What Does It Take to Close the Opportunity Gap in America’s Labor Market?

What Does It Take to Close the Opportunity Gap in America’s Labor Market?

BRIAN KENNY: In his final presidential campaign speech in October of 1928, Herbert Hoover sounded the alarm that Americans had a choice to make. We could either follow the path of rugged individualism that blazed trails from coast to coast, or we could succumb to the European philosophy of paternity and state socialism. He went on to win the election, but before long, it was clear that Hoover did not recognize that the sheer size of the nation’s economic problems had made the concept of rugged individualism meaningless. But that romantic notion of self-reliance against all odds persists, despite mounting evidence that the field of play is far from level. Since 2000, the economically insecure population in the U.S. has risen from 30% to 34%, with more than half being people of color. A Harvard Business School study found that 44% of American workers are stuck in low-wage jobs, unable to escape poverty, despite having years of work experience. Millions more are in limbo, lacking the educational credentials or skills to qualify for even entry-level jobs. They face odds that even the most rugged of individuals would have trouble overcoming alone. Today, on Cold Call, we’ve invited Professor Kash Rangan and case protagonist Maurice Jones to discuss the case entitled, OneTen: One Million Opportunities in 10 Years. I’m your host, Brian Kenny, and you’re listening to Cold Call, on the HBR Presents network. Kash Rangan is an expert in business marketing and the co-leader of the school’s Social Enterprise Initiative. Maurice Jones is the CEO of OneTen. He also served as president and CEO of Local Initiative Support Corporation and the Secretary of Commerce for the Commonwealth of Virginia. Thank you both for joining me today.

MAURICE JONES: Nice to be with you.

KASH RANGAN: Thank you.

BRIAN KENNY: So, I have to say, I’ve been doing this show for six years and I have never taken the opportunity to attend the class where the case is actually discussed. So, today I changed that and I went and sat in on the case discussion, which just happened, within the last couple of hours. And it’s the first time the case has been discussed. Is that right, Kash?

KASH RANGAN: Very first time. Yeah.

BRIAN KENNY: And Maurice, you got to sit there and listen to the students, talk about the case and give you some ideas.

MAURICE JONES: Good stuff.

BRIAN KENNY: Yeah, some great insights there. So, I think this will really enrich our conversation today. And I think people will really be interested in hearing about this big audacious goal that you have been put in-charge of, but you’re not doing it alone. So, we want to hear about the context of that too. So, let’s just dive right in. Kash, I’d like you to get us started by telling us what’s the central issue in the case, and what’s your cold call to start the conversation in the classroom?

KASH RANGAN: The cold call is very simple, Brian. One million opportunities for Black talent, in 10 years. That’s the title of the case. But the cold call is: what is the problem, what are we trying to solve? And on the face of it, it looks like providing one million jobs, but the case is far more nuanced, it’s far more layered. And the cold call really draws out a variety of perspectives. As you saw in class today, I think at one extreme, we can take a look at the wealth gap in our society. There’s a lot of data that shows that the median wealth of a white family is something like $250,000, a Black family is $25,000. How can there be a 10x difference in the same country? But then, narrowing the problem down, what’s the problem on the supply side, why is it that only 35% of young Black men and women graduate from six-year colleges? The Black unemployment rate usually is 3% or 4% points above the white unemployment rate, traditionally. So, is it a question of lack of opportunities, lack of jobs? Is it a supply-side problem? Is it a problem in terms of accumulating wealth?

BRIAN KENNY: Tell us how this relates to the kinds of things that you think about as a scholar. Why was it important, to your mind, to write this case?

KASH RANGAN: So, that’s been a recent transition, Brian. This problem can’t be solved by a protagonist, leading any one organization. So, our case focus and my research focus has changed to–let’s take a view of the system. So, we have to elevate the role of the protagonist inside an organization, be it for profit or non-profit, it doesn’t matter. We have to elevate the perspective of the protagonist and take the protagonist outside the organization. One has to reach outside the comfort zone of one’s organization, the authority and the resources that one has. And since it’s a societal level problem the issue can only be solved collaboratively, cooperatively by getting many other people involved in solving the problem. That’s a skill that we want to impart to our students and make them think more about these kinds of issues, which is the challenge for managers and leaders in the future. So, this sort of is a pivot in the research focus that we have undertaken to do all cases at the level of the system and still bring the change agent, the protagonist, into play. That’s why we undertook this case.

