New research by the Harvard Business School’s Project on Managing the Future of Work finds that access to work-based learning is a key factor in low-wage workers’ upward mobility.

The study defined "low-wage" workers as individuals who earn less than about $20 per hour, or live in a household of 3 with annual income of $39,970 or less. These workers comprise 44% of the American workforce, and 6 out of 10 remain stuck in low-wage jobs despite their aspirations to advance.

Researchers analyzed worker and employer surveys, resume and job posting databases from EMSI Burning Glass, and other literature to identify differences between workers who advance beyond low-wage jobs and those who don’t. Among their findings:

• Inability to gain new skills on-the-job is a major factor for workers who stay stuck. Too many companies see high turnover as an inevitable cost, and therefore design entry-level jobs to be as simple as possible, with no investment in skills training. Low-wage workers, struggling to make ends meet, lack the time or financial resources to pursue training on their own outside of work.

• Even where advancement opportunities exist, lack of information is an obstacle. Over half of workers surveyed said their employer had not discussed what skills they should develop or how to learn the skills needed to advance to a higher paying job.

• Many workers who move beyond low-wage jobs do so by switching industries. At the same time, the data reveals that workers will be more loyal to employers who invest in creating opportunities for them. Of the workers surveyed, 62% said the prospect of upward mobility would induce them to stay at their company.

Joseph Fuller, co-author of the research report, recommends three actions employers can take to increase clarity and understanding about job pathways and required skills – give workers clear, actionable and regular feedback, direct them into a pathway program designed around their needs, and offer some mentorship or guidance to help them address barriers.

Faced with a tightening labor supply and rapidly evolving technologies, employers need to rethink their approach to upskilling and reskilling if they are to remain competitive. Alternative staffing enterprises, as trusted workforce intermediaries, are well-positioned to help employer partners design and communicate pathways for entry-level workers' career and wage progression that will improve job quality, increase earnings, and boost long-term retention.

Visit the Harvard Business School’s Project on Managing the Future of Work for links to the full research report and detailed results of the worker and employer surveys, and read a recent interview with Joseph Fuller about the report at the Harvard Gazette.

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