EdFix Episode 16: Workforce Development in an Era of Change

What is the real impact of technology and process transformation on American workers? Are we doing enough to prepare the modern workforce at a time of growing inequality and stagnant wage growth? Dr. Mary Kay Vona, Principal in Ernst & Young LLP's People Advisory Services, and Dr. Ellen Scully-Russ, Associate Professor of Human and Organizational Learning, discuss the changing nature of work, talent shortages in the U.S., and curricula to support the jobs of the future.

TRANSCRIPT

MARY KAY VONA:
We have a responsibility in higher ed to create curricula that supports not only job relevancy, but to be working with the commercial side to develop the curriculum that supports the jobs in the future.

MICHAEL J. FEUER:
Welcome to EdFix, your source for insights about the practice and promise of education. I'm Michael Feuer and I am delighted to host Dr. Mary Kay Vona and Dr. Ellen Scully-Russ. Dr. Mary Kay Vona is currently a principal in Ernst and Young's people advisory services group. She comes with 35 years of experience consulting with many fortune 500 companies on change management, business transformation and the like. And very importantly for us, and very proudly, Mary Kay received her doctorate from the executive leadership program here at GW.

MICHAEL J. FEUER:
Professor Ellen Scully-Russ in our department of human and organizational learning and is currently serving as the chair of that department. And her research has focused on adult education, workforce development, and the challenges of the emerging knowledge society. Welcome to Ed fix, Mary Kay Vona. Tell us a little bit about yourself and what you're doing in your current position.

MARY KAY VONA:
So as you stated, I'm extremely proud graduate of the EOP doctoral cohort. It provided quite a trajectory into my career as a consultant. So I'm currently a principal with EY. We are a global consulting firm and I'm proud to say that I'm part of the people advisory service, so anything to do with transformation, the people agenda for our clients.

MARY KAY VONA:
Most of my clients are in the financial services world, but I've had the great pleasure and honor of serving every single industry out there with the exception of gaming. I've served in the high tech industry and the communication sector and media and entertainment. But my current passion is serving clients in the banking, capital markets area, wealth management and insurance and have seen, especially over the past five years, the impact that technology and process transformation has had in the workforce. So I've been able to leverage all of my education from GW and my clients love the fact that I bring both theory and practice to our teams.

MICHAEL J. FEUER:
Ellen Scully-Russ, tell us a little bit about yourself and about the program that you lead and how it relates to these issues of the transition and the evolution of work in modern competitive American society and for that matter, globally.

ELLEN SCULLY-RUSS:
Thank you, Michael. The human and organizational learning department is a department of scholars and scholar practitioners focused on learning, culture, change and leadership in a variety of organizations including schools and higher ed. But mostly we look at these phenomenon across the economy. And so in addition to studying and sponsoring research of our students in the areas of, like I said, leadership, organizational culture, organizational change, social change, we also conduct our own research.

ELLEN SCULLY-RUSS:
Mine actually happens to be in the area of work and work and learning. And I have throughout my career, been very interested in the evolutionary nature of work and how work itself has been transformed due to new technologies and new policies and new social relationships that actually make work on the qualitative level to be extremely different these days, than it might've been when all of us were starting out in our careers.

ELLEN SCULLY-RUSS:
So this whole area of technology, mostly artificial intelligence, robotics has really captured my attention lately and my research. Just the way of background, I actually came to the academy a little later in my career. I had had a 30 year career with the US labor movement, negotiating and setting up job training programs for workers who were being impacted by the changing nature of work and new technologies as well. So I have, like Mary Kay, have had experience in a variety of industries, probably the only one I haven't had experience in, Mary Kay, is the financial sector.

MICHAEL J. FEUER:
We've been hearing a lot over the last, I don't know, several decades that the changing nature of work and the changing nature of the economy has brought about new challenges for American work and workers and that we are no longer, that is in the United States, as productive a workforce as we once were, compared to other countries.

MARY KAY VONA:
I've also read what I would interpret as sensationalism. I mean, I like to trace the cataclysmic events that have shaped talent shortages in general from a global economy perspective, but also from a US perspective. I look at Y2K, what 20 some years ago, the economic collapse, the impact actually that Enron had, the history behind that, that created an environment where, and the interventions were regulation, business schools and even here we started programs in ethics.

