Worker Training: Competing in the New

International Economy

September 1990

OTA-ITE-457

NTIS order #PB91-106716

GPO stock #052-003-01214-6
Recommended Citation:

U.S. Congress, Office of Technology Assessment, Worker Training: Competing in the New

International Economy, OTA-ITE-457 (Washington, DC: U.S. Government Printing Office,

September 1990).

For sale by the Superintendent of Documents

U.S. Government Printing Office, Washington, DC 20402-9325

(order form can be found in the back of this report)
Foreword

Effective use of technology depends as much on people as on the technology itself. This

has never been more true than it is today. The once great technological advantage of American

firms has narrowed in many industries. Increasingly, the competitive edge will go to the

company or country with flexible, well trained workers who can adjust quickly to rapidly

changing demands and who have the skills to fully exploit new technology. Such workers are

key to the creation of more productive, effective enterprises-the kind likely to contribute to

raising living standards.

The stakes are high-for America’s position in the global economy, for national living

standards, and for the individual worker. Many of our competitors have well educated, highly

skilled workforces, who are paid less than our own, and receive more training. Clearly, we

can’t compete with these countries on the basis of wages without sacrificing living standards.

If we are to avoid falling behind, far more American companies (and other institutions, public

and private) will need to develop and tap their employees’ skills at all levels. The few leading

edge American companies that have done this find that they must make major commitments

to training, both in resources and attention to quality, and that the training must reach all levels

of the workforce-not just managers, professionals, and technicians. Often, these companies

have discovered that they need to upgrade the basic skills of their workers before the workers

can benefit from training.

For such reasons, employee training, once a minor concern in American industry and

largely ignored in public policy, must move toward center stage. This report, requested by the

Senate Labor and Human Resources Committee, the House Education and Labor Committee,

and the Senate Finance Committee, focuses on the training given to employed workers both

from the standpoint of the competitiveness of U.S. industry and from the standpoint of the

individual worker who may need training to advance. Most workers who get training get it

from their employer, and much of the report looks at the employer provided training system.

The message of this report is that the debate about national training policies needs to be

broadened to encompass not only training programs for the economically disadvantaged, the

displaced worker, or people with special needs, but also those who stand on the front line of

American productivity-employed workers at all levels.

w Director

0.,

Ill
Advisory Panel—Workplace Training:

Competing in the New International Economy

Donald N. Frey, Chairman

Department of Industrial Engineering and Management Sciences

Northwestern University

Paul E. Barton

Director

Policy Information Center

Educational Testing Service

John H. Bishop

School of Industrial and Labor Relations

Cornell University

Waker H. Bruning

Consultant

Process Management Institute

Anthony P. Carnevale

Chief Economist and Vice President,

National Affairs

American Society for Training and Development

Peter S. DiCicco

President District 2

International Union of Electronics, Electrical

Technical, Salaried and Machine Workers

Patricia M. Flynn

Institute for Research and Faculty Development

Bentley College

Badi G. Foster

President

Aetna Institute for Corporate Education

Paul Funk

Major General

Us. Army

Robert W. Glover

Center for the Study of Human Resources

The University of Texas at Austin

Annie L. Hill

President Local 7904

Communication Workers of America

Malcolm S. Knowles

Professor Emeritus

North Carolina State University

Harry M. Lasker

Vice President

Applied Learning

Ira C. Magaziner

President

SJS, Inc.

Larry W. McMahan

Vice President for Human Resources Development

Federal Express

James R. Morns

Executive Director

State Board for Technical and Comprehensive

Education, South Carolina

William Pechstedt

President

Sanford-Lussier, Inc.

Ernest J. Savoie

Director

Employee Development Office

Ford Motor Company

Gail Spangenberg

Vice President

Business Council for Effective Literacy

A. William Wiggenhorn

Corporate Vice President for Education

and Training

Motorola, Inc.

Joan L. Wills

Vice President

National Center on Education and the Economy

NOTE: OTA appreciates and is grateful for the valuable assistance and thoughtful critiques provided by the advisory panel members.

The panel does not, however, necessarily approve, disapprove, or endorse this report. OTA assumes full responsibility for the

report and the accuracy of its contents.

iv
OTA Project Staff—Workplace Training:

Competing in the New International Economy

Lionel S. Johns, Assistant Director, OTA

Energy, Materials, and International Security Division

Audrey Buyrn, Manager Industry, Technology, and Employment Program

W. Wendell Fletcher, Project Director

John A. Alic, Senior Associate

Margaret L. Hilton, Senior Analyst

Gretchen Kolsrud, Senior Associate

A. Jenifer Robison, Senior Analyst

Stephen E. Baldwinl

Joan G. Erhardt Michael J. Feuer

Gale R. Morse2 Willie Pearson, Jr.3

Administrative Staff

Carol A. Guntow, Office Administrator

Christopher N. Clary, Office Administrate@

Diane D. White, Administrative Secretary

Publishing Staff

Katie Boss, Publishing Officer

Cheryl Davis Dorinda Edmondson Steve Kettler

Chip Moore Christine Onrubia Susan Zimmerman

Contractors

Columbia University John F. Krafcik

Paul V. Delker Joe W. Lee and Youngho Lee

Ronald Dore and David Cairncross Robert R. Miller

Ralph E. Grubb Northern Illinois University

Larry D. Hirschorn Lynn M. Powers

Thomas J. Hoffman Frances R. Rothstein

Industrial Technology Institute Technology Management Group

Greg Kearsley

@~ee, Natio~ Commission fOr Employment Policy.

2

0TA fellow.

30’E4 fellow.

4Until June 1990.
Chapter

Chapter

Contents

Page

I: Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Chapter 2: Policy Issues and Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Chapter 3: Human Resources for Competitiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

Chapter 4: Technological and Organizational Change: Implications for Training . . . . . . . . . . .

Chapter S: Delivery of Training by U.S. Firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 6: Basic Skills and the Workplace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 7: Training Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 8: Training and Workers’ Careers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Appendix A: Training in the U.S. Military . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ● .....**

101

127

153

183

227

259

271
Chapter 1

Summary
CONTENTS

Page

THE CHANGING AMERICAN WORKPLACE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

THE NEED FOR TRAINING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Training for the Workplace of the Future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Basic Skills in the Workplace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Labor Mobility and Changing Demographics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Training and Human Resource Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

TRAINING APPROACHES: THE UNITED STATES AND OUR

FOREIGN COMPETITORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Corporate Training in the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Training and Workers’ Careers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........ 18

The Growing State Role . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Training Among Our Competitors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

TRAINING TECHNOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

FEDERAL POLICY OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Issue Area A: Reducing Barriers to Company Training . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Issue Area B: Individual Workers and Retraining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Issue Area C: Training and Technology Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Issue Area D: Improving the Effectiveness and Quality of Worker Training . . . . . . . . 32

Boxes

Box Page

I-A. Job Opportunities and Skills: Growing Mismatch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

l-B. Training in U.S. and Japanese Automobile Assembly Plants . . . . . . . . . . . . . . . . . . . . 15

l-C. Measuring Interactivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

l-D. Future Prospects for Training Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

I-E. The Military and Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Figures

Figure Page

l-1. Annual Hours of Training Per Employee, Automobile Assembly Workers . . . . . . . . 15

l-2.Hours of Training, Newly Hired Automobile Assembly Workers . . . . . . . . . . . . . . . . 15

l-3. Upgrade Training by Occupation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Tables

Table Page

l-1. changing organizational Patterns in U.S. Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

l-2. The Changing Labor Force: 1976-2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

l-3. Educational Credentials of Employed Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

l-4. Worker Training Compared . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

l-5. State-Financed Customized Training Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

l-6. Work-Related Applications for Training Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

1-7.Summary of Federal Policy Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ,...,.., . . . . . 28
Chapter 1

Summary

The quality of the U.S. workforce matters now

more than ever. Well-trained, motivated workers

who can produce high-quality goods and services at

low cost help enhance industrial productivity and

competitiveness and keep American living standards high. In today’s international economy, workers must be prepared to change the way they do their

jobs in order to capture the benefits from rapidly

evolving technology. Training goes hand-in-hand

with productivity, quality, flexibility, and automation in the best performing firms.

Good training pays off—for the individual worker

whose skills are upgraded, for the company seeking

a competitive edge, and for the Nation in overall

productivity and competitiveness. Conversely, inadequate training costs firms and workers—in downtime, defective parts or equipment, wasted material,

health and safety risks, late deliveries, and poor

customer service. Poor training also can delay the

implementation of new technology or work reorganization.

When measured by international standards, most

American workers are not well trained. Many in

smaller firms receive no formal training. Larger

firms provide more formal training, but most of it is

for professionals, technicians, managers, and executives. Our major foreign competitors place much

greater emphasis on developing workforce skills at

all levels. Experienced production workers at Japanese auto assembly plants, for example, get three

times as much training each year as their American

counterparts.

American manufacturing and service workers

have the skills for yesterday’s routine jobs. But,

these workers will need new skills to function well

in the more demanding work environments that

increasingly characterize competitive industries able

to provide high-wage jobs. Skills and responsibilities are broadening. Competitive manufacturing and

service firms will increasingly rely on employees

with good higher order skills-reasoning and problemsolving. Work reorganization forces employees to

take more responsibility, cooperate more closely

with one another, understand their roles in the

production system and in the organization, and act

on that knowledge. These changes require good

worker training.

The need for better training is clear in both

manufacturing and service industries. American

manufacturers have repeatedly lost out to foreign

competitors who are able to make more reliable

products with better features at lower cost. In many

of the service industries, it is domestic competition,

shifts in consumer demand, and deregulation that

have forced companies to reassess their management

and training policies. Like manufacturers, service

firms compete on the basis of price (e.g., for

insurance), quality (e.g., rapid but accurate response

to customer inquiries), and flexibility (e.g., new

banking products). Many services now depend on

redesigned production systems built around dispersed computing power and on employees with the

social skills to interact with customers. They need

workers who are motivated, managed, and trained in

new ways.

Simply providing more training will not promote

industrial competitiveness, however. If work is not

organized to tap employees’ skills, the firm’s

investment will be wasted. In addition, training must

be focused on workplace problems and delivered

effectively. Techniques such as relating training

more closely to business goals, following instructional development principles, and effectively using

training technology can improve the quality of

training and increase its chances of transferring back

to the job. Yet, systematic efforts to apply these

techniques are still rare outside of sophisticated

firms with large training budgets. Most training

programs lag far behind the state-of-the-art.

Demographic change is shaping training needs.

Over the rest of the century, the labor force will

expand more slowly than at any time since the

1930s. In 2000, the average worker will be nearly 40

years old, compared with 36 today. Keeping this

slowly aging workforce up-to-date and flexible will

require ongoing training. Many new entrants will

come from minority groups that historically have

received less education. New entrants in general

need better basic skills, including reading, writing,

arithmetic, and oral communication, as will many

Americans already in the labor force. In part because

–3–
4 ● Worker Training: competing in the New International Economy

American workers are so mobile, especially when

they are young, most companies offer training only

sporadically, such as when introducing new equipment. Moreover, few American workers voluntarily

upgrade their skills for job advancement.

Our major trade competitors provide more and

better worker training. Their governments offer both

financial and technical support to firms and workers

for training. Our competitors also provide better

basic education. On average, young Americans have

lower academic competencies than young people in

several other industrialized countries. Moreover, in

other industrialized nations, training and learning on

the job are seen as a continuing need. More than ever

before, the international economy pits the U.S.

workforce against those in other countries. The

worse the United States fares in this competition, the

more American industrial competitiveness and living standards will slide. American companies can

move some of their operations abroad; few American workers have that choice.

Over the long term, improving the educational

system and developing more effective ways to help

young people make the transition from school to

work will be crucial to the Nation’s continued

economic success. Yet, people already at work will

comprise a majority of the workforce over most of

the next two decades. In the near term, their training

will have the greatest influence on national competitiveness. While the need to improve the schools has

been the focal point for much debate, policymakers

have only recently begun to turn their attention to the

continuing training and education needs of employed workers.

The U.S. Government now does little to influence

corporate training. With a few exceptions (e.g.,

small grants to demonstrate ways to improve the

basic skills of workers), federally sponsored training

programs focus on the unemployed or economically

disadvantaged. State governments provide only very

modest direct support to corporate training in

economic development programs, plus indirect support through community colleges.

New institutional structures will be needed to

make affordable training available to employees of

small businesses and other firms with limited

resources. A variety of approaches, including industry training consortia, involvement of employer

organizations in training, State assistance programs,

and joint labor-management programs promise to

enhance the scope and quality of training. Such

efforts currently are very limited, however.

For a slowly increasing number of businesses,

training is becoming an integral part of competitive

strategy-key to continued growth. When improving their production systems, however, most American firms focus on investments in hardwareequipment and physical plant—rather than on the

people who will make the hardware perform. When

managers treat their workforces as adjuncts to

technology instead of as capital assets, they fail to

capitalize on employee skills and to reap the rewards

that can come from blue-collar innovation.

This assessment, requested by the Senate Labor

and Human Resources Committee, the House Committee on Education and Labor, and the Senate

Finance Committee, examines employee training

issues from the standpoint of maintaining a competitive workforce. The assessment analyzes the forces

that are shaping training today, and describes the

extent of current U.S. employer-provided training

compared with that of our major competitors. The

assessment also examines trends in instructional

technology and their use in training programs.

Finally, it presents options Congress may wish to

consider to encourage employer-provided training,

improve the quality and effectiveness of training,

link training and technology assistance, and provide

retraining to individuals for career advancement.

THE CHANGING AMERICAN

WORKPLACE

American firms are competing with foreign rivals

that are much more competent today than just a few

years ago. The competitive pressure will only grow

stronger over the coming decades as more companies in more parts of the world master the skills

needed to export or to compete with imports in their

domestic markets.

Cost, quality, and flexibility determine competitive outcomes. Success in producing high-quality

goods at low cost comes from highly developed

production systems that effectively couple product

and process design, work organization, and shopfloor management.

Many U.S. firms lag behind their competitors in

introducing flexible automated production systems

that can offer the variety that consumers expect and

the just-in-time deliveries that corporate customers
Chapter 1-Summary ● 5

demand. American firms also lag in the reorganization of work—and the worker training-needed to

improve quality and flexibility. These problems

show in the marketplace (e.g., when America’s

drivers purchase imported cars or when foreign

banks underwrite bonds for American corporations).1

The higher the competitive standing of U.S.

industries in the international economy, the higher

will be average U.S. living standards. To pay wages

commensurate with American living standards, U.S.

firms must equal or surpass their foreign counterparts in productivity or quality. And, the competitiveness of small firms and the services matters even

if their products do not trade internationally. Many

of these businesses supply other firms that do export

or compete with imports. Suppliers’ costs, quality,

and productivity directly affect those of their corporate customers. As most new jobs in the United

States over the next several decades will be in the

services, the strength of service industries will be

critical to living standards. Small firms of all types

also will create proportionately more jobs than their

total share of employment.

Faced with ever more intense competition, U.S.

firms are searching for strategies that offer sustainable long-term advantages. While the mass production era has not ended, the rules for success have

changed (see table 1-1).2 The changes summarized

in table 1-1 and in the discussion below are in their

early stages. A few American firms have already

reorganized along these lines. Many others are

taking tentative steps, experimenting with new

approaches. Smaller U.S. companies, in particular,

have been slow to grasp the new forces at work and

their implications for training.

Some American companies that have radically

altered how they do work have emulated Japanese

production systems, which depend heavily on motivated and capable employees to prevent or catch

product defects. Japanese firms also seek stable,

long-term relationships with smaller groups of

frost-tier suppliers that are expected to be sensitive to

customers’ day-to-day needs. To be responsive to

shifting market demands and provide more customization for individual clients, Japanese companies

also design products for ease and speed of manufacturing. Finally, they emphasize employee involvement and job rotation backed up with substantial—

and ongoing-training. American companies that

have adapted this model have found that their

workers can achieve levels of productivity and

quality equal to the best in the world.

U.S. multinational firms must achieve productivity levels equal or superior to their competitors

abroad; everything else the same, such firms will

locate plants in countries where costs are lowest and

productivity and quality highest. Multinationals are

seeking to combine operations in the major industrial nations into a globally integrated whole while

geographically dispersing design, development, production, distribution, and marketing (see chs. 3 and

4). American workers might be expected to help

schedule production to coordinate with foreign

deliveries, or they may need to cooperate with their

counterparts in factories overseas to solve quality

problems. Globalization also can bring new

workplace technology (e.g., computer networks for

worldwide inventory control), rapid changes in the

goods a factory produces, and frequent minor

changes to accommodate national markets (e.g.,

labeling in local languages).

At the same time, the United States has special

significance for foreign multinationals. As the largest market in the world, the United States is a magnet

for goods and investment from abroad. Any foreign

firm that aspires to global success must be competitive here. This means jobs and opportunities for

American workers. It also means that foreign-owned

plants in the United States will continue to be

sources of new ideas in production management.

Foreign-owned consumer electronics firms introduced new concepts during the 1970s and 1980s;

more recently U.S. auto assembly plants operated by

Honda, Toyota, and other have been trendsetters in

productivity and training.

@TA’S ongo~g assessment of Technology, Innovation, and U.S. Trade involves three reports on competitiveness in IIMinUfaCtLU@. The first ~ the

series analyzes the role of manufacturing in the U.S. trade deficit; see Paying the Bill: Manufacturing andAmerica’s Trade Deficit (OTA-ITE-390). For

policies to restore the technological leadership in manufacturing, see Making Things Better: Competing in Manufacturing (0’IA-ITE-443). The third

report, due in spring 1991, will examine the trade and industrial policies of Japau other East Asian countries, and the European Community and their

possible relevance to U.S. competitiveness. An earlier OTA report dealt with service industries; see Znternationd Competition in Services

(OTA-ITE-329).

2A mom comprehensive version of table 1-1 maybe fo~d h ch. 4 w table 4-3.
6 ● Worker Training: Competing in the New International Economy

Table l-l-Changing Organizational Patterns in U.S. Industry

Old model New model

Mass production, Flexible decentralization,

1950s and 1960s 1980s and beyond

●

●

●

●

●

●

●

●

●

●

●

●

●

●

Overall strategy

Low cost through vertical integration, mass production, scale ● Low cost with no sacrifice of quality, coupled with substantial

economies, long production runs. flexibility, through partial vertical disintegration, greater reliance

Centralized corporate planning; rigid managerial hierarchies. on purchased components and services.

● Decentralization of decisionmaking; flatter hierarchies.

Production

Fixed or hard automation. ● Flexible automation.

Cost control focuses on direct labor. ● With direct costs low, reductions of indirect cost become critical.

Outside purchases based on arm’s-length, price-based compe- . Outside purchasing based on price, quality, delivery, technoltition; many suppliers. ogy; fewer suppliers.

Off-line or end-of-line quality control. . Real-time, on-line quality control.

Fragmentation of individual tasks, each specified in detail; . Selective use of work groups; multi-skilling, job rotation; few job

many job classifications. classifications.

Shopfloor authority vested in first-line supervisors; sharp ● Delegation, within limits, of shopfloor responsibility and authorseparation between labor and management. ity to individual and groups; blurring of boundaries between

labor and management encouraged.

Hiring and human relations practices

Workforce mostly full-time, semi-skilled. ●

Minimal qualifications acceptable.

Layoffs and turnover a primary source of flexibility; workers, in

the extreme, viewed as a variable cost. ●

●

Smaller core of full-time employees, supplemented with contingent (part-time, temporary, and contract) workers, who can be

easily brought in or let go, as a major source of flexibility.

Careful screening of prospective employees for basic and

social skills, and trainability.

Core workforce viewed as an investment; management attention to quality-of-working life as a means of reducng turnover.

Job ladders

Internal labor market; advancement through the ranks via ● Limited internal labor market; entry or advancement may

seniority and informal on-the-job training. depend on credentials earned outside the workplace.