BRIAN KENNY: Yeah. And it’s a really important transition, because we do all kinds of cases on Cold Call, the School writes hundreds of cases a year. And a lot of them are, you know, what you might think, this is a marketing case, or this is an accounting case, or this is a case about strategy. But these cases, cases like this in particular, force us to talk about how do you use management tools to solve a societal problem. And I don’t think that people necessarily think about that dimension of it unless we put it right in front of them. So, I’m glad that you wrote it. I’m glad that we’re here to talk about it. Maurice, let me turn to you, for a second. Just tell us, for our listeners who aren’t familiar, but what is OneTen and what problem are you trying to solve?

MAURICE JONES: So, OneTen is a coalition of now almost 70 companies all over the country. And about 105 organizations that are trainers and other kinds of talent developers, who are held together by the ambition to hire, to promote and advance a million Black talent, who don’t yet have four-year degrees, into family sustaining jobs and careers over the next 10 years. That is in terms of a headline. That’s what OneTen is all about. And Kash’s piece on the problem to be solved is right. It is about how you, through a team effort, eliminate the racial wealth gap in this country. So, here we are, right, we’re sitting in the Cambridge Boston area. About five years ago, the federal reserve bank of Boston looked at the wealth of families in the Boston area. They concluded that the median wealth of a white family in Boston was $247,000. They also concluded that the median wealth of a Black family in Boston was $8. No zero. $8. That kind of disparity is not something that we can both sustain and create a more perfect union. What the OneTen journey is about is mobilizing the private sector and organizations that train folks and Black talent in organizations that provide wraparound supports like mentoring and coaching and transportation and childcare. To attack this issue and to attack it through what has to be a fundamental leg of the solution, which is quality jobs. And to attack it for quality jobs for those without four-year degrees because 76% of Black talent in the workforce today ages 25 and above, do not yet have a four-year degree.

BRIAN KENNY: Right. And we’re going to dive into that a little bit more. So, what you’re talking about here is an economic solution, but what started with a catalyst that started OneTen was really a social justice issue. Can you talk a little bit about the sort of catalyst that got it started? And I’d love to hear a little bit more about your background and why you decided to take on this pretty big challenge?

MAURICE JONES: Some days I ask myself that question. Look, the catalyst was 2020, right. 2020, you had a pandemic that we’re still all fighting, that broke out and has had and still continues to have a disproportionately adverse impact on Black communities and other communities of color. That triggered a recession, that had the same disproportionately adverse impact on the same communities, Black communities, other communities of color. And then you had series of just heartbreaking and searing killings, Ahmaud Arbery, Breonna Taylor. Most especially, Mr. George Floyd’s murder in broad daylight, that was broadcast all over the world. Those things moved people. They moved people who hadn’t been moved before, or at least not sufficiently. To say, is this country the country I think it is, when it comes to being a land of opportunity? Is this country, the country that we want it to be, when it comes to forming a more perfect union? And if the answer to those questions are, no, what can we do about it. A handful of CEOs said no to the first two, and we can do something about it. And we’re going to mobilize our peers in the corporate community to lead. So, Ken Frazier from Merck, Ginni Rometty from IBM, Ken Chenault of American Express and General Catalyst, Charles Phillips of Oracle and Recognize. And then, Kevin Sharer, who used to be a professor here at the Harvard business school and was the CEO of Amgen. Came together and said, look, we can do something about this and let’s focus on this issue of quality jobs because that’s what the business community does better than anybody else. And that’s what the business community has more control over than they do other things. And so, when you started looking at the data, that’s when they said, this access to jobs that pay a living wage and above, right now is almost nonexistent for folks who don’t have a four-year degree. Let’s focus on getting Black talent without four-year degrees into living wage jobs and careers. And let’s get our comrades, if you will, to join us. And so, they went out and recruited other companies who were, by the way, delighted to join a journey that has such a tangible ambition, right. You can measure hires, you can measure promotions. And now here we are, we had 25,000 hires and promotions between March and December of last year-

BRIAN KENNY: That’s phenomenal.

