Lack of skills stifles competitiveness, but funding isn't following the need.

January 30, 2009

Lack of skills ranked second behind high tax rates as the issue that makes US cities uncompetitive, according to a report issued in December by the US Chamber of Commerce. We all want to complain about taxes, and given what I know about European tax rates, I question if American companies are at a global tax disadvantage. This even further highlights the disparity in and importance of skills when we compare ourselves to our European competitors.

In July, I asked the question; "What's a good capitalist to do?" with respect to funding workforce development and education. Although not answering the question of what should be done, this Chamber report does provide some insight into what businesses are doing. Workforce development ranks very low (17.5%) in terms of corporate philanthropy, voluntarism and in-kind giving. Some businesses invest modest amounts in the training of their own workforce, but most do not see it as part of their corporate citizenship responsibility to invest in raising the skill levels of the workforce in general. In my experience, this is short-sighted, leads to sub-optimization, creates competition for and steeling of employees, erodes employee loyalty and ultimately results in higher costs for everyone.

On the other hand, business is investing in education. According to the report, education is seen as the top issue for attracting and retaining talent; is among the top five issues for attracting entrepreneurs and new businesses to a region; and ranked third behind lack of existing skills as an issue blocking competitiveness. Education is an issue that corporate America is supporting with their philanthropy, with more than half of all companies surveyed reporting that they provide financial support to education.

I support and encourage educational philanthropy, but is it solving the problem? The lack of skills in manufacturing needs to be solved now, not in 12 or 16 years when a new batch of young people make it through the system. By then, it may be too late for manufacturing.

Are we throwing too much of the money at bachelors degree programs and forgetting that a majority of jobs need skills that are obtained with more than a conventional high school education but less than 4 years of college? There are lots of folks with bachelors degrees who are currently unemployed or underemployed.

Too many of our programs are directed at the edges: to low achievers and high achievers to the exclusion of the average achiever. Our European competitors seem to do a much better job in preparing those who would comprise our forgotten middle half.

Why isn't business putting more of its money where the need is more immediate? Is it because the philanthropic decision makers in corporations are using their own educational path as the model? Is it because buildings are named in recognition of educational contributions? Workforce development and training isn't so glamorous.

If we are going to improve competitiveness in America, we need more pragmatic solutions to the skills shortage than just sending big contributions to our educational institutions. If you agree with me, lobby those making coporate citizenship decisions to carefully evaluate if their educational giving is supporting the real needs of business and the economy. And, whether you agree with me or not, share your ideas with the readers by posting a reply.

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I fully agree, way too many managers and top executives will make statements about what great assets their workers are; but the minute the business road gets slightly bumpy, they immediately flush those assets. While I understand the workforce must be balanced to the business level on a long term view, when temporary business slow downs are used for developing people and processes, the returns can be enormous. There is a cost for ongoing training and improving of people�s skill levels, but again, the returns will exceed the costs. If the company does not have the belief that they must improve daily, they will not be competitive over time, and the cost to try to recover lost opportunity is many times higher and the journey more difficult. Giving to educational institutions, to the community, and to needy causes is tremendously important; but investing in the people is the means to stay competitive, which ultimately creates a successful and sustainable business and provides the funding for all causes.

Posted by: Larry Marks on January 30, 2009

Well done

Posted by: James Soucey on January 30, 2009

Corporations in North America have lost sight of their focus and moral obligations. It is immoral to be a quote "ideal corporate citizen to the general or special minority or vocal groups" and neglect or abuse not only your employees but customers. It is corporate responsibility to hire, train, protect and be fair to employees first in producing quality needed products for customers who wish to be treated also fairly. It is the employee's obligation in return for being treated fairly to give of their personal surplus to people in need (not corporations). (Corporation can suggest where it employees should help). When this philosophical change takes place the US will again become a power and an example to the world. Until then the slide towards more self-centeredness and pain continues.

Posted by: Paul Zepf on January 30, 2009

Business leaders need to be reminded that we are in the people business first, everything else is a by-product of that effort.

Posted by: Stan Walulek on January 30, 2009

Have you published comments on AIDC trends? Requirements for track and trace labeling for produce,toys, pharma pedigree and unique medical device identifiers, probably others all developing. Thanks.

Posted by: napoleon monroe on February 2, 2009

College let me know the breadth of knowledge in the world and taught me how to look it up (then).

I had to self educate to perform many of the functions required by my job.

Most skills needed are corporate specific which leads me to believe that corporations need to do four things.

1) Encourage and teach employees how to self-educate and stay on top of their specific fields.

2) Give them access to self-education tools.

3) Give them time to learn the specific skills needed to perform their jobs.

4) Reward them for good performance AND for promoting latest competing technologies.

Posted by: Eric Miller on February 2, 2009

I agree that companies could do a lot more for training skilled trades and technicians. We have formed a partnership with the regional manufacturing association and community colleges that is having a large impact on our workforce, both the currently employed and the next generation. The cost to us has been nominal and the return outstanding. Get involved and make a difference!

Posted by: Steve Kullberg on February 3, 2009

Hi guys.

Quick question. Can anyone suggest resources that a recent graduate can use to acquire some relevant education/information with regards to the pharmaceutical packaging industry?

Posted by: Hesh on February 19, 2009

About Keith Campbell

Leaders learn from the past while looking to the future - and bring both to bear on the here and now. This is the philosophy that has steered Keith Campbell's 30+ years in manufacturing. It has worked for him in operations, maintenance, engineering, R&D, education, consulting and professional organizations--and now he's putting it to work for you--taking you to the edge of his thoughts on packaging operations.

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Lack of skills stifles competitiveness, but funding isn't following the need.

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