Low-Skill, Low-Wage Workers: The Widening Skills Gap

TeamOJT Tip of the Month for July, 2005

The American Society for Training and Development (ASTD) and other leading learning organizations are doing a pretty good job equipping highly skilled workers with education and training opportunities. However, when it comes to those with lesser skills, I feel that we are falling short.

Quite simply, we are not paying enough attention to the low-skill, low-wage workers. By not doing so, we are only contributing to the skills gap problem and the potential economic ruin of the U.S. Most employers, as well as their training staff, routinely spend little time on training for low-wage, low-skill workers. Neither employers nor trainers seem to know much about the problems of these workers. They acknowledge the problems of absenteeism, turnover, skill deficiencies, and low productivity but accept them as "facts of life," feeling that not much can be done about them.

Employers and training professionals are often completely unaware of what the less skilled workers do and do not know and what they can and cannot do.

A few examples:

• A barista at Tully's Coffee did not know how much coffee was in a quarter-pound bag. He didn't know how to measure that amount of coffee because the store's scale read in decimals only. He did not know that 1/4 pound = 0.25 on the scale. And to make matters worse, his co-worker didn't know either.
• At Northwest Airlines, United Airlines, and U.S. Airways mechanics had never had any training on how to use a torque wrench - a tool that is used daily. Yet according to NTSB accident reports and NASA's maintenance error databases, the most common maintenance mistake leading to incidents and accidents is the incorrect use of torque wrenches. Team leaders, supervisors, and trainers assumed that any mechanic should know how to use the simple tool - so no need to train.
• Technicians at Genetics Institute in Boston (now part of Wyeth Pharmaceuticals) admitted to not knowing much of the math that was required of them - after 20 years on the job. Nobody had ever asked about problem areas or training needs. Yes, mistakes were made, but no one connected the dots. Quality errors were expected. These technicians probably would have advanced to better, higher-paying jobs if they had had the skills to do their current work.

Once hired, low-wage, low-skill employees often find themselves on their own, in new and somewhat alien environments, without the specific support they need. In addition, little is being done to prepare supervisors for these employees. As in the airlines example above, most supervisors or team leaders are unfamiliar with these employees' problems and do not have the specific skill sets they need to coach and supervise them. In many cases, job descriptions are inadequate or lacking; the actual skills required by jobs are often unknown or inaccurately specified. Hiring requirements are thus inaccurate, leading to mismatches between new hires and job requirements. New hires receive little if any orientation or preparation, are thrust out on the production floor, and turn over rapidly (some turnover rates exceed 40 percent per year). Training is nonexistent or limited and informal and inconsistent, and performance evaluations are rudimentary.

Very little is written about this segment of the workforce in our training publications; and training conferences are geared almost exclusively to management, leadership, and other high-level employees, and of course, to technology. Granted, low-wage, low-skill employees and their supervisors do not generally subscribe to membership in organizations like ASTD or read training-related literature, and are unlikely to attend training conferences.

State and federal agencies and organizations together with community and technical/vocational schools are working to increase learning opportunities for entry- and near-entry level employees, but these resources are not enough. And industry skill panels are not the answer either. During the 1990's the aviation industry (together with universities and community colleges) spent years developing skill sets for aircraft mechanics in order to improve training programs at A & P (Airframe and Powerplant) schools. But mechanics still graduate without the necessary skills needed by the airlines. And interestingly, how to use a torque wrench was not on the list of skills. Jobs are just too specific, specialized, and change too fast for traditional skills panels to be an adequate solution.

In their book, Structured On the Job Training: Unleashing Employee Expertise in the Workplace (1995), Ronald Jacobs and Michael Jones state that research shows, "an employee learns 90 percent of his or her job knowledge and skills through OJT", a fact that has been documented by numerous authors (including myself). And for low-skill, low-wage employees, the actual figure is closer to 100 percent. (Most of this is informal or unstructured OJT.) Jacobs and Jones go on to say that, "up to one-third of a newly hired employee's first-year salary is devoted to the costs of OJT. These results confirm what many managers and employees know from experience: Most training takes place at the job site, not in a training classroom." Yet we in the training industry focus almost exclusively on the other 10 percent - "formal" learning, most of which is for higher-level employees. The ASTD 2004 State of the Industry survey excludes from "formal learning activities," all on the job training and coaching (structured and unstructured). Structured OJT is not even mentioned, much less included under formal training - which it clearly is. The message this sends to corporate America is that structured OJT is not even recognized as a viable learning option. If 90 percent of what we need to know and be able to do to perform our jobs is learned via on the job training, why is on the job training not included in the survey? Doesn't leaving it out encourage companies to continue spending billions of dollars per year on training for only 10 percent of the learning that occurs? If we continue to focus just on that 10 percent, the skills gap will continue getting wider and wider.