MARY KAY VONA:
That transformed I think, how we view, not only the American economy but the talent shortages that we have. So my perception and what I've seen, and I've been part of probably over 35 major business transformations in my 30 plus year career, meaning my clients and most of them are in the commercial sector, have transformed maybe their finance function, their HR function, their supply chain. They may have introduced new products into the economy.

MARY KAY VONA:
My perception is I have not seen, and I think that assertion that the labor market here has a disadvantage over the global economy. I have not seen that. If anything, it's been the opposite. And I think what we've neglected to see is the interconnectedness and the integration that we have with the rest of the world. We're in a global economy. It's not just a US economy.

MARY KAY VONA:
So I would push back on that and I think that the American worker has never worked harder. I think that they're focused, at least what I have observed and the clients that I have served is that there is recognition that there is a talent shortage, there is a war for talent. There are different interventions that certain industries are using and applying to fill that gap.

MARY KAY VONA:
Learning has never been more important and I, like Ellen, have had a passion. That's my background, is in education on the commercial side. I have seen the proliferation of different types of blended programs to address from a macro level, what needs to occur in the labor market in the US. I think that we have a competitive advantage oftentimes, but what we have failed to see is the interconnectedness of the American worker with the rest of the global economy.

ELLEN SCULLY-RUSS:
I think the predictions don't always play out the way in which people suggest that they might. I happen to agree very much with Mary Kay, that we have to factor into our equation that this is a very different economy. It is a global economy and our labor is competing in ways that it never has in the past with growing economies overseas.

ELLEN SCULLY-RUSS:
I think the introduction of new technologies is fundamentally changing the skills mix within industries, as well as creating whole new opportunities that we haven't even begun to figure out how to measure that yet. And then I also think that we're riding the wave, of the crest of a wave that productivity and the economy was up and down, yes, for many years. But I think we might have reached a tipping point in our labor processes where we've really gone so lean that there's very little left to take out of the systems.

ELLEN SCULLY-RUSS:
I mean, I think people are working harder than ever, longer hours than were predicted back in the '70s, that we would have a workless society. And I don't think we've really factored in to our productivity measures the impact of a lot of the redesign that went on in response to the last great recession.

ELLEN SCULLY-RUSS:
I think employers totally used that as, not necessarily an opportunity, but as the need to really get in and rework their processes and introduced new technologies. I just don't think we've accounted for those shifts in the labor market or in our productivity measures at this point.

MICHAEL J. FEUER:
Let's unpack this phrase, talent shortage.

MARY KAY VONA:
When I talk about talent shortages, it's part of five talent trends that we've seen collectively in the future of work predictions. One is talent shortage and it is skills-based as well in terms of numbers. The second talent trend we've seen is talent retention and engagement. So, it's more of a micro level versus a macro level, but many organizations, particularly on the commercial side, and I don't know if you've seen it in the public sector side, Ellen, are measuring and managing and looking at the engagement of their workforce.

MARY KAY VONA:
And then the third one is the impact of digital and robotics and Ellen nicely touched on that. There've been a lot of predictions in terms of what AI and robotics, the impact of that in terms of the workforce. I've read some things that by 2025, smart machines will replace one in three jobs.

MARY KAY VONA:
Now we have not seen that from a data perspective yet, but I think it's premature to measure that, but it's also creating jobs on the flip side. So I think the talent shortage is also tied to Michael, the types of jobs that will be created over the next 10 to 25 years. We've also seen a growth in the contingent workforce, meaning those that are not necessarily employees of a particular organization, but they come into the economy as managing projects, managing short and longterm engagements. We've seen an increase in that.

MARY KAY VONA:
Lastly, we've seen challenges around leadership development and the succession planning as it relates to transformation. So there's the five key things that we've seen, we call it the talent era and talent transformation issues and challenges that we've seen over the past couple of years.

ELLEN SCULLY-RUSS:
So what I have found in my research is, and I've been partnering for example, with our colleagues over at the School of Public Health to take a look at their approach to actually workforce analytics and workforce predictions. Because as we know, that's a big thing in public health to be able to predict the number of nurses that we need, the number of doctors that we need, for example, five, 10, 15 years from now.

