2007 WORK FORCE TRAINING: Expanding Companies Come To Depend on State Work Force Training Programs
By Ken Krizner | Managing Editor
The demand for a quick ROI in a new facility means that it is imperative that a company's work force is highly trained from the first day of operations.
Your company is on the fast track. Sales, and your share of market, are increasing by the quarter and you, as the president or CEO, have made what is perhaps the most monumental decision in company history. You’ve decided to build a new facility in another state.
An expansion project is one of the most critical decisions a company will make. If done correctly, that company will reap rewards for years to come. If done incorrectly, it could haunt the company for years to come, even putting it in financial peril.
It is not a decision to take lightly.
Once you’ve decided the best state for your company’s new facility — and location within that state — it’s time to determine when you want to be at full production. In today’s fast-paced, global marketplace, where competition can come from just about anywhere, that time frame continues to shrink.
A decade ago, company executives might have used a plant’s first six months in operation for training before they expected to see a return on their investment.
Today, however, it seems that company executives demand an ROI almost as soon as the doors are open.
That means it is essential to have a work force trained and qualified before the plant launches operations. On-the-job training is no longer an option.
Workers are the linchpin of any operation, and a state or community doesn’t stand a chance of attracting any company from any industry unless its work force is properly trained. New employees are expected to be cost-effective and earning money for the company from almost the first day on the job.
Work force training programs must reflect that philosophy.
Training a work force to be proficient and efficient in today’s technology-intensive world is a difficult task for employers. But it is a task that must be accomplished and that’s when employers turn to state work force training programs.
“More and more, companies are realizing how critical the quality of the work force is to the success of their startups and expansions,” said Jackie Rohosky, assistant commissioner for economic development programs in Georgia’s Department of Technical and Adult Education.
Each state offers work force training programs, but each state is different. Eligibility rules vary, as do cost per employee, funding restrictions and wage requirements.
Top 10 State Work Force Training Programs1. Georgia SOURCE: Expansion Management poll of corporate site consultants, June 2007 |
Some states offer work force training programs free to qualified companies, while other states award grants to companies to cover the cost of training.
Most states take full advantage of their community college systems, which are an ideal place to conduct work force training because that is, in essence, their mission.
“Our sole purpose is to provide opportunities for people to get a good job,” said Jerry Beck, president of the College of Southern Idaho (CSI), a community college in Twin Falls, Idaho.
Work force training is a price of attracting expanding and relocating companies — or retaining companies already located in a state — and a training program is one of many incentive tools that states have at their disposal.
While the specifics might differ, the objective of all work force training programs is the same: Provide expanding and relocating companies with a vehicle to ensure that they have a properly trained work force. That site location decision might come down to which state has the most effective work force training program.
Georgia Leads The Way
In a poll of more than 80 site location consultants, the state of Georgia was ranked No. 1 in the country for work force training for its Quick Start program. Alabama, Florida, South Carolina and Kentucky rounded out the top five (see page 12 for a listing of the top 10 states).The consultants, among the most prominent in the country, were asked to judge the quality of the programs based on their experiences working with expanding and relocating companies. Programs are judged not only in terms of their financial value, but also in terms of ease of usage and applicability.
In other words, some programs may have a high monetary value, in theory, but are of little practical use to most companies. Likewise, some programs may be both useful and valuable, but are so wrapped up in red tape requirements that they are extremely difficult to use.
Expansion Management has conducted a work force training poll since 1999, and this is the third time that Georgia has been ranked No. 1. In fact, the lowest ranking for Georgia in our poll was a tie for No. 4 in 2000.
Since 2001, it has ranked either No. 1 or No. 2 and, since 2004, it has alternated between the No. 1 and No.
2 spots with the state of Alabama.
Quick Start has provided customized work force training free-of-charge to qualified companies in Georgia for 40 years. The program is one of the state’s key assets for supporting new and expanding companies. Quick Start delivers training in classrooms, mobile labs or directly on the plant floor, wherever it works best for a company.
In 2006, Quick Start undertook 259 projects and trained nearly 45,900 employees. Twenty-seven percent of the projects involved international companies.
“When new prospects are considering Georgia, issues regarding training and the available work force are some of the first topics on the table,” Rohosky said. “Georgia knows how important these issues are, and that’s why we strive to keep Quick Start’s training capabilities state of the art.”
Quick Start played an important role in outdoor retailer Bass Pro Shops’ first-ever regional distribution center (DC), which it set up in Macon, Ga. The DC became operational in April 2006. (The company’s only other DC is a 1.3 million square foot facility in Springfield, Mo., where the company is based.)
