Joe Fuller: Covid-19 has prompted a reassessment of work. What constitutes a good job and a sustainable work-life balance? How can employers maintain talent pipelines, including the essential frontline positions? While Congress and state governments, major companies, and big-name skills providers have joined the debate, one key player is hiding in plain sight. You may be familiar with Goodwill Industries through its ubiquitous thrift stores and donation centers. But the 120-year-old nonprofit is among the largest workforce development organizations in the world. The global network is focused on equipping a wide range of individuals with skills to land and keep jobs. Goodwill works with public and private partners, including Google, Coursera, and Indeed.

Welcome to the Managing the Future of Work podcast from Harvard Business School. I’m your host, Harvard Business School professor and a visiting fellow at the American Enterprise Institute, Joe Fuller. My guest today is Steve Preston, president and CEO of Goodwill Industries [International]. Former secretary of Housing and Urban Development and administrator of the Small Business Administration, Steve also has extensive private-sector leadership experience. We’ll talk about the Great Resignation, second-chance employment, digital skills, and how to build lasting careers. Welcome to the podcast, Steve.

Steve Preston: Thank you for having me.

Fuller: Steve, I imagine the vast, vast majority of our listeners know of Goodwill. They might associate with donation centers or retail thrift stores, but Goodwill does a whole lot more. Could you tell us about Goodwill Industries, its structure, its mission, and what attracted you to it?

Preston: Most people do know us for our stores, but our mission in life is to help people reach their full potential through learning and, ultimately, through employment. We work to tool people with the right kind of supports and services so that, ultimately, they can take care of themselves and move down a successful career path. It’s what we’ve been doing for 120 years. The stores employ and provide opportunities for the people who work there—many of those people do have some unique and significant needs—and they provide a service to the community. The profits from those stores provide funding for employment and training centers, in addition to funding we get through other government and philanthropy sources. So there are over 600 locations across North America, in addition to the stores where we provide that employment support. So ultimately, when you’re donating or shopping at Goodwill, you’re supporting that broader mission to help people into a self-sustaining future, which they may not have today.

Fuller: At the Managing the Future of Work Project, there’s a number of projects to essentially segment workers and aspiring workers who are somehow on the fringes of the workforce. There are many different factors that contribute to someone having a difficult time launching a career or sustaining employment. Are there particular populations that Goodwill Industries focuses on, or is it a very broad pallet?

Preston: Well, it’s a little bit of both. Because of our scale—before Covid, we had over 2 million people coming to us each year for services—so because of that, we serve a very diverse population. Over 80 percent of the people we serve have a high school degree or less. So there is a huge opportunity for those people to move forward in life if they can get the right kind of skills training and other support. Many of the people we serve are going through transitions. So we served last year roughly [50,000] veterans. Many of the people we serve have lost their jobs or they’re looking to upskill. And then there are a lot of people with very specific challenges. Last year, we served about 50,000 people who self-identified as having been incarcerated. So we believe that actual number is much higher. We serve a lot of people with disabilities and, obviously, many people who are experiencing poverty and homelessness and other challenges like that. Then, if you look once again at the total number, nearly 60 percent are people who would represent either racial or ethnic minorities. So once again, a large, diverse population, but within it, there are very large segments that we serve with very specifically targeted services for that population. But in other cases, those people come to us for the more generalized services.

Fuller: Well, with that broad population that you’re serving, how do you structure your approach to helping aspiring workers get ready for the workplace? You mentioned also upskilling someone that’s lost their job. How do you go about that?

Preston: So it’s very critical to know the needs of the local job market to make sure that the skills people are getting are relevant within that context, and then both the skill level of person that we’re working with and potentially other needs that they have. It’s one of the reasons why having local Goodwill organizations is so important, because they’re knowledgeable about those local markets. They have that connectedness with both employers, with channels through which they can get access to people who need help, and even other service providers. So our support can take a number of different forms based on the needs of the individual. We try to understand where they are in terms of skills, where they are in terms of other needs. Maybe they need assistance in financial management, maybe the transportation help. Personal support is a key component often for us. One of the great things I get to do is frequent ceremonies where our participants are recognized. When they tell their story, it usually includes something about how thankful they are for the career counselor or the instructor who walked with them along the journey. The reason that’s important to understand is, many of the people we serve have never had access to the types of opportunities that they aspire to. Many of them haven’t had much education. They don’t have networks. So when they come into this, they don’t really know how to navigate their way forward, and they may have the confidence that, if they invest themselves in something, there’s actually going to be a payoff. Then, the other piece is, they encounter a lot of challenges along the way. And you can’t get that support online. You need people who can support you and can advise you and can encourage you. The other thing we do is, we make very detailed assessments of where a person is, where they want to go, and a realistic understanding of what it will take for them to get from where they are today to what they aspire to do. Many cases, we provide the training directly. Sometimes we partner with community colleges or other support services. I mentioned potentially financial skills, but sometimes people need childcare. Sometimes people need housing. And we do that in some cases, but we often work with third parties who are partners. And then, once a person gets to the point where they’re actually looking for a job, writing a resume, doing interview skills, knowing what’s out there is a big part of helping someone be successful. That’s the exciting part of the journey, because it turns into something very fruitful. But that’s a very important form of support we provide people.

