And worryingly, not many people seem to be offering a realistic solution to the problem. In almost every interview I’ve done this year, there has been a complaint about attracting talent. And yet not many seem to be able to offer a viable solution for fixing the problem.
The assumption is that this is a multi-year challenge that needs to be addressed. We are told that we need to get kids studying coding at the age of 10, so that by the time they come out of college or university in their early twenties, they’re skilled up.
But who has the time to wait ten years for a ready-made population of technophiles? No-one. Which is why we see Silicon Valley having to compete on things like salary, work environment and maternity pay to attract the top talent that is available now.
However, after an interview this week with founder and CEO of a company called Year-Up, I have realised that much of this is misguided and that there is an alternative out there that is not only socially responsible, it’s a solution to the problem right now. And it makes good business sense.
Gerald Chertavian is training up young people between the ages of 18 and 24, giving them the skills they need to start work in a corporate technology role in just twelve months. This is providing some of the largest companies out there (including Google, Facebook, LinkedIn, JP Morgan and American Express) with a pipeline of talent, all the while saving the lives of a section of society that is too often ignored, just by giving them an opportunity.
And when I say saving lives, I mean that quite literally.
The solution is quite simple when you think about it. Chertavian was speaking at Pega’s annual user conference in Las Vegas this week, where he explained to delegates that in America right now there are six million young adults that are disconnected from stable career pathways (often because of their socio-economic background, as well as the colour of their skin).
Meanwhile, in America there are 12 million jobs that will require post-secondary education that will go unqualified in the next decade.
In other words, there are millions of young adults out there that need an opportunity and there are millions of jobs that struggling to get filled.
Chertavian founded Year Up in 2000, off the back of selling a UK-based software business, recognising that if he could give young adults this training, and supply them to the companies demanding talent, he could not only have a successful business model, but one that helps a generation of young people.
Sixteen years later over 15,000 people have gone through the programme. The average salary of someone beginning their training at Year Up is less than $5,000 a year. Their average salary when leaving the programme is $38,000 a year. That’s life changing.
Year Up is now a $115 million a year business, which gives you an idea of the demand out there, both from young people needing an opportunity, and from companies needing the skills. Chertavian describes it as “combining good business with good citizenship”.
Describing the challenges in the beginning, Chertavian said:
Look, it’s hard when you start because you don’t have anything to show. People would say, have you done this before? No. Have you educated young people before? No.
It’s really hard. I would have walked over broken glass on my hands and knees for quarter of a mile to get one internship. Are you kidding me? It’s really hard.
But when companies are planning their workforce around opportunity youth, and seeing the opportunity to not only get good workers, but better workers, that’s the promise.
Our students stay longer, they’re more motivated, they’re hungry. State Street Corporation hired 500 of our graduates, they stayed 46 months on average, versus 12 to 18 months for the average millennial in the same role. That’s a lot of dollars of savings in lost opportunities, retraining and rehiring.
The Year Up programme works by operating in locations across the US where there is demand for tech talent. It then goes into the local communities, speaking to everyone from boys and girls clubs, to foster care agencies, to high schools, to churches, and looks for motivated young people that want to change their circumstances and start a new career.
Applicants are then put through a rigorous application process, which consists of interviews and group learning assessments, to establish that they’re right for the programme. This isn’t necessarily to screen someone out, it’s more about understanding someone’s story, figuring out how they learn and making sure they’re attracting the right people that will succeed.
The selected students go through a six month training programme (which is supplemented with a basic wage) and are then placed into a company for six months on an internship. A lot of the students on the internship then end up getting offered a full-time job at the end.
When speaking to Chertavian I asked him why Year Up had decided on the 18-24 age bracket. I suggested to him that wouldn’t a lot of people by the age of 18 have already gone too far down a wrong path to see an opportunity like Year Up as a possibility?
Chertavian’s response was spot on, in that he recognises that there shouldn’t really be such a need for acompany like Year Up and that things would ideally be solved earlier on in a young person’s life. However, he added that Year Up focuses on that age bracket, as this is where it can make the biggest impact. He said:
We always have to look at systemic change in order to reduce the affect of bad systems, which is so many people being on the sidelines of this economy. It’s easier and would be easier for this country if we solved this sooner. Not that there would be no need for Year Up, but Year Up should not be a growth business in the United States of America. Systemic change is what we are going to need if we are going to look at millions of young people.
