Joe Fuller: The workplace is getting more complex. A generation ago, you could get a good job with a high school education.

But today half of all jobs require more training than high school, even if they don’t require a full four year college experience.

Many high school graduates however simply don’t have the resources to get that critical additional training. So they get shut out of the labor market, especially the good paying jobs that sustain economic independence. But at the same time employers are facing an increasing shortage of workers nationwide.

Gerald Chertavian: This is a major crisis for our future workforce. When your destiny is more determined by your bank balance than your SAT scores, we have to think differently about talent in this country in order to allow us to be competitive globally as a country.

Fuller: Gerald Chertavian is the founder and CEO of the non-profit Year Up.

It’s the largest organization of its kind in the United States and it’s dedicated to giving low-income high school graduates the skills they need to get good paying jobs in industries ranging from cyber security to data analytics.

Companies help fund Year Up, they provide work-based learning opportunities for its enrollees, and often hire the graduates. For many of the 20,000 participants, Year Up has literally changed their lives.

Chertavian: One, I just got an email about yesterday. It's a young man who came here from Rwanda, [who] unfortunately was for a period of time homeless, so he was selling souvenirs on the street. Heard about Year Up, came to Year Up, did a great job in the program. Ultimately, in fact, I'm just so pleased to tell you he's now just starting a new job at Cambridge Associates, which is an incredible place to work. He also just got accepted to the Summer Entrepreneurship Program at Harvard Business School.

Fuller: Welcome to the Harvard Business School’s podcast, Managing the Future of Work. I’m professor and visiting fellow at the American Enterprise Institute, Joe Fuller. I’m joined today by the founder and CEO of Year Up, and I’m proud to say a Harvard Business School alumnus, Gerald Chertavian. Welcome, Gerald.

Chertavian: Thank you Joe, thanks for having me.

Fuller: Gerald can you start off by explaining to our listeners what Year Up is and sharing a little of its history.

Chertavian: Sure, Year Up is a national non-profit organization that works with low income 18-24 year olds. And in one year enables those young adults to go from either no income or low income to meaningful careers in some of the best companies across this country.

Fuller: Year Up has become one of the defining organization in this sector, it's grown very dramatically. Can you tell us about how it has grown and how its outreach works to draw students into the program?

Chertavian: Sure, so Year Up, when I started there were 22 young people. They had the misfortune of having me as their teacher. We've now served 20,000 young people in 21 cities across this country. And primarily the programs work because the young adults we serve are really an untapped and overlooked source of talent. By providing them with an opportunity to build both their professional skills and the technical skills they need, they're able to now transfer those skills very successfully into the best companies in this country, whether it's JP Morgan, Bank of America, Google, Facebook, LinkedIn. And we reach into those communities that we serve, which are often very low income communities in this country, and talked to high school guidance counselors, community-based organizations, a Boys & Girls Club, a YMCA. Could be a foster care agency, who has youth who are aging out of that system. That's how we initially enter a city. After a period of two or three years, word of mouth starts to take over and one young person recommends our program to another, and therefore in an established city, 60, 70, 80 percent of the applicants have come through word of mouth.

Fuller: Now you're describing these youth as people that had been on the fringes of the workforce, who have found it difficult to find avenues into the workforce. What types of skills and training are you giving them to let them make that leap so that they are desirable candidates for employers?

Chertavian: So the young adults that we serve are high school graduates but they haven't really connected into either post-secondary education or livable wage work. Many of them are existing on I'd say minimum wage, temporary, not great jobs. Certainly don't have the capacity, financially, to afford post-secondary education. And frankly that's a bit of a trap for millions and millions of folks in this country today.

What we're able to do, in a relatively short period of time, is provide those young adults with what I say are the, the new ABC's. Attitudinal, Behavioral, and Communication skills – really professionalism – and then learn what does the market want? Whether it's help desk support, cyber security, quality assurance testing, fund accounting. Then helping those young adults learn a set of skills that are in-demand in the economy. And that's always going to change. Then provide those young adults, after six months of training, with six months of an internship, where those companies can really see those young adults for who they are: talented, professional, motivated young people, who yes may not yet have a four year degree, but are highly able to do the types of roles that they need done in their companies.