William Rothwell and H.C. Kazanas, in their book, Improving On the Job Training (1994), cite research that shows U.S. employers spend between three and six times more for unplanned on the job training than for other training (the 10 percent), and that it is almost never a budgeted item. Again, companies are wasting big bucks and may not even be aware of the waste, or that anything can be done about it. Rothwell and Kazanas continue on to say that, "training professionals and line supervisors would scarcely recognize that fact" [the amount actually being spent on unplanned on the job training] "from what has been published about training in today's organizations." They say that, "As a consequence, OJT is typically ignored by professional trainers and is left to devices of well-intentioned co-workers, supervisors, managers, and executives, who recognize its importance but often lack the necessary skills to plan and execute it successfully." Why isn't the training industry paying attention? Are our surveys measuring the right things?

A.P. Carnevale and R.A. Fry, in their 2001 paper, The Economic and Demographic Roots of Education and Training, predicted that employers will need to spend $96 billion on training in 2005 just to maintain their current training commitments to their "most highly educated employees." They say that, assuming employers wish to expand the number of employees being trained to make up for current training shortcomings, the employer totals could be as high as $175 billion. Just think what the unplanned on the job training is costing.

Tremendous amounts of money are being spent on training by corporate America and we continue to have serious skill shortages. Employers say that limited access to a skilled workforce is by far the largest barrier to expansion over the next several years. This lack of skilled workers is found not only in manufacturing companies who are sending thousands of jobs overseas, but in all industries.

We in the training profession need to raise awareness among our own colleagues as well as company executives and their organizations that more attention needs to be focused on low-skill workers who now learn their jobs through informal OJT which is nothing but a degenerating buddy system. We need to enable supervisors and employers to more successfully manage these workers and increase satisfaction and retention rates. Low-skilled workers with limited experience in entry- and near entry-level jobs could become productive, successful employees likely to be retained and advanced if employers and training professionals paid more attention to their skill needs - not just dump them into the job and let them fend for themselves. We're not going to even come close to bridging the skills gap until the training organizations start to support them as much or perhaps more than the current attention focused on management and professional employees.

Training industry leaders should be leading the way. If we don't give more attention to this segment of the workforce we may indeed become a Third-World workforce. As it is now, these workers are just getting further and further behind, as even higher skill levels are needed. If they can't do many of their basic tasks now, how can they be expected to take advantage of the technological changes being thrust upon them?

The good news is that some companies are aware of the problems of these workers and have decided to do something about it. For example:

• At a Nestle plant in New York, supervisors decided to develop a structured on the job training program for their less skilled employees. They ended up retaining workers who had traditionally been shifted from group to group because they couldn't seem to learn the jobs; other employees who before thought they could never learn certain jobs looked at the newly-created step-by-step instructions for doing these jobs, saw that they could learn them, started applying for the jobs, and continued to advance within the company.
• Supervisors at Precision Castparts in Portland, Oregon developed a structured OJT program for their entry-level employees in hopes of not only getting them up to speed quickly, but also providing them a path for advancement. The program enabled supervisors to objectively weed out one-third of their new hires before the 90-day probationary period was up. They thus avoided making a commitment to employees who would be trouble in the future. They were also able to tie the training to a wage progression scale so that the workers know exactly what they have to do to advance their careers by continuously learning new skills.

Unfortunately it sometimes takes a crisis for a company to start such programs. Hopefully it won't take an economic crisis here to make us sit up and pay attention to the needs of all our workforce. All workers demand skills that enable them to perform their everyday work tasks and a chance to learn new jobs that require higher skills and that advance their careers. Paying more attention to low-skill, low-wage workers is an absolute necessity if we are to have a world-class economy. And we in the training industry have the skills and tools to do it.

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