ELLEN SCULLY-RUSS:
And they're finding that their analytical approaches and their metrics are no longer holding up because the rate of change in the healthcare delivery system is so rapid and it's so idiosyncratic in terms of the different forms of delivery systems that are being carved together and emerging that they need additional data that is not necessarily high level metrics related measurements. But they need to be on the ground to really understand the decisions that hiring managers are making, that the leaders of these systems are making in terms of how they're thinking about organizing themselves to deliver healthcare in this changing healthcare labor market, for example.

MICHAEL J. FEUER:
One of the longstanding debates in the world of education reform has been whether we are doing enough to prepare young people with the kinds of math and literacy skills that will really make a difference to their future productivity. So that's why I'm interested in this measurement question and whether we've got more in the toolkit to provide guidance on what it is that the modern workforce needs in terms of different skills, talents, and the like.

MARY KAY VONA:
So in addition to my work in the firm, I also, I'm an adjunct at at another university that won't be named, but we love that university as well. And with that convergence of theory and practice and what I've seen, and I take it as a personal responsibility and I think we need more folks like myself and Ellen, that have both worked in the private and the public sector.

MARY KAY VONA:
So I think we can make that link between theory practice and what I call power skills, which have historically been referenced as soft skills. So I think there needs to be a blend of both. And I have seen those that have been extremely successful, those students that have come out of programs that have both a strong math and science program, but they are also able to take those skills and transform them within what I call power skills, which are communication, interpersonal, like my mom talks about, working in a room. They are differentiating skills and I think we need both in order to empower this economy.

MARY KAY VONA:
I believe we have a responsibility in higher ed to create curricula that supports not only job relevancy, what does the economy demand, but for us to actually be working with the industry, with the commercial side to develop the curriculum that supports that, the jobs in the future.

MICHAEL J. FEUER:
Does the research confirm that on the job learning is perhaps as important as what proceeded it?

ELLEN SCULLY-RUSS:
Yes, I believe so. And I also think that some jobs are better designed to facilitate that than others. There's a stream of research that began back in the 70s around job characteristics. And we were interested at that time about what were the characteristics that led to worker satisfaction. And today the research, at least in the work and learning research, is going towards what are the characteristics of jobs that facilitate informal and incidental learning in ways that actually contribute to both the firm performance, as well as the learner's development in long term employability.

ELLEN SCULLY-RUSS:
And what we're finding in that research is those workers or professionals who are in jobs that do actually have a number of these characteristics, actually are maintaining skills, cognitive skills, for example, the PIAAC data is showing us, PIAAC is the competencies test, that's OECD competency test for adults. We're finding, I wouldn't say a causation, but some kind of correlation between some of these job characteristics and people's skills.

ELLEN SCULLY-RUSS:
So people with the same level of education, for example, are performing better on these competencies that are all cognitively related. So we're starting to tease that apart and try and get smarter about, how is it that people learn on the job and how is it that we can create organizations and jobs that facilitate that natural ability that one has towards learning and improving what they do and how they do.

MICHAEL J. FEUER:
What are we currently think about what firms use as a way to balance the need for this kind of on the job professional and investments in lifelong learning against the threat that their best workers will be poached away by firms that want the same kind of skill sets?

MARY KAY VONA:
If they're good leaders, they won't leave. No, I mean I'm of the mindset from a learning perspective, if your workforce is attracted to your competitor, that you're doing something right. Why would you want to keep your workforce down, right? If you were an organization that from a business perspective, your workers are aligned to your goals, they have a purpose, and if they're attractive to other employers, then I think that says something for your philosophy, your culture. Why would you want to keep people down?

MICHAEL J. FEUER:
I mean, there was a time when economists used to try to distinguish between general skills and specific skills and I'm wondering is that still something that is in play when it comes to the decisions that corporate leaders make about what kinds of investments in their workforce they're willing to make?

ELLEN SCULLY-RUSS:
Well, again, it depends upon where you look, right? I mean, if you're looking at, for example, the leadership, the management, the highly skilled professionals, I think we see much more investment in what we might consider general skills, as well as specific skills. But if you're looking at the entry level workforce or the frontline workers is probably a better way of putting it in many industries. We're looking at the investments really going to specific skills and not the general skills, set up from a macro perspective.