Fuller: Gerald, one thing we've seen consistently in studying employers, and talking to employers, is they find many candidates have a deficit in these professional skills. We like to call them essential skills in our project but often literature describes them as soft skills, like communications, like teamwork, like attention to detail and many educators can throw up their hands and say we don't know how to teach that. We know how to teach math, or English composition, or civics. How have you developed an approach to inculcating those soft skills in these candidates?

Chertavian: Well in the areas around the country where we operate Year Up, whether it's inside a community college, where we work with half of our young people, or even our own free standing sites, it's a professional learning environment from day one. You come to school dressed properly, which means if you don't know how to do that, you're going to learn that during the educational phase. And frankly if you don't have those clothes, we're going to help you get them. It's not only what you wear, but how do I interact with another individual on a daily basis, whether it's shaking hands, making small talk, being a good team player. And so you're learning over the first six months of training, a very live, active, experiential environment where you're becoming a professional. You're seeing role modeling that in the environment of education is actually a professional learning environment. And it's interesting, we bring that environment into community colleges, and it's incredibly well received. Our students are often thought of as kind of the business students, right. And it's almost like when you think about ROTC, where you have military fatigues, this is professional training corp – PTC – where you're wearing a business suit rather than military fatigues, but a similar concept. A program within a school that has different and higher expectations and is preparing you for a path where you can realize your God-given ability.

Fuller: Well that's a great description and being able to give young people an opportunity to view that as something that can be learned and create an environment that they can feel safe, that they're learning that and they're not going to get criticized or belittled because this doesn't come naturally to them, is a great design. You also talked about technical skills, or hard skills, like cyber, like being an IT help desk professional. Where do you get that curriculum? Is that something you've developed or are you relying on specifications being provided by your employer partners?

Chertavian: So we work very closely with a range of employers and they're the ones helping to shape, develop and adapt the curriculum to what their needs are. If you think of [how] cyber security has changed pretty significantly over the past five to ten years. Data analysis, or data analytics, is a growing and developing field as we speak. So we would be irrelevant if we didn't partner with those organizations closely to keep getting feedback. Do our students have the right set of skills? Do we need to deepen certain skills in one area versus another? And bring that back in a continuous feedback loop to our instructors to say, what is the market demanding, how is that changing? And how do we ensure our students are market-ready when they go into their internships?

So it's a constant process of evolution, listening to partners, and making sure that we are relevant and valuable to them. Which is why we've now placed more than a thousand people into State Street. A thousand people into JP Morgan. Hundreds each year into Bank of America, Microsoft, Salesforce. There is no way these companies would do this if it wasn't relevant and valuable to their workforce. And so that is our mantra. If we can be relevant and valuable, we have a long-term organization that can continue to grow and scale, and serve young people as we do it.

Fuller: Now you mentioned internships. Could you, just for a typical student, kind of block out their path through the program, up to and including when they start actually going to an employer’s workplace and what obligations the employers take on to onboard these young people, to invest and make them a success?

Chertavian: Sure so our students go through a pretty rigorous admissions process to start. We're looking for motivation. So think about screening someone in, and allowing them to screen themselves in, rather than excluding folks. So it's a different mindset. You're trying to find the student who wants to do this, but perhaps hasn't had the access, the opportunity to do it in the past. And then from 8:30 to 3:30 going to class for six months, learning the skills we talked about. Hard skills. I would say not soft skills, we call those “Harder Skills.” And then they're going to transition to an internship.

Prior to doing that though, that supervisor or those supervisors, are coming to Year Up, learning about our students. Our relationship managers, are going to their environments and understanding their culture, the expectations, the specific job roles, and really creating that match so that the onboarding is less risky for the young person. It's easier and less friction for the company. We even have our young adults do a test commute. So when they know they're going to a company from their home, they'll now take the public transportation. They'll take a photograph of themselves touching the front door and to say how long did that take. You do that a few times and you understand what the commute’s going to be like, so you're not that first day frazzled not being able to find the building you're going to.

So you reduce risk of the transition. You help the employer understand what they're getting in terms of talent. And we have to understand the environment within which those young people are going to help prepare them for that. For instance you probably wouldn't wear a suit and tie to Facebook, and you would to many financial institutions. Our young adults need to know those different environments as they're going into them.

Fuller: Now one issue that regularly comes up when we talk about workforce development programs of all types is, are jobs being guaranteed to participants in the program? What's your understanding with employers about the transition to full time employment?

