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Technological displacement: who is responsible for retraining the displaced?

There has been increasing economic importance placed on the adoption of industrial robots in the manufacturing sector. Rightly or not, robotics have been seen as a panacea for curing a myriad of industrial ills, ranging from ever increasing labor costs to lack of skilled labor. In some industries, the acceptance of robot technology has become so widespread that it has evolved from a competitive advantage to a business necessity, from innovation to the norm. It is not disputed that the introduction of robotics into the manufacturing sector has provided substantial economic benefits for those organizations that have successfully integrated it into their operations, but this progress has not come without its costs. Primary among these costs is the impact on the human resources of the adopting firm. The introduction of the new technology immediately disrupts the skill mix in the organization by placing some skills (those related to the new technology) in high demand while simultaneously making others obsolete. The result is often an employer who frantically seeks to fill technical positions while, at the same time, displaces scores of workers who posses skills that are no longer needed.

It is estimated that over half a million jobs will be taken over by some 200,000 industrial robots by 1995. Projections made by the U.S. Department of Labor reveal that virtually half of all manufacturing jobs could be replaced with robots by the year 2010. Displacement is indeed a widespread phenomenon in the labor market, affecting approximately 1.2 million blue-collar workers and 800,000 white-collar and service workers annually.

Moral implications

As a consequence of this transformation in the workplace, many businesses have felt moral, political and societal pressure to institute training programs to assist the displaced worker. There has been increasing acceptance in recent years of what Robert Smith calls the "Right to Employability." Under this concept, employees are assumed to have a right to be retrained with the requisite skills necessary for employment, whether such employment entails understanding the new technology that has displaced them or acquiring an entirely new vocation. Therefore, the provision of a retraining program for displaced workers will either allow them to integrate into the newly automated workplace or provide them with new skills to further them along in new careers with other employers. An employer survey conducted in 1988 by Paul L. Blocklyn indicated that 48 percent of his respondents offer some form of retraining and, of these, 11 percent specifically offer such programs due to the introduction of a new workplace technology.

However, there exists a good deal of disagreement as to who is responsible for employee retraining. One argument contends that because the employer installed the industrial robots, it incurs a social responsibility for retraining those members of its workforce that the automation displaced. hi essence, this view holds that the organization has a moral obligation to provide retraining to reduce the harm to its employees when their skills were made obsolete.

The countervailing view holds that the goal of any business is to maximize the stockholders' wealth (maximize profits). According to A. G. Carroll, organizations may only focus on their economic and legal responsibilities, meaning the organization has an obligation to produce goods and services of value to society in order to generate profits to repay its creditors and stockholders. So long as it does so within the confines of the law, the firm is acting in a socially responsible manner. Providing retraining programs for employees displaced by robots would run counter to this economic goal. Such a laissez-faire approach to business absolves the organization of any requirement to provide retraining if this training does not increase profitability.

In the case of an organized enterprise, the preceding view is modified somewhat by placing responsibility for retraining on the individual union. Obviously, one purpose of a union is to insure employment of its members. One way this could be accomplished is through the development of retraining programs.

It could be argued that this constituency would have the best interest of the workers in mind and would therefore tend to develop effective retraining programs. Additionally, as the authorized bargaining agent for the workers in the bargaining unit, it could be argued that the union would be in a position to gain retraining concessions in the collective bargaining process.

In a similar vein, another argument runs that educational institutions should facilitate the rehabilitation of displaced workers by offering the appropriate vocational and academic programs. Educational institutions would be expected to provide die expertise, personnel and programs that assist the affected employee in acquiring marketable skills. It could be further argued that marketable constituent is the best equipped of the five to provide leadership in developing and implementing retraining programs. This is especially true if the goal of re g is to provide displaced workers with a new vocation. In such areas as computer, clerical and business education, universities and vocational/technical schools already have such programs in place.

Finally, there are some who argue that the worker, as a member of society, is best served by the government. The government, supported by both corporate and individual tax dollars, has an obligation to society to provide retraining for displaced workers in order to reduce unemployment and maintain the rigor of the economy. Government might be best equipped to deal with die development of these retraining programs, in terms of both financial capabilities and agency assets.

The issue of whose responsibility it is to organize and provide retraining can be approached from the perspective of several constituencies: owners, management, employees or society. This article will examine the issue from the perspective of two of these, management and the employees. Both of these groups provide insights that are relevant to the organization's internal substantial and both could exert substantial influence (particularly management) on policy formulation regarding the nature, content and implementation of any retraining program.

