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Before there were unruly Zoom meetings, we had chaotic conference calls. Though still not as chaotic as a Presidential debate, the most chaotic conference call of all time was relayed to me by a friend who used to work at Career Education, the company that rolled up a bunch of culinary and healthcare proprietary schools, then got sued a lot, then closed them, and then rebranded as Perdoceo in a Hail Mary attempt to get litigants and critics to lay off due to inability to spell, pronounce, or remember its name.
Back in its heyday, Career Education’s founder, Jack Larson, insisted on a weekly conference call with all campus directors. Attendance was mandatory, and frustration began to boil at time wasted in these unproductive sessions. Then a plot was hatched: on the next call, at a specific coordinated time, every campus director would flush the toilet. Executed perfectly, the cacophony of flushing marked a septic end to Jack’s weekly conference calls.
That’s one approach to addressing chaotic conference calls. Another is to pass a law, which you can try if you’re an elected official. Which is why Massachusetts Representative Smitty Pignatelli recently proposed an amendment to job creation bill H4879 mandating “an annual training for members of the house of representatives on how to mute a phone during a teleconference. The subjects addressed in the training shall include, but not be limited to recognizing the mute icon in a phone interface… recognizing when the mute function of a phone is enabled and recognizing the appropriate circumstances to utilize the mute function of a phone.” The bipartisan amendment was co-sponsored by 29 of his fellow fed-up legislators.
But no job creation bill is a laughing matter these days. Following the steepest economic decline since the Great Depression, 11M Americans are out of work – 20% more than the depth of the Great Recession. This time, the misery is not equally shared. At peak job shedding, for every high-wage job lost, eight low-wage workers were laid off. As a result, in a country already reeling from record high inequality, this is the most unequal recession in American history. Per this excellent Washington Post analysis, top quartile earners are doing better than they were seven months ago, while 3rd quartile average income is down 10% and bottom quartile earnings are down over 20%. No wonder 46% of Americans say they’re having serious financial problems.
As America begins to recognize the scope of systemic racism, minority workers are bearing the brunt of the downturn and regaining jobs more slowly; only about 1/3 of Black workers who lost their jobs have been rehired, compared with over 1/2 of Whites. And at a time of generational risk due to the extant crises of college affordability and employability, a shocking 20% of Americans ages 20-24 lost their jobs in the early months of the pandemic. As the Post notes, “young Black workers remain the furthest behind.”
In response, some of our largest, richest companies – businesses that have benefited from the accelerated digital transformation of the past seven months – are springing to action. In June, Microsoft announced an initiative to bring digital skills to an additional 25M people in the U.S. and globally via online curriculum from LinkedIn Learning and the GitHub Learning Lab, and by lowering the cost of assessments for Microsoft certifications. Not to be outdone, in July, Google announced new online career certificates (data analyst, project manager, UX designer) and said it would fund scholarships for 100,000 Americans in need.
Sometimes it seems like training is the answer to all our problems. It’s not a new idea. Either Lao Tzu, the founder of Taoism, or the medieval Jewish philosopher Maimonides started the whole thing with the “Give a man a fish, feed him for a day / Teach him to fish, feed him for a lifetime” shtick. And Microsoft and Google are throwing around big numbers. But when the problems include racial injustice and generational damage, online training is biting off more than it can chew.
First there’s the question of completion. When Google and Microsoft say they’re going to train hundreds of thousands of Americans, are they talking about completing training, or is that the number starting online courses? In order to have any impact whatsoever, training first needs to jump through the hoop of completion before contemplating the very high and daunting hoop of employment. We know from MOOCs that the percentage of people who complete free online courses is less than 5%. And that’s primarily employed professionals outside the U.S. Unemployed and underemployed Americans may complete asynchronous online courses at an even lower rate.
Sadly, training doesn’t begin to address the barrier of hiring friction, which is the reduced propensity of employers to hire candidates who haven’t already proven they can do the job. Hiring friction is worse than ever for entry-level positions due to the shift to digital hiring (which creates a mirage-surplus of candidates for every open position), to the increased cost of bad hires, and to continued high entry-level churn. And now with Covid, hiring friction is further amplified by remote hiring and remote onboarding for remote work. Few employers are inclined to take risks in such a risky environment.
Furthermore, credentials from these online training programs are novel and unproven; HR and hiring managers are unlikely to know what to make of them, at least for some time. So that doesn’t help much. Neither does the fact that Microsoft and Google haven’t promised to actually hire any of the newly trained talent. If the designers and deliverers of the training aren’t hiring trainees to fill any of their tens of thousands of open positions, who will? Microsoft and Google: if they’re not good enough for you, why should another employer want them? It’s far from an optimal signal.