Training

Minimal for production workers, except for informal on-the-job ● Short training sessions as needed for core workforce, sometraining. times motivational, sometimes intended to improve quality

Specialized training (including apprenticeships) for grey-collar control practices or smooth the way for new technology.

craft and technical workers. -● Broader skills sought for both blue--and grey-collar workers.

SOURCE: Office of Technology Assessment, 1990.

The new flexible decentralization model in table

1-1 has two central themes: 1) reorganizing production so that lot sizes can be smaller and production

runs shorter with little sacrifice in efficiency, and 2)

transferring decisionmaking authority downward

and outward to semiautonomous divisions and/or

the shopfloor. Both these trends are reinforced by

U.S. industry’s growing reliance on outside sources

of labor (contract employees), expertise (engineering services), and tangible inputs to production

(purchased components and sub-assemblies).

Those American firms that have redesigned

their production operations most effectively have

done so systemwide. The needed perspective encompasses not only selection of machines and

factory layout, but design of products for efficiency

in manufacturing, appropriate allocation of tasks

among people and machines, and careful coordination of production flow. These firms are decentralizing, flattening their management hierarchies, and

purchasing more on the outside, all in the interests of

cutting costs, improving quality, and responding

more quickly to market demands. To be effective,

these changes require substantial training for employees at all levels.

THE NEED FOR TRAINING

Many American workers are ill-equipped for

the sweeping changes industry must make to be

competitive. Their jobs may not have required

strong basic skills, teamwork, or higher order skills

such as problem-solving. In the future, many more

jobs will require these skills. But the need for

training and retraining is not just a matter of

meeting the needs of growing sectors, growing

occupations, or companies hard-pressed by inter-
Chapter l-Summary ● 7

Photo credit: UAW-Ford National Education,

Development and Training Center

Growing computer use means more workers need to

develop their computer skills. This training facility is jointly

sponsored by a cooperative union-management program.

national competition—it is critical throughout

industry if the United States wants a high-wage,

high-skill economy.

Training for the Workplace of the Future

Nearly half of business investments for capital

equipment now go for computers and related technologies. Personal computers and other inexpensive

terminals collect data on the factory floor, track

inventories, and help schedule production. Statistical process control reduces variance in production

by tracking process parameters (e.g., temperature,

pressure) over time and examining the trends in

those parameters to determine the limits beyond

which product quality begins to deteriorate. Computeraided design systems automate drafting and graphics

and maintain databases of drawings and specifications. While computer-integrated manufacturing remains a dream more than a reality, companies are

slowly but surely learning to capitalize on flexible

automation. Service firms rely more and more on

decentralized computer systems for data processing,

for tracking inventory and sales, and for delivering

their products.

To be used effectively, these technologies will

require workers to learn new, very different

skills. While some jobs become less demanding with

automation, many others become more complex

because of the mix of tasks assigned to workers and

the speed of production (see box l-A). Emphasis on

quality and prevention of mistakes requires employees to have a broader understanding of the production process. With statistical process control, for

example, machine operators may also have to enter

data and construct and interpret control charts. These

tasks may require basic arithmetic skills as well as

an understanding of how one step in the production

process relates to others.

Companies with flexible design, development,

and production systems rely on workers to

anticipate possible problems, eliminate bottlenecks, avoid production shutdowns, and ensure

quality. Increasingly these systems include continuous improvement (kaizen) programs that focus on

cutting costs, improving quality, and reducing waste

and scrap. Workers participate in group problemsolving meetings and employee involvement programs. They need strong social and communications

skills to fit into a group, contribute effectively, and

convey information about group actions or suggestions.

Many American firms have found training

employees for new technology more difficult than

anticipated. Many workers need to upgrade their

basic skills before they can handle other training.

Narrowly focused training, common in the past, is

likely to be ineffective in achieving corporate goals

for implementing new technology when the context

is the total production system. Moreover, problemsolving and teamwork are new objectives for nonmanagerial training in the United States, and the

most effective approaches have yet to be defined

clearly.

New forms of work organization push responsibility and authority downward in the corporate

hierarchy, from line managers and staff engineers toward the shopfloor. Information systems

bring business data previously restricted to managers—incoming orders, unique customer requirements, production schedules, cost and sales projection

directly to the factory floor. Shopfloor groups often

must know how to interpret such information and

apply it to their work. This change, more than any

other, promises to fundamentally alter traditional

workplace hierarchies and to create a new set of

training requirements.

Job classifications are broadened, with tasks such

as inspection and quality control, routine maintenance, and equipment calibration transferred to

semiskilled workers. In the auto industry, for example, traditional U.S. assembly plants have 80 to 95

job categories, compared with 2 to 4 in the U.S.
8 ● Worker Training: Competing in the New International Economy

Box l-A—Job Opportunities and Skills: Growing Mismatch

Will automation and other technological changes downskill the workforce-making jobs simpler, less

demanding, hence less deserving of wage premiums? Or will a higher skill workforce be imperative for using

technology in ways that will enhance competitiveness, hence raising wages and living standards? Does the

machine-particularly the computer-automated machine in the factory or in the office-replace human skills, or

extend and supplement them?

Such questions have been debated for years. The only unambiguous answer is “yes and no.” The scale and

complexity of the Nation’s economy, along with poor measures of skill, make other conclusions hard to defend.

And yet, what might seem an academic question has implications for training policy and for the careers of workers.

This box summarizes findings from later chapters (especially chs. 3,4, and 6) concerning upskilling/downskilling

questions, and the probable mismatch between the better job opportunities generated by the U.S. economy and the

skills of much of the labor force.

Neither Upskilling Nor Downskilling, But Both

Technological innovations may raise skills needed for some jobs while stripping skill away from others. In the

early years of numerically controlled (NC) machining, generating and debugging programs was quite difficult, and

typically assigned to engineers or other specialists (see app. 4-A, ch. 4) Machining jobs were deskilled, in some cases

to little more than machine monitoring. Today, preparing NC programs is easier, more like working with word

processing equipment. Those machinists who now prepare their own programs (a few always have) find their jobs

upskilled. The new skills are mental (planning a sequence of cuts and programming it) rather than manual (set-up,

gaging, tool sharpening). But eventually, most of the simpler NC programs will themselves be prepared

automatically. People will handle only the exceptions—make decisions that cannot be left to an automated

system—resulting in another round of deskilling. As this example suggests, the overall dynamics of cycles of

downskilling, upskilling, and reskilling are not easily predicted from short-term trends.

What about the aggregate picture? To get a handle on future skill and occupational needs, it is useful to think

of the economy as consisting of just two groups: traditional and knowledge-intensive sectors (see app. 3-A in ch.

3). While the two groups now employ roughly the same number of people, the knowledge-intensive sectors

(including high-technology manufacturing, health services, and business services) are growing more rapidly and

will create more new jobs than the traditional sectors (e.g., retail trade, personal services, traditional manufacturing).

Of course, some jobs in the traditional sectors require a great deal of know-how (e.g., the skilled trades) and

many jobs in the knowledge-based sectors require little knowledge or skill (hospital orderly). Moreover, jobs and

skills in both sectors are affected by restructuring and automation (e.g., the computerized systems used for ordering,

inventory control, and on the sales floor in retailing). But the traditional sectors create low-skilled and low-paying

jobs in larger proportion. More of the jobs in the knowledge-intensive sectors are technical, administrative, or

otherwise specialized; they are likely to require education/training credentials for entry. In health care, for example,

job and skill categories continue to expand, in part due to new technologies. Some familiar jobs have changed

dramatically-technicians in pathology laboratories now work with automated equipment alongside their

microscopes, for instance-while diagnostic techniques like magnetic resonance imaging require new sets of skills

for both maintenance and use.

Mobility and Demographics

The simplified two-sector picture of the economy-one sector in which skill requirements change relatively

slowly (in both directions), the other characterized by more rapid flux-can now be contrasted with the labor market

(also divided into two parts), As described in chapter 3, the lower tier of the labor market consists of poorly paid

occupations (e.g., clerk, custodian, waitress) that have not generally required much education. The upper tier

includes managerial, administrative, technical, and professional or paraprofessional occupations (many though not

all quite well paid, but most requiring education/training credentials). The traditional sectors generate low-tier jobs

in large numbers, along with some upper tier jobs. The knowledge-intensive sectors generate jobs in both tiers.

Atone time, people of ability and ambition could, with on-the-job experience, climb beyond the lower tier with

relative ease. Today, specialized education or training may be required simply to enter a track promising upward

mobility. Many employers even screen applicants for jobs usually regarded as unskilled for credentials that suggest

trainability. Relatively speaking, there will be fewer opportunities for people without credentials to prove

themselves in the workplace and then to advance.
Chapter 1-Summary ● 9

These shifts mirror a population in which more and more Americans take some college courses. While the

relation between years of schooling and job performance is loose, people who lack basic skills and/or the credentials

to find a job that promises upward mobility will be left behind. In the years ahead, more young workers seeking

entry-level jobs will be blacks and Hispanics who on average have received less education than whites. Some will

be immigrants, with poor language skills. During the boom years of mass manufacturing, lack of schooling or poor

basic skills were no handicap to getting a job in a textile mill or an auto plant. Today, they are. Automation and

foreign competition have cut into blue-collar manufacturing jobs, and technological change has raised the skill

requirements for many of those remaining. Many jobs in the services require employees at home in dealing with

the public. Without substantial changes in the performance of the U.S. education and training system, the mismatch

between jobs and job opportunities and the skills and abilities of the workforce will grow. There will be too many

people who can qualify only for the least demanding of jobs, too many people who will not be able to move upward.

There will be too few people with the skills needed to drive innovation and economic growth.

SOURCE: Office of Technology Assessment 1990.

plants operated by Japanese automakers (at a minimum, production and maintenance workers). When

group members rotate among jobs, multiskill training becomes important. Job rotation not only adds

flexibility (workers can help and cover for one

another), it brings variety to the workplace and helps

morale.

These changes also require new forms of

management and professional training. First-line

supervisors will spend more time on planning and

coordination than direct oversight of production.

They must be retrained to oversee work groups,

which calls for skills in facilitating change and

resolving conflicts. Supervisors and managers also

need training in how to make the most effective use

of retrained workers—how to follow up on worker

training to ensure it transfers to the job, and how to

help workers assume more responsibility. Product

engineers and manufacturing specialists may be

expected to join continuous improvement meetings

and to act on suggestions from production employees. These employees will require not only teamwork training, but will have to accept new workplace

roles. Training managers may also meet with corporate strategic planning groups-a situation unheard

of a few years ago and one to which executives may

have trouble adjusting.

Reorganizing along these patterns generally

calls for good basic skills, a wider range of

task-specific technical skills, and organizational

training. The latter sets each individual’s job in its

overall context and demonstrates its importance for

achieving the company’s goals. Such training is

difficult to deliver effectively.

Globalization also means new responsibilities.

Flexible organizations that must respond quickly to

local market conditions cannot wait for decisions

from the home office. Local managers must be

trained and informed to make decisions themselves.

Companies also may need to train their employees in

other cultures and languages, both to better understand their competitors and to operate in foreign

markets.

These changing skill needs pose special difficulties for smaller fins. American companies are

seeking stable, long-term relationships with relatively small groups of frost-tier suppliers. Xerox, for

example, now purchases from 500 rather than 5,000

suppliers. Today, suppliers may be expected to

provide just-in-time deliveries and guarantee quality

control (e.g., with their own statistical process

control and continuous improvement programs).

They may be asked to install computer-aided design

equipment compatible with the manufacturers’ to

facilitate shared engineering databases and rapid

exchange of technical information. Suppliers that

hope to be part of such a strategic partnership must

hire more engineers and technicians and provide

additional training for their workers. A few suppliers

get technical and training assistance from corporate

customers, but most must fend for themselves.

Training is not an end in itself, but a means to

implement workplace change. With more training,

workers find further learning easier and are better

able to adapt to new technologies, processes, and

organizational structures. Managers who recognize

this and embrace the concept of continuous training

have taken a major step toward continued competitive success.
10 ● Worker Training: Competing in the New International Economy

Basic Skills in the Workplace

Any nation expecting to attract or retain new

model industries of the sort discussed above must

offer a flexible and trainable workforce. Many

American workers—20 percent or more in some

firms-are deficient in basic skills (reading, writing, arithmetic, and communication). The problem is

seldom illiteracy, but that workers need to upgrade

their basic skills to cope with changing job requirements. Workers need good basic skills to interpret

and apply information in the workplace and to

participate in both formal and informal training.

Many firms have faced delays in implementing new

technology or work practices (including training)

until they upgraded their employees’ basic skills.

Workers without sound basics will find it increasingly difficult to advance beyond entry-level positions or to change jobs. (Ch. 6 discusses basic skills

issues in detail.)

A 1986 survey of adults aged 21 to 25 found

that 20 percent have not achieved 8th grade

reading levels, and 38 percent cannot read at the

11th grade level. Many job-related reading materials (e.g., manuals) require 10th to 12th grade reading

skills. Although some can be rewritten at lower

proficiency levels, technical or complex information

is difficult to convey at such levels.

An unacceptably high number of young adultshalf or more—are not good at quantitative

problem-solving of any complexity. While only 7

percent in the 1986 survey were unable to perform

simple arithmetic operations (e.g., adding two entries on a bank deposit slip), around 35 percent were

unable to reach the correct answer when the addition

was part of a problem in which judgment had to be

exercised to determine which numbers were relevant. Even among those with 2 or 4 years of college,

39 percent were unable to figure the cost of a

specified meal from the prices on a menu, and

determine the tip and correct change from a restaurant check.

The basic skills needed to perform job-related

tasks can be quite demanding-more so than those

needed in school. Workers often have to apply what

they have read immediately or risk production

problems or downtime. They also need to be able to

ask questions and monitor their own comprehension

when reading on the job, in part because they need

to recognize and seek clarification of incorrect,

misleading, or extraneous information. Thus, the

concept of basic skills is enlarging to encompass

problem-solving, the ability to adapt existing knowledge to new situations, and effectiveness in group

interactions-skills traditionally associated with

management. While some workers with limited

education are excellent at these higher order

skills, strong basics always help.

The costs of basic skills deficiencies are quite

high for American companies. Although accurate

estimates do not exist, the direct costs in lower

productivity may include ruined parts and equipment, wasted material, and health and safety risks.

Administrative costs for screening and hiring new

employees also can be significant.

Companies would prefer not to have to upgrade

employees’ basic skills. The presence of a welleducated labor force is often a factor in firms’

location decisions, whether domestic or overseas.

Firms also can use technology to replace or deskill

jobs to compensate for workers’ inadequate basic

skills. Many workers with poor basics learn to cope,

often developing practical solutions to problems that

would stump them if presented outside the job

context (e.g., on a written test). Not all of these

options are available to every company, however,

and they do not necessarily further overall competitiveness.

Only a few U.S. companies now offer in-house

basic skills training. Many large or medium-size

companies test job applicants for basics and most do

not hire those who fail. Other companies offer

remedial programs in skills basic to specific jobs

(e.g., blueprint reading, accounting principles). Still

others may encourage workers to enroll in free

courses offered by public agencies, but active

support (e.g., giving employees paid release time) is

rare. The total funding that employers, government

agencies, unions, and workers dedicate specifically

to improving employees’ basic skills has never been

accurately estimated. However, it probably does not

exceed $1 billion per year. This compares with

estimated total annual industry expenditures for

formal training of $30 billion or more.

For many years, States have offered basic adult

education, partly supported by Federal programs.

Some States support workplace basic skills improvement activities with other kinds of customized

industrial training programs (see discussion of the

State role in providing training, below).
Chapter 1-Summary . 11

Recently, several workplace-oriented basic skills

programs based on partnerships among government,

employers, and/or unions have emerged. These

include workplace literacy demonstration projects

funded by the U.S. Departments of Education and

Labor. Major expansion for workplace programs has

been proposed in the 101st Congress as part of

comprehensive adult literacy legislation (see discussion of policy options, below).

Workplace programs need to take into account the

various levels of proficiency among workers. People

with the most severe problems—who read or write

at the 6th grade level or below—need extensive

individualized help. Workers who need to upgrade

basic skills benefit from programs that use

work-related materials. The more successful workplaceoriented programs encourage transfer of learning

back to the job by developing and using materials

and tasks that relate to the learner’s job (e.g.,

teaching arithmetic via blueprint reading). Such

customized workplace programs are still rare, however.

Basic skills programs often can be enhanced

through well-designed courses delivered via computers or other forms of instructional technology

(see chs. 6 and 7). High-quality technology-based

training takes less time to deliver than traditional

classroom instruction, with equivalent or better

learning gains and transfer to the job. Moreover,

many workers like computer-based or interactive

video instruction. Relatively little courseware now

available is targeted toward adult learners, however,

or toward workplace-oriented skills.

There is a clear need for more research,

evaluation, and dissemination of findings on the

most effective ways to upgrade basic skills. Not

only would this aid firms in establishing their own

programs, it would help policymakers determine

how much public workplace-oriented efforts should

depart from the traditional model of adult basic

education.

Working definitions of the basic skills needed

in a competitive economy will continue to broaden.

Training employees in competencies such as cooperation and teamwork-skills rarely stressed explicitly in the educational system-can be expected to

be a more frequent requirement in many fins.

Labor Mobility and Changing Demographics

The U.S. labor force has changed dramatically

over the past decade. The baby boom entrance

bulge is past, and overall labor force growth has

slowed. The civilian labor force grew by nearly 3

million people each year during the late 1970s, but

only by about 2 million annually during the late

1980s. Labor force participation has reached a new

peak, with 67 percent of all Americans aged 16 and

over working or actively seeking jobs; previously,

labor force participation had remained stable for

years at 58-60 percent. The increase is due primarily

to the entry of women into the workforce; nearly

twice as many women were working in 1989 as in

1969. The fraction of the workforce with part-time

jobs increased from about 15 percent in the rnid1960s to more than 20 percent in the mid- 1980s.

The overwhelming majority of people who will

work in American industry at the beginning of

the next century are working now.3 In the next few

years, the labor force will have fewer new entrants,

and many entrants will be minorities or immigrants—

groups that have been underserved by the educational system. Overall, the labor force will continue

to be overwhelmingly white. Through the end of the

century, women will account for nearly two-thirds of

employment growth. There will be fewer younger

workers (aged 16 to 24), although by the mid- 1990s

this age group will begin to grow as the baby

boomers’ children begin entering the labor force (see

table 1-2).

While labor force growth has slowed, labor

mobility still is high. Americans change employers

and occupations more frequently than workers in

other advanced industrial economies. People move

from job to job; entrepreneurs start new companies,

with varying success; existing companies grow,

promote people, transfer them. American companies

must more or less continuously integrate new

employees into their organizations. At least 15

percent of the labor force may need some new

training each year simply because of mobility.

They will not necessarily get it—mobility makes

employers reluctant to train their employees. Many

3~e B~~uof ~bor s~ti~ti~~ ~~~testit workers from he 1988 labor force ~1 Comprise 70 pe~ent Of tie year 2000 Workforce.The Mthate

depends in part on retirement decisions of workers and other variables. Judging from the age distribution of workers in table 1-2, the estimate could be

low.
12 ● Worker Training: Competing in the New International Economy

Table 1-2—The Changing Labor Force: 1976-2000

Labor force share (percent of total)

1976 1988 2000’

Blacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Hispanics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Asians and other minorities . . . . . . . . . . . . . . . . . . . . . . . .

Young workers, al laged 16 to 24 . . . . . . . . . . . . . . . . . . . .

Aged 25 to 54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Older workers

All aged 45 to 54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

All aged 55 and over . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Women (all) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.9%

4.4

1.9

24.3

60.8

17.7

14.9

40.5

10.9%

7.4

3.0

18.5

69.0

15.7

12.4

45.0

11.7%

10.1

4.0

15.9

71.8

21.8

12.3

47.3

Total number of workers (million) . . . . . . . . . . . . . . . . . . 96.2 121.7 141.1

%ureauof LaborStatistics moderate growth scenario.

