Workforce Development - A Good Investment?

Preparing unemployed and underskilled workers for skilled positions

The other day I got a message from Laura Johnson, over at Public/Private Ventures in NYC.  She was telling me about a new study that had come out entitled "Tuning In to Local Labor Markets: Findings from the Sectoral Employment Impact Study" available on their website.

I did a quick review of it, and from my point of view and it's an impressive study, loaded with sound thinking, backed up by empirical data, and packaged to answer any question a reader may have.  Here's a synopsis from the report.

For American workers, having a high school or general equivalency diploma (GED)—which once represented a means of entrance to the middle class—is no longer adequate for finding steady employment. In fact, three quarters of low wage workers have these qualifications but lack the relevant occupational skills and connections to employers needed to launch a career. At the same time, in some regions of the country there are persistent skills gaps clustered in particular industries, such as manufacturing and healthcare.Many of these jobs are expected to grow and require specific technical skills that can be gained only through focused training that is closely linked to the needs of local businesses.

Over the past two decades, an innovative approach to workforce development known as sectoral employment has emerged, resulting in the creation of industry-specific training programs that prepare unemployed and under-skilled workers for skilled positions and connect them with employers seeking to fill such vacancies. Based on earlier outcomes studies pointing to the promise of this strategy, Public/Private Ventures (P/PV) set out to conduct a random assignment evaluation to assess whether sector-focused programs could in fact increase the earnings of low-income, disadvantaged workers and job.

This study focused on three distinct programs across the country:

1. an employer/union association,
2. a social venture and
3. a human service organization.

These programs had strong effects for participants, including higher earnings and better jobs (as measured by hourly wages and access to benefits).

In the conclusion, of the report the authors point out that as we emerge from the Great Recession, which has disproportionately affected disadvantaged workers, these strategies and the organizations that implement them may represent a key element in America’s economic recovery—for its workers and its employers.

In other words, the playing field has changed over the past 3 years, and the understandings and approaches that we as workforce managers need to change as a result.

 

 

To stimulate our workforce, new industries will be needed

We will need 15-18 million new jobs in the next five years, just to get back to where we were only a few years ago. Without the creation of whole new industries, that is not going to happen.

Nearly 20% of Americans are not paying anywhere close to the amount of taxes they paid a few years ago, and at least ten million are now collecting some kind of unemployment benefits or welfare.

But new industries require capital, and the conventional capital markets are not lending in order to meet market needs.

Used to be, there was a simple formula for bankers called the 3-6-3 rule; Bankers would give 3% interest on depositors' accounts, lend the depositors money at 6% interest and then be playing golf at 3pm. Lately however, these depositors have been getting a bit troublesome - overextended, not paying according to terms agreed upon, and that sort of thing.

So the banking industry, always sensitive to avoiding risk, (and looking at a way to recapitalize themselves amidst mountains of toxic loans and investments), have found a new approach, which has been enabled by our friends at Treasury.

Borrow money from the Feds at 0%, buy Treasuries that pay 3%, and VOILA ! be back on the golf course at 3pm.  Isn't it wonderful how all things old become new again.

Oh, I forgot about that "new industry" stuff, didn't I?

Yes, new capital infusion will be needed to get some new industries going, and it's anyone's guess where THAT will be coming from (new ventures are risky, so there are always the equity markets, VCs and such)

The challenge I see is that in addition to all of the new capital that will be needed to launch new industries, we likely will continue to see workforce reductions in the foreseeable future as existing firms cut back and shut down due to lack of operating / growth capital.

So maybe this issue is a lot bigger, and more complex than any one is willing to talk about?

From Training to On the Job Skills Transfer - 5 Important Tips

In these financially difficult times more and more companies are starting to look to their training budgets as a possible area for cuts.

Stop! This is time to invest even more in training. The secret is smart investments that truly transfer to the workplace.

MaryEllen Gibson, who writes in the Work + Money area for Yahoo, recently developed a short article entitled "Five Tips for Training to Transfer to the Workplace" that has some excellent guidance, especially in light of the market-related turmoil that has upended the plans of many businesses.

In her article, she justifies why is is not only important, but downright essential NOT to cut into the training and development area.

Here's a high-level summary of her article:

1. The trainer makes a big difference.  Don't underestimate this vital point.  Lose your good trainers and youcan undermine your entire program.

2. Training must remain a key part of a consistent message from the organization.
3. In order to increase organizational commitment, you need to ask each individual’s manager, and the manager’s manager, to attend the training session with their staff.
4. There is more value and long-term results from training delivered in “chunks” that are scheduled over a period of time, versus "big bang" that has lower learner retention.
5. Focus is necessary in order to train people in skills and information that are immediately applicable on the job.

 

 

International Construction Jobs - Profitable Ventures Abroad

There are many Construction jobs abroad. Despite the downturn / slowdown in the US, there are many places in the world which are currently booming. Countries like China and India are in great need for skilled construction workers.  Read on to find out what these areas are looking for, and what they are NOT looking for...