ELLEN SCULLY-RUSS:
And it's the general skills that, that workforce, many folks, especially adults, is lacking. And so there's a general question and debate about who's responsible for making those investments. The public investments in these general basic skills are very, for adults, is extremely low, woefully underfunded, and employers aren't likely to want to invest in those skills either, leaving them to the individual to figure out how they can increase their own capacities. And there aren't many options, so again, I think it depends upon where you look.

MICHAEL J. FEUER:
Where in the federal government could or should investments in the ongoing general upgrading of the American workforce take place? Where will those funds come from?

ELLEN SCULLY-RUSS:
For all the small amount of funds that exist at the moment come from the Workforce Investment and Opportunity Act that integrated both adult basic education funding into the workforce funding apparatus and mechanisms. So, that's where it's coming from currently.

ELLEN SCULLY-RUSS:
But the research tells us there's enough money in that system to address maybe 10% of the needs. So in other words, 10% of the people who actually need this kind of training can access the federal system, whereas the other 90%, there just isn't enough funding or room for them. That's the problem.

MICHAEL J. FEUER:
Mary Kay, in your experience with some of these enlightened companies that you work for-

MARY KAY VONA:
They're not turning to the government to-

MICHAEL J. FEUER:
They're not counting on the government for any of this?

MARY KAY VONA:
I mean, the clients that I work for in the commercial side, I'm not speaking of federal employees. But the clients that I have worked with in the commercial side actually, they turn to their chief learning officers, their learning and development organizations to create and to help and to inspire overarching learning strategies for their organization that are driven by their business objectives.

MARY KAY VONA:
So let's take for example, years ago when ... I mean, we're not really doing a lot of training in the telco industry to teach people how to climb poles. There was a transformation from that to digital, from analog to digital, but you still had a group of employees that had that skillset. And what we would help our clients develop or learning strategies, we didn't turn to the government. We developed learning strategies from a commercial perspective that said, okay, we have X-amount of people. We want to retrain them. Many of them went into different types of training programs. They ended up doing more in the technology field. They transformed the workforce.

MICHAEL J. FEUER:
To what extent is our national interest in workforce development catching up with these very profound changes in the economy that have resulted in growing inequality, in stagnant wage growth? What can this workforce development sector do to provide some relief to all of that?

ELLEN SCULLY-RUSS:
Well, I think first of all, there's the wage gap, but I also think we go back to one of Mary Kay's five trends in talent and the increasing growth in the contingent work. So you have the stagnant wages coupled with increasing job insecurity and constant churning from job to job without any kind of real employability security.

ELLEN SCULLY-RUSS:
So those two trends alone are greatly contributing to the growing inequality. We can also point to what we might call an education gap, where folks who are in these contingent labor markets do not have access to a lot of the informal and incidental learning opportunities that we were talking about earlier. They're probably in the contingent area for many of them because they don't have very strong basic skills to begin with.

ELLEN SCULLY-RUSS:
So it's a confluence of factors that lead to people getting caught in a vicious cycle of marginalization in the labor market. And then we add to that some employer practices, I mean they are just designed and I wouldn't necessarily suggest that it's across the board in all industries, but there are some industries that have made a path dependent decision many years ago, that they were going to compete on low wage, low skilled work.

ELLEN SCULLY-RUSS:
And they have devised a number of strategies, including contracting out, outsourcing to other countries, the use of technologies in ways that drives skill out of the work process and leave the work that's there to be very routine and under skilled. And so those are the factors that I think our workforce system doesn't have the political leverage to actually address.

MICHAEL J. FEUER:
From the standpoint of the private sector in particular, what would you say, Mary Kay, should be important points of emphasis in their thinking about longterm policies and programs to improve workforce?

MARY KAY VONA:
What we haven't really chatted about is the impact of technology and RPA and AI, because there's been a lot of predictions. There's been a lot that's been written out there, that robotics and AI will not only transform, but reduce the number of people that will be needed in certain roles. And I think initially, some of the CIO type of literature and magazines, we're talking about up to 50% of certain jobs that are redundant, that are transaction based, which oftentimes I think the two-year programs historically have prepared workers for, that lot of those roles will go away.

MARY KAY VONA:
But they're also going to create new jobs, so I think from a policy perspective, I think more research needs to be done in the AI RPA space to actually look at-

MICHAEL J. FEUER:
Unpack all of those acronyms.

MARY KAY VONA:
Okay.

MICHAEL J. FEUER:
AI is artificial intelligence.

