A New Course for Financing Entry-level Training

Written by Larry Press

Colleges and universities are doing a poor job of training students for entry level jobs — companies may (re)assume that role. Larry Press comments.

aNewDomain.net — Today many college graduates leave their university with little to no professional training. They might have a broad education and the ability to think critically, but many do not have entry-level job training. MOOCs have led to advances in online education technology and pedagogy, and industry may be starting to (re)assume responsibility for entry-level and lifelong-vocational training.

Back In the Day

Fresh out of college, my first job was at IBM. The minute I was hired they sent me to San Francisco for eight weeks of training. I became acquainted with the culture of the organization, and I was trained to wire control panels in a unit-record machine, as well as trained to design unit-record systems. That was phase one. I worked for a while with those skills and was eventually sent to a second training course, and then a third.

Back in the day, IBM had their own hiring process. Applicants were accepted based on aptitude tests and interviews — your university major had little to do with it. In fact, when I came on board the head tech-guy (and my mentor) majored in English. Because of this, IBM relied on its own training methods to account for entry-level employees.

Flash forward a decade (or two), when I started teaching at universities. Instead of companies continuing to train entry-level employees, the university itself was expected to leave graduates with real-world know-how. Companies like IBM expected their new staff to be productive on day one.

That worked great, mostly because education was affordable. Everyone could have those skills, and the universities were happy to have high enrollment. Keep in mind, my UCLA tuition was $76 a semester.

A Broken System

The reality, though, is that the old method has broken down. Society has cut support for universities and, to be honest, IBM did a better job of entry-level training than many of our universities. As we see below, today’s students often borrow large sums to pay for their college education and many end up in dead-end jobs.

College Graduate Statistics MOOCs

Image Courtesy of the US Census Bureau and US Bureau of Labor Statistics

Percent of graduates in jobs not requiring a degree
College graduates: age 22-65 with a bachelor’s degree or higher
Recent graduates: age 22-27 with a bachelor’s degree or higher
Shaded areas designate recessions.

College Graduate Statistics MOOCs

Image Courtesy of the US Census Bureau and US Bureau of Labor Statistics

Good non-college jobs: at least $45,000 a year
low-wage jobs: $25,000 a year or less
Shaded areas designate recessions.

It is way too soon to call it a trend, but the Internet may be taking us back toward industry-financed entry-level job training.

The most IBM-like example is AT&T’s sponsorship of the development of an online master’s degree in computer science at Georgia Tech. The first semester of that program has been completed, and the students are satisfied. The administration is optimistic but not declaring victory yet.

In June 2014, AT&T (and others) announced that they would be participating in the development of tech-oriented “nanodegrees” on the Udacity platform. (Udacity also hosts the Georgia Tech MS).

IBM may not be offering the same three-phase training that I had as a new hire, but they are offering MOOCs at universities through their Academic Initiative and have recently agreed to partner with 28 business schools and universities on developing data science curriculum and programs.

The Georgia Tech MS degree will cost students $7,000 and a Udacity nanodegree will cost approximately $2,400 — about $200 per month for 12 months. AT&T is sponsoring some of their employees in the master’s program and will offer internships to 100 nanodegree graduates.

Online education has also reduced the cost of tuition reimbursement benefits for employers. Starbucks is offering full tuition reimbursement for employees who complete an online bachelor’s degree at Arizona State University.

Online education has boomed with the spread of massive open online courses (MOOCs). MOOCs have had successes and failures, but the infusion of capital and interest has triggered an ongoing wave of innovation in technology and pedagogy. New media often mimic and substitute for old media. We first saw MOOCs as a replacement for university education, but it may be that their major impact will be on vocational training.

Udacity has pivoted from university education to lifelong vocational training, and the deal looks good enough to induce companies like AT&T and Starbucks to cover part of the cost.

What Does it Mean?

Traditional universities will lose students. The majority of students see a degree as a path to a job, and universities control certification. If a $2,400 nanodegree gets one a good entry-level job, many students will skip the university.

University education is much more common today than it was when I started at IBM. Universities, like many other organizations, typically try to grow, leading to aggressive marketing programs and lowered admission standards. While a university might have an incentive to admit and retain poorly qualified students, an employer does not.

Therefore, the company personnel department may replace the university admission committee as the gatekeeper to the middle class.

That sounds good, but tying education to employment also has a downside. Consider the effect of tying medical insurance to employment — it is an important part of an employee’s benefits, but it discourages mobility, harming both the economy and the individual.

The courses I have mentioned here are not typical MOOCs, but they are compatible with MOOCs. For example, Udacity has not spelled out the details, but a nanodegree will involve testing for certification and, no doubt, more personal interaction with instructors than today’s MOOCs. However, they also intend to make the teaching material available as a MOOC. Self-study students will not get nanodegrees or personal attention, but they will have access to the same material as paying students. The material will be a fringe benefit for society and an advertisement for Udacity.

As Steve Jobs used to say — one more thing. I’ve been talking about vocational training, but I think there is also demand for curiosity-driven, non-degree, lifelong education — edutainment if you will.

The times they are a-changin’. What do you think?

For aNewDomain.net, I’m Larry Press.

Based in Los Angeles, Larry Press is a founding senior editor covering tech here ataNewDomain.net. He’s also a professor of information systems at California State University at Dominguez Hills. Check his Google+ profile — he’s at +Larry Press — or email him at Larry@aNewDomain.net.