Workers prepare to move products at an Amazon fulfillment center in Baltimore.

Why Amazon ‘upskills’ its workers

Companies may have more faith in retraining current workers by recognizing the talents they already have.

In Hollywood rom-coms, a frequent plot twist occurs when someone suddenly realizes a helpful friend can be a true love. Scales drop from their eyes as they recognize what is right in front of them. Something like that is now happening in American companies seeking to innovate. With near-record low unemployment in the United States, executives realize their own workers, rather than new hires, may be the very talent they’re looking for. Employees just need to be “upskilled.”

On Thursday, Amazon gave a good example in how to tap internal talent. It announced plans to retrain a third of its workforce in the U.S. by 2025. The $700 million initiative will offer various programs for an estimated 100,000 workers to take on new careers – even if many later leave the company.

Amazon’s goal is quite ambitious given that its current retraining programs, which began in 2012, have attracted only about 12,000 of its U.S. employees. Still, the company is showing a renewed faith in its workers to expand their skills. And for workers who participate, it shows a faith in Amazon’s knowledge of market and technology trends in forecasting the types of skills needed in the future.

Such a “build, not buy” talent strategy takes a skill all its own. Employers must know the ambitions, learning capacity, and skill sets of current workers. They must ask workers for input and be transparent about the quality of retraining as well as the quality of their job forecasts. They must also fend off pressure from company shareholders who too often expect mass hiring and firing.

About a quarter of existing U.S. jobs will be disrupted by advances in artificial intelligence and other forms of automation, according to a recent Brookings Institution report. The affected jobs range from cooks to truck drivers. Yet organizations are also spending more on worker training. In 2017, they spent around $1,300 per employee, up 8% from 2013, according to the Association for Talent Development.

The higher spending shows workers may be more flexible, curious, and open to new ideas in today’s churn of occupations. Many countries are in an “innovation movement,” says British researcher Ben Ramalingam. Much of that innovation, he says, comes from improved qualities of thought, such as adaptation, humility and patience in the workplace. The upside to upskilling is in recognizing what already exists in employees.

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