MARY KAY VONA:
Yes.

MICHAEL J. FEUER:
RPA is-

MARY KAY VONA:
Is robotics, so let's decompose a process, a certain transaction, whether it's manufacturing or banking. Some of the more redundant type processes that are done by humans now, can be done by robotics or AI. So there has been this supposition that up to 1/3, I've read up to 1/3, up to 1/2 over the next three to five years of certain roles within organizations will go away because they'll be done by robotics, right? And a lot of, on the commercial side, you could take a certain functions, accounting, you could take, let's say training administration that might be done historically by a person, right?

MARY KAY VONA:
From an administrative perspective, certain things that are wrote can be done by technology. So what will that do to the worker? So I think much more research from a policy perspective needs to be done and supported. I mean, evidence based academic and evidence-based practitioner, show me where that has occurred, where you have done financial ... Let's say, general ledger, transformation of the general ledger or transformation in banking or transformation in life science and you've taken certain functions and roles and you have automated that. What has been the longterm impact to the worker? Is there really something to support the X-percent now goes away? So what do you do then to transform that worker to be prepared for the future roles?

MICHAEL J. FEUER:
What individual corporations see the economic incentive to invest in that kind of research or does this going to require some kind of a collection responsibility?

MARY KAY VONA:
I think it's a collective responsibility. I mean, the organizations that I work with ... I mean there has to be a business case to transform. I mean, organizations aren't going to put millions of dollars into enhancing their processes without that return on investment, whether it's operational efficiency, whatever the purpose may be. So having research that actually follows that transformation I think it would be a public/private partnership.

MICHAEL J. FEUER:
What would you add as a bullet from the standpoint a little bit more of the research and academic side?

ELLEN SCULLY-RUSS:
Sure. I see a real advocacy in the research for what is come to be termed as active labor market policies, which actually provide a number of incentives, as well as carrot and stick, if you would, for employers to make a bigger investment in the workforce and to also partner with these private/public partnerships to form them, to lead them and to take their workforce strategy more seriously and also to think about it in terms of a sector and not necessarily as a firm. Because I don't think we get to solving this problem firm by firm, by firm.

ELLEN SCULLY-RUSS:
I think we've got a lot of great firms out there that do a good job for their own workforce, but those strategies stop at the front door and they don't move into the broader workforce or labor markets. So I think we need active policies to provide employers with both incentives to get involved in a broader program and disincentives not to and to make the investments that we know can help the broader labor market, not just the workers in an individual firm. That's number one.

ELLEN SCULLY-RUSS:
Another set of active labor market policies would be directed obviously towards the individual and really trying to fortify people, both through education and other kinds of social supports in this new labor market where work is becoming more and more contingent.

ELLEN SCULLY-RUSS:
So how is it that we actually provide people with the kinds of social support that they need to move from job to job? How do we make that transition smoother? How do we make information and opportunities more available to people? How do we do that job matching piece much more efficiently? What's the data that we need for that? What's the different services that are needed? What are the relationships needed among the different organizations to make that work well? That's a whole area of policy I think that we could make some investments in and improve.

ELLEN SCULLY-RUSS:
And then finally I think income support in some way. I mean, we have unemployment, but that's for people who don't really work a job and don't work in a job for very long, that's not a viable option for them. So how is it that we think about innovations to income support for people, as well as for education support when they're not affiliated with an employer and they don't have, for example, tuition support plan from an employer because they're not considered an employee?

MICHAEL J. FEUER:
This business of the future of the American workforce is maybe the number one priority facing the country and it's terrific that the two of you are working on this. So I want to thank you both very, very much. This has been a fascinating conversation.

MICHAEL J. FEUER:
Well folks, if you enjoyed this episode, then please be sure to subscribe to the Ed Fix podcast on iTunes or Spotify or iHeartRadio or Player FM or wherever you listen to your podcasts. We also have edfixpodcast.com and you can get more information there. Ellen Scully-Russ.

ELLEN SCULLY-RUSS:
Thank you very much. This has been a very enjoyable conversation.

MICHAEL J. FEUER:
And Mary Kay Vona.

MARY KAY VONA:
Thank you so much. It's just been a pleasure to come back. I owe so much to this university and this program. It's been just a thrill to be able to share some thoughts and ideas of what's happening out there.

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