Innovators under the Radar: Prudential Financial & the Future of Work
By Michelle Dervan, Partner, Rethink Education
This is part of a series of interviews with organizations taking innovative approaches to upskilling and reskilling.
When we think of the future of work, there’s a tendency to focus on a dystopian near future where behemoth tech companies coldly automate jobs away by applying AI to tasks that could previously only be done by humans. However, the reality is that for most companies, the future of work means a lot more than just automation; it is about how the human workforce can adapt their skills and mindsets to enable innovation and future-proof the company’s competitive position. The future of work is as much about culture, upskilling, and new approaches to workforce development as it is about automation.
While most CEOs recognize the need to future-proof employees’ skills, very few have taken significant steps to address this need.[1] The companies taking the most innovative and comprehensive approaches to upskilling are often firms such as Walmart and AT&T that employ large numbers of frontline workers. Another bold innovator, one perhaps less well-publicized than Walmart and AT&T, is Prudential Financial, based in Newark, NJ.
Pru (as it is known by its employees and on NYSE, where its ticker is PRU) is the largest life insurer in the US and one of the largest financial services company in the world. This 145-year-old company employs 50,000 people worldwide and is making a huge bet on upskilling, underpinned by a belief that technological advances are changing customer preferences and putting pressure on existing business models.[2] This thinking is driving urgency around the company’s investment in a large-scale skills transformation initiative.
To find out more about this, I spoke with two of the leaders executing this strategy. Wagner DeNuzzo oversees the company’s internal program of talent transformation for the future of work and Sarah Keh leads the company’s very substantial philanthropic efforts focused on training & pathways to meaningful jobs. Over a group Zoom, Sarah and Wagner shared what they have been up to and some of the ways in which Prudential is emerging as an interesting case study in preparing for the future of work.
● Worker-centered approach
It can be hard for the leadership of a large corporation to be in tune with the needs and aspirations of employees at all levels. Prudential bridged this gap by commissioning a series of surveys called the Pulse of the American Worker that surfaced some interesting insights to inform their transformation initiative:
● 69% of American workers believe they have the skills to compete today but only 46% believe they already have the skills to compete 10 years from now.
● When asked to rank who is most responsible for career development, American workers responded that they were primarily responsible for this, with their employer in second place.
● Workers identify soft skills, such as adaptability, people management, and time management, as being most useful in both the short and long-term future. Time constraints and an inability to extend the workday are currently the biggest barriers to accessing training.[3]
In response to these and other insights from the surveys, Prudential designed its Talent Transformation strategy in 2019 with a focus on internal mobility, access to training to stay ahead of the market and effective use of technology to create higher quality, more timely and lower-cost outcomes.
● Blending high-tech (AI) and low-tech (apprenticeships) approaches
The program includes a technology core called the Skills Accelerator, which is essentially an AI-driven self-service career center that allows employees to assess their own skills, get suggestions about future positions to consider based on transferable skills, and plan towards aspirational roles. Once employees have a sense for the skills that they need to get from “now to next”, they can access online training on a set of future skills identified as critical for the enterprise. These learning pathways are organized under 3 categories: Business, People, and Digital. Employees who are seeking to reskill have also the opportunity to enroll in an accelerator academy, which is essentially a cohort-based approach to reskilling employees for specific enterprise future skills. Some academies are created in-house and others are offered in partnership with training providers.
Once an employee can demonstrate that they have the skills to move to a new position, they may be able to try that position out through an internal apprenticeship. Apprenticeships are interesting because they enjoy strong bipartisan support in the US but employers tend to be very slow to offer them due to the costs and time associated. As a result, only ~400,000 people are hired through apprenticeships in the U.S. each year.
Prudential chose to roll out apprenticeships as they help to address several aspects of the skills transformation goals: they offer hiring managers a low-risk way to try out a candidate thus enabling internal mobility, they provide an opportunity for the employee to truly master new skills through on the job training, and they overcome the issue of employees not being able to extend the workday for training.
In terms of outcomes so far, 74% of Prudential’s domestic US workforce has activated their Skills Accelerator profiles and the goal is to have 85% utilizing the tool by end of the year. Internal mobility is up by 11pts YoY, and they have launched a successful full stack developer academy, as well as a sales apprenticeship program. The stories of associates moving from one part of the business to another seem to be encouraging others to explore upskilling as learning consumption has increased by approximately 138% from Jan through Sept 2020.
● Innovating both inside and outside of the company
Unlike many companies, Prudential has a unique window into what works in terms of workforce training models from their extensive philanthropic activities. Prudential manages one of the largest impact investment portfolios in the world; in the past 5 years, it has invested $1bn in impact organizations, including significant investments addressing societal issues related to education and the future of work. Also, the company has a $180 million commitment through 2025 to provide opportunity youth (young people between sixteen and twenty-four years old who are neither in school nor employed) with the training and tools to access the job market.
The breadth of Prudential’s activities in workforce training is pretty impressive. The company has supported accelerated training programs like Per Scholas, partnerships with high schools & universities on educational programming in its hometown of Newark, and organizations like the National Fund for Workforce Solutions that bring together businesses, workers, funders, and community leaders to scale new approaches for connecting people to good jobs. In short, Prudential has extensive exposure to what does and does not work in the field of workforce development, and it will be interesting to see how these insights inform the programs supported for their own employees and vice versa.
When asked where Prudential is seeing the most interesting innovation in workforce training, Sarah pointed to the challenge of innovative financing. One of the biggest problems with workforce training is that for-profit models can exclude students who can’t afford to pay tuition or are unable to access loans. By contrast, nonprofit models often struggle with issues of scale and efficiency. All providers can be susceptible to a misalignment between outcomes and incentives. In response, Prudential is supporting a fund for a promising new financing tool called the Career Impact Bond (CIB) which is based on a ‘pay for success’ model. The student pays nothing upfront and repays the cost of their tuition only once they are in a job that pays above a certain salary threshold. CIBs include wraparound support services like benefits enrollment assistance and emergency aid funding to help students address real-life challenges, like childcare and transportation, so they can focus on their training. Prudential, along with a number of other impact investors, recently supported the launch of a dedicated $40mm Career Impact Bond fund by nonprofit Social Finance.
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In conclusion, Prudential may not be the first company that jumps to mind when you think of the future of work, but perhaps it should be. The company has a rare window into effective workforce training models through its large-scale strategic philanthropy and impact investments, and, according to PWC’s latest CEO Survey, is well ahead of its peers on progressing upskilling opportunities for its 50,000 employees.
Prudential’s end goal is to stay ahead of the curve as rapid technological change shapes consumer preferences and behaviors. Although it is not clear which of their experiments will work, Prudential’s chosen combination of high and low tech approaches and its laser focus on the needs of the American worker are likely to pay dividends for all of the company’s stakeholders, including shareholders as well as employees and customers and their communities.
[1] PWC 23rd Annual CEO Survey, 2020. Fewer than one in five leaders (18%) believe their organization has made ‘significant progress’ in establishing an upskilling program.
[2] Prudential Financial, Form 10-K, Feb 14, 2020, pg. 47
[3] https://news.prudential.com/presskits/pulse-american-worker-special-report.htm
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