Investments in Training

Manufacturers have been fretting about the Skills Gap for years, seeing a looming crisis which has by now actually arrived in some areas. One of the plausible explanations for the problem is a lack of investment in training.

Just 54% of manufacturers invested in worker training in 2018. Estimates say that all manufacturing employee training averages just over $1,200 per person per year. In 1979, manufacturing companies spent 2.5 weeks training workers each year. That number fell to just 11 hours in 1995, but has jumped to 47.5 hours in the past two years. Note that this is still just slightly more than half the average back in 1979.

Deloitte’s research suggests that part of the problem could be in figuring out what kind of training makes sense. Organizations hesitate to invest in skills that could be obsolete before the ROI of the training has been realized. Just like schools, Deloitte suggests, companies need to focus on meta skills like learning, problem solving, collaboration, and higher-order tech skills rather than on teaching specific hardware or software.

Amazon is an example of a company that’s putting its money where its mouth is. Already a leader in robotics, AI, and automation all along its supply chain, Amazon plans to spend more than $700 million over the next few years to train 100,000 workers in a range of flexible skills that will help those workers be ready when new jobs come along.

The new jobs don’t have to be at Amazon. The old joke goes like this:

Q: “What if you spend a lot of money training people and then they leave?”
A: “What if you don’t spend any money training people and then they stay?”

Amazon has framed their relatively open-ended tech training as a “responsibility” to their workers, something that will benefit all Amazon employees in their future lives, wherever they choose to work.

But it’s also good for the company’s bottom line. More companies may follow suit.

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