Amazon Goes to School (for $700 Million)

It’s one of the scariest stats the constantly-disrupting business world has produced. More than 1.4 million Americans, and as many as 375 million workers worldwide, will need to switch their occupations because technology will make what they’re doing now obsolete.

But Amazon doesn’t appear to be quite so scared. In one of the boldest cases yet of planning ahead for labor needs, it has decided to make a huge bet on retraining its employees.

Recently, the retail giant announced a $700 million program to re-skill 100,000 of its U.S. based employees in areas such as healthcare, machine learning, manufacturing, robotics, and computer science. The efforts could not only help employees qualify for higher-paying jobs but also create a huge group of internal candidates who can take on roles in some of the nation’s—and the company’s—fastest-growing areas.

Amazon’s commitment may be huge, but the idea of retraining employees is increasingly on the minds of leaders at organizations big and small, says Melissa Swift, a Korn Ferry senior client partner and leader for the firm’s Digital Advisory for North America and global accounts. But while many firms take already tech-savvy workers and train them to take more advanced technical roles, Amazon is focused on creating a so-called “pool of capability,” a large swath of employees trained in a variety of skills, rather than prepped to take on specific roles. “Amazon may know the categories it will need if not the actual jobs,” Swift says.

As an example, the company will offer employees at its fulfillment centers a 90-day program giving them skills to handle a variety of IT support technician roles. The employees don’t have to have any prior IT experience. Another program aims to give non-technical employees the skills to become successful software engineers. “This is all about being talent ready. All jobs will have a digital component and you have to start planting those seeds now,” says Joe Navarre, a Korn Ferry senior client partner and global head of Change Management.

Some organizations worry that some of the employees it retrains could then take their skills somewhere else. Amazon says it’s OK with that. “While many of our employees want to build their careers here, for others it might be a stepping stone to different aspirations,” Beth Galetti, Amazon’s senior vice president of human resources said when the company announced the program. “We think it’s important to invest in our employees, and to help them gain new skills and create more professional options for themselves.”

The training, which could reskill up to one-third of the company’s U.S.-based workforce, is voluntary and most of the programs are free for Amazon’s employees. The price tag could work out to about $7,000 per worker, which is more than most firms spend on retraining efforts. But Swift says some companies have seen their prior reskilling efforts bogged down because their programs haven’t done enough to either engage workers or help employees who have difficulty learning. “You can’t just employee cheesy graphics onto a simple website,” she says.

Reskilling those 1.4 million Americans who could lose their jobs to automation could cost up the government and private companies $34 billion, estimates the World Economic Forum. Organizations with reskilling programs are betting that their own cost will be far cheaper than the cycle of laying off workers that don’t have the skills needed for the future and replacing them with new recruits who do. And that’s assuming firms can even find new people with those skills. Companies are already struggling to find enough people that can be data scientists, artificial intelligence experts, healthcare aides, or other hot roles. “There are some roles which are unhirable at any cost," Swift says.