Running on Empty: Just Whose Job Is It to Train Employees?

Your most valuable assets walk out the door every evening, or so the CEO keeps saying. But corporate investment in training has dropped in half since the financial crisis - and it was already in rapid decline then.

Meanwhile, enterprises claim they can't find good people or the right people or people with the right skills or, apparently, anyone else for that matter.

This is not hard to understand when job descriptions are written so narrowly that only the person currently performing that task is considered qualified by the algorithm doing the recruitment screening. While you're at it, incomes are declining and the funds available for government training are being cut so that potential pool of talent can no longer afford to invest in their own skills improvement.

And even if you are willing to bend the rules and invest a little in training, you have to do so without telling disapproving investors that you might be spending money on people, because there are no tax advantages in making contributions to staff productivity and effectiveness.

In other words, as the comic book character Pogo once famously observed, 'we have met the enemy and he is us.' 

The evolutionary system institutions have tolerated and, in many cases, encouraged, has left them with a limited pool of talent that puts them at a competitive disadvantage in a global economy. Potential recruits dont have the skills, nor thanks to a paucity of paid opportunities to learn, the potential to do so from organizations themselves nor from the governments that might be encouraged to offer funding for training.

The rationale for investment in training, both in terms of macro benefits to consumer-oriented post-industrial societies and due to the micro benefits to enterprises whose return on improving the performance of the people they hire or contract with as well to the benefits of enhanced productivity, efficiency and effectiveness will generally more than meet most reasonable hurdles.

Enterprises used to do this as a matter of course because they believed that they were building for the future. It is possible that we now seem more focused on exit strategies than investment opportunities. The challenge then, is overcoming our own fear of the future. JL

Lauren Weber reports in the Wall Street Journal:

If employers want only people who can step in immediately because they are currently doing the job, [they] narrow the pool to almost no one.

Hu-Friedy, a manufacturer of dental instruments in Chicago, says its future hinges on four employees. So, it is paying them to leave their jobs for two years.

While their colleagues bend and grind cylinders of steel on the factory floor, the four workers since March have been mastering the fundamentals of metal composition and heat-treating, among other things. The hope, managers say, is that the two years of full-time training will help keep the 106-year-old dental-instruments maker competitive in a mature industry crowded with rivals.

What's happening at Hu-Friedy Mfg. Co. LLC is a rare exception to decades of corporate disinvestment in skills development, and gets at the heart of the debate playing out in the hiring market over whose job it is to train workers.

Companies complain that they can't find skilled hires, but they aren't doing much to impart those skills, economists and workforce experts say. U.S. companies have been cutting money for training programs for decades, expecting schools and workers to pick up the slack. Economists say that reluctance to develop workers in-house has made it hard for workers to launch or sustain careers, resulting in a stalemate in the labor market: Companies won't look at job candidates who lack a specific skill set, so openings go unfilled even as millions linger on the unemployment rolls.

The government hasn't tracked spending on corporate training since the mid-1990s, but one rough measure, the percentage of staffers at U.S. manufacturers dedicated to training and development, has fallen by about half from 2006 to 2013, according to research group Bersin by Deloitte.

Employers' expectations for new hires have shifted since the recessions of the early 1980s, when companies laid off masses of workers and slashed training programs. Where bosses once hired for potential, viewing workers as lumps of clay to be molded to the company's needs, they now want hires to arrive with all or most of the skills needed for the job—another symptom of how the employer-employee relationship has become reduced to a transaction, said Peter Cappelli, a management professor at the University of Pennsylvania's Wharton School.

If employers "want only people who can step in immediately because they are currently doing the job, [they] narrow the pool to almost no one," said Mr. Cappelli. He added that today's novices are more likely to briefly shadow an experienced worker or log a few hours of on-the-job training than participate in a weekslong learning program.

