When Wages Rise for Skilled Labor, Can Your Firm Maximize Worker Value and Minimize Investment?
by Dean Prigelmeier, President of Proactive Technologies, Inc.
Ideally, wages rise for most job classifications when conditions are right to match the rising cost of living that an expanding economy brings. As skilled workers find their rightful full-time place, they leave openings behind them that employers need to fill. Competition for the most skilled of the remaining skilled leads employers to adjust wages and benefits accordingly to be competitive.
Rumblings point to the fact that wages for skilled workers have not kept up and a major adjustment is long overdue. When wages rise, will your firm feel the affects of added labor costs or will they adapt to increasing wages and realize offsetting higher returns on worker investment?
click here to expandThe economic reasons for competitive compensation usually include the scarcity of labor, scarcity of relevantly skilled labor, abundance of job choices yielding migration of the skilled workers with choices, increasing technical nature of jobs, and an expanding economy yielding internal promotions that create openings both above and below current job classifications. These all increase the level of competition for highly skilled workers that leave job openings in its wake.
This perpetual labor volatility is more unique to the United States than to other developed economies. European government and business policies facilitate workforce development efforts based on more accurately predicted labor needs. Economic policies have a purposeful affect on the corporations that thrive, and toward workers and the available jobs today and those to come. Students are exposed to career opportunities starting in grade school which leads to focused interest by middle school school, leading to paid vocational training and apprenticeships before leaving high school. For those wanting to continue college in their chosen profession, apprenticeship training is coordinated with academic learning to promote growth in each and time in both to reinforce each effort.
It is much different here. The U.S. does not believe in long-term planning for the greater good. Many like to believe that this driven by a policy of laissez faire or “let it be” or “let it go.” Other economists claim that this is not a policy as much as it is neglect. Still others see this version of laissez-faire as very selective and that the government does intervene to the betterment of some individuals, companies, and industries to the detriment of others.
In any event, this version of capitalism often yields wild gyrations dotted with cataclysmic events. Read More
Retiring Workers and the Tragic Loss of Intellectual 
Property and Value
by Stacey Lett, Director of Operations – Eastern U.S. – Proactive Technologies, Inc.
The warnings went out over two decades ago. Baby Boomers were soon to retire, taking their accumulated expertise – locked in their brains – with them. But very little was done to address this problem. Call it complacency, lack of awareness of the emerging problem, preoccupation with quarterly performance, disinterest or disbelief, very few companies took action and the Crash of 2008 disrupted any meager efforts that were underway.
According to Steve Minter in an IndustryWeek Magazine article on April 10, 2012, “Only 17% of organizations said they had developed processes to capture institutional memory/organizational knowledge from employees close to retirement.” Who is going to train their replacements once they are gone? Would the learning curve of replacement workers be as long and costly, repeating the same learning mistakes, as the retiree’s learning curve? Would operations be disrupted and, if so, to what level?
click here to expand“In our new “outsourcing nation,” a widely held belief is that employees are simply costs to be cut and not assets to be valued.” …. “Manufacturing faces a two-sided problem: it not only has thousands of people retiring, but it does not have the training programs to train skilled workers to replace them.”
In the last few years, it seems an alternative to the concentration of expertise in a few subject matter experts has become to use lower-wage temporary or contract workers who specialize in smaller quantities of processes, and who can be “traded-out” with a minimum amount of disruption. History will tell us just how costly that approach was and if anything was learned.