From President Carter to today there has been a 30X decrease in funding for 18 to 24 year olds. A kid at 12 has a reasonable amount of resources. The American government considers you an adult at 25, there’s a whole another bucket of resources that kick in. There’s this gap 18-24, where a lot of young people fall off the face of a cliff for the wrong reasons. It’s also a time when many young people start to consider what they really want to do, there’s a changeable, malleable attitude.
And Year Up is not only teaching these young adults how to code, but it’s teaching them how to survive in corporate America. Chertavian said:
Honestly, learning tech is not that hard. If a dumb guy like me started a technology company and sold it for a lot of money, trust me, tech is not that hard. But actually understanding how corporate America works is important. You get hired for skills and fired for behaviour. We have to make sure that our students have the attitudes, behaviours and communications required in order to hold down a liveable wage job in a knowledge based economy.
Year Up has also been smart to follow demand. Instead of giving its students some sort of generic technology training, it speaks to the companies that need the talent and then skills up groups of young people specifically around what they need. This means that the trainees get a set of skills that are attractive to employers and the companies taking on the interns get a pipeline of talent that they couldn’t get previously. Chertavian explained:
We have to be demand led. We started in 2000 in web development. Guess what happened in April of 2000? All those companies went bust. Web development fell through the floor. So we then retooled up and said, where’s the demand? We found demand in desktop support, help desk support. And then our clients, Google and others, asked for QA testing. We saw the rise of cyber security, we got into a partnership with Symantec. Then we kept asking our clients, where do you have pain? Where do you have pain in hiring middle skills?
That led us into into finance. Multiple areas of tech. And then most recently sales has been a great growth area for us - AT&T has recently committed to hire 100 folks in sales. And they codeveloped their sales curriculum with us to make sure that it met their needs. We will keep changing.
If we are not nimble operationally, we are not going to meet market demand and we won't be able to generate success and the revenue we need.
We at diginomica have written a great deal about the importance of creating a diverse organisation, which is more reflective of the world in which we live in - we believe it is critical to the success of a company. Which is why I’m so impressed with Year Up.
No only is it giving these young people an opportunity, whilst simultaneously plugging a skills gap, but because it focuses on young people from disadvantaged backgrounds, this often means that the pipeline of talent coming through is incredibly diverse. A far cry from the all white, all male leadership we see in most tech companies at the moment.
If you put ‘four year degree required’ on your application process, you’ve excluded 87% of Latinos and 82% of African Americans in the US. If that’s your goal, to exclude that many folks, you’ve done that pretty effectively. Especially if you’ve got a bot weeding out resumes.
If they changed some of their practices about how they hire, they would open up the aperture of who got a look. If they didn’t interview based on a degree, but looked at competency, for example.
Don’t look at pedigree, look at competency.”
I don’t think that anyone could argue that to lead a company in the 21st century, you have to be culturally competent. How can you lead a diverse society if you’re not culturally competent? I think the forward thinking organisations are leading into it sooner rather than later, to build the pipelines of talent rather than cherry pick a few executives of colour.
Whenever I do an interview on the topic of diversity I am always keen to find out the interviewee’s view on the issue of quotas. It’s an issue that divides people on all sides of the fence, with some minority groups finding it offensive, whilst others see it as a necessary ‘stick’ to making change happen.
Coincidentally, Chertavian’s view perfectly reflects my own personal view. Some sort of goal is important. He said:
We believe in having goals. Without goals you can’t measure and you can’t manage it.
I made the mistake of not having goals six years ago and I won’t make that mistake again. You need the goals if you are to hold people accountable for building a diverse society. That’s leadership’s responsibility. And sometimes you wonder if leadership is equipped to do that, given that sadly it still tends to be a white male led environment.
And to give you an idea of the character of this man, he added:
Think, how many times have I been consciously or unconsciously biased myself? In terms of not believing what someone can do just because they’ve been born in the wrong zip code, with the wrong bank balance, in the wrong school system and sadly often the colour of their skin. That’s every day. The good news is we don’t have to live with that. We can change it.
Running a company in the US that has a skills gap? Get in touch with Year Up. Just do it.