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Its All About the Talent

FMI Corp's,  Ron Magnus, who heads their Talent Development division dropped me an email recently, alerting me to a new Construction Industry report on Talent Development that FMI has just published.

By 2008, it's an accepted fact that a wealth of skills and experience will disappear from the job market as the first members of the Baby Boom generation reach average retirement age. Talent development will become a critical strategic objective and differentiator for any competitive organization.

Magnus reaffirms that in order to remain successful in the knowledge-based, global economy building and construction firms must continually invest in their human capital. 

1. This is a great report, well worth your time, in a easy to read format. Click here Download USTReport2007.pdf for a copy. 

 

Offshoring is also eroding the quality of the U.S, workforce

Offshoring is increasingly eroding the quality of the workforce in the US. There are fewer entry level IT jobs in the US. These jobs go to increasingly Indian or Chinese software engineers. Similarly, the legal and investment banking tasks sent overseas are the yeoman's work that historically enabled young people to learn the profession. Next are the entry level jobs in architecture and design/engineering.

Fortunately, many service firms aren't of a scale where this sort of outsourcing is viable, but nevertheless, it reduces the number of domestic training positions. It's a hollowing out of service industries. The fact that is is now happening at the very large firms that do the most sophisticated corporate work begs the question of where their next generation of executives / principals and partners will come from.

Where will it end.  Keep watching this blog.  We've got answers coming for you.

Skilled worker shortage hurts U.S.

According to a recent story published by CNN, Skilled worker shortage hurts U.S. the cross-industry problem being experienced by all industries is bad and getting worse.

Most experts agreed the shortage of skilled workers is likely to persist longer than it did in the late 1990s. That earlier tightness was fed by dot.com companies burning through investors' cash to hire people. The latest round of hiring is being driven by stronger corporate balance sheets, and as more retiring Baby Boomers start leaving the work force.

Today's challenge is different and the mandate for companies is different.

The problem I see with this article is that it's long on explanations, but offers few substantial ideas for firms looking for solutions.  What's your opinion?

Report on America’s Dynamic Workforce

A report is now available, entitled America’s Dynamic Workforce: 2006, which "presents an overview of current conditions and notable trends affecting the American labor market and economic activity

This report is published by the office of the Assistant Secretary for policy at the U.S. Department of Labor

Working with the Contingent Workforce

Esme Friesen of the Galt Global Review published a set of great best practices to assist the supervisor or manager thinking of hiring a contingent worker.

According to Friesen, the squeeze on workforce budgets continues the same as it has for well over a decade. Whereas everybody wants to expand their scope while increasing their bottom line, adapting to variable market trends is still the order of the day. In some organizations this means the hiring of new staff and for others this means a decrease in their labor pool. Both ways, managers have had to find flexible staffing solutions and as a result, the demand for a skilled, reliable contingent workforce has risen significantly.

Fishing for resources in a new "fishing hole" carries with it a special set of challenges.

Friesen offers the following points to help you be more effective in sourcing from the Contingent Workforce marketplace:

1. Have the staffing service coach or counsel a contingent worker on job performance.

It is one thing to point out a procedural protocol to a new contingent worker, but it is another to give them an evaluation. Marcie Ellison, Vice President of The Personnel Department's temporary division advises "the staffing service should be calling you. If there is a need for a performance or corrective review, it is the responsibility of the service to address it." Otherwise, contact the service to request a review and tell them why it is necessary.

2. Let the staffing service negotiate the rate of pay.

This issue is best addressed with the staffing service. The staffing service's account manager uses input from you to establish rates of pay and will handle all communications regarding pay raises for the contingent worker. Contingent workers are regular staff of the service and as such, have their own agreements with respect to wages. When you begin negotiating with the contingent worker, you become a de facto employer and can run into difficulties in defining the "employer" if there is ever a dispute.

3. Express your needs for skills and let the staffing service do the training.

Staffing agencies often have training and upgrading programs available to their field staff. If specific training is required for a job, the staffing service will work with you to identify and implement the best training program for the contingent worker.

4. Refer any requests for personal time-off or vacation to the staffing service.

Contingent workers will request time off through their staffing service manager who will then contact you regarding coverage prior to approval being given. If temporary employees approach you, simply refer them back to their staffing service manager. Your primary relationship is with the service, and so is the employee's.

5. Discuss job opportunities with the staffing service.

In this era of talent shortages, it is best to discuss job opportunities with the staffing service. Often the best contingent worker is not the best permanent employee. For many individuals in the contingent workforce, it is a lifestyle choice. They prefer the flexibility and variety that going from job-site to job-site affords them and staffing services know this. The service may have other individuals available who are interested in finding permanent employment, and who are more suitable to the position. To get the best from the "temp to perm" potential, contact the service who can then work with you to determine who the most suitable candidates are. It is always good to check first with the service.

If a temporary or contract worker approaches you for a position, it is a compliment to your managers and your organization. Still, you are best advised to direct them to publicly available job postings to which they can apply. If there were a position that you wanted to hire the contingent worker for, contact the service, which will then approach the employee directly.

