(WSJ) As the labor market reorders, more Americans are making the leap from blue-collar jobs and hourly work to “new collar” roles that often involve tech skills and come with better pay and schedules.
More than a tenth of Americans in low-paying roles in warehouses, manufacturing, hospitality, and other hourly positions made such a switch during the past two years, according to new research from Oliver Wyman, a management consulting firm that surveyed 80,000 workers worldwide between August 2020 and March 2022. Many of the new jobs are in software and information technology, as well as tech-related roles in logistics, finance, and healthcare. New data from the Current Population Survey and LinkedIn also suggest the pandemic has helped catapult more workers into more upwardly mobile careers.
Tech job postings have boomed over the past two years as work, shopping and other aspects of daily life have gone more digital. At the same time, millions of Americans quit their jobs, with some sitting on the sidelines and others finding new ones with higher salaries. Companies have struggled to hire all the talent they need, so many have dropped prequalifications like prior work experience or a four-year college degree.
Those pandemic shifts kicked in as broader macroeconomic forces were already creating new job-market opportunities and pressures. The percentage of retirees in the U.S. population has climbed sharply over the past decade and ticked even higher in the Covid-19 era, with millions of baby boomers leaving the workforce. Declining immigration has added to shortages, particularly in tech, healthcare, and other fields that depend heavily on foreign-born employees. Thousands of businesses are in the thick of a digital revolution that is requiring them to fill new roles and adapt existing ones to integrate more data and automation.
Altogether, these forces have led to a giant shock to the workforce. “I don’t think we’ve seen a talent transition of this magnitude, really, since the disruption of World War II,” said Ana Kreacic, chief operating officer of Oliver Wyman Forum, the consulting firm’s think tank, which conducted the research. Back then, the wartime economy created new opportunities, including for women, and the GI Bill funded the higher education of millions of returning soldiers and launched them into the middle class.
Alexis Ayala, 27, enjoyed the hustle of retail sales in his job at a cellphone shop in San Francisco before the pandemic. He had immigrated from Mexico as a toddler and, like his parents, didn’t go to college. When Covid-19 broke out and dried up his commissions, he found work hawking cable-TV plans but yearned for more.
He heard about a position at a software maker that came with the promise of on-the-job training. He didn’t have any tech experience but his friend, who already worked there, assured him that they were looking for people who could learn on the job.
In January, Mr. Ayala started as a business development associate at Okta Inc., which provides tools that allow secure access to business applications. Once hired, he learned the technology behind the company’s identity-verification products, plus skills like making PowerPoint presentations. By next year, he hopes to be promoted to account executive and make six figures selling software to corporate clients, well beyond the $80,000 he made in his best year of retail sales.
“I put myself on the other side,” Mr. Ayala said of the tech workers he used to sell to. “I’m one of those tech guys now.”
Mr. Ayala said he relishes the trappings of corporate life at the office, including standing desks, an on-site gym, and free snacks. Only a year ago, he was working out of his car, selling cable plans door to door, and relying on gas stations and fast-food places for bathroom breaks. At home, where he lives with his parents and three of his younger siblings, he takes pride in showing off his bedroom-office setup for his remote workdays. His siblings, he said, “See I’m doing great, and that’s important. I’m the oldest and I want to set a good example.”
Okta said it removed college-degree requirements for a number of sales positions last year to cast a wider recruiting net. It also formed a new business development associate program that Mr. Ayala joined to bring in and develop such candidates.
The company said it is hiring more broadly to keep up with its growth targets—it aims to roughly triple revenue to $4 billion by 2026. Like other bigger businesses, it is also seeking to further diversify its workforce, and hiring based on skills and potential, not a college degree, has helped. “We’re moving more to look at motivation and skills and experience, not ‘What college did you go to?’ ” said Rachele Zamani, whom Okta hired last year to launch and manage the business development associates program.
Many employers from International Business Machines Corp. to CVS Health Corp. now say they are happy to help relatively inexperienced new hires get trained in coding, cybersecurity, and healthcare technology to fill positions. The workers who made the “new collar” switch skews about 67% male and 77% between age 25 and 44, according to the Oliver Wyman poll. Sixty-seven percent live in cities and 70% describe themselves as optimistic about their career prospects.
Many said they made the pivot because the pandemic made them realize they value flexibility over when and where they work. Although fewer of them said getting paid more was a priority, most new-collar workers find that their compensation has grown.
After losing his Atlanta bartending job in March 2020, Zack Williams, now 36, took a landscape construction gig to tide him over. He contemplated work as an electrical line repairman but knew it could be dangerous and required frequent travel and holiday work.
Then in August 2020, he met a woman named Lindsey on a dating app. She worked at the Flatiron School, one of more than 110 coding boot camps that have sprung up around the U.S. over the past decade, according to Course Report, which tracks the industry. She suggested it could be a good fit, especially after she learned that Mr. Williams won a technology prize in high school.
Mr. Williams was nervous at first about the intensity of the nine-month $15,000 program, but he said he took to it easily after completing his first project, constructing a digital tic-tac-toe game.
Armed with a software engineering certificate, Mr. Williams started a new role in January as a software engineer at media company Gannett Co., building web applications for a salary that’s more than double what he earned as a landscaper and 20% higher than what he asked for during his job interview.
