As COVID-19 upended the working world as we knew it, leading to a great remote-work experiment for the office-working world, those who worked on-site, often in physically demanding jobs, found themselves in high demand. We still needed plumbers, mechanics and truckloads of groceries to be moved, even in lockdown.
As a result, wages for hourly retail, food service, manufacturing and other blue-collar work started rising quickly. Employers began promoting expansive education benefits that could allow someone to theoretically work as a cashier while earning a degree and get promoted from within. Chipotle billed itself as “the fastest path to the middle class.” Wages continue to increase despite relative plateaus in the overall labor market.
“Not only are wages going up, but an increasing number of employers in sectors like transportation, health care and hospitality are actively investing in career pathways to fill positions internally and increase retention,” Josh Bersin, global HR analyst and CEO of the Josh Bersin Company, a research and consulting firm, said in an email this week. “Disney spends $20 million or more annually on internal development to keep various parks, cruise lines and other hourly workers in the company.”
But despite the increased pay and benefits, many of the workforce challenges remained. Inexperience, absenteeism, high turnover and inconsistent performance or working conditions led to myriad issues for workers and employers alike. Employers are frustrated by rising costs, an inability to forecast their capacity and shortages reported across industries.
Joshua Kleyman is the chairman of the National Logistics Training Center (NLTC) and CEO of Citizen Trucking. He spoke at the EdTech Week conference in New York City earlier this month, sharing his experiences with this segment of the workforce as a serial entrepreneur who found himself leading a distribution company.
With regard to the absenteeism and high turnover, he and his leadership team identified some simple technology solutions, many in the form of automated chatbots, that addressed turnover and decreased the number of accidents in workplaces. They also launched an education initiative that is reshaping the commercial driver’s license (CDL) labor supply in their region.
“We’re not just throwing AI at a problem and thinking it’s going to solve it,” Kleyman said. “We have to figure out what the problems actually are.”
Getty Images/Vadim Orlov
AI did help Kleyman and his team conduct an analysis of the four most prominent reasons for turnover and absenteeism at their distribution company: medical issues, scheduling conflicts, manager relationships and personal emergencies.
“We went through every single reason…went into our phone system, took every single message we got, threw it into Chat GPT,” and it produced that list, Kleyman shared.
At Bonvoy Distribution, a corporate partner of the NLTC, around 5 percent of its 700 blue-collar workers would be absent without notice. After running a similar analysis on the reasons for being absent, the company launched a chatbot with the help of the NLTC that cost $800 to put together and $200 dollars per month to maintain, Kleyman said, and reduced absences in half. Turnover went down and overtime spend decreased as well.
The NLTC created an app for Citizen Trucking, Kleyman shared at the conference and confirmed in a message to Newsweek. This one was purely SMS-based, and provided daily scheduling info and team-generated delivery notes about road closures or entrance tips for the various locations on their routes.
Kleyman shared that the cost was around the same as the Bonvoy app, and for Citizen Trucking it reduced safety incidents by around one-third and delivery times decreased by 18 percent.
“We created a Google Sheet, ChatGPT wrote a Google Apps script, [we] took about eight hours of testing and tinkering, connected it to OpenPhone…and then everything gets connected with Zapier,” Kleyman said, explaining the process to make these apps. He said he estimates the value of the decreased delivery times and safety incidents to be “a few million.”
A wide range of technology solutions are now available to support a variety of needs for this segment of the workforce, such as apps that help with access to child care, credit services and training programs, including for learning English. Research suggests that 10 percent of U.S. workers have limited English proficiency, and that this is a huge opportunity for attraction, retention and development of frontline workers.
“We look at language as a big barrier,” Sabari Raja, managing partner at Jobs for the Future (JFF), a nonprofit focused on national workforce development, told Newsweek.
“[Language training] is a perfect example of how, using AI-based custom models, you support an immigrant population in order to thrive at work and land technical jobs.”
In many cases, Raja explains, traditional ESL or English language-training does not cover the vocabulary of work, or a specific profession. As leader of JFF’s venture fund, Raja has overseen the fund’s first investment, in a company called Pace AI that meets this specific vocational language gap.
Advancing into technical roles doesn’t mean going from zero to fluent—it means learning the right vocabulary as someone with basic speaking skills to pass a nursing certificate program, for example.
Raja shared that other AI tools catching her eye are working on the massive challenges of skill identification, development and measurement, for the benefit of hiring, performance management, internal mobility and leadership development. She adds that companies are frequently thinking about these concepts for office workers, but a sound business strategy would also be focused on improving the employee experience and career paths for frontline workers, especially as that market continues to tighten.
Before working on the aforementioned technical solutions for Bonvoy and Citizen Trucking, Kleyman also launched an education arm of his company to train motivated individuals for work as commercial drivers. With labor supply dwindling and salaries rising, his company decided to look at creative ways to bring new people into the field.
“Hiring bonuses were $100,000 for drivers, and we were not doing that,” Kleyman said. “Plus, you would hire somebody and chances are they’re leaving in three months.”
This led to the launch of what eventually became Zeta Driving School, a program training CDL drivers in Kansas and Missouri.
“Why compete for talent when we can develop it ourselves?” Kleyman stated. “The school was intended just for our internal company, with no intention of ever making it a public institution.”
Rather than meet these rising salaries and bonuses for a diminishing talent pool, they determined it would cost around $2,000 to train the students. They could pay them a modest stipend while in school and continue to train them once they join the company as well, and it would be far cheaper.
But the benefits extended beyond cost savings.
These drivers tend to have higher average tenures and better safety records and they start at lower salaries earlier in their careers because they were paid while learning and had their education covered. It’s also been a boon for diversity, with the training programs seeing an increase in female enrollment.
“We figured out that anybody who came out of our school, they were a better driver, they ended up staying longer,” Kleyman said. “That’s why we did it, and it’s been kind of the greatest thing we’ve ever done.”
