by Dean Prigelmeier, President of Proactive Technologies, Inc.
Albert Einstein is credited with saying, “Insanity: doing the same thing over and over again and expecting different results.” It is not sure if that includes instances where the packaging has been changed, but the process is basically the same. But I think we all feel, at times, a little like Bill Murray’s character in the movie “Groundhog Day” when it comes to skill gaps and worker training.
Proactive Technologies, Inc. was started in June of 1986 to address a critical need seen developing at the time. In the mid-1980’s, the
addition of computers and microprocessors began to accelerate the automation of manufacturing and change the nature of work – sometimes in subtle ways, sometimes profound. Since this movement was in its infancy, it was difficult to predict its many directions and full impact. However, it was not hard to imagine that this was going to have a major impact on the nature of future work and, therefore, the way in which employers and education developed workers.
Leading up to this, while working in certification program development, training program development and quality engineering for manufacturers, I found that the traditional, academic approaches to job training were beginning to lose their effectiveness in the workplace. Even the techniques for developing training materials was no longer suited for a job classification that may have significant changes to it weekly. Rapid job changes affected job descriptions, hiring assessments, performance appraisals – impairing an employer’s efforts to remain compliant with Equal Employment Opportunity Commission regulations. Establishing certifications for workers was impossible since the training that led into it, and even the materials used for hiring a candidate, grew quickly obsolete. Evaluating worker performance was being reduced to subjective generalities, often generating resentment from workers and those that evaluated them.
“It was not then, and is not today, uncommon for a displaced worker to bear the cost of a 2-year vocational program for a job that was there when the program started but not there when completed – a waste of time, money, opportunity and hope.”
Training materials and certification standards were difficult to develop and maintain to a moving target, and therefore often conflicts arose with engineering processes, and safety and quality compliance policies of the organization. Employers did not have the luxury to allow 6-8 months for the development of a training manual for just a part of the job, only to discover that 60% of it was obsolete when put into use.
My frustrations were being experienced by others around the world and it was the talk of the time. The warnings went out, although more directed at the symptoms of the problem then the problem itself:
“By 1990, an estimated three out of four jobs will require some education or technical training beyond high school” … “Workers with critical technical skills will be retiring at an increasingly rapid rate. For example, the average of the nation’s 300,000 machinists is 58, yet the industry is training only one-forth of the skilled machinists needed each year.“
Employment Policies:
Looking to the Year 2000
National Alliance of Business, 1986
“Some companies have calculated that the “occupational half-life*” of an employee has declined, on average, from 7-14 years to 3-5 years.” * Length of time necessary for 1/2 of the employee – held knowledge, skills and abilities for competent performance (for the job classification originally hired) to become relatively obsolete.
Michigan Industrial Technology Institute, 1987
“Nearly $30 billion is spent on employee training each year in the United States…and most of that money goes to waste.”
Fran Tarkenton, Management Consultant
Training Magazine, November 1988
“Employers spent an estimated $30 billion last year on training, but some observers feel much of that outlay was wasted. If businesses want to get a bigger bang for their buck in the 90s, they have to make changes.“
Noel Tichy, University of Michigan
Human Resource Executive, October 1988
Yet, technological advances were not the only threat to the once considered stable practice of worker development. In the 1970’s, America’s reaction to the skill gap was to begin outsourcing the production of entire industries – exchanging declining worker capacity with lower-waged labor…with even lower capacity. First, the steel industry took a hit and entire towns were devastated when the main industry that sustained the economy was dismantled and reassembled in lower-wage countries that minimized their own worker protections, environmental regulations, government taxation and oversight to attract the industry…in some cases incentivized directly or indirectly by our own government.
Next, it was the electronics industry in the 1980’s. Again, entire communities who relied on the stability of well-paying jobs for their tax base and economic activity were left ravaged as citizens tried to first understand what happened to them, and then tried to figure out a way forward for themselves, their family and the community.
Each time this upheaval occurred the call by public officials was the same, “we need to train workers for the jobs of tomorrow”…”the old skills will not be effective in the new economy”…”America has to reinvent itself.” Federal and state government agencies responded to the crisis in a predictable way; more money to the same institutions to increase their capacity to train workers (without changing how they did that). And each time employers responded by spending more money to train workers because the institutions were not delivering what they needed.
Both are guilty of not coordinating the effort based on the reality of the time. Educational institutions went with what was most familiar – teaching knowledge with, in many cases, materials that were static and outdated, by instructors with little or no relevant experience relative to the job skills they are trying to impact. The government went with what it knew, directing heavily-lobbied money to these institutions who appeared to have the solution.