MAURICE JONES: So, we’re off to a strong start. Our goal is a million over 10 years, we’re going to had to ratchet up our game.

BRIAN KENNY: We’ll do the math on that one a little bit later-

MAURICE JONES: Yeah, yeah. We have to ratchet up our game. But you know, the first journey starts with the first step, and we made the first step.

BRIAN KENNY: And so, you have some real heavy hitters in that lineup that you just described, which gives the sense at least that this is different. There’s more heft behind this, there’s momentum here. And then the number a million doesn’t sound, as audacious, it sounds, hmm, like you might be able to do this. Is that what convinced you to take this on?

MAURICE JONES: What convinced me to take it on was several things. One, no question about it, the fact that you had the two Kens and Kevin and Ginni and Charles, and then they were mobilizing others, convinced me that this was for real and achievable. The second piece is, it is the largest private-sector-led initiative intentionally focusing on black talent without four-year degrees and jobs, in my lifetime. That also convinced me that this was a unique opportunity. And the third piece is, my job before this was, I led an organization called the Local Initiative Support Corporation. We were and continued to be fighting the racial wealth gap, right. And it was clear to us that, that fight will not be, we won’t have a chance to win that unless quality jobs are on the table. And what we need for that is a large mobilized company effort to do it. So, my view was the ingredients of systemic change, in the OneTen piece are there in amounts that I just hadn’t seen before at a scale that I hadn’t seen before. And so, my thought was, this one is worth me giving this everything I got.

BRIAN KENNY: Kash, let me turn back to you for a second. Can you just describe the current state of the U.S. labor market? You know, where that supply is, where the demand is, and where Black Americans fit into that picture.

KASH RANGAN: So, the U.S. labor market, roughly, Brian, as of today, there are like 160 million adults in the U.S. labor market. And if you take a look at the proportion of the different ethnic races in the labor market. At a high level, the number doesn’t look too bad. There are 20 million, 25 million Blacks in employment, that looks good, but most of them, when they get in, they’re in entry-level jobs. There the representation is fantastic, it’s not even 15%. It’s something like 18%, 19% of the frontline jobs are all staffed by Black entry-level employees. From there on, the story gets murkier. There are not enough support systems within our private sector companies. There’s not much wraparound services. Blacks feel alienated within jobs, so much, so that number of 18%, 19% at entry levels start shrinking as you go up the retention, promotion, economic mobility ladder. So much so, that by the time they get to senior levels of management, that number is shockingly at 5%. 5%. inside companies, it so happens that more than 70%, 75% of jobs require four-year college degrees. That’s the way they’re credentialed. However, 50% of the jobs don’t require four-year college degrees. When you just look at the skills needed to get the jobs done. And automatically, given the four-year college degree graduation rate of Blacks, which is like 35%, they automatically get shut-out of terrific jobs. These are all living wage, paying jobs, they get shut-out. So, there are some issues at the entry level, but a lot more issues with respect to retention, economic mobility, and the really good jobs that can build wealth. So, these are the issues that one has to address.

BRIAN KENNY: This has been recognized before, right? The case talks about Year Up. That was an organization founded by Gerald Chertavian, who’s also an HBS graduate. And he’s been working on this very issue for a while. Maybe you can describe a little bit about what Year Up does? And I’d love to hear how that factors into your thinking, Maurice, about what the challenges that lies ahead for you? Kash, why don’t you start?

KASH RANGAN: Yeah. So, Year Up. I think Gerald Chertavian, his focus is very clear, what he calls opportunity. First of all, it’s very important to also change the mindset. So, these are not like, oh, these are poor unemployed, young kids, they’re a burden. They’re opportunity youth. Why? Because the youth that Gerald Chertavian focused on, they’ve all graduated from high school, they have a high school diploma. How come that these high school graduates who should be perfectly employable in entry-level jobs, do not have any employment? And there are something like three million of them, three million such individuals. There are 10 million people who are neither employed nor engaged in training, but of that 10 million, three million actually have high school diplomas. It was not the lack of skills, but the lack of soft skills. People are hired for skills, but they get fired for behavior. So, Year Up is one-year training, Year Up, it’s one year. So, opportunity youth are gotten into this program. It’s a brilliant program. Because half the fee is paid for by employers who are already there at the waiting-line to hire them if the training goes well. And the other half is raised by philanthropy. And there’s a one-year training program, half of the time is hard skills but more importantly, soft skills. How do you show up for work on time, how do you dress, how do you write your resume, how do you manage colleagues. And bingo, 85% of them, not only complete jobs, the employers just love them. They say, my goodness, this is really opportunity youth, because these young men and women are much more loyal to their job, because they’ve got this job, they perform better because they have got the right skills for the job. And they see this as a pathway to really building their own career, building their own economic and social mobility. And Gerald Chertavian does this. So, he started off small, but now I think he’s been in the business for 20, 25 years. He’s been able to raise funds and something like 5,000 students graduate from the Year Up program every year.

