Corporate America: The New Vocational School

Amazon is spending $700 million to reskill employees. Why other firms are also taking workers back to school.

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 and a few others don’t appear to be quite so scared. In the boldest case yet of planning ahead for labor needs, a few large employers have decided to make huge bets on retraining their employees.

Last month Amazon announced a $700 million program to reskill 100,000 of its US-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 on the large side, but the idea of retraining employees is increasingly on the minds of leaders at organizations big and small. The consulting firm Accenture has spent four years retraining 300,000 employees, and aims to do the same for the remaining 150,000-plus. AT&T says it’s spent $1 billion to reskill half its employees in areas such as data science, cybersecurity, and agile project management.

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 they will need, if not the actual jobs,” says Melissa Swift, a Korn Ferry senior client partner and the leader for the firm’s Digital Advisory for North America and global accounts.

As an example, the company offers employees at its fulfillment centers a 90-day program giving them skills to handle a variety of IT support-technician roles, with no prior IT experience required. Another program aims to give nontechnical workers 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 the employees they retrain 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,” said Beth Galetti, Amazon’s senior vice president of human resources, 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 US-based workforce, is voluntary, and most of the programs are free. 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 the programs haven’t done enough to either engage workers or help those who have difficulty learning. “You can’t just employ cheesy graphics onto a simple website,” she says.

Reskilling those 1.4 million Americans who could lose their jobs to automation could cost the government and private companies up to $34 billion, according to estimates from the World Economic Forum. Plus, government may pick up only about 75% of the tab. Organizations with reskilling programs are betting that their share of the cost will be far cheaper than the cycle of laying off workers who don’t have the skills needed for the future and replacing them with new recruits who do.