Three months ago, business leaders anticipated that the labor market of the coming months would be one of increasing volatility. They were preparing for a reality in which the demands of the workplace would continue to shift, skills would become outdated faster and the lifespan of an occupation would continue to shrink.
Today, of course, all that has changed. Employers are grappling with the grim reality of layoffs and the likelihood that the impact of the virus will affect their planning well into the future. But the reality is that even before the pandemic, there was evidence that this type of workforce transformation had already begun. According to a troubling report from Wakefield Research released before COVID-19, seven in 10 employers either already have laid off — or plan to lay off — employees due to the implementation of new technology.
In the months to come, as the world faces not only ongoing technological transformation but the ongoing economic fallout of the crisis, the magnitude and frequency of those workforce changes will likely increase. As a result, business leaders face mounting pressure to pursue approaches that not just reflect, but also anticipate, the shifting relationship between employers and workers.
And as the pace of change accelerates, a growing number of employers are turning to a new — and perhaps counterintuitive — education benefit: training for employees who will eventually leave their organization.
How does this so-called “outskilling” approach work — and what good can it do for employers in an increasingly volatile labor market?
Consider Amazon’s Career Choice program, first launched in 2012. The company, whose massive investments in hiring have made headlines over the past few months, pays 95 percent of tuition for skills training courses offered online and on-site at its fulfillment centers across the country, focused on career paths like health and trucking that extend well beyond the purview of Amazon. According to Amazon, as many as 25,000 hourly workers at the company have already taken advantage of the program, taking courses in high-demand fields like healthcare and IT that will enable them to find jobs in those industries once they leave Amazon. Simply put, Amazon is investing in skills that — on the surface — it has no use for. Why?
Amazon and other forward-thinking employers pursued this strategy in the pre-virus world because they understood that the quality of past, present and future employee relationships is a critical determinant of business success. As Allison Dulin Salisbury of Entangled Group put it, outskilling is “good social stewardship, and it’s good business.” The practice helps organizations promote overall positive employee sentiment, establish positive long-term employee relationships and differentiate themselves in the eyes of potential candidates. Investing in employees can help reduce costly churn and has led to the rise of “boomerang” employees — those who leave a company only to return later. Eighty-five percent of HR professionals say they’ve received a résumé from a former employee. In a tight labor market, boomerangs can be an important talent pool, which means that the way employers say goodbye may determine whether they say hello again to the employee in the future.
A recent survey, also conducted before the virus took hold, found that outskilling was popular among business leaders — at least in theory. Nearly nine in 10 respondents agreed that it was in their interest to invest in outskilling, a figure that rose to almost 100 percent for those who were already anticipating layoffs due to the changing nature of work. But despite that sense of momentum for the idea among corporate leadership, it has not yet taken hold across the enterprise. Just four in 10 employers reported that they actually have, and consistently use, an outskilling program.
In the tight labor market of the past few years, education and training were a critical part of employers’ future-proofing strategy. As employers prepare for the roller coaster of the next few months, that approach will only become more important. In some cases, it may be possible to reskill and upskill existing employees to meet changing needs, as evidenced by the work of companies like Guardian and Bloomberg. But in other cases, the impact of the pandemic will necessarily lead to restructuring or layoffs — which means employees will need help finding and preparing for new opportunities in the rapidly changing economy.
Today, outskilling remains a nascent practice for many employers. But preparing outgoing employees for future success will be a critical component of the changing social contract — and may be the differentiator between companies that thrive and those that falter in tomorrow’s world of work.