Many in corporate America have come to view all labor as expendable; easy to swap with a cheaper alternative – disregarding the cumulative asset value of the investment made in each. Read More
Apprenticeships: Be Careful Not To Minimize Integrity 
While Spiking The Numbers
Dr. Dave Just, formally Dean of Corporate and Continuing Education at Community Colleges in MA, OH, PA, SC. Currently President of K&D Consulting
In a Community College Daily News article, “Drawing Lines on Apprenticeships,” business and industry representatives seemed to have expressed to their congressional leaders the changes they would like to see in apprenticeships before they would consider participating. The opening statements from the Senate Health, Education, Labor and Pensions Committee chair Sen. Lamar Alexander (Tennessee) and ranking minority member Sen. Patty Murray (Washington) set the debate, with “Alexander arguing that registered apprenticeships limit creativity and flexibility that employers seek because of cumbersome administrative red tape. More companies want less-formal, industry-recognized apprenticeships that allow them to work on specific skill sets, he said, adding they also are more appealing to industries such as health care and information technology that don’t traditionally offer apprenticeships.”
Ranking Member Pat Murray (Washington) rebutted this claim, “…registered apprenticeships ensure rigor and program quality. She said GOP efforts to encourage more nonregistered programs is designed to ‘weaken and water down’ programs and to open the training market to for-profit institutions.” Most people actively involved with apprenticeships know that much can be done to make apprenticeships more attractive, practical, fulfilling and feasible to employers and more attractive, achievable and valuable to apprentices. And that there is a role for for-profit training providers when the non-profit and institutional related technical instruction in the area is weak, has not been kept up-to-date or is non-existent.
click here to expandThere is no denying that the iconic apprenticeships of old were hard for employers to embrace. An 8-10 year apprenticeship program for, in many cases, 1 apprentice was a non-starter. And with developments in the last 30 years – massive relocation of jobs off-shore, instability of employment even before the Crash of 2008 but more so after (employees not able to continue in a job classification for 3 years let alone 10 year apprenticeship), the stagnation and decline of wages and continual introduction of newer technology that redesigns the nature of jobs – everyone involved including community colleges felt they were playing a seemingly never ending shell game. Add to that a period of uncertainty such as the current trade and tariff action exchanges and the only thing certain is an uncertain workforce development target.
In the past, the criteria apprentices had to meet to reach journeyman status was ambiguous. Read More
When is Illustrating Technical Materials Useful to the Trainee?
by Dean Prigelmeier, President of Proactive Technologies, Inc.
Technical process documents standardize work processes in an attempt to maintain task performance at a consistent level of output. From organization to organization, process documents may vary in usefulness though required by ISO/AS/TS certification. Some may be too vague, too specific or too cluttered into lengthy paragraphs designed for human error. Nevertheless, the intended purpose is to offer guidance as to the “best practice” way of performing work. Whether illustrating technical documents is useful in achieving that goal is dependent on a few factors.
Technical processes, illustrated or not, are most useful to a worker when learning a task for the first time. Unless in a checklist format where step-by-step initials are required to document that no steps are missed, most process documents are reduced to a “reference status” Even though management and auditors want to believe process documents are followed intently each time, that is usually a “staged” behavior. In reality, once committed to a worker’s memory many documents are not seen by the user until the audit is scheduled. Unfortunate but true.
click here to expandSometimes more diligent workers make up for document inadequacy or lack of process documents by keeping notes in their lunchbox or, more precariously yet, in their head. Heaven forbid this is discovered during an audit. These notes not only are uncontrolled and unofficial, but they represent a wealth of “tribal knowledge” that is not routinely shared with new-hires. Mistakes that are known to have happened, and can be avoided if shared, are repeated with each trainee to everyone’s detriment. The fact that each employee feels the need to keep their own notes is a sign of some problem with process documentation and should investigated.
Stepping back to get a better view of learning patterns of a typical worker may be helpful. It varies from organization to organization, job classification to job classification. If an organization has been trying to hire based predominantly on wage level, they often find the lower the wage level the lower the inventory of prerequisite skills for not only the tasks to be learned, but also the ability to learn. And most organizations that focus on lower wage levels do not have a budget for remediation of deficient core skills to improve the process of learning.
It is here that organizations sometimes try to make up for the deficit by expending time and money to illustrate the technical materials, thinking “pictures speak a thousand words.” Read More
Read the full October, 2018 Proactive Technologies Report newsletter, including linked industry articles and online presentation schedules.
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