SOURCE: HowardN. Fullerton, Jr., ’’NewLaborForce Projections, Spanning 1988t02000;’ MonWyLaborRetiew, November 1989,table l,p.4.

firms try to get by with little or no training for new

hires. Many firms also are reluctant to train older

workers (age 45 and up). As baby boomers enter

middle age, the United States also will need to find

ways to keep a slowly aging workforce up-to-date

and flexible.

Small enterprises have accounted for about 35

percent of total U.S. employment in recent years.

But hundreds of thousands of these small firms

appear, grow, and die each year, contributing to U.S.

labor mobility. Over the next two decades, small

firms will create more jobs than their share of

employment might suggest. They face special problems in training. Many lack experience in training

and often the resources to develop expertise or to pay

for outside training. Further, these companies typically experience higher than average rates of turnover, and therefore are reluctant to invest in their

employees. Small firms rarely have enough people

who need training at any one time to justify a

focused training effort. Public policies have provided little help in solving small firms’ training

problems.

Retraining for older workers will become more

important as the workforce ages. Average retirement

ages have been declining in most industrial nations;

companies continue to encourage early exits and

tailor most training for workers farther from retirement. Programs initiated under the Older Americans

Act and Job Training Partnership Act have successfully placed older workers in jobs, but these programs offer no incentives to firms to train their older

employees. The aging of the U.S. workforce will

force both corporate officials and government

policymakers to pay more attention to training

for older workers and to capitalizing on their

skills and experience.

Immigrants accounted for 22 percent of labor

force growth between 1980 and 1987—more than

twice their contribution during the 1970s when the

labor force as a whole grew very rapidly. Immigrants

are projected to account for an even higher portion

of labor force growth over the next decade. While

many are highly skilled professionals, such as

engineers and doctors, roughly 33 percent have only

an elementary school education and 13 percent have

not progressed beyond the 4th grade. As many as 17

percent speak no English at all. Without basic skills

upgrading, these people will be stuck in low-paying,

unskilled jobs.

Younger American workers switch jobs more

frequently than older workers. Because younger

people are so mobile, larger firms tend to hire only

those with 3 to 4 years stable work experience for

career path jobs and most employers are reluctant to

provide young workers with much training . Good

training early can help motivate younger workers to continue learning-on the job and off—

throughout their careers.

Nationwide, about 85 percent of workers are high

school graduates, but the rate is lower among

minority groups (see table 1-3) and as low as 50

percent in some geographic areas. Even among those

who graduate from high school, however, the bottom

third academically are poorly prepared for work.

Groups with the most formal schooling have the

lowest incidence of unemployment. Educational

level also is seen as an important indicator of

receptiveness to learning when workplace technologies are changing rapidly; better educated
Chapter 1-Summary ● 13

Table 1-3-Educational Credentials of

Employed Workersa

Not a high One or more

school High school years of

graduate onlybcollege

Whitesc . . . . . . . . . . . . 15.8% 39.8% 44.4%

Blacks . . . . . . . . . . . . . 22.7 42.4 34.8

Hispanics . . . . . . . . . . 39.0 33.5 27.4

aEmployed during March 1988.

blndudes those with less than 1 year of ~@18.

cNon-Hispanic whites only.

SOURCE: George Silvestri and John Lukasiewicz, “Projections of Occupational Employment, 1988-2000,” Month/y Labor Review, November 1989, table 10, p. 83.

workers are viewed as more likely to know how to

learn. Moreover, while U.S. workers’ average number of years of schooling has risen, actual academic

competencies of high school graduates have increased only marginally. Students in competitor

nations score higher on academic skills tests than

American students.

The United States also does not seem to be

doing as much as our competitors to prepare

non-college bound youth for the workworld.

Graduates of secondary vocational education programs in this country often find their skills ill-suited

to the workplace because the rapid pace of technological and organizational change in modern firms

has outpaced curricula.

The best vocational education programs can

produce graduates well-prepared for the modern

workplace. These programs emphasize both practical and theoretical skills in a setting where students

work together. They also typically involve access

to--or a blend of—vocational and academic courses.

Students can be taught basic skills such as arithmetic

quite effectively within the context of vocational

courses such as drafting. Employer involvement

adds relevance to today’s workplace (e.g., through

assistance in curriculum development), as do realworld work experiences such as cooperative education or internships. Congress is considering legislation to encourage more vocational programs to adopt

best practice approaches (see discussion of policy

option 6 below and in ch. 2, and ch. 8).

Growth in jobs will be highest in the South and the

West. Particularly in these regions, the mismatch

between the capabilities of job seekers and the

needs of the local economy will continue (see box

l-A). The only way to cure this mismatch is through

better education and training, particularly for minorities, women, older workers, and people from rural

areas and inner cities.

Training and Human Resource Practices

Current human resource practices in most

American firms place a low value on training.

Many firms try to hire people with the skills they

need rather than develop current employees’ skills.

Large firms do extensive screening, including tests

and interviews, to measure prospective employees’

skills. Firms that have reorganized to emphasize

multiskilled work groups also test for higher order

skills and performance in a group setting. People

who do not pass are not hired. Larger firms often can

pay above average wages to get the skills they need.

When implementing new technology or processes,

they can afford to-and sometimes do-hire new

employees with the needed skills. Current employees with outdated skills or who have trouble

adapting to new conditions may not be retrained or

retained.

Small firms’ access to new hires with good

skills is much more limited. These companies

usually pay less and cannot screen prospective

employees extensively. When introducing new technology, smaller firms typically add new tasks onto

existing jobs, with training provided informally or

by the equipment vendor. These approaches seldom

prove adequate, making it more difficult to capitalize on the investments.

When times are bad, companies often slash

their training budgets. Few firms evaluate the costs

and benefits of their training programs, either in

terms of job performance or business outcome. Thus

they have trouble justifying continuing their training

programs during bad times. Moreover, most American firms of all sizes respond to economic downturns

by laying off employees.

Some U.S. firms do retrain and redeploy their

workers when they reorganize rather than laying

off one group and hiring another. This strategy

can be cost-effective. Reorganization and restructuring for increased competitiveness require employees who understand corporate goals and believe

themselves important to achieving those goals. But

employees will not feel coremitted to corporate

goals if they believe their employer will respond to

the next generation of automation or to economic

downturns with immediate layoffs. Moreover, retraining and redeploying employees (e.g., assigning
14 ● Worker Training: Competing in the New International Economy

Photo credit: UAW-Ford National Education,

Development and Training Center

Reorganizing work to encourage employee involvement

can improve morale and productivity.

them routine maintenance tasks) during slow times

can be more cost-effective than laying them off and

then rehiring them at the end of the slack period,

particularly if many move on to other jobs.

A few companies have even begun to use

downturns to provide concentrated training on

company time. These firms believe that the upgraded worker skills will improve productivity and

competitiveness when demand picks up again.

Relying more heavily on contingent workers

(including contract labor and services) makes it

easier to retain a core workforce if sales slump, but

managers must balance this against the difficulty of

integrating contingent workers into the organization

when markets are booming again. Growing use of

contingent workers poses special challenges, as

these workers may not receive the training and

benefits given to core workers.

It is difficult for firms to justify changing their

human resource practices without understanding the

relative costs and benefits. For training, in particular,

such benefit/cost evaluations are necessary not only

to provide a basis for corporate decisions about the

level of investment in training, but to target the

investments at specific business needs, to weigh

alternate delivery systems for cost-effectiveness,

and to improve the quality of training.

If new practices in workplace organization and

training are to become a permanent part of the

American industrial landscape, it will be because of

top management understanding and commitment,

backed up with funding. A 7-year business expansion has made it relatively easy for American

industry to invest in training and experiment with

innovations in production. The test will come in the

inevitable downturn. Executives need to grasp what

training can and cannot accomplish, and how

reorganization and restructuring backed up with

training can help their firms compete. Without

direction from the top, inertia will prevail.

TRAINING APPROACHES:

THE UNITED STATES AND

OUR FOREIGN COMPETITORS

Corporate training in the United States is

delivered unevenly across firms and among

workers. On-the-job training-the kind most U.S.

workers receive—usually is informal and unstructured, consisting of experienced workers showing

newer employees how to carry out tasks. The U.S.

Government has little influence on training of

employed workers; Federal programs focus on the

unemployed and economically disadvantaged. State

support for industrial training is limited, though

growing. Other nations, including West Germany

and Japan, have more effective public and private training systems than the United States (see

table 1-4). These competitor countries provide more

training, take a much more systematic approach to

training, provide government support for it, and train

their workers to higher average standards. Box 1-B

compares U.S. and Japanese training programs in

automobile plants as an example.

In the sections below, American training practices

and programs—by firms, for workers, and by the

States—are first discussed. This is followed by

analysis of foreign training practices, especially in

Japan and West Germany.

Corporate Training in the United States

Reliable estimates of the extent and cost of U.S.

worker training do not exist. The few company

surveys that have been conducted have had very low

response rates. Only a few large firms keep track of

training expenditures and they account for training

costs in very different ways. Estimates based on

worker surveys depend on employees’ recall of
Chapter 1-Summary ● 15

Box l-B—Training in U.S. and Japanese Automobile Assembly Plants

Creative engineering abroad has meant heavy pressure on American firms to follow suit (e.g., automobiles with

multivalve engines, electronically controlled transmissions, and antilock brakes). Not only must companies bring

these technologies to market quickly, they must do so with minimum risk of recalls or product liability suits. This

places a greater burden on workers to maintain quality. Training is a critical factor in achieving this goal.

Figure 1-1 compares annual hours of training per employee for Japanese auto assembly plants in Japan (J-J),

Japanese-owned plants in the United States (J-U.S.), and U.S.-owned plants in the United States (U. S.-U.S.). As

shown in the figure, autoworkers in J-J plants get more than three times as much training each year as workers in

U. S.-U.S. plants. The differences are even more striking for newly hired workers (figure 1-2). New employees in

J-J plants get more than 300 hours of training in their first 6 months compared with fewer than 50 hours for U. S.-U.S.

plants.

In pre-employment screening, Japanese automakers value willingness and ability to learn more highly than

previous experience or specific skills. Their training programs emphasize individual and group responsibility along

with job skills. U.S. automakers look more for experience and their training tends to stop with narrow technical skills

for craft workers and brief on-the-job sessions for unskilled workers.

Japanese automakers combine just-in-time production with continuous improvement and quality circle

programs. Their work organization is built around semi-autonomous groups with substantial training and careful

attention to shopfloor management. Work groups serve as vehicles for communication between factory floor and

engineering to help achieve design-for-manufacturability. In contrast, workers in U.S. plants have narrowly defined

responsibilities. Organizational barriers still impede information exchange among product design, manufacturing

engineering, and the shopfloor. Not surprisingly, Japanese auto manufacturers achieve higher productivity and

quality levels than their U.S. counterparts.

SOURCE: John F. Krafc~ “Training and the Auto Industry: International Comparisons, ” report prepared for the Offke of Technology

Assessment under contract N3-191O, February 1990.

Figure l-l—Annual Hours of Training Per Employee,

Automobile Assembly Workers - -

Hours

100

80

60

40

20

0

Japan/Japan Japan/U.S.

= Hours of training

U.S/U.S.

SOURCE: John F. Krafcik, Trah?ing and the Automobile h?dustry: /international Comparisons, contractor report prepared for the Office of

Technology Assessment under contract N3-191O, February

1990, pp. 8-9.

training events, which may be unreliable. Employers

more often train workers informally on the job than

in formal settings, and it may be difficult to

differentiate between training time and work time.

Therefore estimates of total employer investment in

training vary greatly (see ch. 5).

350

300

250

200

150

100

50

0

Figure 1-2—Hours of Training, Newly

Hired Automobile Assembly Workers

Hours

Japan/Japan Japan/U.S. u.s./u.s.

= Hours of Training

SOURCE: John F. Krafcik, Training and the Automobile Industry: lnternationa/ Comparisons, contractor report prepared for the Office of

Technology Assessment under contract N3-191O, February

1990, pp. 8-9.

The few data available suggest that U.S. employers’ investments in formal training are between $30 billion and $44 billion annually. This

range is equivalent to 1.2 to 1.8 percent of total

private sector worker compensation ($2.4 trillion in

1988), 0.61 to 0.9 percent of 1988 gross national
16 ● Worker Training: Competing in the New International Economy

Table 1-4-Worker Training Compared

United States Germany Japan Korea

School-to-work Left mostly to chance; Apprenticeship for most Personal relationships Employers recruit from

transition some employers have non-college-bound youth between employers and vocational and

ties with local schools local schools academic high schools

Vocational education

Extent Available in most urban Universally available Limited; mostly Universally available

areas assumed by employers

Quality Wide range: poor to Uniformly good Fair to good Vocational high schools

excellent uniformly good

Employer-provided training

Extent Largely limited to Widespread at entry Widespread Limited; employers rely

managers and level and to qualify on public vocational

technicians for promotion institutes

Quality Wide range; some Very good Very good Generally poor

excellent, but more often

weak or unstructured

Public policies Federal role very Govern apprenticeship; Subsidies encourage Directive-some

limited; State aid to encourage continuing training by small firms employers resist

employers growing training policies

SOURCE: Office of Technology Assessment, 1990.

product, and 10 to 14 percent of the national

investment in primary, secondary, and higher education in 1987. Some companies spend much more on

training, such as IBM and Xerox (4 percent or more

of payroll), and Motorola (2.5 percent of payroll).

Informal training may cost firms as much or more

than formal, but the costs (e.g., lost production

during training) and the benefits (improved quality

or productivity) are difficult to tie directly to training

and impossible to quantify.

Only about 35 percent of workers recalled taking

skill improvement training in their current job,

according to a U.S. Department of Labor study.4

Professionals (e.g., lawyers, teachers, engineers) are

the most likely to get continuing training for their

jobs (see figure 1-3). Technicians are next most

likely to get upgrade training, followed by executives and managers. Shopfloor and other blue-collar

workers are less likely to receive such training in the

United States.

U.S. employers are reluctant to provide training for several reasons. Many fear that employees

will leave for better jobs and the firm will lose its

training investment. Others lack expertise in training

or have had unhappy experiences with poorly

conceived training programs. Senior managers may

not plan well enough for training when introducing

new technology or process changes. Production

managers are often reluctant to disrupt operations by

releasing employees for training.

Larger firms are more likely to provide formal

training than smaller ones. Large firms typically

have lower labor turnover and more money for

training. Moreover, they find that training tends to

be associated with lower labor turnover.

Some large firms with organized training programs provide new hires with formal training-a

preliminary to on-the-job training. Formal training

may cover technical skills (both task-specific and

generic) and workplace hazards. Some firms orient

new employees on company policies, customers and

product lines, and the fro’s plans for the future. The

purposes are to encourage employees to take responsibility and link workplace tasks to the company’s

overall goals, and to build loyalty to the organization.

Small firms are more likely to employ workers

who have less education, or who are older or young.

Jobs in small firms often involve a variety of quite

different tasks. Lacking training budgets, small

firms usually try to develop employee skills through

unstructured informal training, which varies widely

in quality. Those smaller firms that do invest in both

4~e study WaS baaed on tio~tion obtained from special questions in the 1983 Current Population Survey; it has IIOt been repeatti sinCe thin.

See Max L. Carey, How Workers Get Their Training, Bulletin 2226, U.S. Department of Labor, Bureau of Labor Statistics, March 1985.
Chapter I-Summary ● 17

Figure 1-3—Upgrade Training by Occupation

(percent of workers reporting upgrade training in their current job)a

Professional

specialties

Technician &

related support

Executive/

managerial

Precision production,

craft & repair

Ad m in is trative

support

Sales

Machine operators,

assemblers & inspectors

Transportation &

material moving

Handlers, equipment

cleaners, helpers &

laborers

=’”47%

I T I I I

o% 1 o% 20% 30% 40% 50% 60% 70% 80% 90% 1 00%

+Jote: On average, !Yj percent of all workers reported skill improvement training for their current job.

SOURCE: Max Carey and Alan Eck, How Workers Get Their Training (Washington, DC: U.S. Department of Labor,

Bureau of Labor Statistics, 1985), pp. 18-19.

formal and informal training usually have a strong

management commitment to training.

In addition to in-house training, U.S. workers get

training from many sources, including equipment

vendors, private training consultants, community

colleges and other educational institutions, union

programs, and technology-based courseware (e.g.,

computer-based training). U.S. fins’ purchases of

training from outside resources are estimated to total

about $9 billion per year.

Only the vendor may have the expertise to train

workers to use and maintain new equipment. Equipment vendors are not in the training business,

however. They typically design courses to highlight

a product’s features rather than to prepare trainees

for possible problems. Downtime due to employees’

lack of skills can offset the gains in productivity that

would otherwise result. from new equipment. Vendor training also tends to reach only a few workers,

and not always those who will actually operate the

new equipment.

Regardless of the source, training often does not

transfer to work. Training is more effective when

it is quickly reinforced on the job. Successful

learning often occurs in practical and collaborative

job settings, such as apprenticeship, where the

concepts learned are applied to daily tasks. Training

also is more effective when developed as part of an

overall strategy linked to corporate goals.

Training technology can deliver quality ondemand instruction. Simulators, for example, can

train workers to fix a wide range of malfunctions

safely and without equipment downtime. Embedded

training is valuable for malfunctions that occur

infrequently and in situations where it is either

impossible or not cost-effective to train everyone in

all operational characteristics.5

5Embedded training is instruction tbat is an integral component of a product or system. An example would be a machine display panel with a diagram

that shows the location of a malfunction and a list of the steps needed to fix it.
18 ● Worker Training: Competing in the New International Economy

Photo credit: American Association of Community and Junior Colleges

Instructor explaining programmable controller to

Alcoa employees.

Training quality also is directly affected by the

expertise of training professionals and courseware

developers. Many entrepreneurs are attracted to this

low-overhead business with potentially high earnings. Some are highly knowledgeable training professionals that produce quality products; some hype

‘‘new age’ training methods whose effectiveness is

unproven; a few are con artists.

Training and Workers’ Careers

Training is important not only to companies, but

also to individuals (see ch. 8). More than half (55

percent) of workers in the Labor Department study

cited above said that they needed some specific

training to obtain their current job. Most got the

training at a school or informally on the job. Not

surprisingly, nearly all professionals needed qualifying training, as did 85 percent of technicians, and

most managers. Nearly two-thirds of those in the

craft and skilled trades also needed training to

qualify for their current job. The proportions vary

not only by occupation, but also age, race and

educational background. Minorities receive a disproportionately small share of training. Employers

are hesitant to train young workers (aged 16 to 25)

because of their mobility; older workers also get less

training than their share of the workforce might

suggest. Those with the most education to begin

with get or take the most training.

Increased competitive pressures and the resulting

restructuring of the national economy have made

jobs and income less secure. Moreover, in many

industry sectors, career ladders within companies

have become fewer. Many manufacturing firms, for

example, have cut back on the number of first-line

supervisors-jobs often filled in the past by promotion of production workers.

People who do not have the appropriate blend of

educational credentials, training, and experience

will find it increasingly hard to win promotions and

pay increases. The skills and abilities needed to gain

entry onto an upward track tend to be broad and

general, associated more with formal education than

on-the-job training and experience. It will be more

difficult than in the past for people without educational credentials to demonstrate through on-the-job

performance that they deserve a chance to move

upwards. The U.S. training system will have to

begin delivering both task-specific skills and the

broader problem-solving and social skills traditionally associated with managerial work if the

system is to serve both workers and industry

effectively.

The training workers get in firm- or equipmentspecific skills may not transfer to other jobs.

Employer-supported programs leading to formal

credentials (e.g., apprenticeship, associate degree

programs) are more transferable than other types of

training. But, transferable training is hard to get.

At the post-secondary level, community colleges

and other institutions offer widespread opportunities

for vocational training. As these institutions work

more closely with employers on customized training, their vocational curricula may become better

matched with local labor market needs. At the same

time, post-secondary vocational education should

provide students with broad transferable skills.