To seek security in numbers, these institutions sought industry support by bringing in retired CEOs and available current CEOs to decide what the workers of tomorrow needed…then standardize that. Organizational development theory warns us that the further a worker is positioned vertically from the actual work performed the less they know about it. No doubt these representatives had skills for the jobs they held, but would these “industry experts” have enough relevant experience to positively affect the direction of worker development for the future for jobs they never held? Remnants of the 1990’s national skills standards efforts linger today.
Not for lack of financial resources being thrown into the effort (mostly to educational institutions), employers – many in the same industries the industry experts standardized skill training for educational institutions – looked internally for solutions because the “growing skill gap” kept growing.
“According to a 2002 survey of Ohio manufacturers by the Ohio Workforce Policy Board, for which 732 companies responded: 70 % of the respondents rely on informal on-the-job training for new hourly employees
57 % rely on informal on-the-job training for incumbent hourly employees
The numbers are nearly the same for salary employees; 58 % and 48 % respectively”
(AdvanceOhio – Creating a Comprehensive Workforce
Development System for Ohio, The Governor’s Ohio
Workforce Policy Board, December, 2002
But the challenge grew more pressing. While money was being showered on educational institutions to “train workers for jobs affected by advances in technology” a more sinister challenge emerged; the increasing outsourcing of the remaining jobs in other industries. No industry was safe. Paralegal work was being sent to India, engineering research and development was sent to China and Mexico, information technology and administration support jobs to India, medical lab analysis to India, call center work was being sent world- wide, assembly work went to the lowest bidder. Even the jobs Americans were told would be the jobs of the future and “everyone should get on board or be left behind” – information technology – were being increasingly outsourced worldwide or lower-waged foreign nationals brought here because “employers just could not find the skilled workers they needed.” It was not then, and is not today, uncommon for a displaced worker to bear the cost of a 2-year vocational program for a job that was there when the program was started but not there when completed – a waste of time, money, opportunity and hope.
And yet another challenge emerged as if education and employers were not dealing with enough. Someone realized, and began to write about, the fact that the baby boomer retirement crisis was looming, and that soon the remaining skilled older workers would be retiring faster than the workforce development “system” could replace them. Employers woke up to the fact that they have been doing nothing to document what they called “tribal knowledge;” the expertise in the heads and hands of existing workers that make the company or organization run. No one bothered to document best practices of their experts, with all their collected wisdom, before they left the building. In many cases the only person that could run a machine or knew a process would be leaving…for good. What would be the impact on the organization?
“Findings from the 2,046 respondent companies showed that:
• Only 4 percent of their organizations have a formal process of transferring knowledge from
retiring boomers to other employees.
• 23 percent have an informal process.
• 29 percent do not have a process but plan to implement one.
• 44 percent do not have a process and have no plans for one.”
Novations, a Boston-based global consulting and training firm that commissioned the survey in 2007
A survey Monster released in September 2007, which SHRM Online reported on similarly found that knowledge retention is not a high priority among organizations.
Before employers felt the full effect of skilled retirees leaving with the intellectual capital, the Crash of 2008 occurred. Skilled older workers and younger workers gaining skills were laid off at an alarming rate of 800,000 per month. Training would not be an issue for most of the next several years while companies first saved themselves, waited years for the Crash’s effects to find bottom, then formulated a strategy after the Crash and started looking for skilled workers they once had or could pick up.
Yes the labor market was now full, and many employers saw this as a opportunity to pick up skilled workers at a low wage rate. They did not realize though that these workers came from the same skill training system that they were skeptical about of before the Crash. With an additional 3-5 years of skill stagnation while unemployed, core skills slipped further behind, and they still needed to learn the core skills they lacked and training for the tasks of the work they would need to perform. Although there might be individuals with experience in similar type facilities, most of the work that needs to be performed is unique to the company and unique to the individual. Additionally, most employers laid off their training department along with the other workers, so they lost their capability to drive the training process and were now reliant of ad hoc, informal on-the-job training more than ever.
Some employers sought out their retirees with the valuable tribal knowledge as part of the solution, but this only kicked the can down the road. At best, these employers were back to where they were before the Crash, and everyone saw the need for skills training and skilled workers.
“Employers – When asked, “Which of the following is your greatest staffing concern as a human resources professional?”
• Training and developing employees – 45 percent;
• Retaining top-performing employees – 27 percent;
• Recruiting new employees – 23 percent;
• None/does not apply – 5 percent.”
Results of OfficeTeam survey of 500 HR managers of companies with 20 or
more employees, September 2, 2010 in EHS Today
A survey on the attitudes of multiple generations of workers showed that professionals of all ages value ongoing learning.
“Job security is an on everyone’s mind, and having up-to-date skills is key to staying relevant and marketable. By providing training opportunities, companies demonstrate they are committed to their employee’s long-term career growth, and this can help with their retention efforts.”