“I said, ‘I don’t think we need to negotiate, this is way better than I was expecting,’ ” he said from his home office, where he works alongside Lindsey, now his wife.
In the Oliver Wyman poll, U.S. workers who described themselves as blue-collar pre-pandemic said that enrolling in a specialized course or boot camp, or acquiring another credential, had unlocked new kinds of jobs in sectors such as tech, data processing, healthcare, and electronics manufacturing. LinkedIn Learning, a major online credential platform, saw completions of certificate-eligible classes, such as project management, rise more than 1,300% between 2020 and 2021.
The number of former front-line workers with LinkedIn profiles who made the transition to more middle-skilled jobs—say, a sales representative switching to an account manager, or a construction supervisor moving to project manager—was up 12% since 2019, LinkedIn said.
Some of the biggest increases in such career switches have been out of predominantly male fields, according to an analysis of Current Population Survey data by Brad Hershbein, a senior economist at W.E. Upjohn Institute for Employment Research, a nonprofit, nonpartisan think tank focusing on labor markets. In the fourth quarter of last year, 41,500 workers in construction, oil-rigging, and extraction jobs reported moving into professional work—a 65% jump over the same period in 2019. Among maintenance and installation workers, 20,200 made the same leap—which was 56% more than in the fourth quarter of 2019.
Recent switchers
Looking to leave to
3
6
9
12%
IT/data processing
Electronics manufacturing
Software
Healthcare
Finance
Construction
Transportation/warehousing
Wholesale
Broadcasting
Education
While the new job-market dynamics have left employers scrambling to find enough low-wage employees, they are helping much longtime retail staff, restaurant servers, forklift drivers and other laborers move into careers with better pay and less risk of being automated away one day.
Andrew Rozema, head of the computer information systems department at Grand Rapids Community College in Michigan, said many of the students in his classes had been laid off from jobs in fast food or hotels during the early lockdowns. They had a little time—and the cushion of federal employment benefits—to rethink their options, he said. “They saw how many jobs can be remote,” he said.
As many as 32 million Americans lack a four-year college degree but have the skills or experience to parlay into higher-income jobs, according to a 2022 study by Opportunity@Work, a nonprofit social venture whose mission is to help more people without a college diploma onto higher-earning career paths. The key is spending the time and dollars on training, and spotting the potential in applicants who lack traditional criteria.
“That’s a huge opportunity for a lot of employers right now, precisely because there are so many companies sleeping on it,” said Byron Auguste, CEO, and co-founder of Opportunity@Work.
Some companies have re-evaluated job requirements. In a January study, the Federal Reserve Bank of Philadelphia compared online job postings from five months before and after the pandemic’s arrival and found that when compared with the pre-Covid era, there were 2.3 million more open jobs in the pandemic period that paid above the national annual median wage of $36,660 without requiring a bachelor’s degree. Much of that had to do with simply having more U.S. job openings, but lower education requirements also played a role, the bank said.
One of the first recruits to Okta’s business development associate program was Joanna Estanislao, a Chicago-area bartender and server who was furloughed from her job at the start of the Covid era. She’s supported herself since her teens but couldn’t afford college, though she longed for a corporate career. Ms. Estanislao assumed her best bet was to become an administrative assistant and work her way up.
“I knew I had the grit, I just wasn’t sure of the path,” she said.
Reflecting on her hospitality work, she realized she had always been selling—promoting new products, cultivating a loyal customer following, and figuring out how to read a room. Her first month after completing Okta’s business development program last summer, she made 600% of her sales quota and has since won another promotion.
She gives colleagues advice on dealing with customers that she picked up from her years in hospitality: “You pretend right away you know them,” she said.
After dabbling in some free online training through Pluralsight, a software skills platform, and watching YouTube tutorials, Mr. Wallace decided to enroll in a $12,000 coding boot camp in July 2020. He completed 100 hours of preliminary coursework and used a financing option to buy an HP laptop, rising at 5 a.m. daily to study. In between classes, he supported himself with Instacart and DoorDash deliveries. He was hired in November by PNC Bank to be an application technology lead, and now maintains servers while working from home. Faking it until he made it didn’t come naturally to Tyler Wallace, 22. As a teen, he wanted to become a nurse but dropped out of college his sophomore year because he couldn’t afford it. After cycling through a series of jobs, including Chipotle worker and roofing contractor, he was hauling furniture as a mover in Chicago when the pandemic hit. Worried his future would be filled with jobs that never let him get ahead financially or professionally, he talked to his fiancée about potential career changes and settled on pursuing a job in technology.
Figuring out which skills he needed to confidently know “this is my worth, and this is how I’ll be able to add to a team” was the biggest challenge, he said. “My impostor syndrome, that was huge for me to overcome.”
The more predictable hours, higher salary and paid time off has let Mr. Wallace and his fiancée, an events marketing specialist he met when they were both in seventh grade, plan a more elaborate April wedding, as well as a honeymoon with stops in Jamaica and Europe. Mr. Wallace said he still picks up the occasional Instacart or DoorDash delivery. It’s a habit that’s been tough to shed after years of financial insecurity, but one that he hopes to give up after the wedding.