What Corporate America’s Shift in Education Versus Training Means for Big Tech

More organizations should be investing in equipping their employees with the right skills

Illustration of a face with people sitting in chairs in front of a chalkboard and two others sitting at a table together.
Perhaps the standard education system is not working after all. Getty Images
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Editor’s note: Industry consultant Shelly Palmer is taking his popular newsletter and turning it into an Adweek article once per week in an ongoing column titled “Think About This.”

Technology, we know, moves fast. One of the ideas caught in the wake of the speed of tech is how to understand the difference between education and training. What do you really need to know? Would a sixth-grade education give you enough basic skills to enable you to use online tools to learn a trade or become a service worker or a knowledge worker? Would you perhaps need a four-year college degree?

One of our engineers, for example, just taught a high school intern how to create and configure a new Aurora Serverless DB cluster on AWS in a few hours. This particular intern is about 150 hours of training away from being in a position to earn about $90,000 annually. With what he has learned in the past 50 hours of training, this young man could earn enough during the rest of the summer to pay for his first year of college, which he may not actually need.

But if he doesn’t need to go to college or even finish high school, what kind of education does he need? Considering the escalating costs of higher education and the nature of the skills required to obtain a “good job” in the 21st-century, it is time to shift the conversation from education to training. And this is precisely what corporate America is starting to do.

The skilled labor shortage and the skills gap

It is hard to find skilled knowledge workers. The unemployment rate is below 4%, and companies are struggling to find qualified employees. Retailers like Walmart and Target have begun raising pay to attract more qualified and skilled workers to make the retail experience better. But a pay raise alone won’t be enough to attract and retain new workers.

We can (and should) debate the requirements of baseline skills and how education should evolve for the fourth Industrial Revolution.

There are far more openings for relatively high paying jobs than there are people in the workforce to fill them. In March, CBS reported that there were about 1 million more open jobs than unemployed workers. A recent survey by CareerBuilder found many highly skilled jobs could not be filled quickly enough, such as software developers (84,000 job openings), IT administrators (51,000 job openings) and web developers (46,000 job openings).

But even if we could convince more people to enter the workforce or figure out how to update our immigration policies to adapt to the very clear trends in the job market, we would still have a significant skills gap because our current system of education simply cannot produce enough scientists, technologists, engineers and mathematicians. And depending upon the specific job, graduates are often ill-prepared for the workforce (and I’m being kind).

Counterintuitively, there is also a shortage of non-digital workers such as home healthcare aides, restaurant workers, construction tradespeople and hotel and hospitality staff. That same CareerBuilder survey found that there are roughly 300,000 unique job postings per month for nurses, but only 100,000 hires), while the National Restaurant Association reported that 37% of its members say labor recruitment is their top challenge. Not surprisingly, America’s corporations are stepping up to solve the problem. After all, they are the organizations that will most benefit from a better trained workforce.

A new kind of training for a new kind of workforce

Amazon recently said it would spend upward of $700 million for training about 100,000 workers by 2025 so that workers can move into technical and non-technical jobs and careers. While Amazon has offered employee training and continuous professional education for quite some time, its vice president of workforce development, Ardine Williams, said the company is investing more into employee training programs to make Amazon an even more attractive employer for current associates and people looking for a job.

This is awesome for a couple of reasons. First, these new and enhanced training programs demonstrate that Amazon knows many of its workers are operating on 18-month to three-year timelines. If Amazon is just a stepping stone to someone’s next job, the best way to attract and retain workers is to help them learn enough to get their next job while they add value to Amazon’s shareholders.

Second, these programs highlight Amazon’s strategy to empower people who work for Amazon as part of their compensation packages. You’ll make slightly higher than market wages while working at Amazon, but the real value will be in the training you receive while you are there.

Amazon estimates a cost of roughly $7,000 per worker. This is a big number. According to the Association for Talent Development, the average organization spends about $1,296 per employee annually on training. Big employers (with 10,000 or more workers) tend to spend even less—much less.

Amazon employees, including some former university professors, will teach the classes, from giving nontechnical workers engineering skills to offering those with a tech background more opportunities to machine learning skills.

Corporations doing what academia cannot

Many professions require a postgraduate degree. I don’t want my doctor, lawyer or accountant or the molecular biologist designing my medicine to have learned their craft from YouTube. But there are also many professions where the best education you can get is on-the-job training inside an organization that is dedicated to best practices continuing professional education.

K–12 may no longer be required. Maybe we need to be teaching our children how to identify specific problems, use best practice search techniques to get the information they need and to critically think about solutions as opposed to teaching to ace a test. We can (and should) debate the requirements of baseline skills and how education should evolve for the fourth Industrial Revolution.

That said, one thing is very clear: Training has an important role to play in the creation of a productive 21st-century workforce.

@shellypalmer Shelly Palmer is CEO of The Palmer Group, a strategic advisory, technology solutions and business development practice focused at the nexus of media and marketing with a special emphasis on machine learning and data-driven decision-making.