Workplace Redefined, a study by Robert Half reported in EHS Today, September 2, 2010
Further hampering a return to “normalcy,” many experienced community college, technical college, career center and continuing education professionals were laid off during the Crash or forced into early retirement, and their departments abandoned. With the high level of unemployment and continuing layoffs, who needed workforce development?
The solution that was selected nationally: more skill standards and more funding to educational institutions; billions of dollars in fact. Much of this money was directed to community and technical colleges who used the money to rebrand there existing curriculum – which was not helping before – and direct all efforts toward credit courses. Associate degree programs of the past became “apprenticeships.” Yet the content of the materials in many cases remained the same as was taught in the 80’s and 90’s, and what was referred to as the “on-the-job training” component of the apprenticeship was “time in the job – no structure.”
And the challenge continues to be written about.
“As the latest skills-gap survey by the Manufacturing Institute and Deloitte shows, despite continued high national unemployment rates, more than 80% of manufacturers say they are experiencing a moderate to severe shortage of skilled production workers. By some estimates, 600,000 manufacturing positions remain unfilled due to companies’ inability to find people with the right skills.”
“There is a significant evolution occurring in how American manufacturers recruit and train employees of various levels…requirements in the business world outpacing the education system, companies are developing innovative ways to compete against each other and the rest of the world to maintain a competitive workforce.”
Stephen Gold, MAPI President and CEO
For IndustryWeek Magazine – March 14, 2012
Manufacturers Alliance for Productivity and Innovation (MAPI),
an executive-education and business-research organization in Arlington, Va
“The loss of talented older workers is described as “a problem” or “a potential problem” for their organizations according to 72 percent of the human resources professionals polled.”
“HR managers said that their companies have taken the following steps to prepare for the loss of talented older workers who retire:
Increased training and cross-training (45 percent)
Developed succession planning (38 percent)
Hired retired employees as consultants or temporary workers (30 percent)
Offered flexible work arrangements (27 percent)
Designed part-time positions to attract older workers (24 percent).”
Published in EHSToday, April 9, 2012 by Sandy Smith from findings in a joint poll released
April 9, 2012 by the Society for Human Resource Management (SHRM) and AARP of employers.
“Only 17% of organizations said they had developed processes to capture institutional memory/organizational knowledge from employees close to retirement, while just 13% said they were providing training to upgrade the skills of older workers.”
IndustryWeek Magazine April 10, 2012 by Steve Minter regarding same poll results
“A newly released Gallup poll, sponsored by the Lumina Foundation: 14 percent of Americans — and only 11 percent of business leaders — strongly agree that graduates have the necessary skills and competencies to succeed in the workplace.”
“That’s in contrast to another recent survey, conducted by Inside Higher Ed in conjunction with Gallup, indicating that 96 percent of academic officers believe that they’re effectively preparing students for success in the workplace.”
Julian L. Alssid
Chief Workforce Strategist at College for America
Huffington Post February 27, 2014
“Over the next decade, nearly 3.5 million manufacturing jobs will likely need to be filled. The skills gap is expected to result in 2 million of those jobs remaining unfilled.“
The Skills Gap in US Manufacturing: 2015 and Beyond
Deloitte and The Manufacturing Institute
Has the billions of dollars distributed to mostly community colleges and non-profit organizations through the Trade Adjustment Assistance for Community Colleges and Career Training, federal efforts to increase apprenticeships, grants for dislocated and disadvantaged workers, tax incentives and tax credits alleviated the skill gap dilemma? Here is one comment from an US Department of Labor sponsored review of Technology-Based grant funded programs:
“While survey respondents [of those completing a program] felt they learned something new from their TBL training, less than half of the survey respondents felt the knowledge they acquired in these programs would help them advance in their career…this suggest that TBL training programs may need to evaluate their objectives and determine whether they are offering content that has enough depth or relevance for current skills required of the workforce.”
“About 53 percent of employed participants had a job in the sector of their training.”
Release and Availability of a Report: Evaluation of Programs Funded by the Technology-Based Learning (TBL) Grants Final Report – Lessons Learned
U.S. Department of Labor issued a Training and Employment notice 29-15 on 2-29-16
There are some “experts” who suggest manufacturing jobs are going away and are never coming back. Tell that to the Austrian, Chinese, French, German, Japanese, Korean and Swiss companies that are building plants in the United States and creating manufacturing jobs. Tell that to the small and medium-sized manufacturers that are creating and maintaining those jobs so long as those single-minded Wall Street corporations don’t disrupt the economy in which they operate ever again. Tell that to the workers in Mexico and China that are in the manufacturing jobs that were once here, and who are performing the same work for a fraction of the pay. Those jobs didn’t “go away,” many think they were driven away by economists and political interests looking out for themselves at the expense of the many.
