The Reskilling Imperative
HR professionals are taking the lead in helping their companies build a future workforce.
A fledgling computer retailer in Tampa, overwhelmed by the company’s rapid growth during the pandemic, is paying bonuses to staffers who learn 3D printing. Near Baltimore, a casino has partnered with a local community college to provide free training to workers who want to move into higher-paying jobs as card dealers. Waste Management, based in Houston, is paying for workers and their family members to take computer, math and other business-related classes.
Meanwhile, instead of pulling from traditional college programs, online retail giant Amazon is training aspiring software developers in its own academies.
Facing a tight job market and a dearth of employees with the right mix of skills, some employers are investing in training that will enhance workers’ expertise and prepare them for new jobs with better opportunities. Called “upskilling” or “reskilling,” it’s a strategy that can deliver a win to employers and workers alike. And in many cases, HR is taking the lead.
To be sure, businesses had difficulty finding workers before the pandemic struck in early 2020, when the unemployment rate was 3.5 percent. But even now, despite many positive signs of a post-pandemic economic recovery and a higher unemployment rate, many employers still face hiring challenges. The biggest problem is a widening gap between the job skills they need and the actual skills their current and future employees possess.
Almost 60 percent of 1,260 learning and development professionals globally identified upskilling and reskilling as their top priority this year, according to the 2021 Workplace Learning Report from LinkedIn Learning.
An earlier survey conducted by West Monroe Partners found that more than half (56 percent) of the 432 HR professionals and 1,000 U.S. employees surveyed described their organization’s skills gap as moderate to severe. Only 6 percent said they had no skills gap at all.
Preparing existing workers to take on new challenges in jobs earning higher pay can be a cost-effective way for businesses to stave off a looming staffing crisis, says Michael Hughes, a managing director at the business consultancy. “Upskilling comes at a time when emerging skill sets are scarce and the talent market is tight—making it prudent to keep people even if they don’t have the right skills right now,” he explains. “It’s often cheaper to retrain current employees than find and hire new ones, as the consequences of turnover can be felt at the bottom line.”
Further, upskilling may help advance racial equity by providing career paths to workers who are overrepresented in low-skill, low-paying jobs and underrepresented in jobs with greater opportunity. A recent study by The National Fund for Workforce Solutions, a Washington, D.C.-based nonprofit that funds projects to improve job opportunities for low-wage workers, shows that the concentration of people of color in low-paying jobs costs the U.S. economy $2.3 trillion annually, largely through lost earning power. Upskilling initiatives can help boost the economy by helping low-wage workers into higher-paying jobs, but such programs must also address child care and other institutional barriers that prevent those workers from succeeding, says Amanda Cage, the National Fund’s president and chief executive officer.
The most effective upskilling programs are those that are data-driven and tailored to meet employer needs, research has shown. President Joe Biden has endorsed the concept. The administration’s jobs plan calls for billions of dollars to beef up so-called workforce development infrastructure, including apprenticeships and computer, math and science programs that can help prepare underrepresented middle and high school students for jobs in well-paying, high-tech fields. The administration also wants funding to train and create jobs for historically disadvantaged groups, including people with criminal records, low-income veterans and displaced workers in Appalachia.
Despite the political support for upskilling, such efforts can face internal opposition. Jess Giudici, a senior HR manager at a midsize manufacturer in the Midwest, has to sell the idea of upskilling to some front-line managers who think she should just advertise for job candidates. In those cases, she reminds managers that many vocational training programs that have supplied workers in the past are gone.
“It takes educating our front-line managers on the mindset that instead of waiting for someone else to train [workers] and [hope they] make their way to us, let’s get them in early and train them up ourselves,” Giudici says. “Then we’re never dependent on the market to deliver skilled candidates—we create them.”
In some cases, the top brass are the ones pushing back on the idea of upskilling. One in 4 business leaders surveyed by McKinsey & Co. in 2017 said they lacked the tools or knowledge to quantify the business case for upskilling. Almost one-third thought that their current HR infrastructure wouldn’t be able to handle the process.
The good news is that now more than ever, HR professionals are deploying programs to help their organizations both meet their talent needs and expand job opportunities. More than half of U.S. employers (52 percent) provide upskilling training so employees can perform new jobs, while 73 percent offer initial skills training to help workers do their current jobs, according to a recent report from the Society for Human Resource Management (SHRM).
“Now More Than Ever” is the theme of the SHRM Annual Conference & Expo 2021, scheduled for September 9-12 in Las Vegas and online, which will feature several educational sessions on addressing the skills gap. At a time when many employers worry about keeping up with their talent needs, HR professionals are playing a heightened role to stave off a talent crisis and advance workplace equity.
