When Amazon is prepared to invest $700 million to retrain its workers for more demanding jobs in technology, you know that something big is afoot. I would argue that this is a looming inflection point in how human capital — today one of the few sources of lasting advantage — is managed. The digital revolution, which began harmlessly enough in marketing and other customer-facing parts of the organization, is now cutting a wide swath through well-established business models, challenging well-established companies with entirely new business models. Entirely new kinds of competitors have used digital to design direct to consumer models, which cause many of the assumptions underlying traditional supply chains, and indeed, traditional B2B practices, to evaporate.
Tours of Duty
The speed at which shifts in competitive advantage take place has created the need for a new strategy playbook, one which is designed for transient advantage. In the new playbook, careers change from being like ladders, with each rung carefully designed to lead one up to a new one, to what Reid Hoffman has famously called “tours of duty.” Top talent is no longer happy to have the promise of rising in a hierarchy dangled in front of them as a mechanism for retention. Instead, they are asking, “If I join your organization, will I be learning and growing? Will I be more valuable when this current role comes to a close?” For the most highly skilled technical talents, an environment in which they can grow and thrive is no longer optional — with so many choices, they have no reason to stick around.
According to the Bureau of Labor Statistics, 21% of entry-level jobs today require a four-year bachelor’s degree. At the other end of the spectrum, dismal studies predict that we are already facing a chronic shortage of tech workers and that the situation is likely to get even worse. Faced with struggles to bring in and retain talent, companies are starting to get creative.
IBM, for instance, has initiated its “pathways to technology,” or P-TECH program, in which students spend six years in high school and graduate with both a high school diploma and an Associates degree. The program has been widely praised and has grown to over 100 schools. It provides early onboarding to technical skills, paid internships, and — best of all — no college debt. Other programs such as “Year Up” provide an on-ramp to youth who for whatever reason haven’t had the chance to learn the skills necessary to succeed in entry level tech jobs.
What to Expect Next
Startups like Degreed are creating systems that potentially challenge the university system as a channel for finding and developing talent. The company offers not only a vast trove of flexible learning solutions, but also the prospect of having a credential with respect to a specific skill, rather than a degree which may or may not have anything to do with whether employees have mastered a specific task. And companies such as Toptal and Mondo provide highly curated talent on-demand. For the talent, perks include flexibility and freedom from rigid career structures. For the hiring organization, much of the screening and vetting process is already taken care of.
The relentless pressure to identify, mobilize, and retain top talent is not going to let up any time soon. Companies willing to try new approaches are likely to get ahead of the curve.