Fuller: Certainly, a constant in our research is access to information or social networks or other means to understand what it’s going to take. How do we go about the process of getting job-ready or even applying successfully for jobs other than those at the lowest end of the skill spectrum?

Preston: Joe, I’d mention a quick anecdote about a woman who went through one of our programs very successfully, and she had been homeless with her two daughters. And I’ll never forget her saying, “Where I grew up, people didn’t talk about career paths.” Maybe the most important part was, we gave her visibility into what was possible, and we gave her access to the ability to tool herself to reach what was possible. And within a relatively short period of time, she’d gone through a digital-skills program. She ultimately landed a good job. And she basically said, “I’ve come this far. I’m going for the stars. I’ve got a future now,” because she got access to people who could support her.

Fuller: That’s a great story, a powerful story. Any kind of intervention that can demonstrate to someone that they do have skills that people need, that they are qualified for work, and that they can start building a sound, economic future is a great tribute to what you all do and what other not-for-profits and social agencies do to help people—not at the scale we wish, but nonetheless, it’s a beacon as to what we need to be doing more of in the future. I want to come back to reskilling for a second. You’ve got programs that are helping people reposition themselves for the work that’s presently available. How are you tackling the reskilling challenge? A lot of companies are concerned about their ability to reskill, and it’s a hugely important question for state governments as well, as they look at a changed composition of demand for work in the post-Covid world.

Preston: A lot of good jobs are being created, as most people would predict. The challenge is getting people skilled to be able to take those jobs. Probably the biggest initiative we’ve had over the past several years has been around digital skills. We kicked off the digital-skills program called the “Goodwill Digital Career Accelerator.” It was funded through a grant from Google. We provided support for everything from introductory computer literacy skills, which many people don’t have, then the program went all the way up to computer coding skills. So there were five levels, sort of the mid-level was basic workforce productivity. So as we go forward, we see an increasing opportunity to expand what we’re doing in that area, very specifically to provide people with digital jobs or jobs that have digital requirements. We just kicked off a program recently with Anthem, as a healthcare provider, to begin offering healthcare skills programs. And then, in other markets, we have specific programs that provide trade skills and manufacturing competencies—often connected with what’s going on in the local market. So understanding specifically where the job market is going and then tooling our capabilities—whether we’re training people directly onsite or partnering with other people who do it—that is what is so important.

Fuller: Well, something that you’ve touched on a couple of times, which I think is really fundamental here, is ensuring that you’re training someone for a job that exists near them. I’m interested in, do you have many partnerships with employers like Anthem, where they’re really helping you specify what type of qualifications are needed and what type of curriculum or practical training will equip a candidate with a credential that is presumed to be a basis for hiring?

Preston: Yes. So it happens on a couple of levels. Number one, it happens through corporate partnerships. Google is actually helping us with, specifically, the curriculum that we use to achieve five different levels of Google certificates. And we’re partnering with Coursera to deliver that. Those types of certificates are very, very much linked to different kinds of jobs. And increasingly, the certifications that we are looking to provide people are connected to very specific roles. On the employer side, it tends to happen more locally. Many of our local organizations—we are what’s known as a “federated” model in the nonprofit world. We’ve got [155] territories across the U.S. and Canada. Those are all independent entities, but they’re all collectively part of the Goodwill network, and we share and support each other in the mission and in stores and that type of thing—those local entities often have partnerships with local employers, and those employers will provide very specific criteria on what they’re looking for and then partner with the local entity to provide those. So we see that in the manufacturing space. I was touring a facility last year that had a partnership with Amazon, and we actually had sort of a mini-processing area set up at the location. Sometimes it’s construction trades. And those types of programs often require investment—either physical investment or teaching investment or equipment—to provide those kinds of supports. So it’s really important for them to be able to connect it with a very specific local opportunity. And sometimes the local employers will support them in that process.

