America’s legacy of economic racism continues to hurt Black Americans. The private sector has an opportunity to promote equity through targeted upskilling and reskilling initiatives.
America has a persistent and consistent racial wealth gap. New data from the Federal Reserve Board’s Survey of Consumer Finances paints a stark picture: Black families’ median wealth hovers at $24,100. White families have nearly eight times as much wealth at $188,200. Persistent income inequality in America only deepens this chasm. The private sector has the opportunity to help close it.
One of the ways that businesses can help close the racial wealth gap and build greater economic justice for Black talent is to establish equitable and accessible skills training programs for employees. Think upskilling and reskilling. In practice, upskilling requires companies to teach employees new skills to move up the ladder in their current area of work. Reskilling involves teaching employees skills to apply to new work, often to fill high-demand roles for which there are not enough existing skilled talent, or to address changes in organizational needs due to automation.
The Justice Imperative to Invest in Black Talent
Promoting racial equity requires that we all have a shared understanding of the ways in which our institutions have failed people of color, particularly Black people. We see very clear examples in discriminatory mortgage lending policies, like redlining, and the systematic denial of GI Bill benefits to Black GIs after World War II, which effectively robbed Black families of the most accessible way to build family wealth: owning a home. These two practices also proved to be a highly effective way of segregating neighborhoods in America, resulting in concentrated poverty, inequitable school funding, and a racial gap in degree attainment. Today, even after adjusting for advanced education, Black people still find themselves on unequal financial footing, often facing higher levels of student debt and higher levels of unemployment.
Upskilling and reskilling programs are one lever that businesses can use as part of a broader strategy to foster equity. There is also a compelling business need that these practices will address. A recent study from McKinsey notes that by 2030, 375 million jobs across the globe will vanish due to technological and market changes in the economy. In short, millions of workers will need to acquire new skills to prepare for these shifts.
Most companies are already offering skills training to their employees. The Society for Human Resource Management notes that 52% of companies in America provide upskilling, and 73% offer skills training to help current employees perform more effectively in the workplace. However, there is opportunity to build greater equity into these initiatives. For example, the OneTen coalition is a group of leading companies in America that are working together to hire, retain and promote 1 million Black people in America without a college degree into family-sustaining roles within the next decade. These companies have recognized that significant upskilling and reskilling efforts will be necessary to achieve their goal, and have prioritized them as such. Organizations nationwide can follow their lead by developing skills training programs that support career development and upward mobility for Black talent.
Setting the Stage for Successful Upskilling and Reskilling Programs: In order to optimize upskilling and reskilling programs to serve both Black talent and core business objectives, companies need to do the following:
1. Understand your current state: Are Black employees disproportionately represented in certain roles/career bands within your organization? What percentage of Black employees take advantage of upskilling and/or reskilling opportunities? Do employees who go through existing skilling opportunities get promotions and/or pay raises as a result? What is the experience of Black people within these programs? How can their experience be improved?
2. Envision your ideal future state: Which roles and career bands are ripe for upskilling and/or reskilling? What kinds of interventions, programming and career pathing will be most impactful for Black employees? What kinds of community partners and educational organizations can help you develop training curricula? It may be helpful to articulate trends and competitive threats within your industry and map the skills and competencies you need to develop internally to address them. Then, compare the costs of recruiting and hiring new workers with these skill sets with the costs of reskilling and upskilling the existing workforce.
3. Develop a pilot program to test your assumptions: Once you have built a compelling vision for the future, it is time to test your assumptions and learn from the results. Develop a pilot program for the targeted roles and employees and see how it goes. Some common metrics to assess the success of a pilot include:
- The number of employees upskilled/reskilled, the new roles that they enter, and the retention and promotion rates of people within these new career bands
- The retention rates of employees enrolled in (and/or given the opportunity to take part in) upskilling/reskilling programs compared to team members who have yet to have this opportunity
- The ROI of an upskilling/reskilling pilot compared to the ROI of identifying, recruiting, hiring and onboarding new hires.
- Note: It is critical to take a holistic view of these ROI calculations to include the total costs incurred in each step as well as the value generated by upskilled employees compared to newly recruited employees. We recommend that you consider a pilot program to be a two-year endeavor (from training and upskilling through employees’ first year in a new role) in order to get an accurate picture of the program’s impact.
4. Measure the results and build a pathway to scale: Use the pilot as an opportunity to learn about the strengths and the growth areas of an upskilling/reskilling program. Upskilling and reskilling employees is a complex undertaking which sits at the intersection of corporate strategy, learning and development, information technology, human resources, and DEI. There will be missteps and hiccups, which will give your team key insights on how to improve (and scale) the program.
Businesses in America have been essential drivers of innovation and wealth creation for generations. As the nation continues to understand and tries to reconcile with its legacy of racial inequality, businesses can play a role in building greater equity through employment by focusing on reskilling and upskilling Black employees. The private sector has all the tools to accomplish this goal and merely needs to focus its strong management, data-informed decision-making, cutting-edge technology, and discipline to this endeavor. In doing so, businesses can build and maintain their competitive advantage while at the same time giving employees and their families greater economic security and, hopefully, a more just future.