Adult education is one of the strengths of the

U.S. system, although under 15 percent of all

adults participate in any year. About two-thirds of

participating adults take courses for job-related

reasons, with employers paying for nearly half of

these courses. Other countries also stress adult

education. One-fourth of adult Canadian workers

participate in adult education. Japan has an effective

adult education system, with many companies encouraging or requiring employees to attend night

classes or take correspondence courses. The Japanese Government offers subsidies to employers who

offer financial incentives to workers taking such

courses.
Chapter l-Summary ● 19

The United States has long ranked near the

bottom among industrialized nations in the number of workers who have completed apprenticeships. The total number of apprentices has remained

about the same (300,000) over the last decade while

the workforce has grown by 20 percent. Only 0.16

percent of the U.S. civilian workforce currently

participates. By contrast, a majority of the West

German labor force has completed an apprenticeship. U.S. apprenticeship is highly concentrated in a

few occupations; over half of those in registered

programs work in the unionized construction industry.6

Apprenticeship training is high in quality as

measured both by workers’ wages and productivity,

and there is new interest in revitalizing the U.S.

apprenticeship system. The apprenticeship model,

combining classroom instruction with hands-on

practice and skill-building, is a very effective

approach to technical training. Because it relies

heavily on informal but structured on-the-job training, which is the predominant training method in

smaller companies, apprenticeship is particularly

well-suited to these fins.

The major barrier to the creation of nonunion

apprenticeship programs is financing. U.S. apprentices typically take evening classes two or three

times per week, as well as receiving on-the-jobtraining, over a 3- or 4-year period. The formal

instruction alone averages $2,500 per apprentice

annually in some crafts. A single firm may be

unwilling or unable to support such extensive and

expensive training. Industry associations could overcome this barrier by soliciting voluntary contributions from member firms to support apprenticeships.

The U.S. Department of Labor (DOL) is examining ways both to strengthen traditional apprenticeships and to introduce the concept in industries that

have not been active participants in the past. DOL

calls the latter effort structured workplace learning.

It includes various combinations of classroom and

on-the-job training leading to a portable credential.

DOL launched several pilot projects to demonstrate

the concept in banking, health care, and small

business in 1989. If successful, these demonstrations

could encourage more employers in more industries

to try similar programs in the future. However, DOL

Photo credit: National Training Fund, Sheet Metal and

Air Conditioning Industry

Apprentice practices welding while others observe.

lacks the resources to strengthen traditional apprenticeships. More funding is needed at the Federal and

State levels to improve outreach programs.

Providing transferable skills also is a thrust of

many joint union-management training activities.

Although unions represent a small and declining

share of the labor force (from a peak of 35 percent

of nonagricultural workers in 1954 to 16.4 percent in

1989), they are still important in workplace

training and in retraining displaced workers.

Successful joint union-management training initiatives exist in both the automobile and telecommunications industries. In 1989 alone, five of these

programs had a total of about $324 million available

to support training activities. Enrollments ranged

from 16 percent to over 50 percent of the 709,000

eligible workers. Most instruction is offered outside

of regular working hours at the plant site. It typically

focuses on topics such as basic skills, health and

safety, computer literacy, and career and financial

planning. Some training, however, is keyed directly

to the workplace (e.g., offering basic arithmetic

instruction off-hours to help workers taking statistical process control training on company time).

As with corporate training generally, joint unionmanagement programs are of mixed quality and

have not been evaluated rigorously. Efforts have

6u~& ~~ ~~@~~tiO~ ~Y~t~~ ~PCHt~ bY ~~ F~&~al B~~~ of ApprentiCeS~p and Tr~g and by s~te Apprentimship COunCflS, ilpprellti~ship

programs may be sponsored by either a single employer or a group of employers, either unilaterally or jointly with a union.
20 ● Worker Training: Competing in the New International Economy

begun to educate local training committees about

techniques for design, delivery, and evaluation, and

to encourage outside course evaluations. Joint training and teamwork programs have shown measurable

benefits, nonetheless, including lower production

costs, increased uptime, and expanded output without investments in more modern equipment.

Older workers have even less access to on-the-job

training and outside courses and programs than

younger workers. Training declines with age within

the older worker population, in part because employers believe they will not recoup their training

investment before a worker retires. Many managers

and executives also rate older workers low on

flexibility and adaptability. Yet older workers also

are perceived as having a strong work ethic and good

work habits; they also change jobs less often than

young workers.

The increasing proportion of older workers in

the labor force makes it important both to

prepare this population for technological change

and to understand how advancing age affects job

performance and learn how to compensate for

any negative effects. Despite gradual physiological

changes (e.g., reduced sensation and perception,

motor control, and memory), age-related declines in

performing traditional tasks in most occupations

seem to be slight. Efforts to compensate can focus

either on the worker or on the job. Older workers’

health-and job performance-can be improved

through company-based health promotion and awareness programs. Training can compensate for some

age-related deficits. Jobs also can be modified to

facilitate retention of older workers.

Most older workers, however, are more in need of

training to upgrade skills that have been outpaced by

technological change. Federal support for older

worker training programs is limited and companies

have shown little interest in developing training

tailored to older workers’ needs. Training methods

that minimize stress (e.g., self-paced learning) and

reduce the need for memory (e.g., embedded training) are especially beneficial for older workers.

Educating managers about age-related issues also

can be effective in changing their perspectives on

training older workers. The great variability among

workers in the same age range means that policy

with respect to the older worker should be flexible

and individualized rather than uniform.

The Growing State Role

In the United States, most direct government

assistance to firms to train their workers comes

from the States. In fiscal year 1989, 44 States

operated over 51 customized training programs

(those tailored to needs of specific industries or

companies) costing approximately $375 million (see

ch. 5). Additional State expenditures on worker

training are embedded in industrial recruitment

programs and in support for vocational-technical

institutes and community colleges. The States report

increasing demand for upgrade training of employed

workers; almost one-third spent more than 35

percent of funds on training workers at existing

firms.

State customized training programs have an

uneven record in meeting employers’ needs for

worker training. The States expect such programs

to serve mixed, often conflicting goals-attracting

new industries, aiding in expansion of existing

fins, enhancing workers’ careers, and providing

broader societal benefits. Customized training for

existing employers must compete for scarce State

resources with efforts aimed at these diverse goals.

Programs focused on a single goal-such as

assisting employers with specific training needs

or enhancing the performance of existing firms—

are most successful.

State funds can help companies overcome many

barriers to providing their own training, including

limited access to training experts, poor understanding of how training can improve business performance, concerns about losing trained workers to other

fins, and bad experience with prior training efforts.

About 10 States also currently spend a combined

total of between $25 million and $40 million a year

on industrial extension services, which provide

technical assistance to small manufacturers. Current State technology transfer programs are

limited in scope and poorly linked with State

training assistance. Most will refer clients to

training agencies, but of five that OTA surveyed,

only one provides integrated training and technical

assistance and helps businesses obtain funds from

State training programs.

One of the largest regional efforts to assist small

business is the Southern Technology Council’s

Consortium for Manufacturing Competitiveness.

Formed in 1988 with some Federal support, the
Chapter 1-Summary ● 21

Consortium has 14 members—all State-supported

schools that offer technical associate degrees-who

extend services to employers and help leverage

private funding. A key purpose is to transfer new

manufacturing technology. Member institutions also

provide training support, such as mobile training

vans and skills assessments.

While States are becoming more involved in both

training and technology assistance to small firms,

funding is still very limited. Both types of programs

are inadequate to meet growing employer demand

for services. The average State training program

helps just 64 companies and fewer than 4,000

workers annually (see table 1-5). Most of the

assistance goes to firms with more than 200 employees.

Training Among Our Competitors

One of the reasons companies in the Federal

Republic of Germany (FRG) and Japan are able to

compete so effectively with U.S. firms is that their

workers are well-trained (see ch. 3). Thus, companies in those countries are well equipped to take

advantage of flexible production systems turning out

high-quality products at low cost. Moreover, training is explicitly supported by their governments’

policies.

In the FRG, for example, about two-thirds of the

employed workforce has completed an apprenticeship program. These programs-as good as any in

the world—are financed jointly by public and

private investments. The government works with

trade associations and unions to define uniform

national curricula and examinations for apprentice s

in over 400 occupations. Policies and traditions also

give status and respect to blue- and grey-collar

workers.

West Germany's Federal and Lander (State)

governments offer substantial incentives to firms

to provide training to their workers. The Lander

typically provide the formal schooling portion of

apprenticeship at no cost to the employer. Both

Federal and Lander governments also defray some

on-the-job training costs. The Federal Government

picks up half the costs of special training centers set

up by trade associations to serve the apprenticeship

and continuing training needs of small business.

The FRG’s education and training system

contributes in a major way to both high labor

productivity and product quality. A comparison

of skills training and cost, productivity, and competitiveness in West German and British firms in

several industries clearly showed that, when factors

such as production machinery are held constant, the

West German workers have higher productivity, are

more adept with computerized equipment, and can

adapt better to short production runs of specialized

goods because they get more and better training than

their British counterparts.

The Japanese excel at integrating on-the-job

training with day-to-day operations. Managers

and supervisors deliver most training on the shopfloor with little loss of working time, and provide

continuing followup and evaluation. Managers who

serve as instructors can stay in closer touch with

factory operations and also can keep workers abreast

of company plans; it also gives managers frost-hand

experience with the usefulness of training. Longterm employment relations (common in many Japanese companies) allow firms to train core workers

with little fear of losing them. Training is more than

a means for advancement; corporate and cultural

pressures encourage continuous learning with workers often participating on their own time.

Table 1-5—State-Financed Customized Training Programsa (most recent fiscal year)

Median Low High

Number of contracts with firms . . . . . . . . . . . . . . . . . . . . . . . . . . . 500

Average contract amount per program. . . . . . . . . . . . . . . . . . . . . $43,313 $6,500 $1,046,000

Range of total program expenditures among States . . . . . . . . . . $2,400,000 $111,700 $106,000,000

Number of employees trained . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,940 55,243

Expenditure per enrollee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $460 $75 $3,461

aBaS~ on 51 programs in 44 States.

SOURCE: Peter A. Creticos, Steve Duscha, and Robert G. Sheets, State Financed, Customized Training Programs: A Comparative State Survey, report

prepared for the Office of Technology Assessment under contract L3-3081O, 1990, tables 4,6.
22 ● Worker Training: Competing in the New International Economy

Japanese Government assistance is less pervasive

than West German assistance; companies and individuals absorb most of the training costs. The

Ministry of Labor (MOL) provides some subsidies

for companies and industry groups with an approved

skill development plan. Small firms qualify for

larger subsidies (e.g., half the cost of hiring teachers

and purchasing in-house training materials, versus

one-third for bigger companies). Japan’s prefectures

spend about two-thirds as much on training as the

MOL, supporting vocational colleges, skill development and training centers, and testing and certification programs. Special subsidies go to companies

that train employees aged 45 and older. Quasi-public

industry groups, such as the Japan Industrial Training Association, the Japan Management Association, and the Japanese Efficiency Association also

provide training.

South Korea and other developing Asian nations

are making worker training a central element in

economic development policies. Training in South

Korea draws heavily on the German example;

indeed the FRG helped South Korea establish one of

its first vocational training institutes. The South

Korean Government offers construction financing,

low-cost land, subsidies for instructors’ salaries, and

free training equipment for trade associations. Skills

tests and preferential hiring for certified workers

help to counter biases against vocational education.

Levies are used by several nations-West Germany, France, South Korea, and Japan among

them-to support training. In some countries, firms

only pay the levy if they fail to spend an equal

amount on training their employees. In other cases,

the levy finances training programs conducted for

various purposes by public agencies.

TRAINING TECHNOLOGY

Large companies such as IBM, Ford Motor

Co., and Motorola expect that by the late 1990s

over half of their corporate training and education will be delivered outside the traditional

classroom using some form of instructional technology. Flexibility and savings in time and money

are the major reasons technology-based training

is catching on. Such training might be delivered at

a worker’s desk or on the shopfloor, at a training

center, or in an electronic classroom. It may be

undertaken individually, or in small or large groups.

The courseware may cover all aspects of a job or

task, or it may review only those steps a worker

needs to perform a particular task. It might involve

basic, technical, or interpersonal skills (e.g., sales,

job orientation).

Well-designed technology-based training can

provide greater mastery of the material in less

time and with higher employee satisfaction than

the average classroom lecture. These benefits,

combined with delivery and content flexibility, add

up to savings in travel expenses and employee time

off for training. IBM was able to avoid $150 million

in training costs by streamlining its education

programs, including expansion of its technologybased learning systems. NCR Corp. expects to save

over $70 million annually in this way.

Today, most companies use some form of ‘technology’ for delivering training or reminding workers how to perform tasks. Such technology spans the

low- to high-tech spectrum, from traditional lecture/

lab instruction and job aids such as templates, to

elaborate simulators and advanced electronic classrooms with interactive teleconferencing. Even informal on-the-job training typically involves hands-on

practice with equipment or models of it. Table 1-6

presents some examples of the work-related applications of training technologies.

Classroom instruction, however, is still the

most common formal training method in the

United States. Even training professionals learning

about new training technologies are most likely to do

so in a traditional classroom setting. Yet, in terms of

labor costs (and often travel), classroom instruction

generally is the most expensive form of training to

deliver.

Several considerations promise to spur continued

growth in the use of technology-based training. The

hardware and software have matured and their costs

have become affordable to most large and mediumsized firms. A wide selection of courseware is

available commercially and is increasingly interactive. Personal computers are becoming more portable, more powerful, and less expensive. Their

pervasive presence in the workplace will make it

difficult and expensive not to use them as training

tools. Advances in computer literacy among today’s

students also will tend to encourage the future

expansion of technology-based training. Finally, the

limitations of most classroom training in terms of

retention and transfer to job performance will lead

managers to be more open to technology-based
Chapter I-Summary ● 23

Table 1-6—Work Related Applications for Training Technology

Setting/representative examples Characteristics

Worksite applications:

Shop or office floor refresher training

● emulator for computer numerically controlled machine tools

allowing training on different brands of programmable controllers

. interactive videodisc showing correct methods for tracking

status of overnight shipping packages

Performance support/enhanced job aids

● work station video displaying procedures for parts assembly

. display identifying correction steps for copy machine paper

jam

● expert system job aid for identifying automobile malfunctions

. interactive video showing correct safety procedures for

forklift operation

Corporate learning center or classroom support:

. Basic skills upgrading using computer-based or interactive

video courseware to supplement instructor capabilities

● Sales training pratiice sessions using interactive videodisc

and video display of trainee responses, with feedback from

sales instructor

. Use of simulators to train recovery boiler maintenance

personnel and operators to adjust operating conditions to

avoid downtime or emergencies

. Knowledge updating of engineers through distance learning

courses, with audio hook up

● Managerial training using electronic classrooms and corporate satellite television networks for teleconferencing

Home study applications for computers, television, video:

. Continuing professional education

. Basic skills, GED preparation

. Distance learning courses for degree programs

● Occupational correspondence courses leading to a recognized certificate

SOURCE: Office of Technology Assessment, 1990.

approaches—particularly those that bring training to

the work station.

Yet, there continue to be barriers to the use of

training technology. Most corporate trainers

have too little experience with it to use it confidently or to design courses around it. Early

experience with clumsy or unreliable technologies has soured many firms on this approach. The

cost of technology-based training can be high, often

too high for smaller fins. Even for large fins,

customized courses can be expensive. Creating good

instructional material-especially interactive courseware (see box l-C)-can require substantial development time and a team of experts, including

● immediacy, proximity to worksite helps transfer information to

job tasks

● more uniform, predictably reliable guidance than informal

consultation with coworkers or supervisors

. many training programs can be used at worksite computer

terminals not acquired for training, thus keeping costs down

● worker often must initiate use on own

. instructional technology can supplement instructor’s subject

matter expertise or sometimes stand-alone

 flexible scheduling is possible for practice or stand-alone

applications

. well-conceived programs reduce training time away from job

● telecommunications allows corporatewide or outside interaction with authoritative experts without need for trainees to travel

to a central site

● reliable information can be packaged and distributed throughout the corporation

. off-the-shelf programs may not meet specific corporate needs,

while customized products are too expensive for most training

applications

. dedicating equipment specifically for training is expensive

. allows self-paced learning at individual’s discretion

● convenient

● uses widely available consumer electronics

● Progress highly dependent on individual motivation

. individuals need sound advice on product quality

instructional designers, subject matter experts, computer programmers, and sometimes video, audio, or

other technicians.

Several trends promise to reduce the cost of

technology-based training. Tools such as authoring systems and other instructional design programs,

CD-ROM resource discs, advanced database formats, and expert systems can both speed up the

process and reduce the needed programmingg expertise. Current authoring systems allow instructors

with no programming background to create computer-based courseware. The more sophisticated

systems also automate many of the tasks previously

performed by technicians, such as integrating graphic
24 ● Worker Training: Competing in the New International Economy

Box l-C—Measuring Interactivity

Interactivity refers to the give-and-take that occurs between the learner and the training program (usually

videodisc or computer-based). Conceptual models are used to classify the types of things an interactive course lets

the learner do. In these models, “level” means the courses’ instructional sophistication. Often, however, sales

literature uses ‘level’ to describe the kind of hardware needed to run a program rather than how much interactivity

it delivers.

Under one such conceptual model of sophistication, five levels or generations of interactivity are defined

according to three groups of instructional design factors: presentation, practice, and adaptation. The groups are

subdivided further into specific factors such as use of illustrative examples, relevance to job tasks, frequency and

effectiveness of practice and feedback, and ability to adapt to individual learning rates. The levels are:

1. First-generation courseware is the least interactive. It may lack graphics and usually provides few examples.

Feedback typically indicates only whether answers are right or wrong, and opportunities for practice are rare. The

program cannot adapt to the trainee’s learning pace or branch to different topics. An example would be a

computer-based tutorial that plunges into its first point without an overview, proceeds with dozens of text screens

without a break or branch, does not summarize them, asks a few multiple-choice or fill-in-the-blank questions

at the end, and includes no opportunities for practice.

2. Second-generation courseware provides more relevance to job tasks, but is still limited in content and design.

Examples and opportunities for practice are more frequent, but graphics are still scarce. Feedback is as limited

as in first-generation. Learners gain some control over the selection of topics, but neither the learner nor the

system can modify exercises or tests. An example would be a computer-based or videodisc tutorial that allows

learners to select one of several lessons or to leave a lesson at any time, but does not allow review of individual

points without starting over. Practice might consist of around five questions at the end of each lesson.

3. Third-generation courseware is much more relevant to job tasks, provides unit overviews and summaries, has

effective visuals, and offers both positive and negative examples. Learners receive clear definitions and

procedures. The course provides frequent and relevant practice, and adapts to users’ learning rates. Typically a

third-generation program includes pretests and mastery tests, and allows learners to select among individual

topics and from lessons within those topics. Each lesson ends with an exercise that simulates the skill being

taught.

4. Fourth-generation courseware has all the benefits of third-generation plus it integrates full-scale simulation into

the instruction. That is, the design allows trainees to practice job tasks in a simulated environment without risking

mistakes that might cause havoc in the real world. Examples include a course on a particular piece of software

that allows the learner to practice using the software without the potential for damaging actual data, or a

maintenance training program that allows the learner to simulate repairs before actually using the machinery.

5. Fifth-generation also simulates actual job conditions, but adds artificial intelligence to observe, guide, and coach

individual learners and mod@ the instruction accordingly. It critiques learners’ reasoning and adapts to their

cognitive style. Learners usually are offered more than one simulation. Fifth-generation courseware is in its

infancy; at present, courses have been developed for medical and military applications.

SOURCE: “The Other Generation Gap,” Training: The Magazine of Human Resource Development, October 1989, vol. 26, No. 10, p. 17.

. overlays, audio, and video. Advanced systems under As with its classroom counterpart, the quality of

development will automate more of the front-end

design and analysis tasks. Expert systems will

augment designers’ experience. When these tools

are available, the time and skill required for instructional design should decrease further.

Other trends include equipment and courseware

leasing and similar concepts that reduce the frontend costs for training that is delivered infrequently.

Some professional associations are promoting the

concept of ‘‘shareware’ for training materials.