BRIAN KENNY: Yeah. So, it’s been pretty successful. And I know Gerald was involved in the early stages of OneTen. So, Maurice, you’d be probably pretty familiar with Year Up, as you look at what he’s been able to do with that. Does that impact the way you think about how you go about executing against the plan that you put in place?

MAURICE JONES: Absolutely. So, Year Up is the kind of organization that we want to make sure that companies know about and can be matched with, right. But Year Up is both a source of supply of talent and an organization that can equip that talent to be successful. We need a thousand Year Ups, to hit the kind of scale that we are talking about. Gerald and his team have been real strong partners of OneTen from day one, both on helping us to match companies with the talent that they are preparing for these roles, and also on the thought partnership pieces of what the OneTen journey must be in order for us to be successful. And literally, they’re partnering with us on best practices for companies when it comes to changing their corporate practices, to make their talent management practices and habits, ones that are more inclusive and equitable. Gerald and his organization have been at this for a while and they’ve got a lot of experience and a lot of lessons that we’re trying to leverage for the benefit of the OneTen journey.

BRIAN KENNY: Yeah. One of the things that you talked about Kash was that once these students were able to get in there and demonstrate what they’re capable of doing, or these workers, I should say, demonstrate what they’re capable of doing, that changed people’s attitudes about them. And I wanted to ask you Maurice, we know that from other sectors, the healthcare sector, for instance, people who are given, put on certain health regimens, do better, if they have ongoing support systems around them, to be able to sustain what they’ve started. How does OneTen think about addressing that issue with these opportunity youth who they’re bringing in to a professional setting they may never have been in before, and I would imagine it’s very easy to get discouraged and sort of throw in the towel, if you feel like you don’t fit in?

MAURICE JONES: Yeah. Our view on this OneTen journey is, it’s about building and scaling an ecosystem, right. You need the employer with jobs, you need the talent developer like Year Up to tap into talent and to prepare that talent. You also need organizations, both in the companies and outside of the companies, that can provide coaches, navigators, mentors. Transportation is an issue. Childcare is an issue. And by the way, that’s not just opportunity youth, I’m talking people from 18 to 65. And so what the OneTen coalition is about is, including those wraparound supports in the offering that we bring to the table for the employers and the talent. And oh, by the way, I need those talent support, right. I mean, I need, I’ve always had a mentor and a coach. I’ve always had to make sure that transportation, and my bride and I have always needed childcare…these are not like unique needs or opportunities of opportunity youth, this is the human condition. And so, we want to make sure that we are partnering with organizations that do these things as part of the menu of the OneTen journey.

BRIAN KENNY: Let’s talk for a minute about credentials and grade inflation and things like that. Because, you know, Harvard Business School has looked at this quite a bit through the Managing the Future of Work project that we have. But it comes up prominently in the case, it’s part of OneTen’s mission is to find jobs that don’t require that four-year credential, so you’re counting on employers to sort of look away from that. I know that every single job that probably that we advertise, here at Harvard Business School, probably is looking for a four-year degree. Do they all need it? Yeah, probably not as clear. So, Kash, maybe you could start, and I’d love to hear your thoughts on this too, Maurice. But let’s talk a little bit about that part of the problem and how do we change attitudes around that.