Tamla Oates-Forney
Senior vice president & chief people officer
Waste Management
Houston
48,250 employees
Making Education a Family Affair
A Waste Management (WM) executive was having a friendly chat with one of his company’s truck drivers when the conversation took a serious turn. The employee confided that he was worried about how he would pay for his kids to go to college.
It turns out many WM workers share the same concern, prompting leaders at the nationwide trash management giant to breathe new life into an educational assistance program that had been scrapped years ago due to lack of employee interest. In April, WM began covering the full cost of voluntary, job-related training for nearly 36,000 full-time, non-bargaining-unit employees. Employee dependents who are benefits-eligible, including nearly 34,000 children and spouses, can begin taking free classes in 2022. (Job training for WM’s unionized workers is handled separately under collective bargaining agreements.)
The benefit will address several of the company’s most pressing human resource challenges, says Tamla Oates-Forney, WM’s senior vice president and chief people officer. Perhaps most notably, it helps bridge an existing skills gap, particularly among drivers and customer service agents whose jobs increasingly require computer and data management skills.
“We knew we had to retrain our current workforce,” Oates-Forney says. “A lot of our employees are tenured and don’t have the skills to pivot from manual to digital.”
She also hopes the promise of free tuition will help the trash company overcome its less-than-glamorous image and spur at least some employees’ family members to join the organization.
“When you engage families in career choice, you have a hook,” she says.
Course offerings are mostly linked to business, technology, science and math and can lead to a high school diploma, an undergraduate or graduate degree, or a certificate. The classes, available both online and in person, are offered through several state and private universities, local community colleges, online providers such as eCornell and Pathstream, and at least one historically Black college.
WM has budgeted more than $4 million for employee tuition this year alone, a cost Oates-Forney says could easily be recouped if workers become more productive or if the benefit reduces recruitment costs. And while tuition comes with no strings attached, she hopes the benefit will convince good employees to stay with the company longer.
“I would rather have a skilled employee for two years than an unskilled employee for four,” she says.
Michael Salamey, SHRM-SCP
HR consultant
Ultimate 3D Printing Store
Tampa, Fla.
24 employees
Paying Employees to Learn
The pandemic triggered a demand for 3D printers that was great for business at the Ultimate 3D Printing Store, a Tampa, Fla.-based online retailer. But the 400 percent sales increase the company enjoyed in 2020—spurred largely by hobbyists eager to learn something new during the lockdown—stretched the company’s four-person staff to the limit, says Michael Salamey, SHRM-SCP.
Salamey was hired late last year as a consultant to help the 6-year-old retailer deal with its growing pains. His first order of business was to dramatically increase staffing to handle the explosion in sales. That meant bringing people on board with little or no knowledge of the product line. (3D printers create an object by stacking one layer of material—typically plastic or metal—on top of another. They can be used to make a variety of objects, including iPhone cases, airplane parts and artificial limbs.)
“We needed new skills in short order, and we had to be creative to make that happen,” Salamey says. “We have used everything from live seminars and webinars to free YouTube videos.”
An early priority for the company was to hire and train a dedicated customer care team.
The retailer contracted with Pryor Learning to provide in-person and online courses in customer service and other topics, and it also urges staffers to access training and development tools available through social media outlets such as LinkedIn Learning. Employees are encouraged to pursue additional job-related training and receive a $1-per-hour pay hike for each additional skills certification they earn. At least one employee doubled his salary—to about $60,000—by earning an Occupational Safety and Health Administration certification and by taking accounting and other business-related classes, Salamey says.
This year, the company is devoting 2 percent of its revenues to employee training.
“It’s actually a really good return on investment,” Salamey says. “It’s one of the few benefits a small company can afford.”
Patty Billingsley, SHRM-SCP
Vice president, HR
Carlile Transportation
Anchorage, Alaska
350 employees
Driving Retention Results
A new internal training program is helping Carlile Transportation, a trucking company in Anchorage, Alaska, increase its driver pool by giving current workers an opportunity to move into a higher-paying driving career, says Patty Billingsley, SHRM-SCP, the company’s vice president for human resources.
“Nationwide, there is a shortage of truck drivers, and in Alaska the pool of applicants is even more limited,” Billingsley says. “Carlile felt it was important to grow our own [talent] by looking internally.”
The company has relied on state grants to cover most of the direct costs of truck driver training. But high demand for truckers in Alaska led the company to offer tuition reimbursement and employee salaries during training, which can last four to eight weeks.
Previously, in many instances, the same workers who collected weeks of pay from Carlile while they were being trained were out the door before actually working a single day as a driver.
