Link to ARC home page.

Supplying the Demand for Training

by Fred D. Baldwin

A lot of people say automation costs jobs. In our case, automation has created jobs. But you've got to think in terms of group skills. This makes the need for skilled people all that much greater."

—Russell Hastings, director of operations at a manufacturing company in northern Pennsylvania, explaining why his firm puts a high value on training, in both technical areas and teamwork skills.

"Our business becomes more complicated every year. Out on the work floor, our workers are using computers. It's a very fast-paced environment. It's just necessary for people to have skills to fit into that scenario."

—Mike Ketner, general manager at a knitting mill in southwestern Virginia, explaining why his firm wanted its employees who lacked high school diplomas to earn their GEDs. "Job quality is very important. One of eastern Kentucky's and the Central Appalachian Region's problems has been an inability to take a natural resource base and add value to it. It is really crucial to have a workforce that is more skilled. In a natural resource economy, low-skilled workers are easily replaced by mechanization."

—Timothy Collins, director of research at the University of Kentucky's Appalachian Center, describing the results of his research on labor markets in Central Appalachia.

Three voices, one message: upgrading the skills of Appalachian workers is crucial to economic growth and community building.

In late summer 1997, the National Association of Manufacturers (NAM) commissioned a survey of 4,500 of its over 14,000 member companies. The vast majority of respondents (88 percent) reported shortages of qualified workers in at least one job category. Although most companies (about 60 percent) said that they receive more than five applications for every job opening, more than 25 percent regularly reject over three-fourths of the applicants as unqualified. These mismatches—between demand for qualified workers and supply, and between job seekers and required skills—demonstrate the need for upgrading job skills.

Moreover, one in five companies responding to the NAM survey (21 percent) said they had postponed or decided not to add new lines of business because of skilled labor shortages. This has especially serious implications for Appalachian communities' efforts to diversify their economies. Low skill levels go hand-in-hand with high turnover rates, both because unskilled workers are less able to adapt to changing employer needs and because their employers are competing on the basis of low labor costs. This hurts workers, firms, and even their communities.

"A low-skilled labor force attracts low-skill jobs," writes Collins in his 1996 report Quality Jobs, Value Added, and Sustainability. "Employers of low-skilled workers have little interest in supporting community activities. Workforce development offers one of the best hopes for building sustainable communities with a viable economic base."

Responses to the challenge of upgrading workers' skills in Appalachia generally come from one of two perspectives: education or business.

On the one hand, the Mount Rogers Regional Adult Education Program, which is part of Virginia's public school system, is an example of a program initiated by an agency primarily responsible for education and training. Its aim is to help individuals compete more effectively in a demanding labor market.

On the other hand, the programs of the Northeastern Pennsylvania Industrial Resource Center (NEPIRC) evolved from a commitment to meeting employers' need for a capable workforce. NEPIRC's interest is in making sure that training meets employers' real needs.

Asking which of these approaches is more promising is like asking which blade of a pair of scissors does more of the cutting. Both kinds of organizations must pay close attention to supply and demand. That is, effective programs run by educational and training organizations work with prospective employers, and effective programs run by employer-oriented organizations must work with training institutions.

You might expect that training programs built around educational institutions would emphasize improving basic cognitive skills (mainly reading, writing, and math). You might also expect programs oriented toward employers to focus on upgrading specific technical skills (such as welding or machine-tool operation). That may be a tendency, but it's not a sharp distinction. For example, Mount Rogers and NEPIRC both provide both kinds of services, depending on the needs of individual firms.

In practice, more and more businesses ask for a third kind of training—in what are often called "soft skills." This refers to a worker's communication abilities, work habits, and capacity for effective teamwork. Sophisticated technology and management techniques make these skills more important, not less.

NEPIRC: The Business Approach

The Northeastern Pennsylvania Industrial Resource Center, which serves 13 counties in northeastern Pennsylvania, is one of eight nonprofit industrial resource centers formed in 1988 to improve the competitive performance of the state's small and medium-sized manufacturers. Eighteen members of NEPIRC's 27-member board are manufacturers, six represent educational institutions, and three represent economic development organizations in the counties the center serves.

NEPIRC does not focus on attracting new firms to its area, certainly not low-wage firms seeking low-skilled labor. Its emphasis is on keeping people employed by keeping their employers competitive. William J. Desciak, the center's executive director, was concerned that many efforts to get unskilled workers into the job market were missing an important point.

"The first proposal I wrote," recalls Desciak, "said, 'Nobody is taking care of the existing workers.' If a guy was working, he wasn't eligible for training because he already had a job."

