Can Employer Investment Narrow the “Soft Skills” Gap?


Carinne Deeds, Policy Associate

With employers growing more and more concerned about the widening skills gap, and considering the increased focus on the soft skills gap, making the case for investing in the skill development of current and future employees shouldn’t be difficult. However, there are many factors for employers to think about when deciding if these investments are worthwhile. Consider the following exchange that was mentioned by a presenter at a briefing I attended last week with the Lumina Foundation, UpSkill America, and Business Champions:

COO: “What if we invest in employees and they leave?”

CEO: “What if we don’t invest in employees and they stay?

This conversation is a perfect illustration of the deliberations employers face when deciding if it’s worth it to invest in the education and training of current or future employees. So – is it worth it? Let’s take a look at what these investments might look like, who’s doing it well, and the obvious and not-so-obvious benefits of such investments.

What do these investments look like?

Employers can invest in the education and training of future employees in many ways. Establishing partnerships between employers and schools within a community to develop industry-driven, student-centered career pathways is becoming increasingly common. However, asking employers to devote resources to the education and training of workers already within their employment is equally important. In fact, the White House recently launched an UpSkill Initiative, prioritizing the need for employers to “commit to help millions of front-line workers climb up the career ladder and earn higher wages.” Around the country, employers are providing various opportunities for employee learning and development, such as on-the-job training, apprenticeships, higher education funding or reimbursement, credentialing, and mentorship. The general goal of these programs is to help employees develop the technical and soft (i.e., not-so-soft) skills they need to be successful in their careers both now and in the future.

Who is doing it well?

According to a 2014 Deloitte study, employers writ large have been increasing their education and training investments. Technology firms are at the front of the pack, spending an average of $1,847 per employee (about $700 per employee more than companies overall). Presenters at the aforementioned briefing also highlighted several companies making significant investments in postsecondary tuition reimbursements for employees, such as Chick-Fil-A, Walmart, Wegmans, Hilton Worldwide, Xerox, and many others*. Wegmans, in particular, has invested heavily in soft skills training for its younger employees who are at-risk or have already dropped out of high school. This investment has clearly paid off for the company – according to Sarah Armignacco, HR Director for Educational Initiatives, Wegmans has saved $7.50 on every dollar invested in the program, in addition to reduced turnover. Additionally, 29 out of 30 participants in the first cohort of the program graduated from high school, 26 were college-bound, and 28 planned to continue working with Wegmans.

Is it worth it?

carinne-graphicThe short answer is: yes. According to industry leaders at last week’s briefing, the benefits of these investments are far greater than the immediate monetary benefits to employers. But first, let’s look at the most obvious benefit to employers: the return on investment (ROI). A recent study by i4cp and UpSkill America found that frontline workers’ participation in professional development opportunities is strongly correlated to the market performance of the organization. This has certainly been the case for Cigna, a global health services company that has provided employees millions of dollars in tuition assistance since 2012 through their Education Reimbursement Program (ERP). According to a recent evaluation of ERP designed by Cigna and the Lumina Foundation and conducted by Accenture, Cigna has seen an additional $1.29 in savings for every dollar invested in their ERP program – a 129% ROI.

The general consensus among employers at last week’s briefing, however, is that investing in ways beyond what is immediately profitable to the company –  in ways that can make a lasting impact – requires a culture shift that steers away from immediate returns and centers more around continuous learning and improvement. Providing employees with learning and skill-strengthening opportunities benefits the individuals, the community, and the employers beyond just monetary ROI. The graphic below, though not a comprehensive list of all the benefits of these investments, illustrates that they can be immensely valuable to employees, employers, and the community and national economy overall, and many of these benefits overlap. For example, when employees are more engaged in their work, they tend to be more satisfied and productive, which benefits employers. Additionally, the wage gains seen by participating employees leads to economic growth for their families and for the economy.

Picture1[1] copy

The White House has put forth numerous resources regarding investments in upskilling and job training programs. The Lumina Foundation has also written in depth about the payoff of talent investments. The bottom line, from what I’ve gathered, is that if we as a nation want to build a 21st century workforce, it is essential that we invest, at all levels, in the development of 21st century skills for our current and future workers. These investments are a growing trend that has and will continue to contribute greatly to the well-being of employees, employers, and the economy as a whole.

*A more comprehensive list of the exceptional employers investing in employees’ education and training can be found here.

Carinne Deeds is a Policy Associate at the American Youth Policy Forum


The American Youth Policy Forum (AYPF), a nonprofit, nonpartisan professional development organization based in Washington, DC, provides learning opportunities for policy leaders, practitioners, and researchers working on youth and education issues at the national, state, and local levels. AYPF events and publications are made possible by contributions from philanthropic foundations. For a complete list, click here.