Activist investors, regulators, employees, and customers are demanding that companies stand behind their commitments to diversify their workforce, and to ensure that equity guidelines are in place for hiring and advancement of marginalized groups of people. A big part of making good on these pledges is offering job skills training to entry-level employees and hourly wage workers. Why? Because when people have the opportunity to upskill through employer-funded education initiatives it opens the door to higher earning power by qualifying them for better jobs.
Take Paul Fowlkes for example: He was only 17 when a family tragedy struck, forcing him to drop out of high school, earn his GED, and work to raise his sisters. His employer, Walmart, offered him education through a company-funded program that helps associates earn bachelor’s degrees for in-demand job skills like computer science—the degree Paul is currently working toward. Paul’s is just one of many examples from a recent Luminera Foundation report on how employer-sponsored education programs can put hourly workers on the career path to higher wage jobs.
Job skills training elevates workers out of poverty
For many individuals, however, low-wage, hourly jobs are the highest up the career ladder they are able to go for various reasons, limiting them to years of working at sub-living wage positions.
A 2021 report from Burning Glass (now Emsi Burning Glass) analyzed resume data of young workers with limited education and work experience. It found that “48% of the young workers in the database appear to be stuck.” According to the report, which analyzed data collected from before the pandemic hit, fewer than half of these stuck youth were earning a living wage after five years of working.
These findings carry even greater significance in an era of heightened awareness around social justice. Certain racial and ethnic groups are overrepresented in hourly, high churn positions—and many employers are taking action. For example, in response to the Black Lives Matter movement, a number of organizations made public commitments to improve the career mobility of Black and Latinx employees. A part of that is offering job skills training so career advancement is more attainable.
A 2021 Visier analysis of 400,000 U.S. employee records reveals that underrepresented groups are less likely to be at a managerial level than their white counterparts, a clear sign of unequal access to career opportunities. Within the 40 to 45 age category, the manager ratio (the proportion of people within a specific group who are managers) is 25% for white employees and 11% for Black employees. Unless there is a major shift, it will take more than 78 years for Black employees to reach pay equity with their white counterparts.
The Luminera report found that across racial and ethnic groups, participants like Paul in Walmart’s Live Better U education initiative saw more promotions than non-participants.
Considering that many workers use management roles to transition out of entry-level work, as revealed by the Burning Glass data, it’s clear that organizations need to set diversity goals related to management positions and other roles that open the door to further career advancement.
Employer-offered education as recruitment perk
On top of DEI considerations, upskilling hourly workers also allows companies to compete for people at a time when quit rates have reached all-time highs. A 2021 Visier survey found that nearly one-third of employees who changed jobs within the past year (32%) did so to learn new skills. When there just aren’t enough people to fill hourly roles, stores reduce their opening hours and packages don’t get delivered. Some businesses are offering free education – in addition to raising wages – as a perk to attract workers in a tight labor market.
Employer-sponsored education programs are not new, but they carry even more weight in this current environment. This means employers will need to ensure their upskilling efforts are paying off, helping them avoid the costs associated with people quitting soon after their start dates and the risks associated with not delivering on DEI promises.
Three ways to use job skills data
Giving people the right skills they need to grow their careers is a high stakes game, for both employee and employer – and a data-driven approach can help. With modern technology, employers can gain a clear vision of realistic career paths, share this information with workers, and hold themselves accountable for giving everyone the opportunity to grow. Here are three ways employers can use data to make upskilling work:
1. Deliver career growth insights to candidates
In the past, career coaching was reserved for a few elite, high potential employees. But tech advances are changing all of that, enabling organizations to leverage career pathing data more broadly. The right insights reveal how employees move from one role to the next and which stepping stone roles are supporting those transitions. For example, does the data reveal that retail sales associates are transitioning into supply chain or pharmacy technician roles with additional training or credentials? This kind of information can then be shared with candidates during job interviews to position the company as an employer of choice, particularly if the company is already investing in training programs.
In the Visier report, Mad About Skills: A Top Reason People are Quitting, our survey found that nearly three-quarters of total respondents (73%) said they would absolutely or probably leave their current job for another job that paid the same but offered better or more skills training opportunities. This jumps to 83% when looking at Gen Zers and 81% for millennials, indicating that younger generations are most at risk for skills-based attrition as they aim to climb the career ladder.
2. Stay on top of the changing market
Future skills demands are constantly in flux, and workers need to be assured that earning a degree or embarking on another type of training program will pay off – that’s why it’s important to access market data. Emsi Burning Glass, for example, seeks to create a universal language of skills that can be shared by workers, employers, and educators. This company scrapes millions of job postings, and then aggregates this information to create a big-picture, macro view of everything happening with labor and how specific occupations are shifting and changing.
Organizations can leverage labor market data to identify which skills are in short supply in their areas of operation, and provide incentives to those employees willing to develop the skills they need. Not only do employers get the talent they need, but by promoting an internal candidate, they get someone with institutional knowledge and a shorter time to ramp up.
3. Measure success
With a unified analytics platform that connects learning, employee, and business data, leaders can instantly see the impact of upskilling programs. With this technology, organizations can promote equity by determining whether hourly workers who participate in a specific program are experiencing more internal movement and flowing from low-demand positions to higher paying, high-demand positions.
Hourly work doesn’t have to be a final destination
The adage is true: talent is equally distributed, opportunity is not. Stepping stone jobs are important, and when they are delivered as part of a commitment to DEI, they can have a real impact for employees and employers alike. This is clearly not an overnight fix, but with the right approach, upskilling can act as one point in the constellation of solutions for improving the career prospects of hourly workers.
About the author: Caitlin Bigsby
Caitlin Bigsby has over 22 years of experience in HCM software solutions and has worked with dozens of organizations over the years to help them maximize the value of their investments, in both their people and their software. Caitlin shines a light on how analytic insight can elevate the strategy of Human Resources. In her spare time, she enjoys spending time with her family and dog, Toby.
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