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To Build a Skilled U.S. Workforce, Change Systems – and Stigmas

Photo credit: Acumen

A high school student grabs the mail on the way home and sorts through glossy fliers from leading colleges.  A recruiter prepares for a day of undergraduate interviews at a top school.  A hiring manager spreads résumés across the table, scanning for prestigious alma maters.

Across the talent ecosystem, we’ve become overly reliant on the incomplete signals, including those provided by elite colleges and universities.  There’s a belief that these institutions are so good at selecting talent and providing such valuable training, that they should serve as proxies for the most lucrative career paths.

This system is flawed. It reinforces existing class and income-based social stratification. It favors those who come from affluent backgrounds. And  — it overlooks the vast talent outside of a small set of schools, undermines the valuable and various experience outside of these settings, and sustains destructive biases.  Further, this system isn’t designed to help our workforce adapt to the changing nature of work.  The livelihood of many Americans is under threat in this new economy.

By overvaluing expensive, outdated and exclusive educational models, and failing to innovate existing skills-focused models, we risk boxing out many low-income Americans.  It’s time to start changing the stigma around skills and begin investing in new systems that will empower all Americans to thrive in the workforce – which is what we aim to do at Acumen America.  Here’s how.

Empower learner choice

Improved learner choice only matters if high-quality programs are accessible. Credit: Acumen

The incumbent system has a bias toward prestige and limits learners by their familial and community networks.  If your uncle or neighbor attended a certain university, that’s more likely to move you to the top of the list.  Unfortunately, neither prestige nor networks are very good at assessing which type of school or program will actually benefit a student most.  A student should be able to compare the ROE — “return on education” — between a coding boot camp, welding certificate, two-year associates degree, and a four-year degree.  Job seekers should be able to compare programs and tracks — biology vs. political science; welding vs. automotive engineering — and also see how institutions stack up.  There are millions of truck drivers, cashiers, fast food workers, and retail workers across the country, and the tasks required of these jobs are poised to change dramatically and quickly.

A handful of emerging organizations are tackling this problem head-on. Viridis Learning bridges school data on programs and performance with localized job data to empower students to select a career pathway that delivers in-demand skills, so that all students can maximize their potential.

Improve and increase accessibility of existing skills programs

Improved learner choice only matters if high-quality programs are accessible. These programs must understand the barriers facing disenfranchised job seekers and design around that experience.  Job seekers may face transportation barriers, childcare needs, or simply an opportunity cost that makes giving up even a low-wage job for a few months untenable.

These “social determinants of work” are core to accessibility, but cost must be addressed as well.  Certain four-month coding boot camps can cost nearly $25,000, but there are innovative models to make high-cost programs more affordable.  Some lenders, like Climb Credit, are opening up the hood and evaluating the quality of a training program.  Rather than just underwrite a student, they’ll incorporate program placement rates and starting salaries when setting a price for their loans.  Others are rolling out income-sharing agreements (ISA’s) which can fundamentally shift the burden of risk to be shared between learner and training organization.  With an ISA, learners agree to pay back a portion of their salary for a period of time, if-and-only-if they are able to find a good job.

With financing innovations like ISA’s and by addressing the social determinants of work, we have hope for a new skills system that is truly accessible to all.

Engage employers to invest in solutions that overcome bias

A student should be able to compare the ROE — “return on education” — of various degrees and programs. Credit: Acumen

Training organizations that truly tackle the social determinants of work can be prohibitively expensive, even with innovations like ISA’s.  We believe that employers must be engaged as partners in paying for the skills required to modernize their workforce.  With an unemployment rate below 4%, the demand for skilled workers is high.  In such a competitive environment, we have the opportunity to shift employer behavior and change the way they hire.

Training programs must leverage the value they’re creating by monetizing apprenticeship programs and capturing placement fees.  Companies like Bitwise in Fresno, CA, provide technology training, while also running an affiliated software consulting firm, that provides paid, real-world work experience for their students.  This “last mile” of training allows students to continue building skills and credibility before entering the job market.  Through the cohort model, students are able to continue their education free from financial stress, and Bitwise is able to staff projects that generate meaningful revenue.

As the pace of technological change continues to accelerate, the shelf-life of skills is shortening.  Employers will also need to invest in their own upskilling solutions to create the nimble workforce required in the new economy.  Guild Education provides “education as a benefit,” which serves the dual purpose of attracting talent and upskilling talent once onboarded.

Employers must also address hiring practices at a cultural level.  Bias toward prestigious four-year degrees is systemic and sticky.  Hiring managers must be retrained to recognize that gold-plated diplomas are not a proxy for skill or workplace success.  We need more nuanced certifications, and better tools for HR teams to assess skill, fit and begin tackling the deep roots of bias.

From an ‘American Dream’ to an ‘American Pathway’

In an age where the promise of the American Dream is slipping away, it’s time to address how we, as a country and a culture, are talking about and investing in the attainment of that dream—the American Pathway.  The new economy requires innovative thinkers, investors and solutions to forge new pathways to success, ones that can work for all Americans.

 

Amon Anderson is the Director of Acumen America, the U.S.-focused portfolio of Acumen, the nonprofit social venture fund changing the way the world tackles poverty. In his role, Amon oversees efforts to build sustainable poverty alleviation models within the United States, which include workforce initiatives funded by Barclays. Most recently, Amon worked on Acumen’s Global Portfolio team out of New York. Prior to Acumen, Amon worked in Addis Ababa, Ethiopia with Cherokee Investment Partners, developing an impact investing strategy and building a community of entrepreneurs.

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