6. Be discrete regarding harassment or discrimination issues.

If a situation where a contingent worker is behaving inappropriately arises, contact the service directly as soon as you become aware of a situation.

7. Let the staffing service terminate a contingent worker.

While it may be your responsibility to do the hiring and firing for your firm, the contingent worker is the responsibility of the staffing service. Always contact the service to terminate a contingent worker.

8. Do include contingent workers in your company's employee functions where appropriate.

Contingent workers are an important part of the modern workforce, therefore it is important to make them feel as though they are part of your team. Inclusion at staff parties and other employee functions is a good idea.

There are times, however, when the company may be hosting "staff only" events such as company retreats and seminars etc. In these instances, it is best to contact the service to explain the contingent worker's exclusion. For recognition events, the service should be invited to present any awards or bonuses the company is offering to its contingent workers.  In addition, a few staffing services offer their field staff benefits packages, training and skill development, advancement schemes, and recognition programs. Choose one that does.

9. Be in touch with the service.

The basic rule of thumb is to always be in touch with the service. They are set up specifically to manage contingent and leased workforces. They have a firm understanding of the legal and logistical issues associated with the hiring of temporary staff.

Is use of "Best Practices" a common practice in your firm?

The term "best practices" is commonly bandied about in business.  "We use this 'best practice' or that one" some claim.  Matt Stevens in his blog "The New Business Model of Construction" gives us some good insight on how to leverage Best Practices in a practical way.

A "Best Practice" is a management idea which asserts that there is a technique, method, process, activity, incentive or reward that is more effective at delivering a particular outcome than any other technique, method, process, etc. The idea is that with proper processes, checks, and testing, a desired outcome can be delivered with fewer problems and unforeseen complications. Best practices can also be defined as the most efficient (least amount of effort) and effective (best results) way of accomplishing a task, based on repeatable procedures that have proven themselves over time for large numbers of people.

Thus, one of the growth strategies for any successful business should be the identification and adoption of Best Practices.  There are numerous sources for these practices.  One of the challenges is finding practices that are relevant to your particular type of business. 

For example, take construction:  According to Matt Stevens of the Stevens Construction Institute, there are over 100 market sectors in the construction industry. F.W. Dodge reports in its construction permit data 30-odd categories and that is just the type of projects. Multiply that by the all the different types of contractors. The old CSI classification methodology outlines 16 divisions of work. Each division typically has several construction firm types occupying each of those.

Stevens has published over 140 best practices in the construction industry in a book entitled "Managing a Construction Firm on Just 24 Hours a Day" that helps contractors seeking to imporove their businesses with better techniques, construction methods, business processes, activity management, workplace incentives etc.

Check out the book and Matt's blog.  Both are filled with good information for Contractors.

The competency framework - where do competencies fit?

Sometimes there is confusion between competencies and skills in the workplace.  I hope to be able to shed some light on the subject. 

To begin with competencies are the successful combination and application of experience, skills, knowledge and temperment. 

Competencies are characteristics which drive outstanding performance in a given job, role or function. A competency model refers to a group of competencies required in a particular job and usually number 7 to 9 in total.

The number and type of competencies in a model will depend upon the nature and complexity of work along with the culture and values of the organisation in which the work takes place.

For almose 3 decades, leading organizations have been using competencies to help recruit, select and manage their outstanding performers after Dr. David McClelland, a Harvard Business School Professor of Psychology, found that traditional tests such as academic aptitude and knowledge tests, did not predict success in the job.

Thus, the use of competency definitions may be more appropriate to creating a high-performance team than the more narrow definition of skills needed to perform on the job.

Highlights of America’s Workforce

Periodically the office of the Assistant Secretary for policy at the U.S. Department of Labor publishes market updates.  One recent publication, a workforce "factsheet" highlights the state of the American workforce.  The report provides current trends that illustrate the state of the economy and workforce.  It's a good report and well worth the read.

When Taxes Drive Away Workers

Since I left upstate NY in the 70's due to cold weather and oppressive tax burdens (business and personal), the state has become even more economically unattractive to resident and non-resident workers.  Unless something changes, it will continue to struggle to find and retain the "best and the brightest"

This is also the thought of I can't Wait to Leave an article posted on The Knickerbocker Blog, a production of The Business Council of New York State, Inc. a group seeking to publish economic data, educate policymakers, and advocate ways to make the Empire State more attractive to businesses and workers.  They have their work cut out for them.

Despite its many and varied charms, New York is shrinking. The state lost 26,000 residents from July 2004 to July 2005. That's as if everyone is Saratoga Springs vanished.

That's a lot of resources to lose and it doesn't bode well for the future. Along with losing personal clout, the state will lose representation in Congress, if this trend continues.

The Business Council of New York State cites high taxes as the likely reason people are fleeing the state. No matter how nice a place is, people need to be able to pay the rent or mortgage with something left over for themselves or their families.

With tax season coming up, it's chilling to realize that New York's state and local tax burden is the highest in the nation at $4,645 per person. Florida and Texas have respective tax bites that are about $2,000 less. Not surprisingly, both gained population while New York lost it.

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