Fuller: Steve, you’ve really got a nationwide perspective across a very large part of the labor force, people that are going to be working basic jobs—what are called “middle-skills” jobs, often that require something beyond a high school diploma but short of a post-secondary degree. How has Covid affected the opportunities for work for the population you’re serving and your own operations?

Preston: For our organization, a couple things happened. Number one was how we dealt with it in the stores. We had to close over 3,000 stores, open them back up, establish health protocols, rehire, and take those forward. So that was just a massive operational undertaking for our leaders in the field. They really did come through that quite remarkably. On the workforce support side, workforce centers closed for a period of time, but also for quite a period of time, people were reluctant to come in. And many of our local centers actually pivoted to virtual support. So we saw a lot more people taking online appointments, taking online classes. We had drive-thru career fairs, where people were hiring, and they wanted to meet people face to face. There was a spike in online support, different from virtual. “Virtual” is still people talking to people. “Online” is online courses that we offer and other online services. So we saw our network really being able to rally in ways, both to keep those stores open, reopen, and running and doing well, but also to ensure that we could reach people that needed our support. The other thing we’ve done is really tried to emphasize for people the value of investing in themselves at a time like this, because in many cases, people were off work. There was an opportunity for them to get training and to think about a different future. Now, as we look forward, obviously, we are in a very tight job market. And where that goes is still a bit up for grabs. So we’ve got this huge demand for labor, really across the spectrum. So a lot of people, I think—especially people in lower-skilled areas—are jumping in right now because the jobs are out there. But I also do have a very significant concern that, in the not too distant future, we are both going to see the economy loosen up, and this transition from lower-skilled jobs to higher-skilled jobs will, as a result, become more apparent. And for people to be employed, they’ll need those skills.

Fuller: Well, you certainly touched on an area of deep concern for us and something that we’ll be researching in the new year, which is, as the skills requirements for all sorts of jobs continue to move up at a rapid rate—accelerating rate—they increasingly outstrip the capacity of the traditional skills provider network, especially post-secondary education and high school education, to keep up. Then, as a former business executive, you know companies don’t throw their growth plans out the window if they can’t find exactly the workers they need. They use technology and eliminate work or create a job that requires even a higher order of skills. They break a job down into simpler component parts and create two or three lower-paying jobs, as opposed to that really good-paying job. They offshore. They outsource. They’re going to cause barriers to getting good jobs—and the requirements that employers are going to be placing on people to get good jobs—to keep going up.

Preston: Now, one of the good things that has come out of that demand is employers beginning to look at the world differently in terms of whom they hire because they realized that their approach to hiring has been limiting in terms of talent, in terms of building a diverse culture, and in terms of advancing equity. What we’re talking about here is philosophically how we’ve hired and how we’ve thought about talent hasn’t really opened up the door to a lot of people who are qualified. So on a base level, many job descriptions automatically screen out people without college degrees or other credentials often when they’re not necessary for the role. People gain relevant experience in many ways—through life experience, very specifically through job pathways, which we’ve learned more about, and even less-traditional training. So about a year ago, we saw over 80 companies who are part of the Business Roundtable effectively come out and say, “We are going to look at all of our hiring policies to determine if we are unnecessarily screening out people that we really should be hiring, because we do think that there are a lot of very positive outcomes by doing so.” The other thing is, certain populations have been overtly screened out. I think it’s not surprising. I think, specifically, people who’ve been incarcerated. But increasingly, again, companies are reporting that the people they hire who’ve been incarcerated are just as good or often better than the other employees they have. So increasingly, we’re seeing people—employers—come out and say, “Actually, we have a program that is dedicated to hiring people who are coming out of incarceration and in supporting them along that journey.” So there are a lot of ways that people are beginning to think differently.

Fuller: And there’s a real need to get beyond just “we’re going to open the aperture on recruiting” by employers. But how do we develop a program that reaches substantively into some of these populations you referred to—for example, the people with criminal convictions, veterans, caregivers, people with certain types of cognitive diversity or physical challenges—to be able to just make enough accommodation to allow them to be productive in our workforce. That can be a very virtuous cycle. Our data supports what you just said: that those workers are highly productive, turn over less, have better attendance records, are more engaged in their work than others.

Preston: Often when you’re dealing with a particular population, you find very specific barriers that that particular population faces. I think we learned a lot of this when a lot of veterans were coming home a number of years ago. Aside from the challenges of having served in combat, many people would come back and say, “I’ve got all these great skills. I don’t know how to translate them into a job.” The interesting situation there is, we had people that were highly skilled and highly trained in many ways, and it was almost more of an inability to translate that into what people were looking for.

