Reposted from Crain’s Business Detroit
The institute, which launched in January 2020 and primarily teaches IT and networking, operates on an income-share agreement model in which a student repays tuition once they’ve landed a higher-paying job. In addition, the institute acts as a consultant for many companies to help address talent needs and diversify the workforce.
There are a fair bit of options, such as community colleges, for those seeking IT certificates. What makes Automation Workz unique?
Yeah, but they all assume that we have some prior knowledge. What happens when we don’t have any prior knowledge? I never thought about it. If I could create a post-secondary institution that’s going to take high technology for those individuals who don’t have prior knowledge, and that’s how we landed on Automation Workz.
Now what we did is that I reached out to partners because I just always believed to do things with partners — they make life easier. And I always wanted individuals to learn the Cisco Systems way of doing the business of networking. If you know anything about Cisco, Cisco is very rigorous, and usually is not your first option when you go and do technology training. It’s usually your second or your third. What would happen if I made it your first? If I could build a system and take people from no prior knowledge, and instead of putting them in an entry-level position, skip them by the entry-level position and put them in an intermediate position. Is that doable?
What did you learn?
Everyone told me that I was crazy, but I’m a trainer. I know how to train. I can teach any complicated subject to a fifth-grader. So I used those skills to create Automation Workz Institute. We do networking and cybersecurity training, and we are mainly focused on individuals that are 25-45 years of age. And from very basic to intermediate level. Now we have been blessed to have some great success. Our highest job offer we’ve received so far has been $117,000, and we placed that person in Atlanta. The second one was $105,000, that person was placed in Arlington, Va.
Your institution uses a somewhat unique form of payment known as an income-share agreement. Explain how that works for students?
Pretty much they are a loan, but they have a different caveat than a traditional loan. Most traditional loans pay schools tuition upfront and the candidate gets no guarantee of anything. They just go through training and hope for the best. But with the income share agreement, what we do is that we give people a guarantee we’re going to help them get a better life. And if they don’t make a threshold (income) of $30,000 or more, we’re going to waive their tuition.
I’m a business person. I really don’t want to waive the tuition. So whatever is necessary to get you employed and get you in a job that is way above the minimum wage, so that we can earn our tuition. And so it has worked for us. It has done a very, very great job of getting people there, but we still do have one barrier that’s outstanding.
What is that barrier?
That is jobs. We still have a difficult time finding jobs for our learners. And it’s not because the jobs are not available. A lot of the employers are still not comfortable hiring diverse candidates. And so we struggle with that intensely. We didn’t realize how much the struggle happened until the protests of June 2020 of last year.
And so being a former headhunter, I whipped out a tool I had not used in 20 years, called the diversity culture audit. And what that tool does is that we go in and we interview the top executives of the corporations to kind of get a sense of what their mindset is, or what their thought patterns are, how their company has grown. And then we turn around and look at every piece of their operation to say, where can we place diversity or where is diversity lacking?
What have you found?
So what we discovered is that a lot of that those problems are happening in HR. Because HR is one of the few departments in the corporation that never gets an audit. Well they should. Because HR defines the culture. It defines the policies and procedures, and right now, labor is your biggest asset and your biggest expense.
The company recently closed on a round of $10 million in financing from Blair, an educational finance company. What does that capital do for the company?
It allows us to scale across the country. While we are headquartered in Detroit, we do have students in other places. Right now we have a lot of students coming out of Baltimore, we have a few students in Atlanta, and just recently we’ve been getting some students coming out of Philadelphia. So it allows us to be able to scale (and) to be able to just go out and just full-scale recruit students, and be able to help them with their tuition set-up and be able to come to our school for learning.
What are the reactions you tend to hear on income-share agreements, which is largely backward to how our traditional educational finance model operates?
First of all, people think that you’re lying, because it just sounds way too good to be true. So that’s the first reaction … and when they sit down and read through the paperwork to see that it really is legitimate, that we are going to keep our promise that we’re going to give the money back if you don’t make it. But our goal is that we’re taking on that risk.
We’re not saying that lightly because we really don’t want to give any money back. What we want to do is make sure you’re ensconced in a career, and that is a career that’s profitable for you. And so, the first reaction is that: ‘I don’t believe you.’ But then when they finally get to the school and get to the curriculum and see the other students that are available, they realize that this is a real phenomenon, and that we’re going to help (them) get there.
One trend we’ve increasingly seen during the pandemic is service-sector workers leaving the industry in favor of different types of work. Have you seen an influx of students due to that?
We actually have gotten some restaurant managers, because they tend to be the hardest-working people known to the earth. So they can come to us and then we just teach them the technology, but we don’t have to teach them the work ethic because they have been accustomed to working 60 hours a week. It’s just part of their industry. So there’s opportunities for all types of front-line workers. But … we do screen (students). We have parameters and what we like to see in our students, and ideally what we like to see are individuals who have strong problem-solving ability. Unlike other schools, we don’t test for academics. What we test is for that problem-solving ability.