The Appalachian Regional Commission (ARC) responded to that reasoning. During the next decade, ARC grants enabled the NEPIRC workforce development initiative (now being replicated across all of Pennsylvania's Appalachian counties) to assist with the training of more than 10,000 workers. (NEPIRC operates a number of other programs and has served more than 600 companies during its roughly ten years of existence.)

NEPIRC itself does no training (except for some specialized work relating to quality and process standards). Instead it finds a third-party provider—a college, a consultant, or even an employee of another, non-competing manufacturer. But NEPIRC is more than a matchmaker. Consultants, for example, are engaged by NEPIRC, not by individual companies, which means that NEPIRC can accumulate a body of experience for the benefit of future clients.

Perhaps the most reliable measure of how highly NEPIRC services are valued is that companies must pay their share of training costs in cash, not the imputed value of training space, trainee salaries, or other in-kind contributions. Moreover, demand has enabled (almost forced) NEPIRC to increase the company share of costs from an initial 50 percent to the present 80 percent.

Efficiency Equals Competitiveness

A visit to Electri-Cord Manufacturing in Westfield, Pennsylvania, provides convincing evidence of the importance of skills upgrading. Electri-Cord, which has approximately 140 employees and has been growing steadily, manufactures power cords for demanding customers like Apple Computer and Hewlett-Packard.

The company's 55,000-square-foot facility suggests a history of twentieth-century manufacturing in microcosm. On one part of the floor you'll see a row of machines (now used mainly to help handle overflow volumes of work), each of which is designed for one operation, such as cutting insulated electrical cable, stripping ends to expose wires, or attaching blades. Together the machines form an assembly line. In another part of the plant, newer, faster machines stand more or less in a circle, which allows workers to move easily from one workstation to another. In the newest part of the plant, one huge machine looks like a blur of grippers, strippers, presses, and measurement tools—a totally automated assembly line in itself. The one or two workers who monitor its production are, in effect, supervisors of a small task force of robots.

Work at Electri-Cord is organized around "cells" (small teams of three to 12 people). "Cells dramatically reduce your throughput time," says Russell Hastings, director of operations, adding that smarter, more efficient production is the only way Electri-Cord can compete with overseas, low-wage competition.

NEPIRC went to a training institution in Appalachian New York to find the right trainer for Electri-Cord. In addition to specialized courses, the training included work on "soft skills." For example, Electri-Cord employee Bessie Tompkins describes an exercise in which small groups of employees worked together on 500-piece jigsaw puzzles. The teams who cooperated and communicated best put the puzzles together in the least time and with the least amount of friction.

Another company that turned to NEPIRC is Rynone Manufacturing, which asked for help in evaluating training needs at its Sayre, Pennsylvania, plant. Rynone makes simulated marble basins and countertops for major home builders and building-products retailers.

The company had a problem most businesses would kill for: demand for Rynone products was outstripping the firm's capacity to produce. The company was hiring—or, as company president Richard T. Rynone puts it—"literally throwing bodies at the increased business." But turnover was high (around 20 percent). NEPIRC helped identify training deficiencies as one key to why new hires didn't stay.

Rynone says that in the next three years the company increased its productive capacity by 75 percent, and its turnover rate fell to 5 percent. He gives much of the credit for that to better training, which made feasible a team-based approach.

Helping Companies Understand What They Need

In addition to the help it gives individual firms, NEPIRC has under way a number of initiatives. It's just received ARC funding for a new effort to train trainers for on-the-job programs operated by companies in-house. "You know how it is," Desciak explains. "You get a new hire and they say, 'Go see Joe. He knows how to do that.' We're training Joe."

NEPIRC also performs five-day training needs assessments, for which it charges companies $3,500. (Rynone was one of these clients.) The assessment process relies heavily on employee focus groups.

The organization is becoming heavily involved in developing "work keys"—detailed skills-needed profiles of specific jobs within a client company, benchmarked against similar jobs in other firms. These analyses of required skills are invaluable in planning training, designing compensation and promotion ladders, and shaping other employee-development efforts.

In 1992 NEPIRC began creating networks of companies who seek to become ISO-9000-registered to meet international quality-control and process-control standards. Pooling company experience is expected to drive down registration time and costs. Determined to practice what it preaches, NEPIRC, one of over 400 "manufacturing extension partnerships" around the nation, was the first to achieve ISO certification and remains one of only two such partnerships with an ISO-9001 designation.