That changed when Carlile began offering first dibs on driver training to employees who already have a proven track record with the company. Carlile also now requires a two-year commitment from employees who successfully complete the training. All aspiring drivers must get a recommendation from their current supervisor, helping to ensure that employees who make the career switch are a good fit.
Employees who are selected for the driver training program must pay a portion of the training costs out-of-pocket, which helps ensure the workers have “some skin in the game,” Billingsley says. In most cases, employees are reimbursed.
“We offer financial support as well as ongoing support from our driver trainer once an employee successfully completes their training,” Billingsley says. “This has not only helped fill vacant positions, it also shows employees we support their career advancement, which, in turn, increases morale.”
Nancy Myshko
Vice president, HR
Live! Casino & Hotel Maryland
Anne Arundel County, Md.
2,800 employees
Improving the Odds for Success
Gaming is one of the fastest-growing industries on the East Coast, and demand for gambling jobs is projected to grow by 10 percent from 2019 to 2029—much faster than the average growth rate for all occupations, according to the U.S. Bureau of Labor Statistics. That means there’s always pressure to hire and train dealers and other employees to work the games on the casino floor, says Nancy Myshko, vice president for human resources at Live! Casino & Hotel Maryland near Baltimore.
A partnership with a nearby community college is key to meeting the constant need for dealers, according to Myshko. In addition to funding a dealer training scholarship at the college, the casino offers tuition reimbursement to employees who show an aptitude for dealing and want to learn the skills needed to work games that are more complex and pay higher wages.
Travan Smart is one of the casino’s most recent staffing success stories. He was in his mid-20s and working in construction when he visited Live! with friends. It was his first time in a casino, but he knew immediately that he wanted to become a dealer. He took a security job at the casino to get his foot in the door; a few months later, he took the skills assessment the casino uses to screen aspiring dealers. Deemed a good match, he was offered a scholarship to attend the community college’s blackjack dealer training program and landed a job at the casino shortly after finishing the course.
Over the past five years, the casino has paid for Smart to take additional classes that prepare him to work more-complicated games such as craps, roulette and baccarat. Each time he gets a new certification, he gets a raise. This spring, he joined a new, yearlong dealer apprenticeship program sponsored by the community college where he is honing his dealership expertise and learning new management skills that could lead to an even higher-paying casino job.
Smart, who immigrated to the U.S. from Jamaica, says he appreciates that his hard work gets recognized through new opportunities to advance in his career.
"I never had anyone invest in me before,” he says.
Myshko says nurturing the careers of staff is a priority at the casino.
“We have found that when our team members are successful, happy and fulfilled in their career paths, it creates an environment that’s inspiring for everyone,” she explains.
Ardine Williams
Vice president, workforce development, HQ2
Amazon
Arlington, Va.
950,000 employees
Delivering Careers in Software Development
Amazon’s continued success, as one of the nation’s largest employers, depends on its ability to keep the talent pipeline flowing. To make this happen, the company has invested over $700 million to enhance the skills of more than 100,000 employees by 2025, according to Ardine Williams, the company’s vice president for workforce development at Amazon HQ2.
A key initiative trains employees to become software developers in nine months. Turning the traditionally lengthy and costly college-based model for teaching coding skills on its head, Amazon has created its own curriculum that focuses on the specific knowledge and abilities the company needs its workers to have.
The program, one of many offered through the Amazon Technical Academy, is “intended to remove barriers to education for our employees because we know now more than ever, it’s important for us to meet our employees where they are,” Williams says.
Hundreds of Amazon employees, many of whom had no prior technical training, have enrolled in the software training program since its launch in 2017, and nearly all have been placed into new, higher-paying jobs. Applicants accepted into the tuition-free program receive a stipend to cover living costs and a subsidy to maintain their employee benefits. The company invested more than $12 million into the software development initiative in 2020 alone.
While the program was originally limited to corporate employees in Seattle, it’s now open to all U.S. employees. About one-third of participants don’t have a college degree, and 40 percent previously worked hourly jobs.
“As a leading U.S. employer, we have an important role to play in providing our employees access to the education and training they need to grow their careers,” Williams says. “We know access to skills training can unlock opportunities and have a positive, long-term impact for our employees, customers and communities.”
Rita Zeidner is a freelance writer based in Falls Church, Va.
Photographs by Todd Spoth (Tamla Oates-Forney), Callie George (Michael Salamey), Carlile Transportation (Patty Billingsley), Live! Casino & Hotel Maryland (Nancy Myshko), and Cassidy Duhon (Ardine Williams) for HR Magazine.
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