Fuller: Exactly. One of the things that we’ve written about is that the artificial intelligence at the front end of a lot of the so-called applicant tracking systems is using natural language processing to look for very precise word matches. And if there’s one thing I can say about veterans, they’re actually quite particular and stubborn about saying specifically what they did.

Preston: Well, the other interesting thing about the reentry population is, our programs have been very successful. People come out of prison with no cash, no job, often no housing, no network, or maybe not a great network—not always—and often an urgent requirement to get a job to stay out of incarceration. And if we can’t help them through that process to land well and to integrate well, the alternative is potentially—reincarceration, a family without support in gross financial terms, the costs to maintain the penal system, the loss in tax revenue, the need to support people who aren’t being supported—is pretty significant. I think a lot of people look at these programs and say, “Gosh, you’re spending $10,000 or $15,000 on a person.” You could spend many times that on a person if it meant that they were going to be successful moving forward in their lives and still be better off in crass financial terms. Obviously, we tend to think more in human terms, and our desire is that those people, like all of us, would have an opportunity to flourish in life. That’s what we all hope for. But for policymakers, looking at this in pure dollars and cents is almost always going to make sense if it’s a good program that yields results.

Fuller: Whether it’s the penal system or corporate hiring, I think there’s a constant, which is that these big institutions—and the programs they have—lead to the outcomes that they generate. So if we want a different outcome—whether it’s easier transitions for veterans into the workforce or lower rates of reincarceration for the previously incarcerated—we’re going to have to think about how the system generates those outcomes and how we can interdict it. Another thing we’ve been hearing a lot about, Steve, that I’m curious about your reaction to is the so-called Great Resignation. We see resignation rates at an all-time high—although, if you look historically, it’s actually pretty consistent with the slope of the line of the rate of resignations we were seeing before Covid—but we’re seeing a low unemployment rate. So people are churning as much as anything else. What do you hear from your affiliates and from your regions, and what have you seen at national?

Preston: Not only is it hard-to-fill positions, but it’s hard to keep people. In my experience right now, it’s almost less people rethinking their lives and more just the burnout right now of the challenges on our sector to serve people, but also all of what we’re reading and experiencing about the emotional and mental health issues related to Covid. And the interesting thing is, with remote work becoming more than commonplace, with the strong demand for labor opening up different kinds of jobs for people, and with scaling opportunities being increasingly available through online education, I think a lot of people are just taking a step back and saying, “What are the possibilities?” I am more optimistic that we will see greater attachment to the labor force as things settle out. I hope that rethinking among the people we serve, however, once again does encourage them to think about what’s possible if they invest in themselves to acquire higher-level skills and if they look at the possibilities that this market is creating for them.

Fuller: Steve, as a final question, you’ve had a very, very interesting career. You were a long time in the private sector, a success in business. You served as a cabinet secretary under George W. Bush, his secretary of Housing and Urban Development. Now, you’re running one of the largest not-for-profits in the United States, one with a storied and proud history. What are the opportunities for policymakers and for executives and for philanthropists and social entrepreneurs to get us to some new level of performance and effectiveness in helping ensure economic security, diversity, and inclusion on a more permanent, more robust basis?

Preston: There is an enormous opportunity for the federal government to partner with workforce development providers, to partner with employers, and to partner with educational institutions, to figure out what this pathway looks like. I think getting this right hits us culturally, socially, economically, and then in a very human way. Flexible funding is important. An organization like ours, we have a huge footprint, we have access to people in need, we have expertise, and we have a network of other service providers and employers that we connect with to make it all work. If we have the funding and the flexibility to use it for the right things, we drive results. At the end of the day, if the American taxpayer is going to fund programs, they need to know that those programs are designed to succeed, because the stakes are so high. It often requires different parts of the government to work together, which is difficult. So I think the programs need to be designed specifically for impact. I think it doesn’t only hit our sector, it needs to go earlier on to the education sector. We have to have our best policy minds in the middle of this to say, “What really works? And what is the evidence? And what are the outcomes we’re driving? How can we be confident that we’re going to be able to invest in programs that drive the result that we crave?”

Fuller: Well, Steve Preston, president and CEO of Goodwill Industries, thanks so much for joining us on Managing the Future of Work podcast. It’s a pleasure.

Preston: Well, it’s really been my pleasure. Thank you for getting these important issues out there. We appreciate it very much.

Fuller: We hope you enjoy the Managing the Future of Work podcast. If you haven’t already, please subscribe and rate the show wherever you get your podcasts. You can find out more about the Managing the Future of Work Project at our website hbs.edu/managingthefutureofwork. While you’re there, sign up for our newsletter.