By Chip Cutter
U.S. companies are increasingly paying up to retrain workers as
new technologies transform the workplace and companies struggle to
recruit talent in one of the hottest job markets in decades.
Amazon.com Inc. is the latest example of a large employer
committing to help its workers gain new skills. The online retailer
said Thursday it plans to spend $700 million over about six years
to retrain a third of its U.S. workforce as automation, machine
learning and other technology upends the way many of its employees
do their jobs.
Companies as varied as AT&T Inc., Walmart Inc., JPMorgan
Chase & Co. and Accenture PLC have embarked on efforts to
prepare workers for new roles. At a time of historically low
unemployment, coupled with rapid digital transformation that
requires high-tech job skills, more U.S. companies said they want
to help their employees transition to new positions -- and they
have their bottom line squarely in focus.
Many have concluded that they must coach existing staff to take
on different types of work, or face a dire talent shortage, said
Ryan Carson, founder and chief executive of Treehouse, a firm that
pairs tech apprentices, often from underrepresented groups, with
employers and helps train them.
"It's the beginning of the flood," Mr. Carson said. "We're
basically just going back to a time where companies would invest in
their own workforces."
The prospects for such retraining initiatives remain uncertain.
Many companies are assessing whether it is more economical to train
their current workers or lay them off in favor of new hires with
the needed skills. Those who have studied retraining programs said
the "reskilling" can boost employee morale and keep workers from
leaving a company, but that not everybody has the capacity or will
to prepare themselves for a new role.
Amazon's promise to upgrade the skills of its workforce --
reported by The Wall Street Journal Thursday -- represents one of
the biggest corporate retraining initiatives on record, and breaks
down to about $7,000 per worker, or about $1,200 a year through
2025. By comparison, large employers with 10,000 workers or more
that were surveyed by the Association for Talent Development
reported spending an average of $500 per worker on training in
Amazon said it would retrain 100,000 workers in total by
expanding existing training programs and rolling out new ones meant
to help its employees move into more-advanced jobs inside the
company or find new careers outside of it. The training is
voluntary and mostly free for employees and won't obligate
participants to remain at Amazon, the Seattle-based company
Hourly workers in fulfillment centers can retrain for IT support
roles, such as managing the machines that operate throughout the
facilities. For nontechnical corporate workers, there will be the
chance to spend several years retraining as software engineers
without going back to college.
"Technology is changing our society, and it's certainly changing
work," said Jeff Wilke, chief executive of Amazon's world-wide
consumer business, describing the initiative as a way to help
workers prepare for "the opportunities of the future."
A challenge common to many corporate retraining efforts is
predicting which skills will be needed even a few years in advance.
"The game of picking winners means you often pick losers," said
Jeff Strohl, director of research at the Georgetown University
Center on Education and the Workforce.
Amazon, like many corporations, has struggled to find enough
technical employees, and Mr. Wilke said the company sees a growing
number of its jobs including a technical component in the future.
The company has more than 20,000 open jobs in the U.S., more than
half of them in Seattle, and recently picked a suburb of
Washington, D.C. as the site for another headquarters, where it
expects to employ 25,000 people with average annual compensation of
Amazon has been criticized for its treatment of workers in
recent years by labor groups and lawmakers. For example, Sen.
Bernie Sanders of Vermont, a Democratic presidential candidate,
tweeted in March that the company must "significantly improve
working conditions at its warehouses" and respect workers' rights
to form a union. On Thursday, the United Food and Commercial
Workers International Union, which has been pushing to organize
Amazon workers, said it opposed the retraining program. The group
said Amazon's adoption of automation would "lead to massive job
losses that could cripple our entire economy."
The company had 630,600 full-time and part-time employees
world-wide in the quarter ended March 31. It has about 275,000
full-time U.S. employees.
Amazon said it has made a series of moves in recent years to
improve compensation for its workers and provide them access to
educational opportunities. Last year, the company raised the
minimum wage for its U.S. employees to $15 an hour.
Peter Cappelli, a management professor at the University of
Pennsylvania's Wharton School, said Amazon's programs will likely
help the company recruit and retain workers amid fierce competition
"It's not altruistic," he said. "There's some hard-nosed
business-decision-making behind this."
Some of the programs offered by Amazon include more advanced
training. Its Machine Learning University will be open to thousands
of software engineers with computer-science backgrounds to take
graduate-level machine-learning skills courses without going back
Amazon employees, some of whom are former university professors,
will teach the classes.
The training programs could help Amazon workers find jobs in
different industries, the company said. It is expanding a program
for fulfillment-center employees called Amazon Career Choice that
pays 95% of tuition and fees for certificates and degrees in
high-demand fields such as nursing and aircraft mechanics -- even
though Amazon doesn't offer employment in those fields.
The company expects to open 15 new career-choice classrooms by
the end of 2020, as new fulfillment centers open.
As companies retrain workers, some find layoffs can be avoided.
"The best thing you can do for somebody is layoff aversion," says
Jane Oates, a former assistant secretary for employment and
training in the Labor Department during the Obama administration,
and the president of the nonprofit campaign WorkingNation, which
focuses on how technology is changing work. "We lose people every
time you see a mass layoff. There's a fraction of them that say:
'I'm done, I can't fit in this new world.'"
The programs could also help workers forgo student loans to get
trained in new areas, Ms. Oates said. "I don't know how we make
people robot-proof, but I certainly think this reskilling, and
taking it on in partnership with your employer, has a lot less risk
than taking the task on yourself."
Though Amazon's training won't carry a stipulation that
employees remain with the company, experts say the program is
likely to help retain staff. The ability to hold on to talent is
important because recruiting new workers and training them is
expensive and time-consuming, said Chris O'Leary, a senior
economist at the W.E. Upjohn Institute for Employment Research, a
nonprofit research center. "If you can maintain stability, you're
lowering your cost," he said.
Many people leave jobs because of lack of opportunities,
Treehouse's Mr. Carson says. As more companies invest in training,
he predicts retention will increase.
"The big secret is there is no lack of talent," Mr. Carson said.
"We just haven't been looking in the right spots. That talent is
often at your own company. They literally already work for
--Lauren Weber contributed to this article.
Write to Chip Cutter at firstname.lastname@example.org
(END) Dow Jones Newswires
July 11, 2019 19:23 ET (23:23 GMT)
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