Learning centers offer services such as satellite

links, and computer and videodisc training stations

with accompanying courseware.

technology-based training always will be a concern. The potential cost savings will not materialize

if the training fails to impart appropriate skills,

includes irrelevant information, or fails to accommodate varying trainee backgrounds and learning

styles. Adherence to instructional design and development principles can help make a training program

relevant, complete, and suitable.

Although most training developers now follow

proven instructional development principles, there

is much to learn about designing effective training materials. One problem is the lack of evaluative

data. Few companies have the time or resources to
Chapter 1-Summary .25

Box l-D—Future Prospects for Training Technology

New developments promise to stimulate broader use of training technology and enhance its capabilities. Over

the next few years, as more people become accustomed to computers in work, education, and entertainment, their

use as instructional tools will grow naturally. Computer-based training could become more responsive to individual

needs with the use of intelligent tutors and expert systems. Advances in optical storage will greatly extend the

possibilities for multimedia instruction. Expanded storage and advanced data management systems will make huge

databases of instructional or background information easier to learn and use. More companies will develop

electronic classrooms to facilitate the use of training technology. Embedded training and other sophisticated job aids

will bring electronic instruction to the workstation.

In the near term, these changes will mean learning on demand-usually at the normal workstation but

increasingly in the field or at home. The learner will be more likely to control the training, and multimedia training

will be responsive to individual trainees’ learning style and pace. In the long term, these developments also could

profoundly change the way many people work (e.g., by eliminating the need for a fixed irregular worksite in service

industries)as well as the way they learn. Training would become even more integral and no longer would be

considered an activity separate from work.

In the long-term (5-20 years), broadband digital telephone networks will allow information of any type-text,

graphics, audio, video-to be transmitted to any location at an affordable cost. Advanced embedded training

systems will be designed that take advantage of workers’ intuitive skills while helping them develop a deeper

understanding of the processes they work with. Researchers also are working on systems that will allow people to

feel immersed in 3-dimensional computer-generated worlds and to manipulate elements of that world by moving

their bodies in a natural manner. This would provide an entirely new environment for simulations and for

manipulating remote environments.

For these developments to be widely used in the long term, training professionals (instructors and managers)

will need to become more sophisticated about instructional technology. Senior management and human resource

development departments must place a high emphasis on training technology. Corporations and the Federal

Government will have to increase R&D funding for instructional technology. Research also is needed on adult

learning and instructional design, and on how instructional technology relates to issues such as retraining, basic

skills, team training, participative management, and multiculturalism.

SOURCE: ~lce of Technolo~ Assessmen~ 1990.

evaluate technology-based training’s effectiveness cal developments will greatly enhance capabilities

compared with traditional methods.

A more fundamental problem is the limited

application to training of basic knowledge about

how adults learn. Despite the enormous sums spent

on education and training and despite the shortcomings evident in both systems, learning research has

never been well-supported outside the military.

If designed carefully, technology-based training has the capacity to provide environments that

accommodate the wide diversity among adults

and their learning styles, and that promote

learning and work simultaneously. Much technology-based training can be delivered at the work

station in collaborative settings that facilitate learning. Good interactive computer or video courseware

provides relevance, participation, practice, and feedback. Advanced videodisc courses combine audio,

video, text, and graphic material. Future technologiand reduce costs further (see box l-D).

FEDERAL POLICY OPTIONS

As challenges to American competitiveness grow,

debate has intensified on the best approaches to

improve worker training and on the appropriate level

of Federal involvement. The need for improvement

spans the public education system, integration of

young people into the workforce, and upgrading

employed workers’ skills. But, because the great

majority of the workforce of 2000 is employed now,

upgrading employed workers’ skills will have the

greatest competitive impact in the near and medium

term.

Currently, the Federal Government plays little

direct role in assisting firms or their employees

with training. The Department of Labor provides

limited support for apprenticeships. Some Federal

vocational and adult education funds support up-
26 ● Worker Training: Competing in the New International Economy

grading of employees’ skills. Most Federal training

programs, however, focus on displaced workers, the

economically disadvantaged, or people with special

needs. 7

Corporations, adult education programs, and workers themselves will play critical roles in upgrading

employees’ skills. Indeed, worker training will

remain largely a private sector responsibility. Yet

proposals for greater Federal involvement are increasing. They have come from various national

commissions, the executive branch, and Congress.

They range from providing better information about

training, to support for industrial training consortia,

to skills certification programs, to tax credits for

training expenses, to payroll levies. In 1989, the

Labor Department announced a 7-point ‘agenda for

action” to improve workforce quality. Several bills

under consideration in the 101st Congress touch on

aspects of employee training, such as industrial

training consortia and workplace literacy. The Nation’s Governors also are debating how to address

workforce skills in their ongoing efforts on national

education goals as a followup to their 1989 ‘ ‘education summit” with President Bush.

The pros and cons of these proposals need careful

assessment—in terms of the need for an expanded

Federal role and its costs and benefits. If American

firms and workers saw a need and were taking

action to upgrade skill levels there would be little

rationale for government involvement in employee training. However, despite some notable

exceptions, the prevailing view among workers and

employers is that little training is needed to develop

the skills required to perform most jobs. The view is

that, when new skills are called for (e.g., to operate

new equipment), firms usually provide it.

Such a view fails to take into account the growing

realization that American companies will have to

make fundamental changes in work organization to

become more competitive in international markets

and maintain a high-wage economy. These changes

require a workforce comfortable with working in

groups, and with both good basic and technical skills

as well as higher order skills such as problemsolving. Some pioneering companies (e.g., Aetna,

Motorola, Digital Equipment Corp., HewlettPackard) that are making these changes place major

emphasis on training and development of their

employees.

Yet, the good results that can be achieved by such

firms (see ch. 4) are not likely to be replicated on a

widespread basis unless some training gaps are

closed. To review some of these: the proportion of

American workers in apprenticeship, long lower

than nearly all other advanced industrial nations, fell

by nearly one-half in the 1970s and 1980s with no

equivalent system of vocational education springing

up to take its place (see ch. 8). While a serious basic

skills problem exists in the workplace, few employers evidence much interest in acting on their own to

remedy the problem at the scale needed (see ch. 6).

Often, firms that stand to gain the most from

training-related productivity and quality improvements are in a poor position to train their workers

(see ch. 3). Moreover, the quality of training is

spotty, and firms often do not make good use of

training (see chs. 5 and 7).

There also are steep barriers to corporate investment in training. High U.S. labor mobility, for

example, makes employers see such investments as

risky. Firms also lack information about how to go

about providing good training. In small firms, these

problems are compounded by lack of human and

capital resources to support training.

Many other advanced industrial economies have

put in place government policies that, in effect,

protect a firm’s training investments by assuring that

other firms make similar investments. Similar policies have not been adopted here. Nor, by and large,

does the recognition yet exist here that there is a

broader public good in having a well-trained

workforce that extends beyond the benefits to any

firm or worker.

Some studies show that, compared with their

untrained counterparts, workers with training can

expect higher wages, less likelihood of unemployment and shorter duration of joblessness if they do

become unemployed. While other factors affect

these outcomes, training can be expected to contribute to broad societal benefits stemming from a

highly productive workforce. To the extent that such

7fiogw~ for ~~afig and ~eemplo~g displaced workers were addressed in previous oTA repo~. see Technology and Structural

Unemployment: Reemploying Displaced Adults (OTA-ITE-250), Plant Closings: Advance Notice and Rapid Responses (OTA-ITE-321), and Trade

Adjustment Assistance: New Ideas for an Old Program (OTA-ITE-346). Better coordination of these programs, and their integration with any new

training initiatives, is needed.
Chapter 1-Summary ● 27

a workforce might command better wages, and their

employers’ realize higher profits, government tax

revenues would increase to defray part of the

public’s investment in training. There also are likely

to be reductions in public costs associated with

unemployment.

U.S. society has a categorical interest in seeing to

it that a high skill industrial system, one able to

justify high wage jobs and rising living standards, is

developed and maintained. This is a fundamental

justification for public investments in training.

As it considers possible policy directions, Congress might wish to evaluate the degree to which

proposed actions support not only industry training

but also contribute to broader societal goals. For

example, actions to improve the overall skills in the

workforce would help not only firms but also

workers adjust to the demands of new technology

and changing competitive circumstances in the

coming years. For workers without much formal

education, workplace training can be a major source

of learning and the last chance for upward mobility.

The American system of federalism offers numerous alternatives for allocating responsibilities among

levels of government and the private sector. State

governments, for example, are better positioned to

provide direct services to fins. The States already

provide modest assistance in customized worker

training, as well as technology and industrial extension services and support to community colleges. In

the long-term, States may beef up these programs as

well as expand assistance into other areas; for now,

their scope is small, and both scope and quality vary

greatly from State to State.

There are aspects of training support that need

to be carried out at the national level, either to

achieve equity or uniformity, or to promote

national goals. The Federal Government, for example, is in the best position to gather and analyze data

about national trends in training. There also is a clear

Federal role in research, evaluation, and dissemination of best training practices, especially since the

military and some other Federal agencies maintain

their own training programs and are major supporters of training research. State programs generally are

motivated by competition for economic development; Federal assistance and policies could help

dilute the rivalry. As mentioned, other countries’

national policies help protect firms’ training investments by ensuring that other firms are making

similar investments. Only the Federal Government

could take meaningful action to accomplish such a

broad objective. A well-trained and educated

workforce contributes to a broader public good—a

higher standard of living and a healthy national

economy with a satisfactory balance of trade-that

transcends the interests of any State or industry.

Within this context, OTA examined 16 policy

options that address four broad issue areas:

A. reducing barriers to company training,

B. upgrading individual workers’ skills,

C. providing training and technology assistance,

and

D. enhancing the quality and effectiveness of

training.

Table 1-7 lists these 16 options and indicates the

approximate level of Federal involvement and

expenditure, as well as the policy goals they would

promote. The options are discussed briefly below;

additional detail may be found in chapter 2.8

Some options would extend existing but very

limited Federal support for worker training; others

would significantly expand the Federal role. None

are mutually exclusive, although some combinations would require free-tuning. Indeed, packages of

options could be devised that represent differing

degrees of Federal involvement. An incremental

package that builds on current Federal assistance for

training research and demonstrations, program evaluation, and best practice dissemination, for example,

represents a modestly supportive but indirect Federal role. A broader version of such a role would add

programs such as workplace basic skills demonstration projects and permanent tax incentives for

employer-paid tuition. A still broader approach

might add new initiatives such as support for

industry training consortia, funding for State clearsEven if fully implemented, these options comprise only a portion of a mtional strategy for human resource development. other Segments relat~

to displaced worken have been addressed in previous OTAreports cited in footnote 5. Several OTAreports alSO address issues associated with education.

See Power On! New Tools for Teaching and Learning (OTA-SET-379), Li&”ng for Learning: A New Course for Education (OTA-SET-34Q), High

School Vocational Education: Measures of Program Performance (OTA background paper), and Elementary and Secondary Education for Science and

Engineering (OTA-TM-SET-41). For a discussion of human reso~~s in manufacturing, see Making Thin~ Better: Competing in Manufacturing

(OTA-ITE-443), ch.4; for services, see International Competition in Services (OTA-ITE-329), chs. 7 and 8.
28 ● Worker Training: Competing in the New International Economy

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Chapter 1-Summary ● 29

inghouse services, or legislative mandates for technical assistance.

Incremental approaches would have low initial

implementation costs; many of their features are

in place or being considered by Congress. However, if funding stayed at the initial level only,

they would do little to change companies’ fundamental training practices. The States would play

the primary government role, with implementation

priorities likely to vary greatly, and corporate

training would continue to be delivered unevenly.

For long-term effectiveness, even an incremental

strategy would need to lead to sustained Federal

support for meaningful impact. Thus, as shown in

table 1-7, many options that might initially involve

relatively small Federal expenditures (under $10

million) might need to expand in time to over $100

million annually to have much impact.

To overcome the barriers that inhibit American companies from providing widespread training, Congress would have to choose more far-

-reaching initiatives. The largest single potential

impact on corporate training with little or no direct

effect on Federal revenues would come from a

payroll-based levy.9 A levy would fundamentally

change training practices among all employers

(including government and small business). But

many firms would see it as an unwarranted intrusion.

Business cooperation might be more forthcoming if

a new institution-outside existing government

agencies—were chartered to work with industry and

labor on issues related to new technology, work

organization, and training. Other options, including

direct assistance or tax incentives for workers and

firms to undertake specified forms of training, would

have less pervasive impacts than a levy. Moreover,

if not formulated carefully, tax options could have

great potential for abuse (e.g., writing off executive

seminars at a resort as training). Nonetheless, all

these measures would give national attention to

worker training for competitiveness in the new

international economy.

Issue Area A: Reducing Barriers to

Company Training

Barriers to company training arise from limited

funds to support training, inadequate understanding

of training needs, lack of knowledge about good

training practices, and reluctance to train young and

older workers. There are several approaches Congress might consider to alleviate structural barriers

to company training. One possibility would be to

encourage firms to participate in training consortia

(Option 1). A bill introduced in the 101st Congress

(S.2114) would establish a Labor Department training program to provide start-up grants to firms

interested in establishing consortia. A program of

this sort, if initially funded at a level of a few million

dollars per year, could be a low-cost means for the

Federal Government to encourage joint ventures that

would help share the risks of training, increase the

resources available to small firms, and allow more

cost-effective development of training materials.

The Federal Government might also earmark some

funds to consortia that emphasize transferable skills

(e.g., basic skills, apprenticeship or other certification).

A related possibility would be to expand technical

assistance to trade associations and other industry

groups and to joint labor-management organizations

to aid in developing training programs for their

members (Option 2).

Congress might also give the Department of

Labor (which now funds such services on a more or

less ad hoc basis) an explicit mandate to provide

technical assistance for work-based learning and

charter an office to provide support services on a

continuing basis. With more funds, the office could

work to increase industry involvement in developing

training materials.

The Federal Government also could use tax

inducements to make training investments more

attractive. A limited tax credit for certain kinds of

training+. g., basic skills training or classroom

training associated with apprenticeships-might encourage more firms to engage in these forms of

training (Option 3). Unless carefully defined and

monitored, however, a tax credit could involve

sizable revenue losses to the U.S. Treasury without

a corresponding increase in the desired training

activities. Congress might first instruct the Treasury

Department, in cooperation with the Department of

Labor, to study the optimal design of such a credit.

To better predict the behavior of firms, a field test

% the short tenq there could be some reduction in Federal revenues from corporations if firms used othenvise taxable income to cover a tmining

levy. Over the longer term, Federal revenues might increase if productivity improvements aemuing Iiom a better trained workforee led to greater

profitability. -
30 ● Worker Training: Competing in the New International Economy

could be conducted in which companies would be

reimbursed for eligible training costs at a level

equivalent to a tax credit. If the study showed that a

credit would increase and improve worker training,

Congress could then decide whether the benefits

outweighed the expected revenue losses.

A national training payroll levy, perhaps more

than any other action, could guarantee increases in

training—and could do so with no direct loss in

Federal revenues (Option 4). Companies would

choose between either spending a specified percentage of their payroll (say, 1 percent initially) on

particular types of training, or contributing that

percentage to a national fund for training initiatives.

Several other countries (including France, West

Germany, Ireland, and South Korea) use payrollbased levies of various types to encourage employers to train workers. In the United States, four States

now raise training funds through a small payrollbased levy.

As an alternative to immediate implementation,

Congress might phase in a training levy. The initial

stage could be devoted to developing industry-sector

information about training costs and aiding firms in

identifying their training needs. During the initial

period—perhaps 3 years-firms could either report

their annual training expenditures or pay the 1

percent payroll levy. As reporting firms would not

pay the levy even if they spent nothing on training,

the main burden of the requirement would be the

paperwork involved in calculating training costs.

The reporting requirement would alert firms to the

need to develop a training strategy. At the end of the

3-year period, Congress would then have information on training norms within industry sectors that

would be helpful in fine-tuning the levy before

full-scale implementation.

Issue Area B: Individual Workers and

Retraining

Although the United States has an extensive adult

education system, the employer is still the primary

source and incentive for education and training for

many employees. Most large and medium-sized

firms provide broad training for professionals,

technicians, and managers. But few firms train

production workers (except for specific needs),

younger entry-level workers (those most likely to

move to another job), and older workers (the fastest

growing segment of the U.S. workforce). Minorities

also get less training. Despite growing corporate

concern about basic skills, few employers have

remedial programs or offer support (e.g., paid leave)

to workers who participate in public programs.

Federal policies that would encourage greater investment in transferable skills training would be

beneficial to employees and employers alike.

Apprenticeship has long been one of the best

examples of a training program that develops the

technical skills firms need while at the same time

providing workers with a credential that leads to a

better paycheck. Yet, the American apprenticeship

system is stagnating. The Department of Labor has

been looking at ways to revitalize traditional apprenticeship and also at ways to apply apprenticeship

concepts—including portable credentials-to industries with little history of apprenticeship (e.g.,

service industries). Yet funds (in real terms) and staff

for the Bureau of Apprenticeship and Training have

fallen. More funding will be needed if the Bureau is

to do much to revitalize traditional apprenticeships.

The Department of Labor also might work with

industry to develop national standards for certification of skills for trainees in industries that do not

have apprenticeship traditions (Option 5).

Congress also could expand assistance available

to firms for certain activities+. g., basic skills

training and vocational skills upgrading-that make

it easier for employees to participate in training

(Option 6). The major Federal vocational education

law is undergoing reauthorization in the 101st

Congress. In the summer of 1990, a conference

committee reported a vocational education measure

that reconciled differences between bills passed by

the House and the Senate. If enacted, the measure

would charnel more support for integrating secondary school vocational and academic curricula. It also

would authorize some support for upgrading of

skills of employed workers (including apprenticeships). Because of the measure’s breadth, it is

unclear whether funds will be adequate to support all

these activities.

Congress is also considering a major new literacy

initiative, which, if passed, would greatly expand the

available Federal assistance for workplace basic

skills (Option 7). A Senate-passed bill (S.1310)

would increase funding for basic skills training

under the Federal Adult Education Act and would

authorize $50 million for the Education Department’s workplace literacy demonstration grant pro-
Chapter 1-Summary ● 31

gram (current funding is $20 million). A Housepassed measure, Title V of H.R. 5115, also would

increase Adult Education Act funding, and would

establish a new ‘‘national workforce literacy strategies program.’ The bill would authorize up to $40

million per year in grants to improve current

workforce skills on a regional, statewide, or industrywide basis. Both bills would also expand literacy

activities in other areas (e.g., research) as well.

Whatever approach is taken, Congress may wish to

ensure that the special needs of workers in small

business are also addressed, and that research on,

and evaluation and dissemination of, the most

effective approaches are required.

Another existing law—a provision in the tax code

that exempts workers from paying taxes on educational assistance from their employers—will expire

in 1990 unless renewed by Congress. Continuing the

exemption (Option 8) would cost the Treasury an

estimated $255 million in fiscal year 1991, with the

amount possibly rising after that, but would mean

that few workers would halt their own retraining

efforts for tax reasons.

While employer assistance programs only reach a

small portion of workers, and many workers cannot

afford to finance their own continuing education, the

Federal Government administers a number of student aid programs that workers might use to finance

continuing education. For the most part, however,

these programs are more oriented toward full-time

students, than employed adults. Special incentives

have been suggested to extend these programs to

workers’ continuing education needs, such as proposals to loan workers education funds that would be

paid back through an income tax surcharge. Other

alternatives would guarantee all Americans some

level of financing for post-secondary education at

some time during their lives. Because they could be

expensive and because they have significant potential for abuse, such proposals would need careful

evaluation before decisions were made (Option 9).

Issue Area C: Training and Technology

Assistance

Training can make or break the effectiveness of

new technologies and work practices. While knowledge about the most effective training approaches is

increasing, the process of diffusion can be quite

slow—few firms share successful techniques with

potential competitors. Expansion of government

efforts to disseminate information and provide

technical assistance could help speed diffusion.

