Wall Street Journal’s Story on Companies Failing to Reskill

Here’s an interesting article from Wall Street Journal about companies’ difficulty reskilling their employees. I’m not surprised that companies are having difficulties after decades of slashing training budgets on the premise that they don’t provide a return on shareholder’s dollars. It was always about the shareholders and whether they valued such training (they didn’t). And companies have lost the capability to train their workforce.

Now with the digital revolution in full swing, companies are looking to transform themselves. Their first instinct is to lay off people with “obsolete” skills and hire in new ones with the requisite “new” skills, but Wall Street Journal says this is expensive. An interesting study mentioned in the article said that while companies claim that skill shortages are a threat to their future, only 3% will increase their budget for training. In another study, 35% of the companies say they will meet their digital transformation through hiring of new people. The habits of the last 30 or 40 years are hard to break.

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“While executives bemoan the cost of hiring in a tight labor market to meet fast-changing business needs, there is a ready pool of talent they wouldn’t need to spend a dime recruiting: their own workers.

If only they knew how to reskill them.

Thousands of companies across the country are in the thick of a digital revolution that requires them to transform their operations. They need an employee base that’s ready to do new kinds of work, filling roles that are just emerging and adapting existing jobs to integrate more data and automation.”

“Why Companies Are Failing At Reskilling”, Wall Street Journal, Lauren Weber, April 19, 2019.

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There are couple of important skills mentioned in the article that I want like to point out: “technical skills along with creativity, interpersonal skills, adaptability and the capacity to continue learning.” Ibid.

Technical or digital skills are going to become part of the minimum skillset, along with reading, writing and math, but they will be insufficient by themselves.

The other thing to note is that our government (mainly Republicans) has failed to step up to the plate. I point at the Republicans because they’ve spent eight years being obstructive, just to frustrate a black president (“to make him fail” a la Rush Limbaugh’s rallying cry) instead of wisely working together on getting America retrained and back to work. Unfortunately, the Republicans are more likely than Democrats to cut budgets, especially education. We can see that impact when you read about teacher protests in mainly Republican states. And Wall Street Journal says US is “second to the last” out of the 29 developed countries to fund education investment.

Democrats may also be a problem in terms of investing in education but at this time I don’t see any evidence.

So between the companies’ shareholder focus and the Republicans constant cutting of education funding, America will not become great again. We have a lot of headwinds ahead of us.

The end of the article provides some pointers to keep in mind when upskilling workers:

• Companies need to get some data on the skillsets of their current employees. They don’t know what they have in-house.
• Companies need to realize that upskilling does not happen in a quarter or year – the short term timeframe that shareholders demand. “Converting a mechanical engineer into an electrical engineer or a business analyst into a data scientist doesn’t happen … in a fiscal year” Ibid.
• If companies involve their workers on preparing for the future, they might find that their employees already have some of the skills and that lots of them can be trained. But companies need to invest the time and money; they need to think long term.
• Wall Street Journal cited a statistic of 28% decline in employer funded training from 2000 to 2009. The implication is: this has to reverse.
• And finally, we need to set realistic expectations. “Laid off coal miners probably won’t become data scientists and few AT&T lineworkers will morph into software developers.” Ibid.

So for me, it’s to continue working on my digital mindset and people skills that Knack says I have and continue working on creativity, adaptability, learning and resilience.