At 3.8%, the unemployment rate in the United States is the lowest it has been since 2000. But many employers say they still can’t find enough qualified workers to fill jobs. That’s because the jobs in highest demand require technical skills that are in scarce supply among American workers. Jake Schwartz is trying to change that. He is co-founder and CEO of General Assembly, a global firm that offers practical training in web design, data science, product management and other practical business skills. During the recent Wharton Global Forum in New York, he spoke with the Knowledge at Wharton radio show, which airs on SiriusXM channel 111, about how job training needs to go beyond the halls of the Ivy League.
An edited transcript of the conversation follows.
Knowledge at Wharton: Your company, General Assembly, takes a unique approach. It’s not just about the hiring, it’s about the teaching as well.
Jake Schwartz: That’s right. We started as an education company and thought of what we were doing as a disruptive force against graduate education. The idea was that if you could decrease the time [for education] and enhance the relevancy of the skills you were teaching, you could dramatically increase the return on investment and get individuals to invest in their futures, as opposed to hoping that the government would subsidize loans. It allowed us to exist outside of the accrediting bodies and that whole incumbent system that was a lot like a taxi limousine commission.
Over time, we have become this two-sided market between individuals and employers. Some of those individuals exist outside of the employers and are looking to get into a career and start that journey. Some of them already work at their employer but are looking for their next move, the lateral move, the upward trajectory, and are thinking long term.
One of our biggest customers has been employers. We are really helping those employers invest meaningfully in their employee’s skills, their talent pipeline, and in the process creating this alternative talent acquisition model for them, which is really needed right now. For all of these high-demand digital skills — things like software development, data science, product management, UX design, Dev Ops — there are literally not enough people on the planet to do all of the jobs. The problem is that every company, no matter what industry, is trying to hire up in those areas at the exact same time, so all of the typical talent acquisition strategies don’t really work that well in this environment. We create an alternative model where we help companies like Disney, Liberty Mutual and Booz Allen set up their own internal academies and succeed in finding the talent and creating the talent that they need.
“For all of these high-demand digital skills, there are literally not enough people on the planet to do all of the jobs.”
Knowledge at Wharton: We’ve talked on our show numerous times about what companies need to do not only to fill those jobs but also maximize the talent they already have by repurposing somebody. If you invest in that person, you can keep them another 20 years.
Schwartz: Seventy years ago, this is what companies did. But you mentioned this timeline of 20 years, and that is what has changed. There was this vicious doom loop that happened. I don’t know if it was the chicken or the egg that started it, but as employee tenure went down, so did the willingness to invest in the long term in that employee. It got to this point where there was this detente, and companies were doing the [minimum] to say they were investing in their employees but not really doing it that much. Employees didn’t really even think that was an option anymore. It is such a stark contrast from where we were in the 1950s. All of the big companies — AT&T, GM, GE — had these big university campuses, and sometimes your first three months on the job would be at the university. It was a really massive investment.
We think there is an opportunity to bring back a little bit of that, have a renaissance in this idea of investing in your employees. But it is not going to be because they stay for 20 years. That just doesn’t work. I don’t think anyone, anywhere expects employees to stay for 20 years anymore, but that doesn’t mean that you can’t invest. You just need to think a lot about a shorter, faster ROI.
Our ideal world is that we can help both the employer find a path to investing in the way that they know they should, and where there is a very clear financial ROI to doing so, but then also help the employee know that this isn’t something that is going to [be relevant only to] that one job in that one role. Because it is General Assembly, because our brand means something, because we have done assessments, and we are teaching practical skills that you can demonstrate in the workplace — employees can take those things with them as well.
You have that continuity of lifelong learning that is important, but you also have to make sure that the employers are playing a meaningful role. We are very big advocates that employers are the ones who know the demand. They benefit from being able to shorten their period of time to fill, time to productivity. They would like to lessen the costs associated with talent acquisition. All of these things make sense, but like anything, getting a big organization to change behavior when it has been one way for 50 years is not easy. I think we are lucky in that we get to work with some of the most forward-thinking, people-focused organizations around the world that are willing to jump into the deep end and make these investments. They have seen incredibly positive results, both from employee morale and the effectiveness of talent acquisition, and now they are looking to scale.
“I don’t think anyone, anywhere expects employees to stay for 20 years anymore, but that doesn’t mean that you can’t invest.”