Several Federal agencies—including the Departments of Commerce, Labor, and Education—now

have demonstration projects and other small programs that provide training or technology assistance

to firms (either directly or through the States). If

Congress expanded these efforts, it might designate

a lead agency (e.g., the Department of Commerce) to

work out coordination among these programs so as

to provide greater benefits to firms (Option 10).

In addition, the Federal Government could help

State governments expand their training assistance

to firms (Option 11). States have long used training

subsidies to entice firms to relocate. Now, as part of

their efforts to retain firms and reduce unemployment, many States have modest training programs to

help existing firms upgrade their workforces. A

handful of States give workforce skills development

a prominent place in their growth strategies. While

such State activities are promising, there has been

little in-plant evaluation of their training programs.

At a modest cost, the Federal Government could

provide funds for such evaluations and dissemination

of the results to other States and the private sector.

Some States also help firms with production

technology and management. Such State industrial

extension programs could help firms identify their

training needs as well, but, aside from referrals, few

now do. Moreover, as discussed in the recent OTA

report, Making Things Better, total State funding for

such programs in 1988 was only $58 million. A

small Federal grant program was authorized under

the 1988 Trade Act, but funds were not appropriated

until fiscal year 1990, and then only to the tune of

$1.3 million. If Congress decides to appreciably

increase this funding, it might encourage States to

experiment with different ways to combine or more

closely coordinate their training and technology

services. Funds to finance such experimentation

could be made available to the National Institute of

Standards and Technology (NIST) in the Commerce

Department (Option 11). NIST also might provide

expanded training to workers and managers at its

national manufacturing technology transfer centers.

Such activities could help achieve better coordination in the delivery of both technology and training

services to fins.
32 ● Worker Training: Competing in the New International Economy

The human resource development issues related

to the organization of work and workplace learning

currently receive scattered and sporadic attention.

No single institution at present addresses workplace

learning issues over the range from research and

development to and best practice dissemination

issues. A new organization, with an explicit charter

to address such concerns, might bring new visibility

to the need for employers to adopt more effective

human resource development practices (Option 12).

A National Institute on Workplace Learning, to be

effective, would need to have extensive employer

involvement. In fact, to have the greatest impact on

industry, such an organization might well need to be

outside the traditional agency structure of the

Federal Government. Startup Federal funding would

be needed. In time, employers might fund such an

institute on their own if the benefits were clear.

Issue Area D: Improving the Effectiveness and

Quality of Worker Training

Increased Federal support for work and learning

research and for development and dissemination of

new training technologies could bring, in time,

substantial benefits to the entire training system,

both public and private, at comparatively modest

cost. The quality of training varies greatly. Some

U.S. firms are world leaders in training. However,

most firms (and many training institutions) know

little about the best practices for training or about the

latest training techniques and technologies. Moreover, research on how adults learn-research that

could, over the long term, lead to improvement in the

efficiency and quality of training-often fails to be

integrated into training practices. One possibility

(Option 13) would be for Congress to direct Federal

agencies with education and training programs (e.g.,

Defense, Education, Labor, Commerce, Health and

Human Services) to develop and disseminate information about best practice approaches and technologies. Congress could, for example, support efforts by

NIST to gain industry acceptance of operating

standards for training technologies and related

software. Such standards, if adopted, would facilitate use of training products. It also might support

Federal agency efforts, now informal, to disseminate

information on training technology.

The Federal Government, historically, has played

a major role in developing new instructional technologies and approaches for the Defense Department and other Federal agencies (see box l-E).

Increased efforts to disseminate federally developed

Box l-E—The Military and Training

The military is the largest single institution in the United States that recruits and trains young people (see report

appendix). The military model for skills training is similar to apprenticeship, except that the “related instruction”

which takes place simultaneously with on-the-job training in traditional apprenticeship is front-loaded in the

military. That is, recruits receive intensive classroom instruction after basic training, followed by on-the-job training

coupled with written and practical skills tests.

There are several basic differences between military and conventional private-sector training. Private firms

expect young workers to move on within a year or two, while the military recruits for 3- to 4-year tours of duty.

A small percentage stay in the military for a 20- to 30-year career. Further, the military model is “up or out”; if

recruits do not pass training and move up, they typically are discharged. Military training also is based more on job

analysis and job-specific performance standards than most private-sector training. Military training is constantly

evaluated, with feedback from the users of the training-the trainees’ commanders. Also, instructors are rotated,

conducting training for 3 or 4 years at a time and then returning to the field. Thus they maintain and upgrade their

duty skills.

Instructional technology is more prevalent in military training than in the civilian sector. The military has a

high interest in training technology for several reasons. It has an extremely high turnover rate but a large population

worldwide. Instructional technology provides both the portability and consistency to meet the needs of this type of

population. The military also frequently introduces new equipment that has increasingly sophisticated and complex

capabilities. In addition, it can afford the startup costs associated with hardware and software development.

Although the bulk of training is still lecture/lab with practice on real or simulated equipment, the military is

rapidly adopting more sophisticated training technology. Current changes in training systems requirements and

technologies include trends toward simulators, networking for team training, and embedded training systems.

SOURCE: Office of Technology Assessment 1990.
Chapter I-Summary .33

or sponsored training materials and expertise to the

civilian education and training communities have

been underway for several years, with limited

success. In the 1988 Trade Act, Congress directed

the Department of Education to establish a training

technology transfer office, but did not appropriate

funds. The Administration also has been slow in

setting up the office. Thus, implementation cannot

be expected to begin in earnest until fiscal year 1991

at the earliest. Initial funding of this office-at least

at the $3 million level originally called for in the

Trade Act-could help launch this program effectively (Option 14).

Even if such efforts are stepped up in the years to

come, the need for more evaluation of workplace

training and the educational system would remain.

Promising techniques need evaluation so that best

practices can be disseminated with some confidence

to potential users. Various proposals have been

made to set up a national institute for learning

technology and research, either through an existing

Federal entity or outside of the normal Federal

structure (Option 15). The Education Department

also could expand its support for education research

and development centers to include more emphasis

on workplace and adult learning issues. The National Science Foundation could support research on

human resource development, work organization,

and issues associated with training technology

adoption. While Federal funding for such activities

would need to be sustained over a period of years,

the potential benefits could be substantial. The

Federal support could lead to more effective training

practices in the longer term. Given the fact that the

workforce is aging, remarkably little research has

been conducted on the most appropriate training

practices to meet older workers’ learning needs.

Earmarked support for such research may be needed

if it is to be sustained.

Finally, information about the extent and effectiveness of workplace training is very poor. If

Congress would like more knowledge about worker

training trends, it could direct the Census Bureau,

the Labor Department, and the Education Department to develop and periodically update information

on workplace training (Option 16). Data collection

could be done through separate directives to these

agencies or as part of an overall review of Federal

statistical priorities. The impacts of worker organization and worker training on productivity, efficiency, and competitiveness are pervasive. Sound

policies in the future will depend on knowledge of

effective practices and their extent.
Chapter 2

Policy Issues and Options
CONTENTS

Page

INTRODUCTION AND CONTEXT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

ISSUE AREA A: REDUCING BARRIERS TO FIRM-BASED TRAINING

(Table 2-2): . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

ISSUE AREA B: RETRAINING INDIVIDUAL WORKERS FOR

CAREER ADVANCEMENT (Table 2-3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

ISSUE AREA C: LINKING TRAINING AND TECHNOLOGY

ASSISTANCE (Table 2-4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

ISSUE AREA D: IMPROVING THE QUALITY AND EFFECTIVENESS

OF TRAINING (Table 2-5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...............64

Boxes

Box Page

2-A. What National Commissions Recommend on Workforce Training . . . . . . . . . . . . . . . 38

2-B. Executive Branch Initiatives on Workforce Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

2-C. State Training Levies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

2-D. Apprenticeship: Old and New Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55

Tables

Table Page

2-1. summary Guide to Policy Issues and Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

2-2. Issue Area A: Reducing Barriers to Firm-Based Training . . . . . . . . . . . . . . . . . . . . . . . . 46

2-3, Issue Area B: Retraining Individual Workers for Career Advancement . . . . . . . . . . . 53

2-4. Issue Area C: Linking Training and Technology Assistance to Firms . . . . . . . . . . . . . 62

2-5. Issue Area D: Improving the Quality and Effectiveness of Training . . . . . . . . . . . . . . 66
Chapter 2

Policy Issues and Options

INTRODUCTION AND CONTEXT

There is a broad consensus that the American

training system needs strengthening; the questions

are how to achieve it and who is to do it. American

society needs to do abetter job of integrating young

people into the work world, providing them with

initial training, and helping workers upgrade their

job skills during their working lives. In many other

countries workforce skill levels equal or exceed our

own, or are advancing rapidly, often with government stimulus. If the pool of skills in the American

workforce becomes obsolete relative to the highly

trained workforces of the Pacific Rim nations and

Western Europe, further erosion in the U.S. competitive position—with adverse implications for living

standards-could occur.

The corporate training system, the adult education

system, and the individual workers themselves will

play the critical roles in upgrading workforce skills.

At present, the Federal role in encouraging these

players to interact is very limited. However, proposals have been made in Congress or elsewhere to

broaden Federal support, ranging from provision of

more information to support for industrial training

consortia to tax credits to a national training levy.

Also, some executive branch agencies, such as the

U.S. Department of Labor, are looking at ways to

encourage work-based learning. The States are also

examining their role: the Nation’s governors are

debating how to improve workforce skills in their

effort to flesh out national education goals emerging

from the 1989 Education Summit with President

Bush. (See box 2-A for discussion of recent recommendations of national commissions on workplace

training; recent executive branch actions are summarized in box 2-B.)

With some notable exceptions (see box 2-A), the

proposed actions do not represent an overall national

strategy toward human resource development for the

workforce. A comprehensive strategy would need to

encompass many elements, ranging from education

of children, drop out prevention, and training

programs for the unemployed and the economically

disadvantaged, to training of scientists and engineers.

The focus here is on just one element—Federal

policy and the continuing training of employed

workers. Before examining the need for such policies, and the arguments for and against an expanded

Federal role, a review of some of OTA’s major

findings is in order:

●

●

●

While strengthening public education is critical

for developing future workforce skills, the most

immediate opportunity for skill development—

the one that would have greatest impact in the

near and medium term-lies in improving the

skills of those already working. Indeed, 7 out of

10 workers in the year 2000 will be people

already in the workforce in 1988; the typical

worker will also be older than is the case today.1

The flexibility of’ this workforce, especially

how well workers at all levels—horn the

shopfloor to the executive suite-respond to

challenges will be a critical factor for national

competitiveness over the next decade.

Aside from managers, professionals and technicians, few American workers get much training

on their job, or act on their own to upgrade

skills. By contrast, our most formidable economic competitors, including Japan and West

Germany, do far more to assure the continuing

development of workforce skills at all levels

than does the United States. Most West German

workers go through formal apprenticeships;

much additional training is needed for workers

to move up to supervisory positions. In Japan,

high quality secondary schools, well structured

but informal training on the job, and worker

interest combine to produce highly skilled,

flexible workers. Production workers in Japan’s

auto assembly plants get three times more

training-formal and informal-than their American counterparts.

Labor mobility in the United States is high.

Companies cannot expect to fully capture all

benefits from training investments, particularly

broad training that gives workers transferable

skills. Recognizing this, many other advanced

IHow~ N. F~lefio~ Jr., “New Labor Force fiojwtio~, SP arming 1988 to 2000,” Monthly Lubor Review, November 1989, p. 10.

–3’7–
38 ● Worker Training: Competing in the New International Economy

Box 2-A—What National Commissions Recommend on Workforce Training

Several recent commissions and national studies have concluded that systemwide improvements are needed

in education and training if the United States is to be able to compete effectively in a world economy in which the

best prospects for a rising standard of living lie in the skills of the workforce. Two which advocated a stronger

government role:l

●

●

The Secretary of Labor’s Commission on Workforce Quality and Labor Market Efficiency (1989): 2 This

panel of business, labor, and education representatives expressed alarm about possible economic decline

unless more is done to educate and train the American workforce. Its recommendations for public and private

actions encompassed both the school system and the workplace. While noting its concern about the budget

deficit, the Commission said that there was “likely to be a clear and pressing need for a sustained increase

in Federal expenditure on human resource programs. ” It called for sustained human resource investments

to, among other things, improve student achievement, encourage lifetime education and training, and make

better use of workers’ skills.

Among its suggestions for Federal action in the training area: give employers a limited tax credit for

training, offer more technical assistance and clarify antitrust provisions for multiemployer training

programs, and continue the favorable tax treatment workers get for employer provided education assistance.

It urged Federal and State Governments to ensure that all adults have lifetime access to basic skills education.

It called for more Federal efforts to disseminate information about best-practice worker participation

approaches, and called for improvements in labor market data. Finally, the Commission urged formation of

a Presidential committee to coordinate human resource policy.

The Commission on the Skills of the American Workforce (1990):3 This panel, also comprised of business,

labor and education representatives, concluded that American living standards will rise only if far more

American companies reorganize work along a high performance, high skill model. To develop the needed

skills, the Commission proposed restructuring the American education and training system at all levels.

Many of the group’s recommendations focused on noncollege bound youth and workers. It recommended

that young people under the age of 18 should not be allowed to work unless they could meet (or were taking

steps to meet) a new educational performance standard, and urged major levels of support for dropout

recovery programs. It called for a program of financial support to allow all students and workers to enroll

in programs giving technical education certificates or associate’s degrees.

A national board, comprised of industry, labor, and education representatives, would appoint industry

and trade based committees to develop specific standards for certification. The Commission also proposed

that the States and the Federal Government see to it that all Americans could receive 4 years of financing

for postsecondary education at some time during their lives.

As for employers, it called on the Federal Government to require all firms to spend at least 1 percent

of payroll on education and training, with the amount increasing over time. Firms that did not spend the

required amount on their own workers would pay this amount to a Skills Development Fund to train

temporary, part time, dislocated, or disadvantaged workers. The Commission also proposed increased

technical assistance to help firms reorganize work in ways that would take advantage of highly skilled

workers.

Isee ~SO tie President’s Commission on Industrial Competitiveness (1985). This group, headed by industrialist JOII.U Young,

recommended strengthening the capabilities of vocational schools and community colleges to provide customized training to employers,

especially small business, and also called for evaluation of tax proposals to achieve a balanced tax treatment of employer investments in physical

and human capital.

Another group, MIT’s Commission on Industrial Productivity, in its 1989 report Made in America, stopped short of policy

recommendations. However, it noted the adverse impacts from what it called a “legacy of long neglect in training“ and a widespread reluctance

by U.S. fms to invest more in training and in reorganizing work to promote continuous learning.

%ommission on Workforce Quality and Labor Market Efficiency, Znvesting in People: A Strategy to AaVress America’s Wor~orce

Quality (Washingto~ DC: U.S. Department of Labor, 1989). The Commission appointed by Ann McLaughlin, a Secretary of Labor under former

President ReagaU made its report to President Bush’s Secretary of Labor, Elizabetb Dole, on Labor Day, 1989.

3~e Cotission on tie stills of tie ~eficm Workfor=, America’s Choice: High skills or bW Wages! (Rochester, NY: National

Center on Education and the Economy, June 1990).
Chapter 2-Policy Issues and Options ● 39

Box 2-B—Executive Branch Initiatives on Workforce Quality

During the last 5 years, the executive branch—and especially the Department of Labor-has been actively

studying new avenues for improving workforce quality. The Commission on Workforce Quality and Labor Market

Efficiency, set up by former Labor Secretary Ann McLaughlin late in the Reagan Administration, proposed a

strategy, and some 44 recommendations for private and public actions, to address what it called “America’s

workforce crisis’ before it disbanded in the fall of 19891 (see box 2-A for details). Also in late 1989, Elizabeth Dole,

President Bush’s Secretary of Labor, announced her own seven-point “agenda for action” to improve workforce

quality. In contrast to the actions urged by Commission, few items on the agenda would require legislative action

or much new Federal spending.

Items from the agenda directly pertinent to industry training include:

● The Secretary’s Commission on Achieving Necessary Skills (SCANS): SCANS is to recommend national

guidelines to help schools better define educational competencies needed to meet workplace skill needs. The

Commission will work to identify needed skills, acceptable levels of proficiency, and effective ways to

measure these skills. Former Secretary of Labor William Brock chairs the Commission, which is expected

to issue its final report in May, 1991.

● A National Advisory Board on Workplace Training: The board would focus on ways to expand

apprenticeship to new industries and occupations (such as service industry jobs). It will work with industry

to develop standards to accredit work-based training programs and to provide workers with recognized

credentials. The board had yet to be appointed when this report went to press.

. A Workforce Quality Clearinghouse: The clearinghouse would work to promote best practices by employers

in meeting employee needs, such as flexible benefits, training, and innovative labor-management relations.

Initial operations were expected to begin in the Fall of 1990.

. Research and demonstration projects to test incentives for employer- and employee-financed training and

partnerships with industry groups.

Secretary Dole’s agenda also calls for research and development on School-to-Work Transitions, including

awards recognizing exemplary practices, and more volunteer efforts. A national conference on the subject was held

in May 1990. In addition, the Secretary has acted administratively to establish an Office of Work-Based Learning,

which includes the Bureau of Apprenticeship and Training and also has responsibilities for displaced workers and

trade adjustment assistance.

The 1989 Education Summit with President Bush and the Nation’s Governors also has focused some concern

on workforce skills. One of the six national education goals adopted by the governors after the Summit concerns

adult literacy and lifelong learning. The goal states that, by 2000, every adult American should be literate and

possess the necessary skills and knowledge to compete in a global economy and exercise good citizenship. Among

the stated objectives: to involve “every American business in strengthening connections between education and

work” and in giving “all workers the opportunity to acquire the knowledge and skills, from basic to technical, to

adapt to emerging technologies, work methods and markets through public and private educational, vocational,

technical, workplace or other programs.”

In July 1990, the National Governors’ Association proposed alternative strategies for States to consider in

implementing the education goals.2 Progress toward these goals will depend on continued commitment at all levels

within the society.

l~c co~~~ion ~c~ly reported t. Resident Bush’s swre~ of Labor, Elizabeth Dole. It’s repO% z~vesfi~g in peoPZe: Sfiategies

to Address Americans WorJ@orce Crisis, (Washingto~ DC: U.S. Government Printing Office, 1989) was issued on Labor Day, 1989.

2RepoII of tie Task Force on ~ucatio~ Education America: State Strategies for Achieving the National Education Goals (w*gton,

DC: National Governors’ Assoeiatio~ 1990).

industrial economies have put in place govern- well-trained workforce that extends beyond the

ment policies that, in effect, protect a fro’s benefits to any firm or worker.

training investments by assuring that other

firms make similar investments. Similar poli- Should the Federal Role Be Expanded?

cies have not been adopted here. Nor, by and The Federal Government now requires employee

large, does the recognition yet exist here that training in some areas where the public interest is

there is a broader public good in having a clear-such as workplace safety, health, and hazard-
40 ● Worker Training: Competing in the New International Economy

ous material handling.2 However, it does little to

assist firms and their employees with skills or job

performance training. Does the national interest in

maintaining economic competitiveness and living

standards justify Federal incentives for employee

training? And, if a Federal role is appropriate, what

should be its scope?

It is clear that the private sector must be the

primary actor in employee training. Proposals that

will receive serious consideration by policymakers

are likely to aim at expanding the Federal role

through activities that augment or enhance, not

substitute for, private efforts. With the list of

proposals growing, the pros and cons of an expanded

Federal role need careful assessment.

Is There Need?

There would be little need for government involvement if employers provided an optimal level of

training or if workers undertook such training on

their own. A common view in American management—and among many workers—has been that

little training is required to develop the skills needed

to perform most jobs. When training is needed to

develop specific skills (e.g., to operate new equipment), firms will provide it. The practice of reducing

jobs to their simplest tasks has been widely used by

American management, in part because training

needs were minimized.

