One of the most important differentiators for a company or organization is the skill and talent of its employees. While finding the right talent is extremely important, this can only be sustained over the long term via “upskilling,” or enhanced education to meet changing demands in the workplace. Demand for higher skill levels in the workplace continues to escalate, but the speed with which those demands have escalated is moving faster and faster.
The need for upskilling has been addressed by companies in a variety of ways. Many companies design and develop their own training programs for their employees and deliver them via a combination of in-person and online offerings. Other companies work with higher education institutions to enroll their employees and executives in a select group of executive education programs. Since the diversity of skills needed will continue to change and differ across the base of a company’s talent, a broader set of opportunities for “upskilling” needs to be provided and at increasingly higher levels.
While Covid 19 created huge problems for employers and their employees across the United States and globally, one federal effort initiated in response to the pandemic has the potential to effectively address the need for upskilling, creating economic value and added employment opportunities for larger numbers of Americans. When the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136) was passed with significant and bipartisan support in Congress, one element in the law received limited attention. Yet it has huge potential significance for companies, their employees, and the broader economy.
To address challenges in the workforce, the CARES Act offered to all US employers a tax deduction of up to $5,250 per employee, per year, through the year 2025, for tuition and other education costs for all higher education programs. This means that if employees lack skills in areas like cybersecurity, biotechnology, artificial intelligence, computer science, or any other area of study, they can register for undergraduate and graduate level courses with their employer’s support. Educational courses may be taken over a four-year period, and even if those costs are in excess of $20,000 per individual, they would be fully tax deductible to the employer should the employer pay the cost upfront. And there would be zero cost to the employee.
This means that the need for upskilling of the workforce would essentially be fully addressed via a creative public-private partnership between industry and their higher education partners. The results would allow employers not only to increase their employee skills and at no cost, but also to save a significant amount of money that they could put into wages and benefits for their employees to make them more competitive.
Employees, for their part, can enhance and upgrade their skills through this program, leading to higher wages and increased worker stability over the long term. This, in turn, creates new opportunities for other workers at the entry level. This solution goes beyond a “win-win,” providing a variety of significant benefits at the levels of individuals, employers, and the workforce.
Of course, taking advantage of this opportunity involves a close collaboration between industry and higher education to make sure that all parties are aware of the opportunity and it is exercised in the most beneficial means possible. If this can be done, the benefits will be substantial. I urge graduate deans, staff, and faculty to communicate this valuable opportunity to partners in industry and other workforce sectors.
Stanley S. Litow is the Accenture Professor of the Practice at Duke University & Trustee of the State University of New York system. Currently he serves as the Chair of the CGS Employer Roundtable.