Podcast
Podcast
- 19 Apr 2023
- Managing the Future of Work
Turning tacit knowledge and weak ties into real opportunity
Joe Fuller: Too often, debates about how to prepare people for employment focus on hard or technical skills, such as coding or the ability to operate and maintain advanced devices. That is especially true for middle-skills and entry-level technology positions, but it ignores the crucial influence that social skills have in ensuring success in the workplace and that social assets—who you know and your socioeconomic context—have in opening the door to opportunity. Is it possible to teach social skills, including how to cultivate a personal network, while also equipping learners with state-of-the-art hard skills?
Welcome to the Managing the Future of Work podcast from Harvard Business School. I’m your host, Harvard Business School professor and non-resident senior fellow at the American Enterprise Institute, Joe Fuller. My guest today is Nitzan Pelman, Founder and CEO of Climb Hire. The nonprofit provides job training in both hard and social skills, as well as helping low-income adults cultivate the professional networks that are invaluable to launching and sustaining a career. Climb Hire helps its participants secure a good-paying job. In turn, those graduates provide financial and networking resources for subsequent cohorts, much as the alumni networks of institutions of higher learning do. We’ll talk about how this model works both organizationally and in the labor market. We’ll also discuss how Climb Hire delivers its programs to busy working learners and how employers contribute to and benefit from its mission. Finally, we’ll consider how public policy can support this type of program. Welcome to the podcast, Nitzan.
Nitzan Pelman: So glad to be here.
Fuller: Tell us a little bit about your journey and how you found yourself creating Climb Hire and now running it.
Pelman: Yeah. Four years ago, I had this unique opportunity to be an entrepreneur in residence at LinkedIn. And when I was there, they put a referral button on their platform. And what they learned by doing that was that the vast majority of job seekers were getting jobs through referrals. And it was really the first time that I really started to think about, “Where have I gotten all of my jobs from?” And very quickly realized that every job I had ever gotten had come through a warm relationship, or a network, or an introduction. I had never applied cold for a job on a jobs board or anything like that. And it just made me then think about where do networks come from, where do relationships come from? And a lot of times, people—especially if you’re growing up in a middle-class neighborhood—your family might be building those relationships for your whole growing-up life. But a lot of times, a new place to build relationships is in college. You might live in a dorm and sing in an acapella club and play lacrosse and write for The Crimson and be in a secret society. And all of those things allow you to build organic relationships over hundreds of hours in a coming-of-age moment of time. But a lot of people of color from low-income backgrounds don’t always get to do that. And it’s not because they don’t have grit and drive and motivation and aptitude. It’s oftentimes because college is more of a sorting mechanism for wealth than many other things at this point. And so, when you are a community college student, you may very well run into school, take a class, run out to go work and take care of family members, and then you don’t get to build those important relationships that then become door openers forever. And it made me think that there’s a lot of hidden and overlooked talent who have the capacity to be working in corporate America, but we don’t know them because they don’t have social capital.
Fuller: Certainly, some of the cutting-edge research is being done by Professor Raj Chetty and his team at Harvard. And he certainly demonstrated profound differences in the trajectories of people that grow up in more active, diverse communities that have resources like community centers, senior centers, scout troops, whatnot, the things that create social assets and network assets. You can’t network if you don’t have any contact to reach out to. So how did that translate into what you’re doing at Climb Hire? And what are you doing to try to create such networks basically from scratch?
Pelman: We intuit that it’s people that we have very deep relationships with, that are our strong ties, those are going to be our door openers. Those are the people that know us the best and are going to make warm referrals and relationships. But it’s actually weak ties—people that we don’t know super well, maybe we’ve had a couple of interactions with them, maybe they’re part of an extended network of somebody who knows somebody. But weak ties actually end up opening up doors far more often than strong ties do. And part of that is just because of the access to many more opportunities that people in our extended network have. The tentacles for opportunities are much larger with your strong and weak ties as opposed to just your strong ties. And so then I start to think about, “Okay, how can we teach people in-demand skills but at the same time helping to build social capital, because we know that applying cold for jobs doesn’t always get us to the outcome that we want. And so we created a framework, where the alumni of Climb Hire come back and they train the next set of climbers. And they become their champions, their near-peer collaborators, their accountability partners. But they also have newfound social capital themselves. So imagine that I’m Miguel, and I’m a cook at a cafeteria in Silicon Valley, and I’ve gone through the program, I successfully get a job offer at IBM, and now I’ve tripled my income, and I come back, and I train the next set of people, and I’ve got a cohort of five to 10 new climbers, and now my social capital can be their social capital. And at some point, somebody’s going to ask Miguel, “Hey, there’s a spot open on our team. Do you know anyone?” And then he can reach into the current network and pull. And we’ve now started to see we have quite a number of climbers that have gotten jobs through the referrals of alumni in the program.
