Extreme “Bumping” – A Powerful Lesson Supporting the Value of Cross-Training From a Union Shop

by Dean Prigelmeier, President of Proactive Technologies, Inc.

A challenge for union shops in this age of “higher-than-normal” labor turnover – through voluntary and encouraged retirements, reactions to economic events, corporate strategies to lower labor costs, etc. – is “bumping rights.” Whenever an employee with seniority departs the organization for any reason, a posting goes up and lesser senior employees can bid on that position if posted for bidding and kept open. If the hiring ends up being internal, several people can change seats to fill the open and subsequently opened up positions, until everyone is seated once again.

The very positive aspect of this labor contract provision is the opportunities for cross-training presented to the employees, and employer for that matter. Although it may be a little frightening for less senior people who, through the early years, get bumped rather than do the bumping, it provides hope to newer and younger workers seeking to move-up from entry-level and a chance to experience more challenging and interesting job classifications. The skill cross-training it provides facilitates continuous development opportunities to the employee that they might not have in a non-union shop -at least to that degree.

One challenge it presents to the employer is the potential for loss of capacity in all departments affected by the bumping chain. Accumulated expertise becomes mobile and less valuable if not positioned to perform the work for which the expertise applies. Capacity is lost from both the job the employee departs and the one they are moving to fill. How much capacity is lost in each case, and for how long, is determined by whether there is an infrastructure to train workers quickly. In non-union shops that do not have a task-based training infrastructure, this potential risk is mitigated by limiting the movement of workers who have demonstrated high level work performance in one area from moving to another job classification – latterly or vertically – for fear of the repercussions of replacing them.

One extreme case of bumping we experienced was at a firm, with a union, for which Proactive Technologies, Inc. has provided technical consulting for the last 16 years. The company’s initial concern in 2000 was that 40% of their manufacturing employees were scheduled to retire in the next two years; 80% over the next 4-6 years. A traditional manufacturing company in Small Town USA, where a company takes care of its employees and its employees are loyal for life, was now facing the fact that a large portion of their workforce had reached retirement age, and this could be a potentially fatal blow to the company’s capacity and operation if not addressed.

The recommended strategy to accommodate this was to perform a full job/task analysis on each job classification, in order of the subject matter expert’s retirement date, to ensure that valuable expertise was captured and the asset was kept “in the family.” Next, we quickly established structured on-the-job training to swiftly and fully train the replacements as they arrived. The retiring subject matter experts in most cases were very cooperative and thrilled that the company had a plan to make sure the company continued on after they left. After all, a lot of people in the community worked for the company, including family members, and they wanted to see the company continue to thrive. In some cases only one person ever knew how to operate a bank of machines important to the flow of product through the production process. Without capturing that expertise the result could be costly.

Several years later, while this strategy was successfully underway, the corporate office announced this division would be soon sold. Not because it was under-performing, but for other strategies involving raising cash and redefining their market. When word got out, several employees scheduled to retire in the coming years moved up their retirement dates. They had become skittish and moved to retire early in an effort to lock in their benefits with a company they knew than take a chance with one that had not yet been announced. At the time, the industry was full of similar stories that did not turn out well for the employees.

For the coming 12 months, 12 employees out of 120 changed their job assignment due to bumping. When senior people leave the company, the bumping “draw” upward can reach very deep as opposed to when a relatively new employee with less seniority leaves the company. For most companies, with no sound strategy to manage the transition, this volatility would have been fatal. Imagine if 12 of 19 job areas at your plant, averaging 6.3 employees per area, were impacted for almost every month for a year by internal turnover. Would your organization be crippled by lost capacity, productivity and output?

This company had a plan and an infrastructure. Although the strategy had to be expedited, it worked better than hoped. The company and its employees made it smoothly through the acquisition, and the acquiring company noticed the program in place and enthusiastically supported it. The company in two years increased revenues enough to pay off the acquisition cost even with all of the retirements and bumping. The new company continued to increase its annual revenues over the next 8 years by nearly 700%, without a noticeable increase in staffing levels and without adding staff to the human resources department to manage the worker development strategy. Still just one HR Director and one assistant after 16 years.

Of course training was not the only reason the company continued to thrive. They had embarked on several other quality and business operation improvement tracks (e.g. LEAN, AS certification, NADCAP), and the structured on-the-job training infrastructure was even able to support that effort.

The company not only had in place a system for the “accelerated transfer of expertise™”, no matter how long that employee was able to stay in the new position – incumbent or new-hire – the company could track the monthly affects of the transition to know where potential bottle-necks could arise and preempt them. Each worker’s accumulating task mastery was tracked for every job classification in which they spent time. If, and when, the employee returned to a previously held position, training resumed from the point where they left off. After the 12 months of employee migration, staffing levels settled down to a level more familiar and less alarming.

In looking at the OJT Progress Report Tracking Chart for each job area, I noticed something. One of the more astonishing outcomes recorded and under-reported was how the overall capacity by job area was maintained at a reasonably high level despite the movement between jobs – sometimes at high levels for extended periods. This meant that each employees received enough documented, job-specific task-based cross-training that bumping had not caused the types of disruption seen at other union (or non-union for that matter) facilities with no structure, no documentation. This company drove up and sustained reasonably high levels of collective expertise for each job area, and the aggregate capacity for all job areas, as they dealt with the change in each area. The imposed cross-training was the force that drove it and the structured on-the-job training infrastructure supported it.

One point discovered and illustrated in the charts show that when one person with 80% task mastery left a job, many times the employee was replaced by someone with accumulating applicable task mastery – in some cases as high as 75% task mastery (see Chart A above). For these job areas, there was really no noticeable effect on productivity and output during this period.

On the other hand, when a person with 80% task mastery was replaced by a new person with 0% task mastery, the department’s average capacity would fall, which is what one would expect (see Chart B above). Small departments with only a few workers were particularly vulnerable to this.

The Aggregate Plant Capacity, across all 19 production job areas, was tracked and documented this movement (see Chart C above) and illustrated that potential bottlenecks that were appearing (like the old “whack-a-mole” game) on average were accommodated fairly effectively. The difference for this company was that they had empirical evidence to identify the risk, present it at the production meeting and an on-the-job training infrastucture that was always online. The potential risk could be dealt with immediately and the company could focus on other parts of the operation.

Although this company averaged 120 production workers during the 16 years of structured on-the-job training, we have documented 440 individual training tracks, and all the tasks mastered in each track, and the number continues to grow. Many employees have completely mastered 2 -3 job classifications and have significant progress in another 5 – 7. This information is valuable in planning for business expansion, replacements for workers on vacation or medical leave, and even to just know more accurately the collective value of each worker to the organization.

Having a structured on-the-job training system, focused on the critical tasks of each job classification, is a vital deterrent to capacity erosion due to volatile employee turnover for any reason. But having the data to track the effects and manage a rapid response is important for planning and trying to predict the affects of staffing adjustments – information and tools a typical human resource management department lacks.

Getting ahead of any potentially catastrophic staffing scenarios should be a priority in this world heaping with disruptive events. It reflects the type of positive, proactive management vision we expect for the other parts of the organization. Waiting for the disruption before developing a strategy is a recipe for disaster.