call center agents, they actually received 243 percent ROI.
We define upskilling as any education, training, or development program that prepares workers with the knowledge or skills that they need to move up in their careers. It’s everything from apprenticeship programs to certifications and college tuition programs, which are probably getting the most press and notice right now, because so many companies are announcing new ones. But it also includes high school completion and GED programs.
Part of why I’m so excited about the upskilling movement is there isn’t just one reason we have to convince employers they need to do this. Income inequality is so bad right now—there are so many people who are working multiple minimum-wage jobs trying to eke out a living. We talk about the high cost of living in places like New York and San Francisco, and how nearly impossible it is for people to survive in cities like those in an entry-level job.
So there are all kinds of economic and social reasons companies should be participating, but that’s equally balanced with their survival, right? They can’t succeed without the right skills and talent. With all of the advancements in the workplace, including changes in technology, companies have to make sure—more than ever before—that they have a learning culture in place that’s going to help people regularly update their skills and knowledge.
First, they need to improve communication and understanding. I think what happens is companies talk to education institutions and say, “We need this,” and they express what they need in their companies’ terms. Then educators say, “Okay, yeah, we can help you solve that problem.” But the education institutions are defining the problem in their own terms, as well.
I think the best thing companies and educators can do is really sit down and go over a number of things in concrete terms. A company has to be clear about what it’s trying to accomplish before it can ever start. Is it a skill it’s trying to build, or is it knowledge that it needs to generally raise?
A company also needs to be clear about what it’s good at and what it’s not, and then get help for that. And companies and educators need to be clear about what’s going to demonstrate mastery of skills or knowledge. Will there be a test, a letter grade, or a certificate?
It’s also critical that the time frame is defined quickly and upfront. Employers might expect something to be turned around in a matter of weeks or maybe a couple of months, while for a lot of educators, it takes two years to get curriculum approved. And what’s the best method for delivery? Will it be at the school, or will the employer need to make space within its facilities for education or training?
And employers need to be clear on what their commitment is to the people who complete a program. Will they be hired, or will the employer just offer to interview everyone that completes the program? Will existing employees who complete a program get a wage gain or a promotion?
I wouldn’t say there is one specific model that works. Companies can be successful with different approaches. Walmart, for example, created its own training academies to better equip their workers for success at Walmart. Another model is Amazon’s Career Choice program, which encourages workers to pursue a variety of careers, including those that might be outside the company, by taking classes onsite at its fulfillment centers.
There are some tremendous online programs, too, but the key is making sure employees have access to the needed technology and the internet, so they can take the classes and complete work at home. That’s still a substantial obstacle for a lot of people.
And the other thing companies must do, almost no matter what model they use, is have some structure in place that provides the support people need to get through the program. People have issues come up; whatever those issues might be, a company wants to make sure that’s not the end of that person’s learning opportunities. The opportunity for lifelong learning should be part of the culture.
Are you a senior leader in HR, IT, finance, or higher education? Request an invite to join Jaime Fall and others at Bloomberg Next’s Tomorrow’s Talent: A Forum for Business and Education Leaders, a full-day symposium on June 28 in New York.