Amazon’s workforce retraining means more for the future of work than you might think

Published on November 15, 2019

Amazon recently announced that it has 30,000 open positions in the United States, the most it has ever had at one time. While that clearly illustrates the company’s continued growth, it may also be, as the New York Times described it, a sign that its “ambitions are colliding with the reality of strong labor markets.” Amazon is not blind to this reality; despite its hiring spree, they are also spending $700 million on retraining its workforce. 

Why they are doing this now may be down to much bigger societal changes, which relates to another bit of recent news: young people are leaving New York City. A migration study found that from 2012 to 2017, New York lost more millennials than any other American city. In fact, 277 people move out of the city every day, which is almost double the amount from a year ago. 

Not just an American issue

Numerous media outlets picked up on this, pushing narratives about crumbling infrastructure, high taxes and ineffective politicians. While you can argue the veracity of each point, this phenomenon is not unique to New York (or its politicians). Los Angeles and Chicago, for example, have also experienced daily losses of 201 and 161 residents, respectively, over the same time period. 

Looking globally, we can see that this is not solely an American issue either: over 300,000 people moved out of London in 2018, and an average of 11,900 people left Paris every year between 2011 and 2016. One young Parisian even felt the need to create a website called “Paris, je te quitte” (“Paris, I’m leaving you”). 

So, what is going on exactly? Are the world’s youth giving up on urban lives for a simpler life in the country? Not exactly. In New York, for example, migratory losses have been offset by almost 100,000 net international migrants between 2017 and 2018. The city is also on an unprecedented tech sector boom. New York has added more than 76,000 technology jobs over the last decade, with more than 14,000 new software engineering jobs.

There are now more than 7,500 New York–based tech companies based in the city, fueled by nearly $40 billion of investment in the past five years. These companies take up almost 17 million square feet of Manhattan office space and employ more than 120,000 people — 60 percent more than a decade ago. And it’s still growing. According to Tech:NYC, New York’s tech ecosystem now includes more than 9,000 startups and 100 startup incubators to help businesses grow. 

It’s not just trendy

What’s important to understand, though, is that new tech jobs are not limited to trendy startups and technology companies. In fact, many of the city’s tech jobs are tied to industries where New York City has traditionally been a world leader, including finance and media, among others. In fact, according to data from Emsi, there are now twice as many tech jobs in non-tech industries in New York. 

What this is making clear is that every company is now a “tech company.” Digital skills are permeating into all companies, including industries that did not have these capabilities just a few years ago. This, again, is not unique to New York. We’ve seen huge growth in the number of “tech jobs” in cities like Boston, Chicago and Toronto – cities that have traditionally been hubs for other fields, including finance, healthcare and media, all of which are now becoming more digitally-savvy. This is creating career opportunities in smaller cities, which, when coupled with the high cost of living in the world’s largest metropolises, is encouraging internal migration.  

The story isn’t, then, about how New York’s crumbling subway system is pushing people to leave; it’s that the world of work is changing and both organizations and professionals need to be prepared. 

Retraining is now a thing

Digital skills training, and in fact, ongoing learning and skills development, is increasingly the name of the game. According to an in-depth 2019 report by the World Economic Forum, it is now cheaper to reskill (or “re-train”) current employees than to hire new ones, and with ongoing innovation in automation and artificial intelligence, it is now “in the financial interest of a company to take on” the reskilling of employees. 

Paying staff to learn isn’t new, but what is new is that reskilling and upskilling could be the difference between a business that thrives and one that does not survive. This isn’t hyperbole, as the World Economic Forum report stated, we are facing “a significant global challenge of mismatch between supply and demand of talent with the skills required.” 

As Economist Susan Lund at the McKinsey Global Institute has said, “The scale and pace of the changes in the workforce are unprecedented. They can’t hire off the street everyone they need. They have no choice but to retrain their own workers.”

Already, we see that companies are acting. According to BrainStation’s 2019 Digital Skills Survey 74 percent of organizations are actively involved in digital transformation; 89 percent claim there are elements of its products and services that did not exist five years earlier; and 63 percent say that its digital investments are growing.

Retention? Try retraining.

All of which brings us back to Amazon. Despite the company’s 30,000 job openings, it is still aiming to retrain a third of its current workforce to “perform tasks that require advanced skills.” They are also focusing on improving the overall technical expertise of employees, so that entry-level staff members can take on more advanced roles in data, development and design, among other fields. According to Amazon, this will be one of the world’s largest employee-retraining efforts, with more than 100,00 people trained by 2025.  

Whether or not the program succeeds, Amazon has made it clear what they think the future holds, and more importantly, what we need to do to be ready for it.

Jason Field is a News Columnist at Grit Daily. He is the CEO of BrainStation.

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