Fuller: Well, certainly something we do at Harvard Business School is urge our students to mine the alumni network when they’re looking for a position. And it seems like you’re extending that basic logic that we’ve been milking here since 1908. So when you are picking the technical or hard skills, are you relying on the vendor-supplied content? So Salesforce-authorized training? Or are you doing any proprietary training or training development on your own? And how do you pick what positions to try to equip people for?
Pelman: Well, four years ago—this was sort of pre-pandemic—there was a lot of doom and gloom in the workforce space. I think everyone was waiting for the economic bubble to burst, and there was just a lot of conversation about how the coal miners in West Virginia and the truck drivers were going to lose their jobs to automation, robots, offshoring, nearshoring. And then we just started to see a lot of this demand for software-as-a-service administrators that were just becoming more and more prolific. So we picked the Salesforce admin cert, and our hypothesis was that there would bet of demand. We thought people that might not have bachelor’s degrees or people that might not have experience will have an easier time breaking in. And that’s proven out to be true. Over 80 percent of our alums from those cohorts have gotten jobs that have doubled or tripled their income. Usually, people come to our cohort with earning less than $30,000 working in retail or working at Uber, Lyft, things that are paying minimum wage or below livable wage jobs, and end up getting jobs that pay $50K, $60K, $65K. And what’s amazing about the Salesforce ecosystem, in particular, is that once you have a year or two of experience, your salary goes up even more dramatically. And many of our alum now are making $80K, $90K, $100K in less than two years, which is really exciting to see.
Fuller: That is great. And, of course, the very shortage that you’re trying to meet is across the ecosystem. So when someone does have that two or three years of experience, all of a sudden they’re being found by a potential new employer on a platform like LinkedIn, and it’s a virtuous cycle for income growth and for building a career. So how do you find your, you’ve called them “climbers,” which is great. How do you find them? How do you recruit them?
Pelman: Well, we used to find them on Indeed, which is an incredible platform for blue-collar workers and for middle-class workers. But we’ve migrated mostly to social media campaigns, and that seems to be pretty effective at finding that hidden and overlooked talent.
Fuller: So, Nitzan, I’ve been studying this area for more than 10 years, and I will say that there are a lot of solutions being proffered by people in the upward-mobility space. It’s everything from try to help people matriculate to four-year colleges, complete four-year colleges, get on more-sustainable career paths. When you think about your design, your theory of change for Climb Hire, how do you differentiate?
Pelman: Yeah. I didn’t want to create another workforce organization four years ago. It seemed like there were plenty. But what there wasn’t was plenty of organizations that focus in equal parts on in-demand skills and creating social capital—and creating community alongside of that. A lot of the people that have gone through Climb Hire have had trauma in their lives. When you are a frontline worker at Target, Walmart, our society just doesn’t always treat you that kindly. And they bring trauma to the table, and they might not always see what their human potential really is. And we find that, when people work in community with others that look like them, that come from their same background, that have the same dreams and aspirations, and then they see the alumni who have gotten what they came here for and are coming back and supporting them in these pods, it really creates the conditions of accountability, of inspiration, of motivation to learn something really hard and then to triumph and to reimagine who you are and what you’re capable of. We also know that, when you’re coming from a community potentially that’s been disadvantaged for a long time, you might not have deep social capital and networks of professionals. And we also know that a lot of professionals don’t always look like the people that we serve, which are generally people of color. And getting used to talking to somebody who might not look like you and doesn’t come from your same background, it’s sometimes daunting to talk to somebody outside of your milieu. And so that requires practice, and it requires an art and a science that we teach. And so we really teach the art of relationship building and then we give climbers many, many, many opportunities to practice and to build relationships with middle-class professionals throughout the cohort experience. Once a month we do these events with people from Google, LinkedIn, Salesforce, lots and lots and lots of companies where they get to engage. So many of our climbers say that this is the first time that they’ve talked to people outside of their socioeconomic bracket. And you can’t just do it once; you have to do it many times in order for you to start to feel safe and comfortable and be ready for that high-stakes interview. But also, in that period, you’re building social capital as well. And so during the five or six months that they’re at Climb Hire, they’re oftentimes meeting between 10 and 15 middle-class professionals alongside of the alumni network. And between those two things, they’re then building that requisite social capital that becomes the opportunity for door opening.
Fuller: One of the very interesting things about a lot of younger people of color, particularly if they’re from a major metro area, is one of the first times they find themselves in an environment that is not majority-minority is in the job-seeking process and in that first position. You’ve mentioned someone being in the program for five or six months. How is that financed?
