Last night, 60 Minutes profiled Year Up, a non-profit organization that basically takes disadvantaged, poverty-stricken students and gives them an intense career boot camp experience in either IT or financial operations. Ultimately, many of the graduates of the program — right now there are about 2,000 per year being reached by Year Up — end up working for places like Goldman Sachs, JP Morgan, Facebook, and other Fortune 500-type firms. The profile had interviews with Jamie Dimon (head of JP Morgan), the CEO of American Express, and others. Here’s a web extra with a title you’d expect: “From Dunkin’ Donuts to JP Morgan.”
It was a really interesting story on a few different levels, and it had some big-time money quotes strung throughout — for example, the founder of Year Up (Gerald Chertavian) says that when people in NYC pass by a black youth, they could be thinking “There’s my next great employee,” but instead they’re reaching to protect their wallet. That’s obviously a comment made somewhat for effect, but I know a lot of people with good jobs in NYC (and other major cities) who would act like that, and who would never make the association between “someone in poverty” and “potential job candidate.” This all goes back to the opportunity gap, which is ultimately what we’re discussing often when we discuss income inequality.
There are a couple of thoughts/reactions I had here, and I want to outline them briefly because I do think it’s an important topic:
1. The most important aspect, and likely the biggest problem, is scale. For this to work, you need full-time staff, you need people qualified to determine who gets in, you need social workers for any breakdowns along the way, you need business development people (who go out and get more companies on board), etc — and if you’re operating as a non-profit, you need to do that while fundraising and maintaining your bottom line. As you scale up, you need more of all those kinds of people. I’m not sure this is a big enough concern for the eventual hiring companies whereby they’d invest a ton more money in it. There was talk in the story of making it even more scalable — partnering with community colleges like Miami-Dade to eventually reach 100K people per year. That would be awesome, but with scale on something like this could come logistical issues or hiccups or inconsistency in delivery. That’s a potential concern.
2. Morley Safer addressed this briefly with Dimon and the AmEx CEO, but there’s a little bit of concern that this might be a feel-good story that places like Sachs and JP Morgan use to off-set the major media coverage of them, which might broadly skew negative. One key fact that kind of supports that: the average salary out of Year Up is about $30K. With more computer experience, it could be around $50K. It’s nearly impossible to live in a financial center on that, even if you’re stretching core budgets. Let’s say a financial MBA is worth around $200K (it might be more or less depending on your view of the current climate) to one of these places; I would think Year Up students should be about half to a little less than half. They’ve been intensely trained, and because of the value of the opportunity to them, they’re likely going to stick for a while (the flip side you could argue is that due to instability in their life, they may not stick that long). Regardless, Year Up grads getting paid 1/6th of an MBA seems like a big drop, especially because most MBA curriculums — while expensive — are probably less intense, contextually, than what Year Up is offering. This makes me think the whole thing is a bit of a publicity grab. “We’re stealing money by the cargo load over here, but look over here at what we’re doing with the minority kids who have experienced more than their share of hardship.”
3. I thought it was interesting that Dimon said (basically twice) that the biggest problem a company can face is turnover and having to re-hire, re-train, re-onboard good people. Dimon has had a ton of issues with turnover at JP Morgan. Part of that involves legal ramifications and the crash and everything, but he seems to know “This is something I should tell 60 Minutes,” even if his focus isn’t there during the day-to-day.
4. I’ve talked about this in a couple of different posts before, but this is why I think Year Up is a potentially great idea. The way talent management and talent strategy works at a lot of places is really sloppy. Basically, a need emerges because someone’s job shifts and they can’t handle a previous focus anymore — so people rush to hire a person for that role (even though that’s no way to hire at first blush, because you might as well be hiring a six-month contractor at that point). The hiring manager makes a list of 7-12 credentials that the new person will need, a poorly-informed discussion with HR/recruiting happens (because both sides are very busy), and tons of people get boxed out of the process for only having 5-7 criteria. Each open position in America right now, give or take based on specificity of skills, has about 183 applications for it. People keep getting denied and recruiters complain about lack of talent, lack of skills, etc. Often, the job gets re-assigned in-house (I’ve probably been told 11 times in the past year that a job was closed for that reason) or a connection gets hired, because connections are the surest-fire way to break through this cycle. Much of this market involves long-term unemployed or recent graduates of various programs. I’ve done recruiting, and you see 100s of the same exact resume: same keywords, same formatting, same skill sets, same universities, etc. Here’s what Year Up offers: a different pipeline, different candidates, different context, different perception of opportunity, and, in all likelihood, diversity. Diversity can make your organization perform better, and whether you’re selling computer parts or bonds or Cheetos, that’s ultimately the goal. Now, above I talked about salaries. For a place like Goldman, that can afford to pay a new hire $90K, I think $30K is ridiculous. But for a middle-of-the-road place or a startup or a non-profit that wants to work with Year Up, $35-50K seems reasonable, and then you’re getting good, diverse, well-trained talent that wants an opportunity and wants to grow. For some of these kids, it’s between this shot and bagging groceries. Opportunity when it’s been lacking can mean a lot. I’ve been looking for jobs for months, and I know that when I land something that feels like a fit, I’d be willing to enter under-market value and work my ass off to make it count and rise a level or two. I know that’s hard, but that’s the context of how I feel. I can only imagine it’s 100 times harder for someone out of Year Up.
Ultimately, Year Up is a great organization because it’s trying to get at the most basic thing we need to get at: how do we take the people in our society who are lacking in opportunity and make their situation better, not just individually but for the greater good? There are many ways to do this, but we don’t have enough strong people working on the problem of this opportunity gap. I only hope something like Year Up can be taken to a broader scale, and more companies can get involved. I’m not 100 percent hopeful knowing about the current state of short attention spans and business needs/quarterly analyses, but … this is tangibly very important.