Proactive Technologies Report – October, 2023

The Good News, Enormous Employer Wealth is Waiting to be Harvested

by Dean Prigelmeier, President of Proactive Technologies, Inc.

The good news for employers is that there is a tremendous amount of wealth yet to be harvested under the very noses. For most companies, it is one of the most overlooked assets and last to be maximized as with any other assets of the organization. Strangely, it is the asset that employers usually recognize as the organization’s greatest.

Sadly, accounting practices still classify labor, as an “expense” while classifying the purchase of equipment the “expense” is expected to operate as in “asset” or “investment,” which is commonly defined as the “commitment of resources to achieve later benefits.” Little is known about the value of the so-called expense nor the return on worker investment, accumulating value throughout the lifespan of the worker. Historically there have been few ways to account for it. Consequently, a general manager has very little data to present to the board when told to cut expenses – the easiest being headcount.

Every employee who is hired encounters the same scenario. Once hired and through whatever screening available to make sure that the known pre-hire skills are sufficient to learn the unique tasks that make up the job, the blank-slate employee is most likely matched-up with somebody who has already demonstrated they can perform the tasks to the employer’s satisfaction. No structure, no training tools, no documentation, just an informal experience that differs from informal trainer to informal trainer, shift to shift, for every employee that goes through the ritual. Read More

Employers Say Fewer Jobs Require Degrees. What is Their Plan to Make Up the Difference?

by Stacey Lett, Director of Operations – Eastern U.S. – Proactive Technologies, Inc.

In a recent article in HR Dive by Carolyn Crist entitled, “Fewer Job Posts Require Degrees, Though Hiring Hasn’t Caught Up,” the author explained what appears to be a growing shift in hiring practices by employers. Or maybe not.

She explains, “While the intention to hire people without degrees is seemingly growing, hiring practices remain influenced by traditional requirements… Talent acquisition pros appear to be changing their habits, but hiring has not yet caught up to the push to end degree requirements, LinkedIn data says.”

Hiring based on skills is more difficult than hiring by degree, by far. Hiring by skill requires an accurate understanding of the required prerequisite skills for the job and an accurate way to measure a candidate’s skill base relative to that job classification. It requires “content valid” or “job relevant” hiring criteria that represents today’s version of the job classification, not yesterday’s or yesteryear’s job criteria – something most employers lack. Many employer’s job descriptions alone are grossly behind today’s technological state of operation, and what they have is guaranteed to continually degrade with each passing year. For some, it might even be so extreme that it may produce an Equal Employment Opportunity Commission violation waiting to be discovered.

Proactive Technologies’ Turnkey Package Offers for Prospective and Returning Clients – Discount Expiring Soon

Estimating the Costs Associated With Skipping Employer-Based Structured On-The-Job Training

by Dean Prigelmeier, President of Proactive Technologies, Inc.

It should go without saying that if the employer has no deliberate strategy to train workers for the tasks they were hired to perform, the employer will probably never realize the maximum output possible from a worker. Multiple workers operating under-capacity can create exorbitant, and unnecessary, costs to the employer – bleeding from profits and often leading to sweeping and irreparable reactions from management as they try to “fix” all but the obvious.

The effect of worker capacity on any business strategy is the least understood of factors, but one as important as innovation, process improvement and zero defect strategies. After all, fundamental to each of these strategies is the worker’s ability to competently carry the intended actions to maximize those efforts efficiently.

Employers need to seriously consider the human factors, not ignore them and focus on everything but this. After decades of neglect, supported by workforce development institutions that have no tools to address this stage of worker development and often unknowingly promulgate distractions in their efforts to claim they do, management has come to simplify the human factor into a cost that can be easily eliminated or replaced by a lower cost alternative in another location. Lacking in this reaction is the underlying fact that moving operations to lower-wage labor markets with even more need for training (e.g. new challenges such as language, culture) only appears to be adding to profits short-term; the same problems exist, but the lower cost of labor makes it more tolerable even if greater challenges to worker performance now exist. As wages rise, these challenges become more pronounced and management becomes more critical.

Total Cost of Ownership formulas, such as the one used by the Reshoring Iniative, try to capture the hidden and overlooked costs of off-shoring operations, with labor challenges being one factor considered. But even so, the factor’s significance is understated. Read More

Read the full October, 2023 Proactive Technologies Report newsletter, including linked industry articles and online presentation schedules.