Pelman: Well, we have a braided financial approach. We have over 50 employer partners, and our employers generally pay a modest fee, but that is commensurate with recognizing that we are identifying talent that they wouldn’t have found otherwise, and we’re really excited and proud about that. We have a zero-interest loan, so the climbers don’t pay anything upfront for the program. And that is oftentimes subsidized by philanthropy on the front end. And then, once they get a job that pays $45K or more, but usually closer to $50K is the average that climbers get paid, their new salaries, then they pay $150 a month for four years. So the cost is $7,200 in total, and they only pay when they’re employed. And so, if they’re getting a $10K or $15K bump, they’re going to pay a little bit more than $1,000 a year for a really nice salary increase. And then we also are starting to get public funding, as well. And that, together, all of that makes the program scalable and financeable. Over the long haul.
Fuller: Nitzan, what’s the typical learning journey for a climber? And how many hours a week are they working on the program?
Pelman: The program is designed very specifically for people who are earning below livable wage. We expect that they have to work while they’re in this kind of program. It’s designed for adult learners who are busy and have very, very full lives. When I think about Abdul, for instance, who was in our second cohort, when we met him, he was working at Jack in the Box during the day, he was driving Uber and Lyft at night, and he was a security guard on the weekends. And that was how he was making ends meet. Many of our climbers are in that situation. So we don’t expect them to be in programming during the day. All of our programming happens at night on Zoom; it’s six hours of class time, so twice a week for three hours. Half of that time is focused on those in-demand skills like Salesforce administration or digital marketing. And then the other half the time is focused on those relationship-building skills and the art of connection and practicing those things, and also getting ready for being able to interview. So LinkedIn profiles, resumes, mock interviews. And then the third component, which I think makes it really special and different, is that once a month we have what we call “social capital happy hours.” And that’s where we bring in middle-class professionals from Google, from Workday, from Salesforce, from LinkedIn, and they meet climbers. And we hear a lot from employers about, there’s almost a lexicon of things that you’re supposed to talk about in an interview about how you’ve exhibited leadership and problem solved and taken initiative. And these are all things that are words that we need to teach and then weave into how people talk about their stories. And all of that takes practice.
Fuller: That speaks to so many of the things that stand in the way of people getting on pathways to good-paying, sustainable jobs—that so many learners are working at the same time, over half of community college students are working learners. And so much of what is sought by companies in the kind of rote standard business interview essentially presumes that the applicant has had some significant prior work experience.
Pelman: I remember asking one of our earliest climbers like, “Okay, so you’re a cashier, or you work stocking shelves at Trader Joe’s. Tell me about some problem that came up while you were in the store this week.” And he said, “Oh, well, we had the produce truck. Normally it’s supposed to come at seven in the morning, but it was stuck in traffic, and it wasn’t going to show up until 8:30. And so I had to figure out how we were going to unload all the produce from this truck that normally takes us two hours. I had to figure out how to do it in 30 minutes, before the store opened. And so I designed a whole process. We rerouted everything, and we were successful, and we were able to get everything ready right before the store opened.” And I was like, “Okay, so that means that you took initiative, you redesigned a process, you managed up to your boss. It now has become storewide practice.” So there’s all these things that sometimes people don’t even realize that they have incredible skills. You just don’t have words that we use in interviews all the time to talk about those stories, and we need to pull those things out of people that are on the front lines. But they have these skills, they have problem-solving skills, they have crisis-management skills, they have managing-up skills, they have systems-change skills. But that’s not a lexicon that they always know. And so that’s part of the teaching that we need to do in order to bring people into a different class and a different set of economic opportunities.
Fuller: Let’s turn to the employer side. When you’re selling it to the employer, what have you run into? And has it changed over the course of Climb Hire’s history?
Pelman: I think our economy is changing constantly, and the skills that people need are changing. So I think staying pretty on the forefront of what the demand is really important. And so, as those certifications, the word is out about the fact that they’re in demand, companies are asking for more and more specialization. And that does make it a little harder on the training programs to figure out how do you not get too niche but niche enough? And so we’re always adapting. And I think that that is what makes us unique and special, is that we can really keep up with what the market demand looks like.
Fuller: And employers are willing to help you finance this. And historically, that’s been a big barrier, that employers are happy to judge a ready-to-hire candidate, but they don’t want to participate in the economics of creating that candidate.
