Editor's Page

Dec. 21, 2004
The real cure for the skills shortage

Here we are in the midst of the greatest economic boom that most of us will ever see, and we're still complaining. In industry after industry, CEOs and plant managers alike are whining about the downside of the full-employment economy: a business-busting shortage of skilled workers. This dearth of talent is actually three problems in one. First, with unemployment at historic lows -- in some areas dropping below 2% -- nearly everyone who's going to join the workforce has already signed up. This means that in many regions even unskilled positions are going unfilled. Second, even areas that do have workers often have the wrong (unskilled) workers or workers with the wrong skill sets. Executives tell me that their firms are turning down orders or passing up new markets because they can't staff their potential new production. Third, even firms that can find skilled workers are having a devil of a time keeping them, as competitors help to make this the hottest job market in years. What can a company do? Unfortunately, there aren't any easy or quick answers, other than throwing money at salaries (and killing margins in the process). What does work are two long-term approaches: Investments in training: Research project after research project demonstrates that one of the most effective strategies for improving performance is investing in employee training. Indeed, many companies have now resigned themselves to finding skilled workers the hard way, by developing their skills in-house. Less understood, however, is how training can be a retention tool. Employees understand that companies no longer can provide lifetime guarantees of employment. Yet smart firms can offer a promise of continuous learning and skill-building, which benefits both the company and the employee's career, whether with the same company or a different one. This promise, and the reputation for innovation that accompanies it, can be persuasive when current employees or applicants are trying to decide between your firm and the competition. Partnership with local educators: More and more businesses are finding powerful allies in their local educational institutions, especially at the community-college level. In region after region, community colleges and universities, often with the help of state or local grants, are developing skills training for specific industries or even particular employers. If you haven't reached out to the community colleges and universities near your facility, you're missing a cost-effective opportunity to build a workforce with expert help. Just as important -- but without as immediate a payback -- are efforts to become involved with local school districts. Companies and regional business associations committed to long-term workforce development are partnering with schools to define educational standards for employability and to invest in making sure that schools have the resources they need to achieve those standards. On the other hand, you could just keep on complaining. Just don't expect the rest of us to keep listening. Send e-mail messages to John Brandt at [email protected]

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