Until March, Tam Nguyen, 40 years old, was an automation specialist at Hu-Friedy, overseeing robots that shaped dental instruments, including tools that hygienists use to scrape plaque from between teeth. On a Tuesday morning in May at Hu-Friedy's headquarters, he opened the round door of a big vacuum furnace and pulled out about $10,000 of stainless-steel handles destined to become probes and chisels. He would man the furnace many more times to master the variables that go into treating metals.

Eventually, Mr. Nguyen and his fellow apprentices will comprise a core of experts capable of running the factory floor and developing its next products and production techniques.

"Only three or four employees right now are true instrument makers who can look at a piece of steel and understand its progression to a product," said Claude Brown, the Hu-Friedy executive who created the program. "My vision is to transition their knowledge to a new employee base."

Investing in training is critical for the survival of firms—not just in immediate skills, but in the deep knowledge that drives problem-solving and creative thinking. Mr. Brown says he hopes the apprentices, all hourly workers chosen from a pool of 14 applicants, graduate to salaried jobs, working perhaps as manufacturing engineers or supervisors on the shop floor. He also hopes they will devise improvements to the firm's product lines and production process.

Such advances affect the bottom line for a company like Hu-Friedy, which employs 750 people world-wide. The roughly $600 million dental-instrument market is relatively stable, but it is also very mature, so "innovation is tougher and tougher to come by," said Ken Serota, Hu-Friedy's president.

"They're preparing us to be better. I don't hear about too many companies doing that," said Antjuan Patterson, who, at age 29, is the youngest of the four apprentices.

Labor economist Paul Osterman at the Massachusetts Institute of Technology found in a recent study he conducted that manufacturers' spending on training has essentially been flat for the last five years.

"Firms have gotten lazy [about training]. They're looking for someone else," such as community colleges, for-profit schools and online courses, to do that for them, Mr. Osterman said.

One proven method for providing skills, apprenticeships, has been rapidly declining. The number of formal programs fell about 40% between 2003 and 2013, according to the Labor Department.

Hu-Friedy is spending $600,000 on its apprenticeship program. The amount covers the cost of the apprentices' wages—roughly $200,000 a year—equipment, outside educators, and course materials.

For the apprentices, learning the business means returning to the classroom for the first time in years. At 10:30 on that May morning, the apprentices gathered in a Hu-Friedy conference room turned classroom, with panel windows overlooking the production floor. On each desk there were textbooks on heat treatment and metallurgy, the topics of the day's lesson.

Ravi Seeralan, Hu-Friedy's principal manufacturing engineer, reeled off a list of potential hitches in heat-treating, from power shutdowns to glues that melt and drip onto the ultrasensitive heating elements.

The apprentices interrupted the lesson with questions about how various chemical compounds respond to heat, followed by a discussion about the importance of keeping temperatures precise. "At 1,820 degrees, 10 degrees is life and death," said Mr. Seeralan.

Ron Saslow, the company's chairman and CEO, said the apprenticeship program will help Hu-Friedy keep the bulk of production in the U.S.; the company makes one brand of products in China, primarily to serve emerging markets. In the 2000s, Hu-Friedy reassigned about 15 workers to incorporate robots that bend steel 12 hours a day. Like the apprentice program, he said, the change was necessary for the company's future.

Over lunch, the apprentices talked about immersing themselves in things they previously understood only superficially.

"We had the instruments in our hands for so many years but we didn't know what the components of the steel were. Now we do," said 46-year-old apprentice Javier Araque, a 26-year veteran of the company.

Later, as the workday wound down, the apprentices displayed one of their early assignments, U-shaped steel bars.

The class's mentor, 74-year-old Martin Schnekenburger, said making a U-bar was among his first tasks as a teenage apprentice in Tuttlingen, Germany, and gives young craftsmen a feel for the properties of steel.

Mr. Schnekenburger, who has 60 years of instrument-making experience, plans to retire someday, but only after "my boys are finished" and gain the same feel for metal, he said. "Hopefully they'll make it."