Chertavian: Absolutely no guarantee at all. This is about employers partnering with us, having a pipeline of talent. They have an opportunity to assess those young adults over the internship period. They're contributing to their education as well, clearly. At the end of that internship the employer has the opportunity to say who do I want to keep on? Who do I want to potentially hire? So there's certainly no guarantee to that. But what we find is, between 40 and 80 percent of those interns will be kept on or transitioned into roles at those corporations, and that's what they need. Companies need to develop very intentional, sub-baccalaureate pathways into their companies, to sit alongside campus recruiting. We probably won't do away with campus recruiting, but I think the enlightened, forward-thinking employers of today are being very deliberate about building these sub-baccalaureate pathways with programs like Year Up and hopefully others where they're assessing and getting a chance to see talent coming in and then structure their own hiring around bringing that pipeline in as a relevant source of talent to help them build the best companies that they can.

Fuller: One thing that we found throughout our research is there's a real need for employers to take more ownership of their approach to sourcing talent, developing the type of pathways you were just talking about. Now you've dealt with lots of employers trying to convince them to partner with Year Up: what are the types of barriers that you've run into, and how have you overcome them?

Chertavian: For many years, I've been doing this very gratefully for 18 years now, you'd hear people say we only hire people who have a four year degree. And so, educational discrimination will lock someone out from ever even being considered. The vast majority of automated HR tools screen out based on that four year degree, so you don't even get a look in. Right now 86 percent of Latinos, 79 percent of African Americans, do not have a four year degree. So that's excluding a pretty large swathe of our population. I think the other recognition is, 80 person of job interviews in the country are gotten through a personal connection or reference. Those networks have often been based on power, privilege. They've often been pretty homogenous networks based on race and socio-economics. And so if getting seen is now related to very homogenous networks, how hard is it for someone who has no networks?

Fuller: One thing that I know you've done quite a lot of innovative thinking about is how to introduce individual candidates to prospective employers. And I was particularly intrigued by the seven second resume. Can you describe that to our listeners?

Chertavian: As part of a wider campaign we've done through the Ad Council to help employers see our young adults as economic assets and not social liabilities, we launched a series of campaigns that, one of which called The Seven Second Resume, where in seven seconds you get to tell your resume. Each person listening, think about how would you do that in seven seconds? For many of our young adults, it may go something like this: I got through high school without a car, without a phone, without a computer, while working two jobs in addition to high school. Now, if you heard that, the immediate thing in your mind would be, that's a resilient person. That's certainly a hard-working person. That's a committed person. Now, think about what their resume would look like. Their resume wouldn't say those words and you would probably discount that resume very quickly. Many, many young people have the resiliency, the grit, the hard work ethic, but that's not going to translate into a traditional resume.

We're trying to upset that apple cart and provide other ways for young people to be seen. In fact, we were so, so pleased when one of the companies we work with has now required the seven second resume as mandatory to apply to them for a job. And already more than a thousand folks have filled out that seven second resume to help the company see people in a different light.

Fuller: Now, when that Year Up-trained candidate transitions into that full-time role, how are they faring in terms of productivity and upward mobility inside the company, particularly relative to college grads because you mentioned in some instances they're being co-located in positions where their colleagues are college graduates.

Chertavian: I am so pleased to tell you that five years after our program, our student will do as well financially as the average college graduate in this country five years hence. That's around $50,000 to $53,000. That's pretty darn good. And you think about how many folks out there are getting excluded from higher education, not because they don't have the intelligence and frankly the SAT scores, but they don't have the bank balance. Right? This is a major crisis for our future workforce. When your destiny is more determined by your bank balance than your SAT scores, we have to think differently about talent in this country in order to allow us to be competitive globally as a country.

Fuller: Are students in your program getting a stipend or do they have the capacity to work part-time when they're not in class?

