We Need To Rethink Employee Training In The American Workplace Now

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Posted: Mar 18, 2020 10:33 AM
We Need To Rethink Employee Training In The American Workplace Now

Source: AP Photo/Mark Lennihan

Sure, employee training is accepted as vital to every enterprise’s prosperity. However, all too many business leaders view employee training as a one-off experience for when a new hire joins the company. They don’t prioritize it correctly, and view it simply as a necessary cost, rather than an investment in the future of business. 

The importance of training and reskilling America’s workers was underscored this past summer, when President Trump signed the Pledge to American Workers, asking companies and trade groups to invest in training, education, and reskilling programs. 

The Pledge is an initiative of the National Council for the American Worker, which Trump launched in 2018 via an executive order. To date, according to the White House, 430 companies have pledged to offer skill training opportunities to 15 million Americans. Titans of industry such as Microsoft, Walmart and Toyota, as well as several state governments, have signed on. 

On the other hand, there’s no mechanism in place to hold these organizations accountable to their pledges, and existing training programs can also count towards their quotas, so why wouldn’t they enjoy the good PR that comes from joining the Pledge? Is this a case of too little, too late?

It’s clear that a recession is coming; the only question is how soon it’s going to hit, and how hard it’s going to hit us. Ensuring that Americans have the right skills for in-demand work – through effective and ongoing employee training programs, with a focus on reskilling – is key for delaying and reducing its impact on our prosperity as a whole.

Hopefully the business ecosystem will wake up in time.

A growing economy needs a growing skilled labor force

With unemployment rates at a record low and 5.3 million new jobs having created between Trump’s election and his second State of the Union Address, many jobs in vital roles are going unfilled due to a lack of applicants with the right skills. 

The situation is particularly acute in manufacturing verticals, where the number of open manufacturing jobs hit an all-time high of 509,000 in May 2019. What’s more, there are additional jobs being created all the time, and it’s estimated that 2.4 million positions will be unfilled by 2028. And technology is transforming faster than ever before. Some 75 million jobs are expected to be displaced in 20 major economies by 2022, while technological advances could create 133 million new roles. 

Employees need to quickly gain new skills to maintain a steady income and fill newly-created positions.

In the US alone, the World Economic Forum (WEF) reports that 1.4 million jobs are likely to be disrupted by 2026. On an individual level, this could be a disaster for many families on the poverty line. But with reskilling, 95% of the workers who are most at risk can find good-quality, higher-wage work in growing job sectors.

On a national level, job disruption could damage economic growth. CEOs say that the skills gap is hampering their growth and profitability in various ways, and their preferred response is to retrain employees in order to deal with it. But in practice, workers in many industries aren’t succeeding in transitioning to higher-paid employment. Rather, they are either remaining in the same position, or falling through the wage quintiles to even lower-paid work.

The OECD ranks the US 28th out of 29 developed nations when it comes to investing in taxpayer-funded training, mind you.

The WEF claims that at least 54% of all employees will need reskilling by 2020, but in the past year, only 30% of employees at risk of losing their jobs due to changes in technology received that training. What’s more, the ones who are most at risk seem the least likely to get retraining. 

Where is it all going wrong?

Retraining isn’t working as it should 

On the one hand, enterprises aren’t stepping up to the mark fast enough. As mentioned above, CEOs know that they need to invest more in retraining. In a PWC survey, 93% said that they need to change their talent recruitment and retention strategy, yet only 61% are taking steps to do so.

Corporate hiring practices still overwhelmingly look outside the company first to fill new positions, with almost 75% of companies refusing to consider internal candidates, but something isn’t working, because nobody seems to have noticed that 46% of new hires fail within 18 months.

At the same time, it’s vital to acknowledge that the private sector can’t handle the burden of reskilling alone. 

WEF estimates that the private sector can only profitably reskill 25% of those likely to lose their jobs by 2022 due to changes in technology. If numerous enterprises join together for economies of scale, they could raise that number to 45%. But with government help, 77% can be reskilled, and the government would benefit from increased tax revenue and lower social costs like unemployment benefits.

I’m rooting for smaller government as much as the next guy. But this is a situation where regulation needs to step in, as the private sector seems unable to save itself. When it comes to actual management of employee training programs, Trump scoffs at his own administration’s ability to provide value. “Government wouldn’t know where to begin,” he said last week. “It’d just be another program that they have that would be a disaster.” 

This approach needs to change.

Employee training programs need to evolve

To support ongoing prosperity, the business sector needs not just to increase retraining and reskilling programs, but to change the way they roll them out. 

Employee training programs need to be:

  • Accessible. Participants must be able to interact with training materials from wherever they are, including across the country, in remote areas, and in disadvantaged neighborhoods. In some cases, federal or private sources might need to subsidize access to networked devices to make this possible. 
  • Self-directed. People of different ages, educational backgrounds and lifestyles should be able to participate in the same training series. Participants need to set their own pace of learning and pick the media that matches the way they learn best, without requiring the creation of a new course for every few people.
  • Engaging. The desire for a better job isn’t enough to motivate every citizen to complete a course. Additionally, not everyone will internalize the real threat to their current position until it’s too late, so retraining incentives need to be built into the program. 
  • Ongoing. The private sector needs to support students throughout their retraining programs, beyond a one-off set of classes. Retrainees need continual help to expand their skills, consolidate what they have learned, and go on to learn more. 

Between the demand for skilled workers to support continued economic growth, and the millions of people who will need retraining when they lose their jobs due to tech disruption, employee training and reskilling are vital for ongoing prosperity. 

President Trump’s Pledge to American Workers is an important step, but is it too little, too late? Only time will tell. 

While we haven’t been meeting our goals thus far, uniting private and public efforts, we have much to gain by shifting the focus within enterprises to internal reskilling and using the right techniques. If done well, training programs can keep employment high, meet the demand for skilled workers, and underpin a strong economy well into the new decade.