While this practice still prevails, its suitability as

a contemporary model for work organization is

increasingly challenged. Indeed, as chapter 4 of this

report discusses, a growing number of American

firms are beginning to reorganize work in ways that

more fully develop and exploit the skills of their

workers. These companies usually find that considerable training is necessary for success. Most fins,

however, continue to rely on the traditional model of

work organization.

Thus, there is growing concern, reflected in the

commissions cited in box 2-A, that American

society is doing too little to develop the skills needed

to support a globally competitive set of industies

and an improved standard of living. Training is too

often given low priority or is used ineffectively by

management. According to this view, U.S. society

has a vested interest in a high skill industrial system,

one that is likely to produce high wage jobs and raise

living standards, and this is a persuasive rationale for

government assistance in training.

Indeed, training can benefit firms, workers, and

society as a whole. For workers, training is associated with higher wages, less liklihood of unemployment, and shorter duration of joblessness if they do

become unemployed. While other factors also affect

outcomes, training can be expected to contribute to

broad societal benefits stemming from a highly

productive workforce. To the extent that such a

workforce might command better wages, and their

employers’ realize higher profits, government tax

revenues would increase to defray part of the

public’s investment in training. There also are likely

to be reductions in public costs associated with

unemployment.

Won’t Firms Train on Their Own?

A few American firms are world leaders in

training; by all accounts, however, most firms do

little training. More might begin to act on their own

to provide training as the benefits of well designed

programs become clear. This seems unlikely, however, unless some structural impediments that now

make many firms reluctant to train are overcome.

Companies cannot expect to fully capture all of

the benefits of their training investments, particularly training that develops general skills. High labor

turnover in the U.S. economy makes many employers, especially small employers, view training that

gives workers transferable skills as a risky investment. Even though the training might enhance the

skills of their workforce, these employers fear that

their workers will take other jobs before the firm

recoups its training investment.

There can be a broader public good arising from

training that the individual firms or workers are not

in a position to achieve through their own actions.

Several other countries recognize this through national policies that help protect a fro’s training

investment by assuring that other firms also make

similar investments. Similar approaches could be

taken here.

~or example, nursing homes that receive Medicare and Medicaid funding must meetminimum Federal standards for nursing aid training. Many

States are now developing literacy tests for truck drivers to meet federally established standards for truck drivers. Implementation of the Occupational

Safety and Health Act now requires companies withover 10 employees to label hazardous substances, warn workers of their dangers, and provide special

training in their safe handling.
Chapter 2-Policy Issues and Options ● 41

Government assistance will not do much unless

there is strong management commitment (which

could require a change in management attitudes) and

employee motivation (which might follow a change

in management attitude) to more fully use worker

skills. Without this, training might do little to

improve a fro’s performance. It could be a goal of

government to provide the information and incentives that could contribute to this change in behavior

and attitudes.

Are There Training Gaps?

Several highly publicized reports have suggested

a growing mismatch between worker skills and

workplace demands. Many low skill jobs will

continue to be created that require little training.

However, unless the overall pattern is toward high

skill jobs that can command high wages, the United

States risks becoming a low skill, low wage country.

The conclusion is almost inescapable that U.S.

industry will not be able to widely replicate the good

results realized by the best-practice firms unless

some major gaps in the worker training system are

addressed.

As discussed in chapter 6 of this report, the best

estimate is that one-fifth of young adults aged 21 to

25 read only as well as an average eighth grader, and

the incidence of poor basic skills could be higher for

the workforce as a whole. Few employers on their

own can be expected to offer basic education to their

employees. The United States ranks near the bottom

among industrialized countries in apprenticeships.

Small firms and firms facing financial difficulty—

the firms that might benefit most from the improved

productivity and quality that can come from relatively low-cost investments in training-are often in

the poorest position to train their workers. Moreover,

the quality of training is often poor, and firms often

do not make good use of training. In the face of such

findings, business-as-usual will leave many U.S.

workers unprepared to participate in the kind of high

skill economy that is most likely to lead to an

improved standard of living.

Government Action: State, Federal, or Both?

What level of government would be best suited to

assist in addressing these gaps? The American

system of federalism offers many different alternatives for structuring partnerships between the Federal Government and States. Ideally, policy initiatives could be crafted to exploit the special strengths

of each level of government.

Clearly, the States are better positioned than the

Federal Government to provide direct services to

fins. Most States now offer modest assistance to

industry for training, and several are now active

providers of workplace literacy assistance. Because

several States also offer industrial extension services, they have the potential to provide firms with

coordinated technology, training, and management

assistance at the same time. Many States also

support community colleges, which provide firms

with training services. States also play a pivotal role

in public education. Some also are experimenting

with new ways to finance training assistance, such as

payroll levies and tax credits:

While the level of State activity is increasing,

progress could be slow and spotty without national

leadership and support. State spending for industry

training and technology services is modest—

probably less than $1 billion. The State activities are

driven by economic development objectives, and the

States are in competition on this. National policies

could help create a more favorable environment for

continuing education and training throughout the

country.

There are other activities that would be difficult to

carry out without Federal leadership. Clearly, the

Federal Government is better suited than the States

to collect and analyze data about national trends in

training. A Federal role to support research, evaluation, and dissemination of the best training practices

is another area where national scope is important,

especially since the military and some other Federal

agencies are major supporters of training research.

Competition for Federal Dollars

An expanded Federal role could heighten competition for Federal funds, a matter of no small concern

in a day of budget deficits and limited funds for

existing Federal training programs for the disadvantaged. Employer spending on formal training-a

low-end estimate would be $30 billion per year-is

one-third more than the total budget of the U.S.

Department of Education and about 10 times the

amount the Federal Government spends for services

to economically disadvantaged people and displaced

workers under the Job Training Partnership Act.
42 ● Worker Training: Competing in the New International Economy

Clearly, Federal support, or any governmental

support, for that matter, would need to be carefully

targeted. Otherwise, government dollars might simply substitute for private training dollars, hence

doing little to expand industry training. Government

efforts might aim at improving the effectiveness of

training. Another possibility would be to target

assistance on either employees that seldom receive

much training or on transferable training.

Government involvement would not necessarily

require major increases in Federal spending, however. Most options discussed in this chapter would

have a small (under $10 million per year) or

moderate (under $100 million per year) initial cost.

Many of these options would need to be sustained

for a period of years to have much impact, and some

of them might well need to be expanded in time

beyond the $100 million level to fully succeed. But

the option that would stimulate the most training, a

training levy, would do so with only modest fiscal

impact on the Federal Government.3 It would force

many firms who do not now conduct training t o

spend on training, but it would also ease ‘free rider’

problems for other firms that do spend money on

training. There would be a danger of training for

training’s sake-with resources not always used in

the most efficient and productive fashion.

Other government roles, such as support for

research, have the potential to improve training

throughout society-including the training Federal

agencies give to their own employees and the

training offered through such Federal programs as

the Job Training Partnership Act. The efficiency

gains might in time pay for the research many times

over. Finally, an initiative aimed at equipping

workers with transferable skills would help workers

get new jobs in the event of displacement.

Do We Know Enough To Take Action Now?

To those demanding a high degree of certainty,

the absence of good data may seem a reason to delay

a major Federal initiative in this area (e.g., a national

training levy). Better information clearly would be

desirable. But there also are risks in delaying action

for the protracted period (certainly several years)

needed to develop good data about training. The

findings of numerous national studies in recent years

clearly indicate that more needs to be done-and

soon—to enhance workforce skills. If a major

initiative is to be launched, it will need to occur very

soon to have much impact in this century.

As it considers possible policy directions, Congress might wish to evaluate the degree to which

proposed actions support not only industry training

but also contribute to broader societal goals. For

example, actions to improve the overall skills in the

workforce would help not only firms but also

workers adjust to the demands of new technology

and changing competitive circumstances in the

coming years. For workers without much formal

education, workplace training can be a major source

of learning and the last chance for upwind mobility.

Workers with abroad base of skills are likely to have

less difficulty in finding new jobs if they are

displaced, reducing unemployment costs to society.

Defining the Scope of Federal Responses

OTA has identified, and analyzed below, 16

policy options that, taken in sum, would broaden and

deepen employer and employee commitments to

training. (Table 2-1 lists these options, grouped

under four broad issue areas, and directs the reader

to more detailed policy tables and discussion in the

text.) Some options would provide a stronger

institutional base of support within the Federal

Government for industry-based training, building on

existing programs. Others, if adopted, would go well

beyond the current Federal role. These options are

not mutually exclusive, although some would need

to be modified if other approaches were also taken,

These options could be put together in various

combinations, reflecting different degrees of government involvement. One approach would be for

government to play a supportive, but largely indirect, role in encouraging training by fins, individual workers, and States. This incremental approach

would build on current Federal activities (sponsorship of research and demonstration projects, help to

States for evaluating training programs, development of data, dissemination of information about

best practices) that could provide a better information base for training. Some existing programs (e.g.,

workplace literacy demonstration projects, favorable tax treatment of employer provided education

3/4 training levy would not entail direct Federal expenditures. There could be some near term revenue loss to the Government ifm used funds

from otherwise taxable profits for training. On the other hand, if the training led to more productive enterprises, the long-term effect for Federal revenues

would be positive.
Chapter 2--Policy Issues and Options ● 43

Table 2-l--Summary Guide to Policy Issues and Options

Issue areas and options Table no.

Issue area A—Reducing barriers to firm-based training

Options:

1. Help firms setup training consortia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2. Expand technical assistance to trade associations, others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3. Consider limited tax credit for private-sector training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4. Phase-in payroll based “national training levy” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Issue area B-Retraining individual workers for career advancement

Options:

5. Expand apprenticeship concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6. Adequately fund Federal support for vocational programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7. Fund workplace basic skills program. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8. Provide favorable tax treatment for continuing education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9. Evaluate ways to help finance workers’ continuing education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Issue area C-Linking training and technology assistance

Options:

10. Coordinate technology and training assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11. Help States expand industrial services, combined with training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12. Support creation of an employer institute for work-based learning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Issue area D--improving the quality and effectiveness of training

Options:

13. Encourage adoption of best practice approaches and technologies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14. Fund the Federal training technology transfer program ... , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15. Fund more civilian-sector learning research/technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16. improve the information base on work-based training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Table 2-2

Table 2-2

Table 2-2

Table 2-2

Table 2-3

Table 2-3

Table 2-3

Table 2-3

Table 2-3

Table 2-4

Table 2-4

Table 2-4

Table 2-5

Table 2-5

Table 2-5

Table 2-5

SOURCE: Office of Technology Assessment, 1990.

assistance, assistance to State technology programs,

and transfer of federally developed training technology) might be continued or expanded. Some new

initiatives (e.g., planning support for industry training consortia, earmarking funds for learning research, and funding of State clearinghouse services)

would be launched, but at a modest level of funding.

The incremental approach has attractions; in its

early stages, it would not cost the Federal Government much to implement, because it would take time

to build the capacities to use resources wisely.

Moreover, many of its features are partly in place or

under consideration in Congress or the executive

branch. It relies on persuasion and avoids controversial measures likely to be resisted by business. But

it also has limitations. Even if effectively implemented, the specific measures that in sum constitute

this approach would likely have a modest impact on

skills upgrading. Since Federal policy would have

little direct impact on the training behavior of

employers, progress would depend on employer

initiatives and actions at the State level. Some States

would do a lot; others little.

If widespread action is desired, Congress could

consider more far-reaching approaches to encourage

skills development and technology upgrading by

firms. These actions would not preempt the measures identified in the incremental approach, but

would provide, in addition, broad incentives or

requirements for employee training. First, Congress

could attempt to raise employer investment in

training, through options ranging from extensive

funding for technical assistance to tax credits to a

training levy. The most far-reaching approach-one

that would affect all firms-would be a national

training levy; with a levy, employers would either

commit a small percent of their payroll to training or

pay the same amount to a national or State training

fund. Other possibilities, such as a limited tax credit

or direct assistance for training, could be used to

assist firms that have limited resources for training,

but these would cost the Federal Government quite

a bit. Enhanced support could be made available to

help individual employees undertake training on

their own.

The more aggressive strategy outlined above,

with its national training levy, would result in a

fundamental change in the training behavior of all

employers (including small business and government). It would elevate training and skill development in the national consciousness. On the other

hand, it could quickly devolve into training-fortraining’s sake. If phased in too fast, and without
44 ● Worker Training: Competing in the New International Economy

some control over the quality of training, its

potential to upgrade workforce skills would be

reduced. Moreover, most employers would need

time to evaluate their training needs and to put

management structures in place to take full advantage of the new skills possessed by their workers.

The training might have greater effect if it were

combined with technology assistance to help firms

adopt new technologies and more effective ways to

implement these technologies. State industrial extension services or Federal technology assistance

might help.

Many fins-even those that spend enough on

training to be unaffected by a training levy—would

see the levy as intrusive and would be concerned

about bureaucracy, red tape, and possible government involvement in the content of training. Business might be more willing to be involved if a new

institution, located outside any existing government

agency, were chartered to work with industry groups

on employee training, work organization, and new

technology adoption issues. Ideally, such an institution would be set up by the employers themselves;

it might be funded through the national levy, were

this adopted.

Even if fully implemented, the options and

approaches discussed in this chapter would comprise only one leg of a national strategy for human

resource development. As a new area of involvement

for the Federal Government, the relationship of work

based training policies to other kinds of government

training programs—assistance to displaced workers,

older workers with outdated skills, the economically

disadvantaged, at risk youth, and those on welfarewould need to be defined and clarified,4 Although

not within the scope of the policy options discussed

here, better coordination and integration of these

programs, especially at the implementation level, is

emerging as a major concern. Indeed, Congress, in

its consideration of bills to reauthorize the Job

Training Partnership Act and the Carl D. Perkins

Vocational Education Act, is evaluating alternatives, such as a human resource council, to better

coordinate Federal training, education and social

service assistance now distributed to a wide variety

of State and local bodies. Others have proposed

merging of existing education and training programs

where possible, or creation of new entities, such as

Employment and Training Boards, to serve local

labor markets. Whatever mechanism is selected,

close interaction with employers will be needed.

ISSUE AREA A: REDUCING

BARRIERS TO FIRM-BASED

TRAINING (Table 2-2)

Employers, of course, benefit from having welltrained workers. But many firms shy away from

paying for broad-based training. There are several

reasons.

Compared to workforces in many other countries,

U.S. workers tend to change jobs more often—

especially in the early years of their careers. Many

employers, especially small ones, fear losing their

investment if they provide general training to an

employee who then takes a job at another firm

(maybe even a competitor). Of course, firms often do

find ways to share training costs with employees.

Moreover, some evidence suggests that employees

who receive the most training tend to have longer

tenure with their employers than those who get less.

Another uncertainty for employers is whether the

training support system available in the community

will meet their needs. Relatively few companies can

afford to develop and implement their own internal

training systems. The majority are therefore dependent on outside providers—vendors, consultants,

community colleges, private training schools-of

highly variable quality.

A third reason is employer uncertainty about

whether their workers’ performance will actually

improve after formal training. Some firms have

found that 20-30 percent of their nonsupervisory

workers must take remedial courses before taking

classroom training and, although classroom training

can be effective, transferring the training back to the

job can be difficult. Faced with such circumstances,

employers may pursue management strategies that

minimize the need for training.

4F~r fi~cu~~ion of d@aced ~ork~r isme~, s= tie fo~o~g Offiw of Tec~ology Assessment reports: Technology andsnctural Une?71p@WK?nt:

Reemploying DisplacedAdults OTA-ITE-250 (Springfield, VA: National Technical Information Service, February 1986); Plant Closings: Advance

Notice and Rapid Response OTA-ITE-321 (SpringfleId,VA: National Technical Information Service, September 1988); Trade Adjustment Assistance:

New Zdeas@r an Old Program OTA-ITE-346 (Washington, DC: U.S. Government Printing OffIce, Jnne 1987).
Chapter 2-Policy Issues and Options . 45

Assuming that Congress wishes to encourage

employers to invest more in training, there are many

options it could consider. Four approaches are

discussed below:

1. helping firms setup training consortia

2. helping trade associations and industry groups

build training capabilities

3. offering tax credits for certain training expenditures; and

4. implementing a payroll based levy for training.

Option 1: Help Firms Set Up Training Consortia

(Table 2-2)

Training consortia or cooperative training ventures involving several employers can help employers reduce costs and ease their concerns about the

perceived risks of training. Small companies in a

consortium can share costs of instruction and

training facilities. Consortia could be used by large

firms and their supplier networks to develop shared

training approaches and common workplace practices (e.g., for quality control). Consortia also might

be used to upgrade the training skills of first-line

supervisors and others who are expected to give

informal training but have little training background.

Community colleges and other training organizations could play constructive roles in consortia.

While a few examples of training consortia exist (see

ch. 5), organizing new consortia can be difficult;

moreover, some firms worry (though perhaps needlessly) that joining a consortium could make them

vulnerable to antitrust actions. To help companies

set up training consortia, Congress could authorize

start-up assistance and clarify the relationship of

training consortia to antitrust laws.

No Federal agency has a continuing program to

help firms setup multifirm training consortia.5 A bill

to setup such a program in the U.S. Department of

Labor is before the 101st Congress (S. 2114 as

introduced).6 The bill would (among other things)

authorize grants to help companies in the same

industry or using similar technologies to plan and

organize training consortia. The training would aim

to help technicians, nonsupervisory workers, firstline supervisors, and other workers function more

effectively with new technologies, management

practices, and new forms of work organization in

both manufacturing and service industries. The bill

would authorize the program for 10 years, with $5

million for the first fiscal year, and such sums as

necessary thereafter.

Some employers shy away from involvement in

multiemployer training activities out of fear that

their participation might be interpreted as violating

Federal antitrust laws.7 This concern may not be

warranted, given the fact that some firms now

participate in multifirm apprenticeship programs.

However, the perception of legal problems can be as

great a barrier as actual legal barriers.

To reduce business uncertainty, Congress could

clarify how antitrust law would be applied when

firms form training consortia. In some special cases,

Congress has adjusted antitrust law to minimize

interference with other public policy objectives. In

the 1984 National Cooperative Research and Development Act, Congress clarified that precommmercial

research and development collaborations are to be

judged “on the basis of. . . reasonableness, taking

into account all relevant factors affecting competition,’ and also limited damages for registered

projects to actual injury.8

In helping firms initiate consortia, the Federal

Government also could support efforts to provide

consortia with information and technical advice on

best practices. Multifirm consortia can be used to

develop and deliver several important types of

training. For example, they might make it more cost

effective for firms to provide the classroom training

associated with apprenticeships. With encouragement, multiemployer groups might develop and

administer industry-specific programs to address

basic skills problems encountered by member firms,

%e Department of Labor on occasion bas provided demonstration grants to industry and educational consortia to develop training materials.

GSection 404 of S.2114, tie proposed Excellence in Mathematics, Science, and Engineering ~uCat.iOnA@ m ~trodu~.

7Co~~~ion onwor~orce Q~~ and ~bor ~ket~lciency, Znvesn”ng in People: A Strategy To A&ressA~n”ca’s Wor@orce Cn”sl”s; A Report

to the Secretary of Lubor and the Amen”can People (Washington DC: U.S. Department of Labor, September 1989), p. 19.

8~bfic Law 98462, 15 u-s-c+ 4301 -4305.” Even wi~out tie c-g1e@s~tio~ ~s“de of r-on” wo~d uStiy apply. Howev~, @ 1984

law did substantially reduce business uncertainty and the need for extensive legal analysis. The 1984 AX and possible further antitrust clarifications and

amendments to facilitate interfii cooperation are discussed in U.S. Congress Office of Technology Assessment Making Things Better: Contpen”ng in

Manufacturing, OTA- ITE-443 (WashingtorL DC: U.S. Government Printing OfiIce, 1989) pp. 219-231, pp. 66-69.