Chertavian: Students earn a stipend during both the six months of training and when they move into the internship. It's about $6,000 over the year. Many are going to work part-time, nights, weekends, to augment that and piece together that opportunity to invest in themselves. We know our graduates on average are earning 54 percent more than a control group. So this is now proven to be a highly effective model at raising wages for young people who historically have not had access to livable-wage careers. And it’s interesting, Joe, to me it's a bit humbling is we've often concluded in this country that if you got to 18, 19, 20 and you haven't made it, that you can't be a productive contributor in this knowledge-based economy. We have fundamentally shattered that myth and I would argue, if I’m from a government position or a business position, I have to take note of that to say how will this influence public policy? How as a CEO might I think about talent differently? I applaud the leaders that we have a chance to work with, whether it’s Jamie Dimon or Ken Chenault or Brian Moynihan or Jeff Weiner at LinkedIn who say “I get it.” Let’s do this for real, let’s be deliberate about it, let’s scale it, and let’s build a great company in doing this.

Fuller: Gerald, you've described how the program works, and the type of students you're enrolling, perhaps you can share with us a few stories about individuals to make this really come alive for our listeners.

Chertavian: I'm so fortunate to have many, many, stories of our young adults over the years, and also pleased to say one of our students, Brandon Lovell is going to be here at Harvard Business School as a first-year student this September. Brandon came out of our program, got a job at Accenture, right, he did really well. He came to me at one point and said I want to look at going to business school. Do you know how hard it is to go from those words to understanding the system of getting GMATs, of applying, of knowing how to write essays?

Working with folks like Management Leadership for Tomorrow to help prepare a young person to apply to a place like Harvard. I was so pleased when the dean of admissions let me know that Brandon was accepted, and it was one of the best days of my career when he asked, "Would you call Brandon and encourage him to accept our offer?" That's a good day if you're in my seat.

Fuller: I bet. We're pretty competitive too, and it sounds like we're going to be lucky to have Brandon join us.

Chertavian: Absolutely. He will be here, and he has a second home in Cambridge with our family.

Fuller: Gerald, you mentioned earlier that about half your students are on community college campuses. Community colleges are a real focal point of discussion. Business leaders, political leaders, educators saying those are the institutions that we have to focus on. Those are the institutions that have to help manage people's transition from being students into the workforce. What's your observation about the community college system? What is the nature of your relationship with community colleges and how receptive have they been to partnering with Year Up?

Chertavian: Community colleges are the largest post-secondary system in the country, approximately 12 million individuals. They have an inbuilt infrastructure, which we probably won't recreate in the next 20, 30, 50 years, so we have to figure out how we use them properly. I would argue today that they are not funded to actually provide some of the support that young people need and/or the services they need to realize their potential. They're funded, if you think about higher education versus community colleges, hugely different funding model. That's one big change. If you were to wave a magic wand, you would fund them to meet the needs of many of the students that come through their door, which could be social, emotional, could be support with developmental education. So you would do that one.

The other thing you would do is you'd say the vast majority of people coming through the door have to work. Going to school without working is not an option: and so how do we help you connect to labor markets in very real and pragmatic ways that allow you to earn enough money so you can continue to study. Having an opportunity to work and learn simultaneously, almost think of community college co-ops where you’re doing both, I think that's the wave of the future of your enlightened community colleges.

We work with 16 different community colleges around the country, and I've been pleasantly, not only surprised, but inspired by the leadership I've seen in many of those institutions. It's probably not all of them, but I've been certainly, whether it's Miami Dade College or Northern Virginia Community College or Bellevue College, you're talking about innovative leaders who understand the challenges they face, and they're trying to figure out, given a pretty tough funding model, given a student body that doesn't have money to pay, how do you still ensure students are graduating, achieving gainful employment, and continuing on to higher levels of education.

Fuller: Well, I can certainly endorse that the leaders in many community colleges are very passionate about creating better pathways for their students and work exceptionally hard in the interests of their students. But one does regularly see this kind of lack of a surround, lack of guidance as to what might be a good fit with someone's skills, a good fit with their interests, a lack of help in terms of charting a course of study that would lead to a good paying job, even a lack of data as to what jobs are actually available out there. And some of the research we now see is that a lot of young people spend those not just critical loan or Pell Grant dollars, but more critically the time they're going to have to go to school, against programs and coursework that don't really lead into a gainful employment situation. How is it that Year Up is providing that surround? Because when you described your program, particularly that first six months of onboarding, it sounded very manpower intensive and very high touch, which is a great model if you can afford it.

Chertavian: That's right. The way that Year Up operates is our corporate partners are contributing to Year Up to have access to this talent pipeline. That revenue that we earn is what pays for the surround sound support that you just articulated.