KASH RANGAN: So, in this one, Brian, I think is beyond, like, four-year college degrees, because there’s already a process of certification credentialing; they’ve been in a four-year college, they’ve seen the rigors. Therefore, this individual should fit the job. But like you rightly said, many jobs don’t really require four-year college degrees. They really require some amount of training, a high school degree is fine. Maybe an associate’s degree, two-year degree, is fine. They can come and get started. But nobody’s suggesting that we take away the opportunity of four-year degrees from a lot of these young men and women, because we are going to give them the starting-level job with two-year associate’s degree. That’s not true. Because it so turns out, data shows that many such young men and women who take up entry-level jobs after two-year associate’s degree, after high school degree, once they’re into the momentum walking into the pathway of doing a job, getting to know the work environment, getting to earn some income, getting the responsibility, later on, go to college and they complete either an associate’s degree or a four-year college degree. All that we are suggesting is that just sort of turn the rhythm of when you get the four-year degree to a little bit later in life, when they’re much clearer about what kind of four-year college degree they need or what kind of associate’s degree they need. That requires a mindset change from the employer side. Because it’s safer to hire somebody with a four-year college degree. As my friend, Maurice, said in class, this morning, he said that you hire somebody with four-year college degree and if it doesn’t work out, you say, yeah, we make such mistakes once in a while. But if you hire somebody without a four-year college degree and then you, doesn’t work out, then, oh, why did we do this, you know, who did it. And so, we got to just be bold enough to say, we need to get a lot of people into the pipeline.

BRIAN KENNY: So, the CEOs involved in OneTen have said, we’re okay with this, we think this makes sense. But what about the mid-level managers, the people who are supervising these folks?

MAURICE JONES: Well, let me build on what Kash was just saying. Look, this is what we’re saying here is companies and others, let’s really build our muscles to figure out what the skills are that you need for a job. Let’s focus on discerning and articulating clearly, with clarity, the skills you’re looking for, for that job on day one, the skills you’re looking for in year two and year three and year four. And let’s understand the multiple pathways that one may have to come about those skills. The four-year degree may be one, experience in the military may be one, that coding bootcamp, may be one, let’s really do the hard work of discerning the skills. And by the way, this skills-first hiring approach is, the business case for it is unambiguous. You hire people who actually then really have the skills that you’re looking for, you hire people who actually it turns out are more loyal and you have less attrition. There are jobs that absolutely need the four-year degree. There are lots of jobs where the four-year degree is not relevant to the skills. And that’s what this is ultimately about. We get graded skills first hiring as a country, we create a country that is more productive, more inclusive, and really furthers the more perfect union in a way that we’re not.

KASH RANGAN: Brian, can I jump in on that comment that Maurice made?

BRIAN KENNY: Sure. Go ahead.

KASH RANGAN: So, I’m sure a lot of the listeners are wondering, oh, all this stuff is fine, OneTen would like to do this stuff, so we will hire for skills, not credentials. But then what happens to these college graduates who come out. And then-

BRIAN KENNY: With loans, by the way, to pay back.

KASH RANGAN: Exactly, with loans to pay back. And now that you’ve given away the job to somebody without a four-year college degree, aren’t we just shifting, we’re just kicking the can down the road, we’ve created the problem for a different set of young men and women. Now that’s a very narrow way of looking at the problem. That’s true that now there’ll be quite a few four-year college degree holders will find it difficult to get a job because their skills are better tapped through by different process. But what we should also recognize is, even as we speak, even as we speak today, there are something like six to seven million jobs, which have not been filled because these men and women don’t have the skills for that. These are essentially high technology jobs, where the U.S. is chronically short of the kind of skills that are needed. Therefore, what it’ll also do is, it’ll also reform our four-year college degrees. A lot of our four-year college degrees really do not train young men and women for the kind of jobs which the economy needs. We are a high tech service oriented economy. We are no longer the economy, which we were, twenty, thirty years ago. And our four-year college degree programs are not adjusted to this new economy. This movement of hiring for skills, will not only enable the entry level and will enrich the labor pool, it’ll also make a four-year college graduates trained in the kinds of skill that are needed for higher level technology service oriented economy.

BRIAN KENNY: So, you’ve done the math, I’m sure, you’ve alluded to it, you got to ramp up the game quite a bit to get to the number. So, what does that look like, what’s the roadmap look like?

