What students should know about Amazon’s massive employee retraining plan

In July, e-commerce giant Amazon announced plans to spend US$700 million over the next six years to retrain about a third of its American workers to do more high-tech tasks. The plan, called Upskilling 2025, would be one of the world’s largest employee retraining efforts. It’s a voluntary programme that will be open to about 100,000 Amazon workers by 2025.

“While many of our employees want to build their careers here, for others it might be a stepping stone to different aspirations,” said Beth Galetti, Amazon’s Head of HR, in a prepared statement. “We think it’s important to invest in our employees, and to help them gain new skills and create more professional options for themselves.”

The announcement is the latest development in the race to upskill workers for the Fourth Industrial Revolution.

Education is often touted as the main key to surviving the age of automation. Workers need new, often higher-level skills to keep their jobs as robots increasingly take over routine work. But the details on how to do this (is it the duty of schools or employers to provide this education or training? What are these new skills that need to be taught?) remain vague.

This duty has mostly been placed on universities and governments, instead of corporations – though analysts have argued each have equal roles to play – which is why Amazon’s announcement stands out. Upskilling 2025 could be the bellwether of what the near future holds.

Amazon’s case, and whether it succeeds or fails in this, will be a significant factor for governments and corporations to consider when charting how they move into Industry 4.0.

These developments will be important for students, regardless of which level of study they’re at. The kind of labour market that will exist will be important for everyone, from young high-schoolers to fresh graduates charting their careers.

Here are several things to note from the e-commerce giant’s announcement:

Amazon careers: retraining vs displacement

This development falls into one of the more positive categories in the on-going prediction that robots will take over our jobs, rendering mankind redundant, or in other words, jobless.

A woman uses a computer to control robots at the 855,000-square-foot Amazon fulfillment center in Staten Island, one of the five boroughs of New York City, on February 5, 2019. Inside a huge warehouse, thousands of robots are busy distributing thousands of items sold by the giant of online sales, Amazon. Source: Johannes Eisele/AFP

But the doomsayers who claim automation is approaching faster than workers can adapt may ultimately be wrong. Amazon’s move shows that to work for Amazon is to adapt or risk being left behind. But it also signals that instead of leaving workers high and dry, companies like Amazon can shoulder their share of the burden in re-educating their workforce. As the US marks record low levels of unemployment and with workers scarce, companies may have no option but to look internally to fill their labour needs.

Plus, as it stands, technology simply isn’t advanced or affordable enough to replace that many workers in one of the world’s largest corporation.

Speaking to The New York Times, Susan Lund, an economist at the McKinsey Global Institute, the research arm of the consulting firm McKinsey & Company, said:

“The scale and pace of the changes in the workforce are unprecedented.

“They can’t hire off the street everyone they need. They have no choice but to retrain their own workers.”

Automation will remake all work at Amazon (and elsewhere)

From executives to warehouse workers, the retraining programme will apply across the company. It’s a confirmation that automation is revolutionising every industry.

Men work at a distribution station in the Amazon fulfillment center. Source: Johannes Eisele/AFP

This falls in line with what economists have been saying; that digital technology will affect mainly routine tasks by using clever software or warehouse robots. As a result, jobs will change, rather than be destroyed.

A 2016 McKinsey report noted that jobs requiring physical labour and basic data processing in a predictable environment could be easily automated with the technology we now have. Another recent report from global forecasting and quantitative analysis firm Oxford Economics projects that about 20 million manufacturing jobs around the world – that’s 8.5 percent of the global manufacturing workforce – will be displaced by machines.

But it’s the details behind this that can explain why the multinational isn’t only opening the retraining to those who work for Amazon warehouse assembly lines, but applying across the board instead.

The manufacturing sector isn’t solely run on routine and physical labour. Many higher level jobs consist of basic data processing, too. For example, financial services spend about half of their working hours collecting and processing data. Automation is estimated to be able to replace 43 percent of workers’ time doing this.

And while physical work is often thought of as routine, many actually happen in unpredictable environments. For example, operating a crane on a construction site, collecting trash in public areas or even cleaning of hotel rooms. Such activities are “for now more difficult to automate with currently demonstrated technologies,” said the report. However, once they’re able to handle these unpredictable environments, their automation potential would jump from 25 to 67 percent.

A small step up the skills ladder

Envisioning the digital future, many see it as one where only those with the highest level of technical know-how will thrive. As such, the aim of education is to make software engineers or surgeons out of everyone. But Amazon’s retraining initiative reveals otherwise.

#Automation is about talent augmentation & not replacement. One of the largest talent augmentation commitments ($700m) to retrain abt 1/3rd of @amazon’s American workforce to do more high-tech tasks. A testament that jobs r being reshaped with automation. https://t.co/jpn7ZG1qIc

— Shail Khiyara (@ShailKhiyara) 14 August 2019

Instead of the mass upskilling of workers, the e-commerce giant is doing it in incremental steps.

Ardine Williams, Amazon’s Vice President said the retraining programme was built on existing education programmes at the company. The aim is not to turn warehouse pickers who work for Amazon into coders. Instead, it wants to push a large number of workers one or two rungs up the skills ladder. For example, training warehouse workers in fulfilment centres to be IT technicians or non-technical workers to be software engineers, even if they have a limited technical background.

“When automation comes in, it changes the nature of work, but there are still pieces of work that will be done by people,” Williams said in an interview. “You have the opportunity to up-skill that population so they can, for example, work with the robots.”