One of NEPIRC's most important initiatives has been its leading role in the formation of a Continuing Higher Education Council, a consortium of colleges. The council, which has its own governing board and is completely independent, helps NEPIRC remain sensitive to the concerns of academic training providers. NEPIRC is also a key player in helping the national School-to-Work initiative's efforts succeed throughout its service area.

A similar initiative is the Business Quality Partnership, a group of firms (not limited to manufacturers) that meet monthly to discuss training needs.

Kimberly S. Pappas, NEPIRC's workforce development coordinator, sums up these and other efforts as follows:

"ARC has helped us to evolve. We started with training subsidies, which was a narrow view. Then we began helping companies better understand what they need. And now we help them build consortia to help each other."

Mount Rogers: The Education Approach

As an example of a program evolving from the insights of education providers, the Mount Rogers Regional Adult Education Program began about six years ago when the Commonwealth of Virginia decided to regionalize many of its adult education programs, which had previously been handled by local school districts that could rarely afford full-time leadership.

The program serves five counties and two independent cities in southwestern Virginia and works closely with other agencies there. The populations of these jurisdictions changed little between 1980 and 1990. The 1990 Census showed that the percentages of their over-age-25 populations with less than a ninth-grade education ranged from 20 to 30 percent; percentages of adults over 25 without high school diplomas ranged from 37 to 49 percent.

Individuals 18 years or older without high school diplomas are eligible for the program. There is no income restriction, and no tuition. Since its inception, the regional program has served from 1,100 to 1,500 adults per year. The program is allowed to absorb up to 100 percent of training costs if funds are available, but Mount Rogers stretches its program dollars by negotiating with employers, who typically pay at least 50 percent of costs.

"We try to customize our curriculum to our workplaces," Deborah Lowe, regional program planner for Mount Rogers, says. "Most of the time we find that businesses and industries want 'a GED class.' If they want some kind of computer training, or more technical skills, we turn to our higher-education partners—the community colleges—or to a vocational-technical center."

In determining training location, the program respects the wishes of the trainees as well as the wishes of the companies.

"If the employees say, 'We want it on-site,' and if the company has a place, we do it on-site," Lowe says. "If there's an embarrassment factor, and they don't want it on-site, we can do it in a church location or in a school. We're flexible. When we have an on-site program we don't even call it 'adult ed' but 'workplace education.' "

For example, Natalie Knitting has about 310 employees, 13 of whom have been enrolled in a GED program arranged by Mount Rogers. So far, seven have graduated.

"What we need are people who are able to communicate, be team players, who understand the need for quality and customer service, and who can adapt to changing needs," says general manager Mike Ketner.

Another firm Mount Rogers has worked with is Cookson Fibers, which has a 450-employee plant in Bristol, Virginia, that produces nylon, polypropylene, and other synthetic fibers used in products ranging from automotive upholstery and commercial carpets to apparel and hosiery. Four years ago the company decided that all new hires would have high school or equivalent degrees and offered its 17 employees without that credential a chance to earn their GEDs at company expense.

Cookson Fibers's Barbara Gillen explains that the firm's operations, now performed by teams, require well-educated employees (whom Cookson Fibers prefers to call "associates" to emphasize that every job contributes to profitability). The firm puts high emphasis on cross-training for everyone, including top managers.

"The more you're cross-trained," Gillen says, "the more value you are to the company. Someday, we hope that when you walk in the door, you'll look at a board, see what needs to be done, decide what you'd like to do today, and go do it."

In 1996 seven Cookson Fibers employees received their GED certificates. Since then six more have done so. Each graduate received a gift chosen by the company after discreet inquiries about personal preferences—fishing gear, wicker porch furniture, and, in one case, a graduation ring. It's an indication of how highly firms like Cookson Fibers value trained workers.

Competitive Workers, Competitive Companies

In summary, efforts to upgrade the workplace skills of Appalachian workers may begin either with a focus on workers as individuals or on the companies that employ them. Either way, the practices of successful programs tend to converge.

Most obviously, of course, improved training preserves existing jobs by keeping both workers and companies competitive. In addition, however, trainers and trainees often mention side benefits, particularly from training in teamwork and communication skills.

One more voice... that of Bessie Tompkins, who lives in Tioga County, Pennsylvania, and works at the Electri-Cord plant there. She's summing up lessons learned in a NEPIRC-assisted training program and needed every day on her job: "If you want to get that product out, you have to help one another. There has to be teamwork."

Her remark also sums up what private firms, training institutions, and organizations like NEPIRC and the Mount Rogers Regional Adult Education Program have learned and are applying to the challenge of upgrading job skills across Appalachia.

Fred D. Baldwin is a freelance writer based in Carlisle, Pennsylvania.