Fuller: Mm-hmm.

Chertavian: Community colleges don't have that revenue stream. They, I would argue, in the future will be developing tighter links with labor that are valuable enough that labor will pay for them. Right? I think that there's going to be a tectonic plate shift around how talent pipelines work in this country. We're seeing this happen as we speak, that talent-as-a-service, much like software-as-a-service, is a new category. There's a lot of venture capital, a lot of effort going into this, to realign the pipeline from education to employment being more driven by the employer. You're seeing staffing firms get into this very heavily. I reckon our community colleges are going to have to get on that train and figure out how they become much more a part of this pipeline from education to employment and ultimately to derive revenue in an ancillary form of revenue from that new chain.

This is literally happening as we talk. Adecco just bought General Assembly. WeWork buys boot camps and just bought MissionU. You've seen a new category emerge that could threaten our community college system if they don't move at the speed of business as opposed to the speed of academia.

Fuller: Gerald, very often people start talking about what Washington should be doing differently. What are your observations about that in terms of federal policy, in terms of reauthorization of the Higher Education Act or other major policy initiatives that would help accelerate this type of change you're talking about?

Chertavian: There are a few things I think from a policy point of view that we can do, more based around incentives, that I think is the right structure for our government to plan. The first is, we have to pay for programs that generate results and pay for performance rather than efforts. Fundamentally, [if] we could change one thing and one thing only, you'd create a more Darwinian system that is: we will pay for the results we want. We don't want to pay to train someone, really. You want to pay to make sure they get a job. The outcome that you're looking for is what we should remunerate programs for.

Fuller: Gerald, how do you view the issue of re-training workers and keeping their skills fresh and current? You are launching young people into jobs today where you do have a specification for what the employer is seeking that you establish through your dialogue with them. But as we know, there's a tremendous amount of dynamism in terms of what skills are required to both stay employed in some of these fields you're talking about, particularly areas of information technology, and also to qualify for advancement. What role does re-training or mid-career training play in the future of Year Up?

Chertavian: So today at Year Up we've developed a robust set of services for our alumni, which we now have 13,000 alums in this country. [In] five years' time, not that I'm competitive, but we'll have more alums in this country than Harvard Business School has alums in this country.

We will still hire those HBS folks, don't worry, we'll be kind to them. But the fact is, is just getting a job at $40,000 to $50,000 a year doesn't mean you're now done.

So it's supporting someone on the journey, providing them with opportunities to learn new skills and/or new credentials. But it's also recognizing for many of our companies, this is front of mind for a CEO today, is with the oncoming of structural unemployment, artificial intelligence, robotics, we're going to need people to unlearn things, to re-learn new things, at a pace perhaps we haven't experienced in the past.

So, our young people most importantly need to learn how to learn, and to recognize that there's a half-life to what we taught them that will mean a constant process of continuing to learn. The good news is they're coming out of Year Up with that understanding. We're also hearing from companies that one of their biggest challenges today is how to ensure their workforce keeps up with the changing demand for skills that is coming at us as a result of technological change at a rapid rate.

Fuller: Certainly when we look at the projections about what types of jobs are going to grow in the future, and generate household-sustaining levels of income, they are characterized as requiring expertise in tens of technologies, 10, 20, 30 different separate technologies, which dwarfs the requirements for employees just 20 or 30 years ago here in the United States.

Chertavian: Yeah, the level of data literacy, of information technology literacy, and then I would argue human literacy. The concept of how do I relate to another human being? Can I sell, persuade, influence. Deeply human and emotional activities will rise in terms of their importance, probably a lot harder to automate. And then having an understanding of data. I mean I think – I heard the other day someone said, "Hey, does it feel like it's really changing quickly today, and everything's changing fast?" and the response was, get used to it, it's the slowest it's going to be.

Fuller: As an old dog that sounds like a lot of new tricks are going to have to get learned, and that's bad news for me, but in any case, Gerald, I want to thank you for joining us today and sharing your experiences as the founder and CEO of Year Up, an institution that's having a profound and positive impact, not just for job seekers, but also for employers around the United States.

Chertavian: Thanks so much for having me Joe, I appreciate it.

Fuller: This is the Harvard Business School's Managing the Future of Work podcast, I'm Joe Fuller, thank you for joining us.