Do We Have a Skill War in Our Future?

Edward E. Gordon, Ph.D., president of Imperial Consulting Corp. in Chicago, would answer YES to the question asked in the title of this article. The author of Skill Wars: Winning the Battle for Productivity and Profit, Gordon is an authority on maximizing human capital. In his book he raises a serious issue for U.S. executives.

To purchase a copy of Skill Wars, visit Amazon.com.

Gordon: Just the opposite. The latest data on training strongly suggest that the typical American business doesn't have time for training. Executive development, sales training, advanced technical training, and continuing professional education are indeed happening. About 66 percent of all training and development is invested in these areas for approximately 25 percent of the U.S. workforce. That leaves a record number of employees getting less and less other than on-the-job (OJT) training.

This is the exact opposite of our chief foreign competitors. Even the United Kingdom (U.K.) has just embarked on a $2 billion national training program to raise the overall skills base of their entire workforce. Do we need to see our industrial/manufacturing/professional services capacity sink to the post industrial levels of the U.K before American business wakes up, smells the coffee, and discovers that other major industrial powers are beginning to eat our breakfast?

MWORLD: What advice would you give senior executives about how to manage their training investment?

Gordon: All training is not created equal. Just as all schools are not of the same quality. Before making a training investment to improve a specific people-performance issue, look at your various training options.

Each option will produce a different return-on-investment (ROI) based on how such people will learn, and how well they apply that knowledge back on the job. In Skill Wars: Winning the Battle for Productivity and Profit, I introduce the Human Capital Scoreboard, a tool kit of seven components to do just that. The last measure is an easy-to-use, very accurate Human Capital Return-on-Investment Worksheet. This nine-step software package is easy for executives to use as they compare the ROI for each alternative training option before investing in a specific training program.

MWORLD: You clearly denounce quick-fix education and training programs in your book, suggesting long-term implications. What do you mean by "quick-fix education and training"? What would be the nature of training our workforce needs for the 21st Century?

Gordon: "Click for Brains" isn't going to work for the employees who have the greatest need to be trained. e-Learning has been flagrantly oversold as a magic-bullet, accelerated, one-size-fits-all training solution. One example is a major telecommunications company that converted all of its sales training to a series of eight-hour classes of computerized interactive training. The corporate trainers would place bets each day over how many hours different employees would last as they sat alone in a cubicle, before either falling asleep or making up excuses to leave the learning center due to information overload.

If you are a highly educated, strongly motivated person, who is typically looking for information and answers ahead of everyone else, properly designed and sequenced e-learning is going to work for you. If you are employed in a job that requires numerous technical information updates, e-learning is going to be very helpful.

But you must also face what e-learning cannot do. As a stand-alone, turn-key training program, it isn't very good at teaching critical competencies, leadership, customer service, selling skills, team building, or the basic skills of reading, writing, math, foreign languages, or English as a second language (ESL).

Why? For several reasons stemming from basic adult-learning research experiments that can be summarized in fewer than two headings:

People learn more from face-to-face interaction than they do alone. There is an important social interactivity needed by most adults to learn something well.

Many people do not have the educational skill capacities needed for e-learning, e.g., they are not computer literate, their reading levels are too low, they do not have the conceptual skills needed to transfer the training to their job, or they lack time, motivation or persistence.

e-Learning is important in workforce education. Once the new mono-mania of click for brains fades, we can begin to concentrate on how a more integrated classroom/software approach will work best for most employees.

MWORLD: What do you think will happen to the issue of training if the economy takes a downturn as some predict?

Gordon: Initially training will be cut even more. This is in direct contrast to the corporate cultures in Germany and Japan. When an economic slowdown begins, training is increased since there is more time available to address the employee-performance problems that management has identified.

Many companies now suffer from learning disabilities. The new demographics of 2001 include large numbers of well-educated people retiring over the next 20 years. The current job pool largely consists of less-educated younger people and recent immigrants. If this HR train wreck is not addressed, we could see a gradual melt-down in the U.S. high-tech infrastructure as we chase after the fewer and fewer information-technology knowledge workers who are available worldwide.

MWORLD: How can HR executives make a strong case for the kind of training you advocate?

Gordon: "You can pay for it now, or you can pay a lot more for it later." Unless American companies again begin to consider the long-term view, why train anyone ever again? For those organizations and managers who expect to be here in 2020 and to stay cost competitive in the global marketplace, may I suggest the following business formula: The high-tech performance workplace + fewer highly-educated knowledge workers = increased people productivity + increased profit.

MWORLD: Is this a U.S. issue or a global concern?

Gordon: The above formula has been long followed by America's principal foreign competitors. In the European Union (EU) and the Pacific Rim nations, massive investments are being make in the basic and technical education of entire national populations. In Germany, Japan, Singapore, Scotland, Ireland, and elsewhere, this concept of a better educated person and lifelong workplace learning supported by business and government has become a widely accepted cultural norm. In American society and American business this is not part of our popular culture.

That is too bad for America. The world's knowledge economy in 2001 is based on more well-educated people using and inventing new technologies anywhere on the globe. Many nations in Europe and Asia are doing a far better job of educating their current and future workers. The U.S. is now losing these Skill Wars.

MWORLD: If you had to face accountants about the return in training, how would you present your financial case to satisfy the bean counters?

Gordon: The Human Capital ROI Worksheet introduced in Skill Wars addresses the three serious issues that have seriously compromised previous attempts at developing a ROI industry standard for training.

Was it the effectiveness of the training or some other business variable that increased productivity? We have introduced a way to filter out other business variables.

Training doesn't transfer equally to all the people trained. We have found a way to calculate the average training transfer back on the job for the employees in a specific training program.

The training effect needs to be depreciated. Even the best training will not permanently improve a business. We offer a way to depreciate these benefits.

Other business units use an ROI Industry Standard routinely to do these calculations. What we now offer accountants is a similar Human Capital ROI Industry Standard that is no better or no worse than these others. Accountants can now begin to run the numbers for a business plan that includes employee training programs.

Ed Gordon can be contacted by e-mail: imperialcorp@juno.com, or via the Web: Imperial Consulting Corporation.