April 11, 2005
Every week I receive a phone call that goes something like this: "I need someone in here to train my guys now. We're behind in filling our customers' orders; our defects are way up; we can't keep the equipment up and running; and the guy who knew how to fix all of this retired six months ago."
I try to help these callers understand what their training options are, but, because of the immediate cost involved, more than half of them choose to live with their frustrating problems, which results in more money lost in downtime, overtime, and quick fixes—not to mention loss of growth and new business.
This scenario is just a glimpse of what is to come in the next 20 years. You've survived the past few horrible years, while many have sold out or folded. You are to be commended, but get ready. Your next hurdle is looming, and in my opinion, it isn't China, it's your human capital. Perhaps this already is your biggest challenge.
By 2008 the number of young adult workers in the U.S. 25 to 40 years old will decline by 1.7 million, while 77 million baby boomers will become eligible for retirement, according to the Hudson Institute's Beyond Workforce 2020.
Further compounding the problem is what many have been telling their children the last 30 years: "Don't go into manufacturing!" And while choosing a career in manufacturing is critical for its future, what is being taught and promoted in our education systems will have to be the subject for a future article.
So how do you deal with this pending crisis? Establish a sound training program that is part of your company's weekly, if not daily, routine. Keep in mind, not all training is formal, such as workshops or college courses; most of it occurs informally among workers. In either case, you need to allocate time and resources for training to happen effectively. Here are some guidelines for starting your own solid training program to carry you through transitions in staff and help you grow your business:
1. Cross-train. Make time for it. No excuses. So Bob has done his job for 25 years, can crank the work out, and you don't have to worry about it being done right. That might be OK today, but what happens when you no longer have Bob?
2. Recognize job candidates with good aptitude, then hire and train them. Hiring in the next 20 years will be based on aptitude and attitude, as the skilled-worker base decreases.
3. Offer compensatory benefits for job training. People who have excellent attitudes and aptitudes look for opportunities for growth. Formal learning in trade schools, community colleges, and universities is very attractive to these individuals. Provide the training and reap the benefits.
4. Make time for and encourage informal knowledge exchange among workers. Bring in pizza once a week and have workers identify problems and brainstorm solutions as they dine together.
5. Be prepared that talented, highly productive, growth-oriented individuals will offer you high reward but may move on in three to five years. This is important! For Generation X employees, a job is all about the experience and what they are going to get out of it. Before we question their loyalty, consider the lack of loyalty these individuals witnessed from their parents' employers in the late '70s and '80s. Accept and work with this phenomenon instead of fighting it, and you'll be better off.
6. Find the time and money for you and your staff to attend industry workshops and conferences where you will be exposed to new ideas.
7. Identify your successor. Mentor him or her, and provide adequate training, including training in managing and leading people.
8. Look for cost-effective training options, such as audio-conferences and Webinars. They often take only an hour or so but provide opportunities for discussing and solving your current challenges.
9. Invest in supervisor training. Supervisors manage your most valuable asset—your corporate collective knowledge, or human capital. Make sure they have the tools to manage your assets well.
If you still aren't sold on how important training is, consider this: Recent research done on 2,500 companies by the American Society for Training Development and Saba found there is a direct correlation between a company's training investment and its financial performance. In the study, the companies in the top half of spending per employee outperformed the average in their market sector in the following year, while the companies in the bottom half underperformed in theirs. On average, companies spent 2 percent of their payroll on direct costs associated with training. Which half are you in? Which half do you want to be in?