“Business was good,” said Bruce Beasley, vice president of distribution for Bass Pro Shops. “As a result of growing sales and a growing store base, we found the need to expand. Our store base is heavy in the Southeast (U.S.).”
Initially, Beasley wasn’t expecting much from Quick Start. While officials from the Georgia Department of Economic Development continually mentioned what a valuable resource Quick Start could be, he figured it would be up to the company to do the lion’s share of training.
“Truthfully, early on in the process, Quick Start sounded good and I thought it was going to be this nice perk to add to the reasons why we should come to Georgia,” he noted. “But honestly, I did not understand what a benefit it would ultimately be to Bass Pro Shops. I was not expecting a lot.”
Beasley’s attitude changed almost immediately after seeing Quick Start jump into action. Trainers traveled to Springfield to watch how the Bass Pro Shops DC operates.
“They worked with our people on the floor,” he pointed out. “They learned our business and took that back to Georgia. They became intimate with our operations.”
Quick Start found and trained an initial work force of 70 to be proficient in the use of radio frequency equipment, which is prevalent on the DC floor.
The training helped the company to be able to service five stores when the DC opened. Within 30 days, the work force totaled 100. Today, the DC services 17 stores with 150 employees.
“The day we launched operations, five of our stores were supported out of [the Macon] facility,” Beasley said. “It was a big deal. We brought on more stores as our employees became more trained and more proficient.”
Customization Is the Key
The hallmark of any substantial work force training program is customization. Company executives, and those who administer work force training programs, agree that the best programs respond to the needs of the individual companies.Many times, officials from a state program will go out and meet with company executives to determine what types of skills that they require (such as the case of Quick Start visiting Bass Pro Shops’ DC in Missouri).
“The most critical role that we can play is to look at both a company’s work force needs and our labor market and determine the gap between those two points,” CSI’s Beck said. “Then, you build a program to fill that gap. It can’t be a one-size-fits-all mentality — even for companies in the same industry.”
That’s the scenario that played out as CSI worked with Goshen, Ind.,- based Dutchmen Manufacturing Inc., a producer of recreational vehicles, as it expanded its manufacturing capacity with a plant in Burley, about 35 miles from Twin Falls. The company wanted a manufacturing facility closer to the West Coast.
CSI worked with a company in the same industry, Jayco Inc., when it announced an expansion to Twin Falls three years ago.
The processes and production methods of Jayco and Dutchmen are different, however, so the training methods had to be different, Beck said.
CSI designed a program where it provides general training, then Dutchmen uses the college’s classrooms to teach employees on the specifics of the Dutchmen way of manufacturing.
As part of the agreement to expand to Burley, Dutchmen will receive state work force training development funds from CSI.
“We always felt, from the college’s point of view, that the money generally should be used for a company to train workers in unique things to the company,” Beck said. “We assured Dutchmen we would get a work force ready from a generic standpoint, and they would be able to do the finishing training.”
To prepare, CSI trainers visited one of the most productive manufacturing plants in the Dutchmen chain.
“What the trainers learned was that they had to instill in the Twin Falls work force the ethic that time is money, efficiency is critical and that every day, employees have to learn how to go faster, better, while keeping the quality high,” Beck said. “It was important to Dutchmen, and to us, that we approximate its work environment as closely as possible, so [workers] can develop the corporate mindset needed to be productive.”
Training is a Matter of Dollars and Cents
Work force training was once considered by company executives to be simply a cost of business — a debit on the financial ledger. That philosophy has completely turned around during the past decade. Today, it is considered an asset — and one they cannot live without.That change comes from the belief that new facilities have to be profitable almost immediately.
Staying ahead on work force training can be difficult. Employees don’t stay with the same company for years like they did in the past, and employers are constantly changing their mix of products and processes.
In addition, what is considered state of the art today can be obsolete within a year.
Quick Start’s Rohosky said that she sees pre-employment work force selection, work ethics and customized training in advanced manufacturing skills as key areas of emphasis in the future.
“Helping to provide businesses with the right team with the right skills at the right time is central to our economic development mission,” she said.
That’s why companies look to state work force training programs before deciding to site a facility
expansion. To them, it’s a matter of dollars and cents.
The money saved in work force training is money that can be put back into the plant. The time saved can be
put into forming a staff, building the plant and starting up the equipment.
From the viewpoint of the global market, companies need a work force that can move quicker than any other work force in the world. That’s why a work force training program is so important.
Making that first expansion or relocation can seem daunting. You may go over in your mind a thousand times whether it was the right decision. A highly trained work force can help ease that burden.
That work force will help the company become profitable in a new location, which will make the original
decision to expand the right decision.
Ken Krizner is the managing editor of Expansion Management magazine and can be reached at kkrizner@Penton.com.
