Blog + Human Capital Management + Impact
Blog + Human Capital Management + Impact
The US has long lacked a comprehensive infrastructure for workforce training and placement. As a result, millions of workers have been left undertrained, underemployed, underpaid, and undervalued while businesses have faced both record profits and unfilled openings.
This dynamic has been brought into stark relief during the pandemic-driven Great Resignation, a movement of workers away from low-earning sectors into sectors with increased flexibility, better benefits, and higher pay. Yet despite this unprecedented labor migration, most workers still do not have the upskilling opportunities or career pathways open to them to pursue family sustaining jobs.
Over the last few years, novel, for-profit companies have emerged to fill this gap, transforming both the channels through which workers are trained and the source of funding for that training, while also deploying innovative approaches to empower workers during times of increasing economic uncertainty.
In our recent Voices of Impact Webinar, we spoke with Jarah Euston, Founder & CEO of WorkWhile; David Zamir, Founder & CEO of Nana; and Vince Jeong, Co-founder & CEO of Sparkwise – three CEOs focused on empowering workers. We discussed what motivated them to start their business, how they help empower workers, and the role of private enterprise and private capital in helping hourly workers get better pay, better conditions, and more job opportunities.
Jarah Euston started WorkWhile thinking about how to improve conditions in the types of jobs she had growing up – hourly wage, blue collar jobs without opportunity for career advancement. As she puts it, “So much of what we build in technology is for the 1%. It is making the top 1% of workers lives 10% better. And I wanted to take a big swing to help the 82 million Americans who work at hourly wage job and leverage technology to make their lives easier.” WorkWhile is a contract labor marketplace that matches workers to shifts based on their skills and schedule and uses cognitive science and behavioral analysis to find the most reliable hourly workers. As a marketplace, WorkWhile allows workers to gain the flexibility they want on the job, and by aggregating labor helps to gain workers higher wages. Moreover, with the data and insight WorkWhile has into the positions employers need to fill, the company is able to partner with providers to offer trainings at no cost to workers that have immediate ROI for workers in getting higher-paying positions and for employers in filling those roles.
David Zamir got his start in appliance repair after years as an entrepreneur in the retail sector. He fell in love with the puzzle-solving aspect of appliance repair, and was satisfied to earn more fixing dryers and refrigerators than he ever had in retail. He was growing his appliance repair business in San Francisco when he realized that the demand for repairs exceeded the supply of workers and that so many workers in America would benefit from being able to fill those jobs. David launched Nana as a marketplace that matches repair technicians with available work while also providing appliance repair training programs. But he also wants to change the way we think of the Trades, where wages are less than 40% of what is earned by similarly skilled workers in the tech sector. Nana works with insurance companies and appliance manufacturers to identify needs and supplies the labor force, earning workers significantly higher wages than they would earn in their previous jobs.
Vince Jeong immigrated to Canada as a child and to the United States for school. Working at McKinsey and then for other employers, he realized the workplace training he received at the famed consulting firm was the best workforce education he would ever have. He wanted to bring that same level of quality and effectiveness in workplace training to everyone, and started Sparkwise to address this gap. Sparkwise is a multiplayer learning platform for professionals to learn skills through interactive group challenges, bringing together the best training with a sticky process that produces results.
Over 35 million Americans need to find new occupations by 2033 because of technology and automation. Private education companies have a role to play in making sure less workers are left behind. As Vince puts it, “The role of a private enterprise is to rethink education altogether into the way that it gets delivered, to decouple the reliance on live human experts such that many more people at scale can get truly great educational experiences.”
Yet, as David points out, in the US and other advanced economies, education at times can be a barrier because of the cost—not just the financial cost of obtaining an education, but the opportunity cost of not earning while you do. Companies like Nana, Sparkwise, and WorkWhile can not only lower the cost of education, but also provide nearly immediate ROI for workers, whether it is landing work in appliance repair or increasing hourly wages through short-term training. David therefore views private enterprise as playing a critical role in actually creating greater economic equality. “At the end of the day, our job in the private sector as I see it is to reduce barriers to entry for upward mobility.”
One of the advantages private companies have in doing so is their proximity both to workers and employers. Jarah notes in our discussion that WorkWhile gets learners excited by showing the ROI on the time invested in training, and is able to do so because it knows what employers need. When WorkWhile learned that its clients had an urgent and sustained need for forklift operators, and that workers trained as forklift operators earn 25% higher wages, it sprang into action. In less than a year, the company partnered with a training provider to offer a free training program for forklift operators that workers can do anytime and anywhere on a mobile phone. It shows trainees jobs available in their area before they start their training and unlocks those jobs as soon as workers complete the necessary modules. WorkWhile can afford to offer the training for free because once a worker has worked two shifts in the new job, WorkWhile’s investment in the training has been returned by the fees paid by employers.
Historically, workforce development has been the purview of the public sector and of nonprofit or public education providers. Yet, as private players like WorkWhile, Nana, and Sparkwise enter the fray, there are opportunities to reconsider the role of local, state, and federal agencies. These range from how government funding can reach workers trained by private providers, to regulatory regimes that make it easier for startups to operate, to understanding what startups can do better or more quickly.
David succinctly articulated the challenge, “Regulators can help entrepreneurs to accelerate processes by reducing barriers to innovation.” He shares the story of Nana partnering with the Workforce Board of San Francisco to train 30 local workers but encountering bureaucratic obstacles along the way. Jarah stated it even more sharply. “I’m skeptical that the government has the insight, capability, and resources to do it as effectively as the private sector.”
The currently unclear regulatory environment creates challenges for businesses in the training sector. Jarah notes, “From my perspective, there are a lot of things that innovative private enterprises are trying to do but are not able to do because of murky regulation or in some cases, misplaced regulation.” She adds, as a possible corrective, “As a business leader, I would like to see clear laws and regulation from the government. The concern for us, especially given our marketplace, is what the current administration going to do, that the last administration didn’t do, that the previous administration didn’t do…There is still a lot of uncertainty around regulation of our industry. That creates a lot of churn, a lot of added costs and conversations with lawyers that is not driving impact for consumers, workers, or other businesses.”
Critically, the need to produce financial returns requires private companies to consider what gets immediate returns for both their employer clients and the workers these startups serve. Both Vince and David highlighted their need to be close to their customers to be able to drive their businesses forward, a position they contrast with the imperatives faced by organizations that don’t need to innovate on their business models. Or as Jarah put it, “The best thing the government can do is get out of the way of any well intended business that’s trying to provide this type of education and training to their workers.”
The US is facing a unique inflationary economic environment coupled with historically low unemployment and unprecedented rates of resignations across a number of sectors. This is within the context of long-term macro trends in the labor market driven by technological change and the consolidation of employer power. Startups like Nana, Sparkwise, and WorkWhile are changing the game by putting workers first while solving pressing needs for employers. Their proximity to workers, their innovative use of client and market data, and their imperative to yield immediate returns for both sets of stakeholders result in true impact at-scale.