You’ve Cut the Training Budget, Then Cut Employees…Now What?
By Dean Prigelmeier, President of Proactive Technologies, Inc.
Layoffs are a traditional business solution to cutting costs in response to a softening of the market or unexpected erosion of the underlying economy. But anyone who has implemented a layoff or survived in its aftermath can tell you, layoffs often do not really make business sense; they seem like an act of desperation.
According to Elizabeth Flood, Associate Editor of CFO Dive, “Layoffs may cause organizational drag.” “Layoffs can erode shareholder returns, with expected savings from workforce reductions offset within three years by unforeseen consequences such as reduced employee morale, turnover and loss of customers,” according to recent research from Gartner.
“The first thing to recognize is that there is an immediate upfront cost to layoffs as a business will need to reorganize itself around a smaller group of employees and typically incur costly upfront severance payments,” Vaughan Archer, senior director, research and advisory in the Gartner Finance practice, said in a statement. Businesses will likely see an increase in both “costly contractor hiring and demands for increased compensation from remaining employees who are now under a greater burden,” he said.
Even if an organization avoids a “vicious cycle of employee turnover,” eventually, the business cycle will turn, leaving the organization scrambling for staff, the report said.”
click here to expandEmployers – especially their financing department – have been conditioned to believe that layoffs are the only option to rapidly turning conditions. This is an extension of the widespread neglect of worker development and worker management. Human resource management professionals have convinced themselves through a sort of “groupthink” that their only role is hiring, firing and management of benefits. This has been reenforced by college curriculum to become a “Human Resources Generalist” – very popular today as a way to lower the costs for HR management. This has further institutionalized the mistaken belief that the worker development process, starting at hiring, is “organic” and will take care of itself; once an employee is hired the HR department’s job is done (until an employee is returned to HR with the conclusion from deep analysis, “I don’t think this guy will work out”). Read More
Have You Captured the Expertise of Your Critical Hourly and Salary Positions?
by Stacey Lett, Director of Operations – Eastern U.S. – Proactive Technologies, Inc.
Starting in the late 1980’s, employers became increasingly concerned with succession planning; ensuring salary workers were being groomed to replace critical senior employees in the event of retirement or voluntary/involuntary separation. It was realized that the potential disruption – direct and the ripple effects – caused by an unplanned void in the leadership chain might be perceived as a threat to shareholder value. Shareholders, too, wanted assurances that maximizing a firm’s performance was not tied to one or two invaluable people.
Compounding the concern was the realization that the workforce was aging at all levels, and that retirements were a certainty. Prior to the Crash of 2008, employer’s concern over this was amplified by anecdotal reports from other employers already experiencing the impact. A movement toward a remedy began to take shape, and not just for high-ranking salary positions, but technically critical salary positions and even hourly positions that with a loss of one or a few technical experts might disrupt operations and impair a firm’s viability.
For decades prior to the Crash of 2008, Proactive Technologies, Inc.® worked with a lot of employers by job/task analyzing their critical job classifications – initially hourly positions but a growing salary class of positions as well. This approach “captured the expertise” of the aging workers to use it to develop the tools which would allow the company to train nearly anyone with a sufficient core skill base, replicating experts as needed.
click here to expandThen the Crash of 2008 happened and employers found themselves unexpectedly and unwillingly accelerating the loss of technical experts at all levels. For employers late to the game, there was no longer time to capture expertise; it had already left the building. We saw this phenomenon repeating itself with the Covid-19 pandemic. Read More
Workforce Development Partnerships with Substance: My Experience
Partnerships between employers and local educational institutions/training providers are a tricky thing. Not every employer knows clearly what they need nor can they articulate the need, and not every educational institution can understand the need, or has products or services available or relevant enough to make a difference. If either of these realities are present, or worse both of them, it can make worker development partnerships difficult to disappointing.
Employers are closest to the work that they need performed by the worker, which is usually very different from the employer down the road. Yet employers rarely bother to document what makes up that work to articulate it in an understandable way to an educational institution or training provider. If you doubt that, take any of your job classifications and try to explain it in enough detail to train from it.
“Our partnership, located in northern Ohio, was the first implementation of the US Metalworking Skill Standards in the country.”
When in doubt, some employers pull out a sample written process and a few random specifications for compliance to focus the discussion. Seriously, I have been in meetings when an employer pulled out a 15 year old job description, which was a cut-and-paste of a 20 year old job description, and gave it to the community college and said, “we need workers trained for this.” Not surprisingly, they are disappointed and disillusioned when what the community college came up with seems irrelevant when shown to workers currently in the job classification. Read More
The Worker Development Puzzle… For Many
by Dean Prigelmeier, President of Proactive Technologies, Inc.
After many years of setting up and providing technical support for employer-based structured on the job training programs, I can say with confidence that most, if not all, employers have significant weaknesses in their worker development process. If pressed, I believe most employers are aware of it, but have become comfortable with the mistaken notion that “it is what it is.,” Some are unaware and frustrated at the lack of results when hiring new workers to maintain or build capacity; accountants show signs of concern when hiring adds labor costs and often results in lower production output. Others in management may be concerned with unsustainable poor output quality or an increase in product or service scrap or rework.
Hiring more workers is not always the answer to the apparent lack of capacity to take on new product lines and new projects. Many employers overlook the fact that there is a tremendous amount of untapped capacity among the existing workers who have never had a chance to be fully trained for the jobs for which they were hired. The reason: most companies have remained in the unstructured, informal, undocumented one-on-one task-based training mode – even though the tasks are often transforming and the skills required for jobs have continued to increase in complexity.
click here to expandUnderstanding the “chemistry“ of worker development is key to maximizing the return on worker skills and efficiencies. If an enterprise is struggling to increase output given the current staffing levels, adding new workers to compensate may often yield even less output. The simple reason being that a new person with no demonstrated skills or relevant capabilities is paired with a higher paid subject matter expert who is to transfer their expertise in an unstructured, ad hoc and undocumented manner. For however long this unstructured experience takes, one person who used to be very productive is now training a worker who has little or no productivity, doubling the loss of capacity rather than increasing capacity to increase productive output. As production output falls, the subject matter expert trainer may feel compelled to take up the production slack – putting more distance between them and the trainee. During the probationary period, the new-hire doesn’t know what they don’t know and what is not being trained, so they may feel the only solution is to lay low.
Proactive Technologies Turnkey Package Offers for Prospective and Returning Clients
by Proactive Technologies, Inc. – Staff
The world has been through a lot in the last few decades. Employers finding themselves making decisions and changing their mind for the most unexpected reasons. Proactive Technologies, Inc.® wants to accommodate and support those decisions in the best way it knows how. This introduction for new and returning clients of its turnkey worker development package is one example.
New Clients:
If you are interested and would be willing to schedule a brief, 45-minute live online briefing on the PROTECH® approach to worker development and how PTI would make establishing and implementing a training system easy, efficient and with low-to-no investment for your organization, PTI is willing to schedule a free follow-up session to dig deeper into what it would look like considering a job classification of importance to your firm. Simply put: Read More
Read the full July, 2023 Proactive Technologies Report newsletter, including linked industry articles and online presentation schedules.
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