Worker Training: Not As Easy As Abc
These days, it seems almost impossible to boost profits by raising prices. Customers simply won't pay more, and if you insist, they can always find someone to sell for less. So, like most companies, at Emerald Packaging Inc. we have become obsessed with boosting productivity. If we could make our plastic bags for less money, we could shave prices and still increase profits.
Many companies confront this conundrum by getting rid of people. I tried it, too. In May, I ordered that three vacancies among the mechanics in bag-making remain unfilled. We quickly found out that the remaining mechanics couldn't fix the machines, relieve bag packers for breaks, and still find time to set up the machines for new jobs. They complained about being overworked. Production suffered. By late June, I relented and the vacancies were filled.
Now how would I hike productivity? Several months later, I think we're on the verge of an answer, thanks largely to an unexpected ally--the government. Most small-business people can't imagine government being good for anything. They think it's all waste, fraud, and taxes. But thanks to a coalition of local, state, and federal agencies, we are finalizing a program that has a good chance of boosting productivity and profits. We're entering the promising world of workforce training.
DOORS OPEN. I had always thought training programs were a good idea. But devising one seemed almost overwhelming. I had written about successful employee-education schemes at large companies such as Deere, Caterpillar, and Motorola during my six-year stint as a correspondent in BUSINESS WEEK's Chicago bureau. Those efforts, though inspirational, provided little guidance for a company such as ours with a fraction of their resources.
Then I got lucky. In mid-June, I arranged a meeting with the economic-development department of Union City, Calif., our home base. I was after some help with California's tough environmental laws. Agency director Susan McCue didn't think she could help me with that issue. But since we were one of the city's bigger employers (with all of 95 workers), she offered, unsolicited, to help me get state aid to train our workforce.
Suddenly, doors flew open. Susan introduced me to a person from California's Employment Training Panel, which distributes state funds for the training programs of midsize and small companies. Most states have these kinds of programs, but getting the money isn't easy. You have to show in detail what courses you're offering and then account for every dollar that you spend. A fellow industry executive told me that the application took him 80 hours to complete.
Swamped by other demands, I told Susan that a formal training program would have to wait. Not to worry. She matched me up with Bob Wood, who organized corporate training programs for a local community college, and Leslie Sims, the head of training for the Commerce Dept.'s local manufacturing extension center, which provides information on best practices to small businesses. They offered to assess our training needs, develop a curriculum, and file the application for free, with the stipulation that the community college do the teaching. Fair enough. By late August, Bob had surveyed more than 60 employees on their training preferences. The big winners? English as a Second Language, math, basic maintenance, and cross-training on machines.
There was only one large problem, however. When Bob unveiled his training scheme to me in mid-October, I realized I would have had to nearly shut down Emerald Packaging's operations to achieve everything he had laid out. It wasn't Bob's fault. I had suggested that he develop six courses, including ESL, math, team-building, and technical classes. To meet the state's complex rules about the mix of training courses, we would end up with almost three solid weeks of class work.
By early November, we were revamping the curriculum. Leslie and Bob insisted we'd be a shoo-in for funding once we decided what to offer. Our current plan: to cut back on the ESL, drop math, and concentrate on cross-training and technical skills, the classes that pack the most productivity punch.
I'd love to offer the other classes, too. And perhaps someday we will. Since boosting productivity and profits was the original motive for training, teaching people to run their machines better seems like a good place to start.