Talent & Economic Mobility for 50M Frontline Workers (Pt 1)

The frontline worker. The deskless worker. An essential worker.

“Frontline” workers hold many names but are commonly defined as employees who interact directly with customers or are directly involved in making a product. These are workers who must be physically present for their jobs and are also often concentrated in the “essential sectors” of the economy, such as healthcare, transportation, and critical manufacturing. They stand at the “front” of the organization, representing its brand.

We focus on frontline workers because they comprise a significant portion of the American workforce, yet are economically and socially vulnerable.

There are nearly 50 million frontline workers in the U.S. across 380 occupations, representing about a third (34.5%) of the American workforce. However, frontline workers earn lower wages on average — most make less than $30,000 a year and hold less than an associate’s degree. The table on the left shows the Top 10 largest frontline occupations — most of these occupations pay less than $15/hr, with cashiers earning the least at $11.17/hr. (Registered nurses are among the outliers, earning higher wages and often having very strong unions.) Frontline workers also tend to be disproportionately people of color and women, living with disabilities or without health insurance, do not speak English well or at all, and non-citizens at greater risk of unpredictable immigration policy.

They also tend to get less attention from L&D (learning & development) and HRTech, which have traditionally focused on serving the needs of professional workers “in the office”. Frontline workers are eager to learn skills that will prepare them for the future (an Axonify survey showed that 81%+ of frontline employees age <54 are interested in reskilling/upskilling training), but only 41% stated that their employers offered development opportunities.

At Rethink, we are investors that believe in the power of capital to catalyze and scale tech-enabled solutions addressing some of the most difficult challenges in education and the workforce. As part of our 2021 Investment Theses, we hope to turn the attention of employers, founders, investors, and policy-makers to the needs of the frontline, and explore how edtech inventions can support and create economic mobility and opportunity for this massive segment of the workforce.

Favorable Market Winds

A few years back when Guild Education (education-as-a-benefit provider for frontline workers & now one of the hottest unicorn startups in edtech) was first getting started, the conversation with Fortune 500 employers around education for the frontline was focused on the incentive of retention. Providing learning opportunities for frontline workers significantly increases retention and drives down the cost of high turnover of the frontline. They calculate a 208% ROI for every $1 spent on education benefits and, armed with this data, Guild was at the forefront of helping companies to understand education for frontline workers not as an expense, but rather an investment that generates a return.

Today, those conversations and incentives are shifting and the winds are blowing in favor of not just education for the sake of retention but also education for the aim of reskilling and career advancement for frontline workers. With the events of 2020 and the nation’s reckoning with race and inequity, employers are recognizing that in order to advance diversity in their organizations, it is imperative to advance their frontline employees and enable talent mobility for the frontline. After all, the most diverse populations in the organization often lie within the frontline.

Talent Mobility

“Talent mobility”, often used interchangeably with “internal mobility”, is the practice of moving employees into new roles within an organization. There are a number of talent mobility solutions today and product features include opportunity marketplaces for internal job postings, project and gig work, and mentoring, where professionals can freely explore projects with different teams, flexibly work with new leaders, and learn new skills. They also include career/performance management and succession planning tools. These platforms have become increasingly popular recently as employers recognize that it is cheaper to build or borrow talent from within than it is to buy talent and hire externally.

For the frontline worker, current talent mobility platforms solve one part of the problem. Because these tools usually serve the professional/white-collar worker, the delivery model and user experience are often not yet adapted for the frontline workforce. One particular consideration is that most tools today are usually self-serve: the onus is on the learner to figure out where they want to go in their career and how they will get there. However, economically and socially vulnerable frontline workers lack resources and time, may be juggling multiple jobs or working odd/night-time hours, and are managing competing priorities of work, family, and learning. (A recent survey by Digital Promise found that 50% of frontline learners drop out of their adult education class within 12 hours of starting.)

To enable economic mobility for frontline employees, it is not enough for employers to just offer education or job postings. Companies must also help workers connect the dots between their career goals and learning, and provide the wraparound services to support the learner (advising, tuition assistance, transportation, and internet access).

Solutions for Frontline Talent Mobility

Today, internal learning/HR solutions for the frontline are focused on compliance, health and safety, and performance/process improvement, but not on pathways upward within the organization. There seems to be a market gap for frontline-focused talent mobility solutions, although there are various tools solving parts of the problem, mapped out in the market landscape below.

We are hearing two large pain points that employers face today when considering talent mobility for frontline workers:

1. How to understand skills & plan for the big picture. Emsi talked to 300+ companies in the past year and found that one of the biggest problems employers face is first understanding skills: what skills currently exist in their organization, what skills are relevant to job roles they are hiring for in the future, and what are the skills gaps in between that requires training. Having a clear picture of the skills data in order to plan mobility pathways is a complex and daunting undertaking. Traditionally, Fortune 500 companies spend a large amount of money to hire consulting firms to do this work, an option not feasible for smaller employers (untangling skills data alone from the HRIS and ATS may take a year). Sophisticated skills-mapping and workforce planning tools (SkyHive, Faethm, Burning Glass, Emsi) are just beginning to emerge to create tech-driven, scalable solutions to this problem.
2. How to drive engagement. Effectively engaging a frontline worker requires designing solutions with thoughtfulness. Talent mobility pathways need to be created with intention with manager accountability, learning needs to be targeted towards the identified skills gap, and support services must be wrapped around the learning to maintain motivation and help balance learning with work, family, and personal priorities. We have seen that drop-out rates are notably higher without these critical wraparound services.