MAURICE JONES: So, the roadmap is, our aspiration is to ramp up to about 150,000 a year being hired and promoted. A big piece of that is getting more companies to join the journey. But a big piece of it is with the existing companies, really working with them to re-credential jobs. They create new opportunities by removing four-year degree requirements and really moving to a skills-first approach.

BRIAN KENNY: We’ve talked a lot about employers and what they need to do. I’m wondering a little bit about on the supply side, what do you need to do to convince people that this is real and that they should believe that OneTen is going to help them?

MAURICE JONES: Yeah, it’s a great question. So, I was mentioning to the class today, trust is our most important currency. We’ve got to convince Black talent that if they do what they need to do to be equipped for these jobs, that the companies really will hire them, really will invest in their ongoing up-skilling and re-skilling and new-skilling, really will create career pathways, not just an entry-level job. That trust factor is really, and by the way, we’ve got to build that trust with the companies as well. We got to build that trust with talent developers and wraparound. Trust is our most important currency. We are entering into stories that have been ongoing throughout the country that has produced skepticism, right. You know, Black folks are saying, they really don’t want to hire me, I’ve been here all this time. And for the most part, I’ve been invisible to these companies. Now you’re telling me, they see me. Now you’re telling me, they want me. Come on, man, seriously. So, that is a big piece of what the OneTen journey will have to get at. And there’s a reason why I joke with people all the time. There’s a reason why we don’t call this One one. These are such fundamental narratives. It’s a 10-year journey, for us to really turn them in a different direction.

BRIAN KENNY: Yeah. So, this has been a great conversation. I’ve got one question for each of you before I let you go. And I’ll start with you, Maurice. I’m wondering how you know you’re on the right track? Like, what are you going to measure aside just from the job numbers? It’s because we’ve talked about multiple facets to this thing, so you got to move this piece to get that piece to move. This is going to be an ecosystem, right?

MAURICE JONES: Look, I think the easiest thing is to say we’re going to measure hires and promotions, so let’s put that to the side. No, the thing that will really, really convince me that we’re on the right path is when I’ve got middle managers in our companies saying, oh my goodness, Joe here has been the best coder I have ever hired. Right. And I’m going to make sure I keep Joe. It’s a mindset shift, right. When we start seeing people managers, you know, my grandmother used to say something to me, she would say, “You’re Mine.” If I asked her if I could do something and because one of my friends was doing it and she didn’t want me to do it, and I would say, but Joe’s doing. And she would say, yeah, that’s fine, let Joe do that, but “you’re mine.” It’s that real, real sense of belonging that the companies are stretching themselves to create for this talent. When I see that, irrespective on the numbers, I’ll know we’re on the right path.

BRIAN KENNY: That’s great.

BRIAN KENNY: Kash, my last question for you. I’ll give you the final word on this. Having discussed the case today with students and talked about it in depth, I’m wondering – if you want our listeners to remember one thing about the OneTen case, what would it be?

KASH RANGAN: The one thing that I would like my students to remember and almost anybody is that business has to recalibrate its role in society. Businesses should also be responsible for the social measures, environmental measures. Equity is a very important social measure, and if businesses claim that we create 80%, 90% of the 20 trillion dollar economy, then business should also take responsibility for creating equity as far as opportunities are concerned. You can’t just wash your hands, oh, that’s the government’s job. Government will create a level playing field through regulation, et cetera, et cetera, and then I’ll follow the rules of the game, I’ll follow what the law asks me to do. Business’ role is to create a better society. And whatever they do for their short-term profits and shareholders, is a stop on the way.

BRIAN KENNY: That’s great. Listen, we really hope that OneTen succeeds with flying colors, maybe exceeds that goal. So, Kash, Maurice, thank you so much for joining me today.

KASH RANGAN: Thank you.

BRIAN KENNY: If you enjoy Cold Call you might also like our other podcasts: After Hours, Climate Rising, Skydeck, and Managing the Future of Work. Find them on Apple Podcasts or wherever you listen. Be sure to rate and review us on any podcast platform where you listen. If you have any suggestions or just want to say hello, we want to hear from you. Email us at coldcall@hbs.edu.Thanks again for joining us. I’m your host, Brian Kenny, and you’ve been listening to Cold Call, an official podcast of Harvard Business School, brought to you by the HBR Presents network.

Source link

June 14, 2022 / energy