Pelman: Well, first off, the staffing agency industry —they take usually a 35 percent to 50 percent fee of that first-year salary. And so we charge about $4,000 or $5,000, and our companies generally are okay with that, because they’re used to paying staffing agencies considerably more. So fees are not an unusual or unknown commodity to companies. And what we say to companies is, “You say that you want diverse talent, you say that you want this hidden talent, because it’s important to your business.” And the other thing that we are able to do is vet that talent very carefully and very thoroughly for over six months. We select them, they’re in the program, they’re doing the work. They can only go meet with employers after they’ve finished doing that six months of really rigorous, hard work to master those both technical and relational skills or power skills. And so, what we say to employers and what really lands well for them is, like, we are a credible skill signal and a vetting process that you would never get from a normal search firm that actually just all that they do is find those people on LinkedIn and then serve them up to you.
Fuller: That’s an interesting mechanism for grounding your pricing in their minds with something that they’re acutely aware of, to relate the expense to an existing line item in their budget, as opposed to a moral good or a societal good, which I think many companies feel as much obligation to try to fulfill these days as they ever had historically. But if it’s a tougher economy, if it’s not a very clear ROI, it’s too easy for people to defer their choices. Can you tell us a little bit about your overall success rates? You talked a little bit about doubling or tripling income levels and then getting people on a pathway to either further advancement that they can build on that success. What other metrics are you following?
Pelman: Obviously, the delta in income is the thing we follow the most and that we’re the most proud of, and just watching our alum climb and rise in their careers is some of the most joy that we get on a daily basis. I just got text messages from two climbers this week who are working at IBM. They started about 18 months ago, and they both got raises and are now making $96,000 apiece. And that’s just so exciting to watch. So I would say it’s about that first job, and then it’s about what happens in the second and the third year. Oftentimes they stay, but sometimes they jump and get more by going to the next company. And we track all of that. Obviously, we track retention and industry-known certification passage rates, kind of like all the standard stuff that deeply accountable organizations that really want to create economic mobility track and are really focused on. I think the other thing that I would say is that the parts that are a little harder to be clear about are where the social-capital parts have outsized impact. And so we’ve launched a project this year with support from the Walmart Foundation to really focus in on bringing 1,000 middle-class professionals into the climbers’ lives to create that social capital between the two of them, between these two communities of people that wouldn’t ordinarily meet, and then track what comes of that: How many referrals come from that? How many coffee dates come from that. How many companies of those people go back and say, “You know what? I should hire one of these people. They’re fabulous.” And so we’re going to be tracking that all year this year. We know anecdotally, and we know through the past evidence, that this happens quite a lot, but we’re going to quantify it and systematize it this year. And in many ways, what we’re trying to do is actually recreate the data that came out of the Raj Chetty study in-house here at Climb Hire.
Fuller: Nitzan, we’ve talked about your climbers, we’ve talked about your funding, what role corporates are playing. We haven’t brought up the G word, the government. You’ve now been very active in this space for a number of years, you’re seeing how the labor market clears and how it doesn’t, why there are mismatches and roadblocks to opportunities. When you think about government policy, any insights into the role either state or the federal government should be playing or things they should stop doing?
Pelman: One thing that’s obvious to me is that we should find a way to allow for Pell [grants] to go to short-term credentialing programs. I know that there’s a lot of trepidation to do that, because it could be a race to the bottom, and there could be a lot of unsavory vendors who are just like, “Oh, we can get this money, and all we have to do is offer five months of programming.” But if there could be really strong criteria and really strong rubrics for high-performing outcomes-oriented organizations, I think it can be a real win-win. We are seeing many companies willing to hire people that may not have bachelor’s degrees. There has been a really strong shift, although I would say that that shift is less strong than I think people might perceive it to be. Companies like Google dropped their bachelor’s degree requirement 15 years ago, and we don’t see a lot of people at Google get hired without bachelor’s degrees. So there is a policy change that we need to see that sometimes comes from dropping bachelor’s degrees or changing Pell eligibility requirements, but there is a mind-shift change that is needed alongside of any policy change.
Fuller: So Nitzan, you’ve shared with us a lot about the history of the development and the maturation of Climb Hire. What do you think we can expect to see from you in five years?
Pelman: Thank you for asking that question. My dream is that we have thousands and thousands of people that have gone through this program, and not only have they, themselves, had a successful outcome—meaning that they’ve created economic opportunity for themselves and their families—but they’ve pulled in the next climber behind them. And so the real vision for Climb Hire is that we are an alternative to an Ivy League network, with people that have short-term credentials, are doing awesome in the workforce, employers love them, they hire more of them, and that we prove that not just middle-class professionals and people who get to go to elite colleges get to have those networks, but people outside of those communities do as well, and that everybody benefits from that.
Fuller: Well, Nitzan Pelman, Founder and CEO of Climb Hire, it’s been a pleasure to hear about your innovation in the space and the impact you’re having, and we’ll look forward to hoping that we see that future you just described unfold.
Pelman: Thank you so much. It’s been great to be here.
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.