And if U.S. wages for some jobs such as Tool & Die, Mold Repair, Press Operator became unattractively high prior to the Crash, it might be good to recognize that it was due to the fact that next to no institutional and industry training programs existed nation-wide to develop the pool from which to draw. Supply and demand. Decrease the supply and wages will react appropriately.
Perhaps what is needed now is a coherent national strategy for industrial production that keeps the jobs we have, encourages the development of new jobs and brings back jobs that should have remained here. This will stabilize the volatile movement of jobs and slow down the target to which workers are to be trained. This policy would need to encourage and support the expansion of those companies that want to remain productive in this country and trade with other countries on a fair basis. What is the point of institutions being funded to enroll students under the guise of “worker training” when government funds and tax incentives encourage the targeted jobs to go elsewhere?
Educational institutions should then focus on what they do best, developing core skills and competencies that change at a much less pace; not venture out past their institutional competency or oversell their products and services which will only disappoint and turn away needed partners. Employers should be persuaded to engage and deliver the on-the-job training in a content-valid, structured, deliberate and documented way so that the records can be added to a student’s transcripts.
Divert some of the money the government gives to educational institutions for workforce development that clearly has not benefited the employer or employee, to the employer with conditions and oversight. A good model is the Ohio Incumbent Worker Training Voucher Program. Although Congress supposedly modernized the local Workforce Investment Boards (WIB) in 2014 with the “Workforce Innovation and Opportunity Act(WIOA),” nothing has really changed and the money is still not getting to the employers for the right projects for their needs. This needs to change as well.
W. Edwards Deming, a father of quality standards, states that “…85 percent of all quality is built into the process.” Thirty years of the same, circuitous and expensive effort – tangential to solving the problem – should be enough. It is not with bad intentions, but the money is coming from policy makers who are too far detached from the problem to understand it, and are easily lobbied off target. The mandated remedies have inadvertently extended, and in some ways exacerbated, the underlying problem. It is up to employers to seek their own way and break this cycle of insanity. Employers know what a “system” is, and should have a good idea what makes a “training system.” Their entire organization is based on systems and they value and improve them. If your approach to worker development does not seem like a system to you, go with your instinct and bring about change.
Others in industry have noticed the repetitive warnings of skill gaps that don’t seemed to get filled. Michael Collins in his April 16th, 2016 IndustryWeek article, “Why America Has a Shortage of Skilled Workers” pointed out the pattern. “The urgency of the problem has been described as far back as 1990 by the National Center of Education and the Economy with its report: “The American Workforce – America’s Choice: High Skills or Lower Wages.” Since then, the problem has been well documented…” Collins goes on to site industry and education reports in 2003, 2005, 2007, 2011. “Year after year, large corporations…do not seem to want to invest in the comprehensive training programs that will increase the skill levels of the employees…”
The conventional “experts” can, and do, get it wrong sometimes. Most recently, the experts missed the Crash of 2008, the collateral damage from which devastated many small and medium-sized companies, the lives of their employees and their families and the communities in which they live to this day. The experts missed the strong anger brewing in rural Britain and gave little chance of the Brexit vote – for Britain to pull out of the European Union – passing, which did pass. The experts underestimated a similar populism growing in the United States and wrongly predicted the winner of the Republican primary in the United States, then wrongly called who would win the presidential election. So it is quite reasonable to question the experts on worker development.
The question for everyone – educators, business leaders, government leaders, employees and general citizens is, “How serious are we about solving the skills gap problem?” There is no denying that the recurring criticism after each lost decade of effort seems sadly familiar. Perhaps it is time to take a step back and separate out the symptoms from the problem. Stop investing everyone’s effort in solutions to promote one or two group’s interests or products. Be honest with ourselves and have the courage to change focus to the problem, and this decade make the investment in worker development matter.
If government creates policies that encourages and rewards manufacturing job creation, we can stabilize the target for which workforce development is applying its efforts. Manufacturing jobs and training for jobs will again have value and purpose. If it works for manufacturing, this approach can work for the other industries. The economy and society will benefit from the stability as well. Solving the devastating 25 year trade deficit will solve may of this countries fiscal and debt worries as well.
Employers can lead the shift by structuring the unstructured, hap-hazard and ad hoc on-the-job training already occurring at their facilities to make it structured, deliberate, documented and pervasive. We know this training is designed for jobs that are here today. If employers show the learning institutions and government agencies the way, they will have no choice but to follow or be left behind.
For more information on worker development programs that work, visit the Proactive Technologies, Inc.’s website. You can schedule or attend a live online presentation by selecting the topic of interest OR contact a Proactive Technologies representative for information about a clearly different approach that will increase worker capacity, work quality and quantity and increase compliance while cutting your overall internal costs of training.
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