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Education and the bottom line.

Achieving Productivity and Profits

Business leaders across America agree overwhelmingly that a capable workforce is the most important factor in selecting a new location to do business. In fact, in a recent survey done by Dan Jones & Associates for the Utah Department of Economic Development, the workforce is cited as the key factor nine times as often as other traditionally important considerations such as tax structure.

CEOs, business and marketing surveys, and academic research projects are all coming to the same conclusion: people, not machines or capital, are the critical factor in today's productivity and growth. Since the end of the Depression, job-related training and education has been more and more responsible for increasing America's productive capacity. Research done by the American Society for Training and Development found that formal school learning accounted for 26 percent of the growth in productivity, and on-the-job training contributed 55 percent, while capital equipment added only 19 percent to productivity increases between 1935 and 1985.

Investments in new technology are crucial, of course, but firms have also learned that the flexibility and productivity potential of new technologies cannot be maximized without changes in business practices. These changes involve more integrated and interdependent networks of workers and machines. In many cases, this new work structure moves more decision-making power and autonomy to lower levels. This often means decentralization of decision making. The new approach to doing business combines interdependence and autonomy. Its attendant technological and organizational developments can potentially have a strong influence on skill needs and human resource strategies, including training provided by the firm.

Putting Knowledge to Work

Progressive firms want workers who have the ability to apply general knowledge and principles for solving problems in particular situations. Moreover, the increased emphasis on teamwork and more complex interactions with co-workers, customers, and supplies also calls for different types of social skills.

In 1991 Lynn Martin, secretary of labor, formed the Secretary's Commission on Achieving Necessary Skills (SCANS), comprising business, government, and labor leaders. SCANS was given the charge to examine the demands of the workplace and to advise the secretary on the level of skills required to enter employment. The results of the commission are based on discussions and meetings with business owners, public employers, unions, and workers and supervisors in shops, plants, and stores. It builds on the work of six special panels established to examine all manner of jobs from manufacturing to government. It also includes the results of interviews with workers in a wide range of jobs. From all their sources the same message came back time and again: Good jobs will increasingly depend on people who can put knowledge to work.

Qualities of the Effective Worker

The workplace know-how identified by SCANS is made up of five competencies and a three-part foundation of skills and personal qualities needed for solid job performance. These include:

COMPETENCIES--Effective workers can productively use:

* Resources: allocating time,

money, materials, space, and staff;

* Interpersonal Skills: working on

teams, teaching others, serving

customers, leading, negotiating, and

working well with people from

culturally diverse backgrounds;

* Information: acquiring and

evaluating data, organizing and

maintaining files, interpreting and

communicating, using computers to

process information;

* Systems: understanding social,

organizational, and technological

systems, monitoring and correcting

performance, and designing or

improving systems;

* Technology: selecting equipment

and tools, applying technology to

specific tasks, and maintaining and

troubleshooting technologies.

THE FOUNDATION--Competence requires:

* Basic Skills: reading, writing,

mathematics, speaking, and listening;

* Thinking Skills: thinking

creatively, making decisions,

solving problems, seeing things in

the mind's eye, knowing how to

learn, and reasoning;

* Personal Qualities: individual

responsibility, self-esteem, sociability,

self-management, and integrity.

A Challenge to Employers

Beyond identifying these competencies and their foundations, SCANS identified a key role for business and industry in developing a world-class workforce. The Commission encourages employers to invest in their workers so that they can get the skills needed to succeed in this new environment. Second, they need to tell educators clearly what they need and work closely with them to help improve the educational system. Employers who value performance in high school when they make their hiring decisions provide students with the right signal--that learning and earning are related activities.

Like employers nationwide, the majority of Utah companies surveyed see a clear link between employee skills and the overall health of the company in key areas such as quality, productivity, sales, and turnover.

As the national recession continues, unemployment grows even in Utah, and America's competitiveness in world markets continues to decline, local CEOs are asking themselves how they can turn the situation around. Increasingly they, too, are identifying a trained workforce as the key to future competitiveness. [Graph Omitted]

Carol J. Berrey is director of the Utah Office of Job Training for Economic Development.
COPYRIGHT 1992 Olympus Publishing Co.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Title Annotation:includes related article on Utah employers' evaluation of their workers; report from Labor Secretary's Commission on Achieving Necessary Skills (SCANS) finds competencies in resources, interpersonal skills, information, systems and technology plus a foundation in basic skills, thinking skills and personal qualities comprise an effective worker
Author:Berrey, Carol J.
Publication:Utah Business
Date:Mar 1, 1992
Previous Article:Business and education: partners in progress.
Next Article:The truth about Utah wages.

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