Knowledge at Wharton: How often are you seeing repeat customers in terms of employees who are coming back to you for that next set of job skills?
Schwartz: We have only been in business for eight years, and our alumni come back to campus at an incredibly high rate. About 40% of our alumni show up on campus at least once a quarter to do something, and that is partly because we have been working to build this network. By the way, we have 60,000 alumni. These people are in their most upwardly mobile part of their career, they are in high-demand skill areas in the hottest industries around the world.
From an employer point of view, that is what they are constantly needing, so that alumni network becomes an interesting community to access. They are making all sorts of investments on continuous learning, and we try to help those companies think about that strategically. A lot of our job is to facilitate a new paradigm, then to create that institutional entity inside these companies where the learning and the positivity and the stories can start to accumulate.
Knowledge at Wharton: We are in a time when unemployment is low, but so is the participation rate because there are more jobs available than people looking. What do you think this type of skill acquisition on a larger scale would do for the United States?
Schwartz: There is a level of economic competitiveness that we need to think about because the pace of innovation, the pace at which China is catching up to this whole idea of what the future economic battleground is going to be, is real. I am not sure companies are even fully there yet in terms of understanding what the bottlenecks in their system are costing them in terms of productivity, revenue growth, pace of innovation. That is a lot of where our time is spent.
If it takes you three months to find a data scientist versus a month-and-a-half, when you multiply that by a thousand, that is not an insignificant number. It can stretch out a digital transformation effort from 18 months to 36 months very easily. That has cost in the market, it has cost in the organization. These are not just little HR metrics that people get graded on; these are actual economic metrics that can drive costs and revenue for your business if you can get them under control.
“If it takes you three months to find a data scientist versus a month-and-a-half, when you multiply that by a thousand, that is not an insignificant number.”
Knowledge at Wharton: Where did the idea for your business come from?
Schwartz: I grew up in Portland, Oregon, and went to Yale. Coming from Portland and going to Yale, I thought I had got my ticket stamped for life. I was set. I was in the club. I got out and didn’t do any of those things that I should have done, like join McKinsey or all of those easy on-ramps from Yale. Instead, I tried to get into the music business and make my own way. I quickly found that I had zero skills to provide value in the real world. I could write a great paper, I could read really well. I like to say that I kind of thought my diploma was in Latin and like a Harry Potter spell that would open any door for me. I ended up spending a lot of my 20s lost and lonely, running around, trying to figure out where my traction was going to be. I ended up going back to business school to try to push the reset button and find a new on-ramp.
The idea that there weren’t a lot of on-ramps for somebody in those spaces is just ridiculous. The 20s are the age when you are willing to work hard, you are looking for a place to create an identity, and that shouldn’t be a time where everybody is wandering around and feeling this existential angst. A big part of [creating the company] was, how can we help people be less lost and lonely in the world of work?
At Wharton, I looked and said, “Wow, this is great, but MBAs are for very specific types of things. There’s a whole world of skills that are needed, and even Wharton isn’t a skills school. It is a place of higher learning taught by professors and academics.” At General Assembly, when we had this opportunity to start running classes, we found that people were coming from all over the city to learn from practitioners, to hear what is actually happening. It is such an interesting revolution because in the 20th century, trade and vocational schooling was thought of as the lowest of the low. We created this bizarre world where the smartest people don’t learn how to do, they learn how to think, and then everybody else needs to learn how to do. I think that world has changed and that the ability to add value, to do things, to get things accomplished even at the entry level of whatever ladder you are trying to climb, gives you a real competitive advantage. It’s not about dressing nice and pleasing the right people.
“We’ve created this bizarre world where the smartest people don’t learn how to do, they learn how to think, and then everybody else needs to learn how to do.”
Knowledge at Wharton: Is there a specific demographic for the people you are training? Is it 20-somethings or a mix that includes older people who are repurposing their careers later in life?
Schwartz: It’s definitely all of the above. I would say GA as a brand and how we set ourselves up was for the millennials, people in their 20s and 30s who are looking to level-up in their existing career or find a new career path.
But over the years we have seen a lot of upscaling happen for people who are a little more mid-career. We’ve had 70-year-olds come and learn how to code. There is a wide range of people who can leverage this. There is also a wide range of training that we can provide for people, depending on their goals. There are a lot of people who are not going to need to learn to code but would highly benefit from understanding what this coding thing is so when they engage with product managers and engineers, they are not flying blind.