The survey

Since the central question is identifying which constituent (company, individual, union, etc.) is responsible for retraining technically displaced workers, an industry was selected that is characterized by substantial use of robotic technology. The aerospace industry, in particular, is an excellent fit for this criteria. Due to the high demand for scarce skilled labor and an

obvious need for rigid adherence to quality standards, the aerospace industry became an early adaptor of robotic technology. Consequently, a firm in this industry was selected and a survey questionnaire was developed to assess management and employee attitudes towards retraining responsibilities. It should be noted that the targeted company's business base was relatively stable, and its workers anticipated no fluctuations in the internal workforce for several years.

The questionnaire asked randomly selected respondents to rate each constituent's responsibility in retraining employees displaced by robots. A scale of 1 to 3 was used with 1 representing minimal responsibility and 3 representing maximum responsibility. The questionnaire was administered to employees arriving at the start of the first shift at one major aerospace company. Questionnaires were distributed by passing out to one individual every three minutes before the start of the first shift at each of the 12 entrance gates over a 12-day period. The probability of being select was equal within each of three employment categories: hourly (union), professional (salaried), and management (supervisory responsibilities). The overall response rate was more than 74 percent.

Results

The results of the survey indicate that there is general consensus among all of the employment categories that the company bore the greatest responsibility for retraining employees displaced by robots (Table 1). This was particularly significant in two worker classifications, professional and hourly. Interestingly, company responsibility had the highest mean response among managers as well, but only slightly above individual responsibility and educational institution's responsibility. This may be due in part to a belief that the company should organize and oversee any retraining program, but that the company is not solely responsible for the program's success.

Respondents across all three categories also consistently believed that individuals were responsible for their individuals This might imply personal obligation for either expending the time and effort to successfully complete any retraining program or deciding which new career path to follow when integration into the new technology is no longer possible. In either instance, all parties agree that the individual, while not the principle responsible party, is an essential component in the retraining process.

The third important entity, educational institutions, was also rated as having important responsibilities in the retraining process. In fact, professional employees rated educational institutions as having essentially the same degree of responsibility as the individual. To management, it was not significantly different from the company's or the individual's obligations. Among the hourly workers, educational institutions were rated with a moderate responsibility for retraining, but not significantly different from the responsibility of the individual. Interestingly though, hourly workers expressed a role for their labor union in this process. Conversely, professional workers and management both saw the union's role as minimal at best.

Finally, all three groups indicated that the government had very little responsibility in the retraining process, with professional workers rating it the lowest. This universal exclusion of government from the process was surprising, particularly in light of its vast financial resources. This may be due in part of the fact that the government may be too far removed from the workplace to understand individual training needs. Additionally, some respondents may have concerns over the efficient operation of such programs by government bureaucracies noted for their preponderance of red tape.

Virtually all respondents rated the company as having a major responsibility in retraining displaced workers, with mean scores ranging from 2.35 to 2.6212. The fact that the company received the highest score by each group would indicate that it was that it was perceived as having primary responsibility for implementing such programs.

Perhaps the most intriguing outcome of the survey was that the majority of the respondents (in all of the categories) did not consider the retraining of technologically displaced workers to be the singular responsibility of any one constituency; it was not determined to be exclusively the company's burden. Rather, retraining seems to be perceived as the collective responsibility of the organization, the affected individual and local educational institutions. The general indication is that these three constituencies should be working in concert.

It may be concluded, from the internal labor force's perspective, that an employer will be expected to offer some form of retraining any time workers lose their positions as the result of employer initiated technological improvements. However, for such a program to gain credence within the workforce, the program should enlist the cooperation of outside educational institutions and encourage employee inputs.

William B. Rose Jr., Ph.D. is an adjunct professor of management in the Department of Management of Texas Christian University. Ross L. Fink, Ph.D. is an assistant professor of operations management in the Department of Business, Management and Administration at Bradley University. Robert K. Robinson is an assistant professor of management in the Department of Management at The University of Mississippi.

For further reading

Blocklyn, Paul L. "Employee Retraining Programs," Personnel, November 1988. Carroll, A.B. "A Three-Dimensional Conceptual Model of Corporate Performance," Academy of Management Review, October 1979. Opalka, Daniel P. and James B. Williams. "Employee Obsolescence and Retraining: An Approach to HR Restructuring," The Journal of Business Strategy, Spring 1987. Podgursky, Michael and Paul Swain. "Job Displacement and Earnings Loss: Evidence From the Displaced Worker Survey," Industrial and Labor Relations Review, October 1987. "Right to Employability," Management Solutions, February 1987.
COPYRIGHT 1992 Institute of Industrial Engineers, Inc. (IIE)
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Title Annotation:Human Resources
Author:Rose, William B., Jr.; Fink, Ross L.; Robinson, Robert K.
Publication:Industrial Management
Date:Jul 1, 1992
Words:1920
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