I get why online training has become the go-to corporate social responsibility initiative. The cost of asynchronous online training is low – a one-time expense for curriculum development – and the marginal cost of delivery is effectively zero. These initiatives can be siloed in the organization; only a small number of people are needed to manage. For all these reasons, it’s easy to scale back or cut if needed. As Haley Glover, Strategy Director at the Lumina Foundation has said, corporate spending on education and training is “discretionary, and when companies run low on income, they cut back.” Finally, and probably most important, it’s also self-serving: by training new talent on their technologies, Google and Microsoft hope to increase demand in the long run, or at least help to unlock current demand.
Last week Angela Jackson of New Profit wrote a piece titled We Can’t Train Our Way to Equity. I couldn’t agree more. Online training initiatives like these aren’t a panacea and may end up doing more harm than good if they act as a palliative, convincing our largest, most dynamic employers that their work here is done.
What large employers actually must do is hire, or at a minimum change hiring practices. While online training involves a de minimis commitment, the cost of hiring is significant and ongoing. While hiring at scale can be coordinated through HR, because new hires must be assigned managers and work, hiring ultimately involves all parts of the organization – a major initiative. Which is the approach taken by IBM when, immediately following the Microsoft and Google announcements, it announced a 10x increase in paid internships with the goal of diversifying its workforce.
Hiring is a next-level commitment, but closer to meeting the many challenges we’re currently facing. And as IBM recognizes, the hiring we need is immediate – not over the next five years (Goldman Sachs) or 10 years (Ernst & Young, Accenture, and the New York Jobs CEO Council) – because each additional month of unemployment or underemployment increases the likelihood of long-term economic damage.
I recognize new hiring is hard when investors respond positively to layoffs – see publisher Houghton Mifflin Harcourt, which jumped over 30% last week after announcing a 22% workforce reduction. So philanthropic impulses alone are insufficient to convince employers to make real progress on racial and generational equity; even our most successful companies will need help to launch new hiring initiatives. France recently launched a new program called 1 Jeune, 1 Solution, which subsidizes the salaries of new hires below the age of 25 if employers hire before the end of January. The French government projects nearly 700,000 new hires. Likewise, a new American hiring initiative will require public support. We need to provide the market with incentives to do the right thing for the country, and for populations that will be irreversibly damaged without immediate action. With PPP in the rearview mirror, subsidizing the hiring of young workers is an appropriate next step.
Anyone worried that hiring initiatives could crowd out training can rest easy: when you increase hiring of young candidates, you’re probably going to have to train as well. With the right incentives, Microsoft, Google and others might achieve even greater scale by hiring, training, and then making new talent available to partners and clients on a try-before-they-buy basis (thereby eliminating hiring friction). That’s a surefire way to not only jumpstart the careers of tens of thousands of young, diverse Americans, but also to close the skills gap.
Even if government support fails to materialize and incremental hiring proves impossible, companies must recognize that training initiatives are insufficient and commit to change hiring processes that discriminate against the young and diverse populations harmed by the Covid Recession. First, change talent sourcing. Stop recruiting from the same colleges and universities and rewrite job descriptions with youth and diversity in mind. That means more distance traveled than pedigree and degrees. It should be less about the job as it’s currently done, and more about how the job should be done in a younger, more diverse organization (and perhaps with additional entry-level training). Next, change screening. Radically increase candidate engagement at the top of the hiring funnel through competency-based assessments and video-based interviewing. And to effect these changes – to overcome the inertia at the core of every HR department – boards should provide senior executives with new incentives. McKinsey partner and ex-NFL player Jason Wright recommends linking senior leader bonuses to how well they bring through Black talent.
Most of all, we need to avoid more empty words. Cheap online training initiatives remind me of last year’s grand pronouncement by the Business Roundtable – the CEOs of America’s largest companies – that, henceforth, they would run their businesses not only for shareholders, but for the benefit of all stakeholders, including suppliers, customers, and employees. Last month, to no one’s surprise, the Ford Foundation concluded that these companies have done no better than others during Covid in terms of protecting employees or pursuing equity. Also to no one’s surprise, Senator Elizabeth Warren called the Business Roundtable’s “big, splashy announcement… an empty publicity stunt.” Empty words increase cynicism, which is currently in ample supply. We need hope. And more than that, we need results.
America is hemmed in by several crises. As America awakens from a Trump fever dream, it’s clear that these crises have one thing in common: a single way out – dramatically improving economic mobility. And so, dear gainfully employed reader, the next time you’re bored or distracted in a Zoom meeting or on a conference call, remember that skills may be good, but jobs are what matter. Unless we’re content to flush away our future, making real progress on equity and opportunity starts with hiring.