* Companies listed in the market map are illustrative, not exhaustive, examples addressing specific frontline areas. In particular for the Training Providers category, there are many fantastic education startups providing learning to frontline workers — we include a few that we have worked with closely.

The current landscape consists of fragmented point solutions. What we need is a comprehensive platform that can combine these solutions, with a delivery model designed specifically for the frontline worker (vs the professional worker). (1) Planning tools can help inform (2) talent /internal mobility opportunities, which will require targeted (3) learning content. (4) Enabling & wraparound support tools need to be layered on top to drive engagement with frontline workers and the learner-facing product should be embedded in the employee’s flow of work: through their (5) frontline communications & management tools.

(1) Planning

• Workforce planning / skills-mapping tools. As mentioned above, these workforce navigation tools help employers plan for the skills they need in the future and measure existing skills gaps. Internal mobility platforms would be greatly enhanced with an upstream solution that informs the 10-year strategic vision of how a company’s workforce hopes to transform.
• Labor market analytics & data. Burning Glass and Emsi provide key data on labor market trends and what skills and occupations are in-demand in various geographies. This informs the workforce planning process: what talent is cheap or expensive to hire externally vs train internally, and where there are talent shortages in the market that the company must train internally for.

(2) Talent / Internal Mobility

• These companies need to connect into the other solution categories to create a comprehensive platform that is frontline worker-focused. Degreed is one of the rarer players that has connected internal mobility with a curated learning content experience.

(3) Learning

• Training Providers. There are many fantastic training programs and content providers that serve the frontline (the SkillUp Coalition features a number of them). We don’t present them all here but have included a few that we have worked with closely.
• Curated learning. There is innumerable training & content available but we highlight the need for curation of these resources. Workers need tools that vet content for quality and applicability. Guild has a marketplace of education programs that they have pre-vetted as effective in facilitating frontline economic mobility.
• Foundational skills learning. 60–70% of frontline workers have job-limiting foundational skills (ie. literacy, numeracy, problem-solving). Companies like Voxy EnGen, Cell-Ed and Opus are creating content around English language learning, math, and digital literacy. The delivery is mobile-first, a necessity for the deskless workforce.

(4) Enablers & Wraparound Support

• Wraparound services are powerful to have for all learners, but especially necessary for frontline workers.
• Career advising / coaching. Leadership coaching & development platforms can train and empower first-line managers to help connect their workers to opportunities and relevant training, while increasing manager accountability in the talent mobility process. Most solutions are focused on executive coaching, but startups supporting first-line managers are beginning to pop up.
• Tuition Assistance & Funding. Education-as-a-benefit and tuition assistance offerings that help subsidize education will drive frontline participation in training. Solutions like FutureFuel also help workers navigate financial planning and debt management.
• Childcare. Childcare options and funding for childcare is a key issue for resource-strapped workers. Vivvi provides subsidized employer-sponsored full-time and back-up childcare, with an education focus and extended hours.
• Hiring. Hiring tools have the potential to enable talent mobility. Arena is an ethical AI-driven predictive hiring tool for frontline healthcare and restaurant workers, and can use its skills data to surface hidden higher-paying roles to candidates.
• Adult Career Navigation. Data-driven career exploration and navigation tools can arm employees with knowledge of what industries and roles are promising and in-demand in their local geography, information that is often opaque and hard to find, to empower employees with career mobility choices both within and outside of the firm (FutureFit AI).
• Certification & Credentials. Workers want training that results in a tangible certification or stackable credential that they can take away with them. Industry certifications backed by brand names are the most useful and applicable. Tools to create, issue and manage digital credentials can help assign value to learning and prove skills attainment (Credly, Badgr, Accredible).

(5) Frontline Communications & Management

• Learning should be embedded into the regular-course flow of work and communication channels. There are a large number of innovative tools providing mobile-first communication, operations, scheduling, employee engagement and collaboration for the frontline. Some also enable job training (onboarding, job processes, compliance). Talent mobility solutions should be plugged into these systems so that the learner can navigate their learning and receive reminders through their natural methods of communication.

We need a solution that is frontline-focused and brings together these fragmented point solutions. Yet, tools are not everything — solving a complex problem like talent mobility for frontline workers will require organizational change and buy-in at levels from the CEO to the first-line manager. However, our hope is that these tools grease the wheels of change and ease barriers for employers large and small who hope to tap into and develop the talent of their frontline workforce.

Also, while the above represents our initial thoughts on frontline solutions, we still have a lot to learn. We are speaking with large frontline employers and leaders in frontline talent development and will publish a Part 2 with further insights in the coming weeks — stay tuned.

If you are a founder building something for the frontline, drop us a line!

If you are an L&D, HR or DEI leader at a company interested in engaging in these conversations or exploring innovative tools, please reach out!

We hope to spark new discussions around how to better support frontline workers and keep engaging in these important and meaningful conversations. Email: jcheng@rteducation.com

This material is for general informational purposes only and is not intended as investment advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation, or sponsorship of any company, security, advisory service, or product. This information should not be used as the sole basis for investment decisions. All content is presented as of the date published or indicated only, and may be superseded by subsequent market events or for other reasons. Past performance is no guarantee of future results. Investing involves risk including the loss of principal and fluctuation of value.