S. 2114, as introduced in the IOlst Congress, proposes that publicly disclosed training consortia covered under the bill would be judged by a similar

rule of reason.
46 ● Worker Training: Competing in the New International Economy

Table 2-2—issue Area A: Reducing Barriers to Firm-Based Training

Option 1! Help firms set up training consortia:

. This could include start-up grants and

technical assistance to firms, trade associations or industry groups, and training

institutions (e.g., community colleges) to

organize multifirm training consortia. To

give the program visibility and staying

power, Congress could give the administering office a statutory basis, and funding

authorization, and clarify employer concerns about antitrust violations. Beyond

this, Congress could, as a further inducement to companies to engage in cooperative training efforts, set aside some funds

from Federal adult education and vocational programs specifically for consortia

activities.

Consortia could involve: 1) new groups

specifically set up to provide training, and

2) existing industry and trade organizations, given added training functions.

Option 2: Expand technical assistance to

trade associations, others:

. In conjunction or separately from Option 1,

give a statutory charter and technical

assistance funds to the U.S. Department

of Labor (DOL) to: 1) help trade associations and other industry groups identify

industry-specific training needs, and to, 2)

help them build training capacities and

institutional structures. DOL now funds

about $3 million of work-based learning

demonstration projects a year. To launch

a meaningful program of technical assistance, initial funding at three times this

level might be needed. Some of the funds

could be made available to State industrial

training assistance programs.

Option 3: Consider a limited tax credit for

private-sector training:

● The initial steps might include: 1 ) directing

the Treasury Department (in coordination

with the Department of Labor and the

Department of Commerce) to evaluate

alternatives for targeting the tax credit;

and 2) directing Treasury (again in cooperation with Labor) to conduct afield trial on

the fiscal impacts of a limited tax credit by,

for example, reimbursing participating firms

with an amount equivalent to what they

might receive for training if the limited

credit were in effect. The fieldtest could be

restricted to small and medium-size firms

and also limited to particular kinds of

training expenses (such as basic skills

training). Legal considerations would prevent offering an actual tax credit to selected firms during the trial period; hence,

appropriated funds would be needed.

Advantages:

. The consortium approach might induce

more firms to share training or risks they

might not singly assume. If coordinated

with other Federal education and training programs, the consortium approach

could expand access of small businesses and their employees to basic

education, job skills upgrading and transfer of the latest training technology and

techniques. The consortium approach

also might help more firms send personnel (such as supervisors and others

responsible for informal training) for

train-the-trainer instruction.

Advantages:

. The approach might encourage more

industry-sector responses to skill development, building on private sector initiative and depending on the private sector

for implementation. If evaluation and

dissemination were built into the program, other industries might become

more involved, with little need for further

government assistance.

● By setting up a statutory office and

program authorization at the Federal

level, Congress would place Federal

support for research, demonstration, and

technical assistance for industry-based

training activities on a firmer foothold,

less subject to year-to-year flux in allocating Departmental research funds.

Advantages:

. The fieldtest would give a sounder basis

for subsequent decision about whether

to proceed with a tax credit. As for the

advantages of an actual tax credit, firms

would have the choice of using or not

using this incentive-and it would thus

be more accepted by employers. If carefully targeted to certain kinds of activities

like basic skills education, a tax credit

approach might affect the behavior of

firms at the margin.

Disadvantages:

● While used in some industries like construction, there could be structural reasons why the training consortia or cooperative training concept has not caught

on with American firms. Firms could be

concerned about loss of proprietary information and also about raiding of

trained employees by firms outside the

group. Also, small firms often do not join

trade or industry groups.

Disadvantages:

● Startup funds alone might not be enough.

It could be difficult for industry organizations to develop and sustain required

levels of support once government funds

ended. Federal technical assistance, even

if provided for several years, will not

necessarily be sustained by employers

or trade associations on their own.

. Many trade associations and industry

organizations Iack close linkages to small

employers and have limited capacities to

deal with training issues. Those industry

organizations most likely to seek Federal

help might have planned training actions

in any case; hence, the Federal funds

might simply substitute for industry funds.

Disadvantages:

. Tax credits are difficult to target and limit.

Tax credits would not do much to encourage firms to undertake training they

were not predisposed to take. Hence,

the approach might not be effective for

such training as basic skills. At the same

time, tax credits can be inefficient when

firms actually do make use of them,

since it is difficult to determine whether

the credit simply substitutes for training

the firm would undertake in any case.

Tax credits would not help not-for-profit

employers and their employees. Finally,

tax credits run counter to recent efforts to

hold tax expenditures under control.
Chapter 2--Policy Issues and Options . 47

Option 4: Phase In a payroll-based national training levy:

● Employers would be obliged to spend a

small percentage of their payroll (say 1

percent) on broad, transferable training or

pay an equivalent amount into a government training fund. (The government fund

could support such activities as workplace

literacy, training of contingent workers or

other underserved workers, technical assistance, or services to displaced workers.) During the first phase, employers

would not have to pay the levy if they

reported their training expenditures to the

government (even if they spent nothing on

training. ) implementation would be

phased in over several years to allow firms

to develop training expertise and select

the best service providers. The levy could

be made to apply to employers in all

sectors, including nonprofit organizations

and governments.

Advantages:

● This approach would assure a certain

minimum of worker training by all firms

and employing organizations, including

nonprofit organizations and government.

it thus has the potential to raise worker

skill levels throughout the employed

workforce. Because the cost would be

borne by the employers, direct competition for public funds—such as training of

unemployed people--wouid be minimized.

Depending on how it were implemented,

this approach could also give firms considerable flexibility about how to fulfill

their training obligation.

Even if full implementation of the levy

never occurred, the approach proposed

(with an initial period of tax forgiveness if

the firm reported training expenditures to

the government) would for the first time

create benchmark data on firm-based

training expenditures that would provide

policymakers with a sounder basis for

subsequent decisionmaking. The first

phase data alone might affect the training behavior of firms, since they would

be able to compare their expenditures

with overall trends in their sector.

SOURCE: Office of Technology Assessment, 1990.

using curricula and instructional materials directly

relevant to the students’ jobs. All of these activities

could be aided by technical assistance.

Consortia, in themselves, will not overcome

employer concerns about losing training investment

when workers leave before a certain payback period.

Consortia members could have cost recovery agreements when trainees move from one member firm to

another. However, outside firms may be “free

riders, able to hire away well trained workers from

consortia members without incurring training costs.9

But the employer’s investment would be smaller,

due to economies of scale, so concerns about loss

would be smaller.

Generally, such concerns might be eased if

individual firms and their employees were to establish “training compacts” to upgrade training of

underserved employees and new entrants. Apprenticeship might offer a model. Some apprentices in

unionized industries enter into compacts when they

receive training financed by joint union-manageDisadvantages:

●

●

●

●

●

The more targeted the training requirements (e.g., basic skills training, apprenticeship training) the more monitoring

and paperwork would be needed. Yet,

without targeting, firms might not use the

training to meet publicly important objectives.

There is a danger that this approach

could lead to training for training’s sake,

especially in the early days of full implementation. Many providers could be

expected to jump into the training market, with the probability that much poor

quality training would be offered.

Some employers, especially employers

having financial difficulties, might not be

able to meet the levy requirements.

The first phase of the program, in which

firms would have the option of paying the

tax or reporting their training expenditures, could create burdensome paperwork or undue expenses for some firms.

The levy could result in undue emphasis

on formal training in classrooms, to the

exclusion of improving on the job training.

ment trust funds. Apprentices who leave the unionized industry during or shortly after finishing the

training may have to reimburse the trust fired for part

of the assistance. Congress might instruct the

Department of Labor to explore and report on

alternative approaches for risk-sharing by employers, workers, and government that could lead more

firms to experiment with training contracts of one

sort or another.

Option 2: Provide Technical Assistance to

Trade Associations and Other Industry

Groups (Table 2-2)

Whether or not Option 1 is adopted, Congress

might give the U.S. Department of Labor (DOL) a

statutory charter and more funds to help fins, trade

associations, and other industry organizations build

up their training capacities. DOL recently set up a

new Office of Work-Based Learning (OWBL),

which is beginning to move in this direction.

%aurie J. Bassi, Multi-Employer Training Consortia: An Idea Whose Time Has Come” (Washington, DC: National Federation of Independent

Business Foundation, April 1990) pp. 4-5.
48 ● Worker Training: Competing in the New International Economy

However, OWBL has other major program responsebilities (including trade adjustment assistance and

retraining of displaced workers). A statutory charter

for OWBL, or creation of a similar office to support

training consortia and training by other industry

groups, would signal congressional commitment to

technical assistance.

OWBL now funds a few national demonstration

projects (3 million dollars’ worth in 1989) on an ad

hoc basis to show new uses for apprenticeship

concepts. (See Option 5 for apprenticeship discussion). Even the most successful demonstrations,

however, would reach only a tiny fraction of U.S.

employers. With a statutory charter, a separate

authorization, and enough funds, DOL could launch

a sustained effort to help trade associations, other

groups of firms, or labor/management cooperative

groups involve their members with training.

U.S. trade associations, for the most part, are less

involved with training than their European counterparts. Without encouragement, they are not likely to

become involved on their own; with encouragement,

such as technical support, some might act. DOL

might help them identify industry-wide training

needs and, when the needs are known, assist in

developing training materials and best-practice approaches that member firms might use. The Canadian Federal Government has had some success with

this approach. In one case, it convinced large

Canadian electrical firms and their unions to join a

government-sponsored study on the industry’s training needs. After the study was done, the companies

and the unions set up a joint training committee

which agreed to adopt a joint training fund, with

some cost-sharing by the Federal and provincial

governments.

DOL would need much more than $3 million—

the current funding for demonstration projects-to

launch a significant technical assistance program. In

fact, without initial funding of $10 million per year,

there would belittle point in characterizing the effort

as anything other than a demonstration program. An

expanded DOL technical assistance program would

complement Option 1 (help to industry for training

consortia). Of course, it might be possible that the

States or a nongovernmental organization will

become more integrally involved in providing technical assistance. For example, if a nonprofit institute

to work with employers and employer organizations

on workplace learning were established, the institute

could perform part of DOL’s technical assistance

mandate. (See Option 12 in table 2-4.) If the States

greatly expanded their technical assistance capabilities, the Federal role might evolve into a grant

assistance program (with higher funding levels) or,

if State efforts were sufficient, be reevaluated.

Option 3: Field-Test Limited Tax Credits for

Private-Sector Training (Table 2-2)

There have been several recent proposals to give

firms a limited tax credit for employee training.l0

For tax purposes, firms now treat much of their

training costs as expenses that can be deducted in 1

year rather than amortized over several years as is

the case for capital equipment.11 Proponents believe

a tax credit would leverage more employer training

investments at less cost to the government than

1%w e~ples:I) H.R. 1219, the proposed National Training Incentive Act of 1985, as proposed but never acted on in tie 98ti Congr=s, ~~

for a 25-percent tax credit for eligible training expenditures (e.g., apprenticeships, cooperative education programs) that exceeded a company’s average

spending on these activities over the previous 5 years; 2) The Commission on Workforce Quality and Labor Market Efficiency, in proposing a training

tax credit to Secretary of Labor Dole, also called for a long base period for calculating the credi~ the Commission proposed to limit the credit to (a)

compensation of full time corporate trainers, (b) purchase or development of instructional materials and equipment, and (c) payments to third-party

training institutions. (One member of the commission dissented on the tax credit.); 3) A recent joint report issued by the National Center for Education

and the Economy and the American Society for Training and Development called for tax-based investment incentives to partially subsidize development

and delivery of training, and discussed some issues involved in designing a tax credit. See Anthony P. Carnevale and Janet W. Jobnsto~ Training

America: Sfraregiesfor the Nation, (Alexar,tiia, VA: American Society for Training and Development 1989), pp. 53-58.

llJOhU M. Quigley and Eugene Smolensky, ‘The Tax Treatment of Traini.ng and Educational Expenses,” Investing in People:A Strategy To Aa2iress

America’s Wor~orce Crisis, background papers, vol. 1, p. 838.
Chapter 2-Policy Issues and Options ● 49

would be the case for directly appropriated funds.12

The tax credit also could make training more visible

to high level corporate officials. Tax credits also

tend to be viewed favorably by potential beneficiaries.

At the same time, tax credits are hard to target

effectively and can bean inefficient way to stimulate

investments. If a training tax credit were authorized,

it would be difficult to devise safeguards to keep

firms from taking a credit for training they would

undertake in any case. Also, the tax credit would

have to be carefully designed to exclude some kinds

of training expenses (e.g., renting a conference

center at a vacation resort, transportation to such

facilities). For reasons such as these, as well as the

unpredictable effect of tax credits on the Treasury,

many consider tax credits to be bad public policy.

Of course, the credit could be narrowed to a few

eligible activities (e.g., basic skills instruction or

formal classroom training in programs that give

successful trainees a recognized certificate of successful completion) .13 The credit also might be

restricted to training of certain categories of employees (e.g., nonsupervisory workers). If narrowly

drawn, the credit might help firms build their

internal training capabilities. One possibility would

be to allow smaller firms (those with under 250

employees) to get a partial credit for training

materials and equipment, or for sending supervisors

and other personnel to courses on training.

There is a danger that a tax credit would need to

be so narrowly cast that it would not serve as much

stimulus. Building in safeguards would increase

paperwork, which in turn would reduce the likelihood of company participation in the program. Very

few companies centralize record keeping of their

training expenses; to make sure that the credit

supported additional training, data collection would

be needed to establish a baseline. While some

activities (e.g., corporate payments to outside training institutions) would be quite easy to document,

internal training activities, if covered by the credit,

would be very hard to document.

Given the implementation questions involved in

administering a tax credit, Congress might take

some preliminary steps (as discussed under Option

3 in table 2-2) before deciding to authorize a

full-fledged training tax credit. For example, Congress might instruct the Department of Treasury, in

coordination with the Departments of Labor and

Commerce, to prepare a detailed analysis of how a

tax credit might be targeted to meet identified

training needs.

As part of the evaluation process, Congress could

also authorize Treasury, in conjunction with Labor,

to experiment with a field test of training incentives

that would be equivalent (in essence) to a tax credit.

One possibility would be to offer the training

incentive to a set of randomly selected firms for,

perhaps, a 2-year period. Firms that elected to

participate in the field trial, as a condition for

assistance, would need to be willing to work with

Treasury or Labor personnel on appropriate accounting measures.

Option 4: Phase in a Payroll-Based National

Training Levy (Table 2-2)

Among options considered here, a payroll based

training levy would be the most far-reaching approach the Federal Government or the States could

take to stimulate employer investments in training.

It also would be the most controversial with

employers. Many variants of a payroll-based levy

exist in other nations. The one discussed here would

lzTraining A~rica: Strategies for the Nan-on, for example, speculates that a 20-perCerM tax credit for new training expenses could leverage a

20-percent increase incorporate training activities. This would mean that the spending off- on formal training could increase to $36 billion-from

$30 billion (the authors’ estimate of what fms now spend on formal training). Revenue losses to the govermnen6 they estimated, would be$600million.

Of course, there is no way to predict in advance~t how much of a stimulus the tax credit would be. The stimulus anticipated by Training America would

appear to be at the extreme upper end of likely outcomes. An analysis of the early years of the U.S. research and development (R&D) tax credit (viewed

by some as a model for a training credit) found that f~ spent on average only 1.2 percent more on R&D because of the credit than they might have

without it losses to the Treasury were probably greater than the gain in R&D attributed specifically to the credit. See Edwin Matileld, “Public Policy

toward Industrial Innovation: An International Study of Direct ‘I% Incentives for Research and Development, ‘‘ in Kim B. Clark Robert H. Hayes and

Christopher hmmz, eds., The Uneasy Alliance: Managing the Productivity-TechnoIogy Dilemma (Bosto~ MA: Harvard Business School Press, 1985),

pp. 385-386.

lssome contend tit a Federal basic swstax credit is a red herring that would prompt little employer action and might divert Pofi@ers from

dealing with the red bmriers to employer involvement. While a tax credit alone would not solve the probleq the only way to fmd out how employers

would react would be to try out the concept. If carefully crafted, a temporary credit would cost little if it failed. (For an analysis of possible limitations

of the tax credit for basic skills, see Forrest P. Chisman and Wendy L. Campbell, ‘‘Narrowing the Job-Skills Gap: A Focus on Workplace Literacy,”

Forrest P. Chisman and Associates, Leadership for Literacy: The Agenda for the 1990s (San l%ncisco, CA: Jossey-Bass, 1990), pp. 165-167.)
50 ● Worker Training: Competing in the New International Economy

give employers a choice between spending a certain

amount on training (say 1 percent of payroll) or

paying the same amount into a special training fund

administered by a public agency14 (see box 2-A).

The levy could apply to all employers, including

government agencies.

This option is not so much a tax as an “obligation” that employers provide their workers with

training or pay the levy. Within broad guidelines,

employers would have the flexibility to use the

training for purposes that fit into their strategic

needs. Only if a firm elected not to spend the money

on eligible training would the levy be imposed.

(Another variant would be a levy-grant system, now

used in some States, in which all employers pay a

payroll tax for training that is then redistributed for

specific training projects. See box 2-C for discussion.)

Many training intensive countries, including

France, Sweden, Ireland, South Korea, Singapore,

and the Netherlands, use variants of a levy system to

insure that more firms engage in training or to insure

that workers do receive needed trainings (see ch. 3

for a discussion of the French and Korean programs).

France requires employers to spend an amount

equivalent to 1.2 percent of payroll on training or

pay the same amount to a training fund. A separate

0.5 percent payroll levy is earmarked exclusively for

apprenticeship training. In place since 1971, this

use-it or lose-it approach has been quite successful

in generating more firm based training-small and

medium-size firms have doubled their training over

the period16—in part because firms have a great deal

of discretion about whom and how to train. But

questions of need and suitability of the training

remain.

There is little doubt that the levies have stimulated

additional training in these countries. If applied in

this country, the levy could be used to place a floor

under employer-based training activities, with minimal direct outlays of public funds. This would have

the advantage of minimizing competition for limited

public funds available for training of economically

disadvantaged people, displaced workers and others.

The levy might have some short term impacts on

Federal revenues, as some firms would use otherwise taxable profits to meet the 1 percent requirement. Firms with better trained employees might be

more productive and efficient and generate more

taxable income, thus offsetting any fiscal impact.

What training activities would the levy cover and

how might it be implemented? One possibility

would be to target the levy for training activities that

develop broad-based skills of employees or that

develop the firm’s internal training capabilities to

develop such skills. Examples: basic skills training,

apprenticeship or other training that would give

employees recognized credentials, and costs for

developing relevant training materials or paying

trainers to conduct these programs. Administratively, it would be easiest if the States oversaw the

levy as they already collect a payroll tax through the

Unemployment Insurance system.

While promising in theory, a levy has disadvantages as well. It would add to the amount currently

subject to payroll tax collection under various

Federal laws—an amount some view as already

burdensome. Some economists might argue that the

workers, not employers, would ultimately bear most

of the cost. If so, workers in firms that elected to pay

the levy would be in the position of paying for the

training of others, without getting training themselves.

Some training produced by the levy-at least in

its early years—would probably be poor in quality,

with little direct connection to the real needs of the

firm or the workers. In France, some managers still

complain that the government is forcing companies

to conduct training for training’s sake. Also, while

the system clearly has generated a great deal of

fro-based training, it has not necessarily been

directed to those workers with the greatest need.

14Tbis appmachwas recently advocated by the Commission on the Skills of the American Workforce, a private group Setup by the NatiO~ @n@r

for Education and the Economy, in its report, America’s Choice: High Skills or Low Wages/ (Rochester, NY: National Center on Education and the

Economy, 1990).

lsothercow~es, including West Germany and JapaL use payroll taxes to finance a range of employment and trainingprograms; some of these funds

are used to train employed workers. Ibid., Supporting Information IV.

16& cited fi B@ s. B~now, by B. c~sanov, and Abhay p~de, Fi~ncial [ncentivesfor Emplo~er.provi&d Workr Training: A Review of the

Relevant Experience in the U.S. and Abroad, report prepared for the U.S. Department of Labor Employment and Training Admitistratiow Apr. 2,1990,

p. 35.
Chapter 2-Policy Issues and Options ● 51

Box 2-C—State Training Levies

At least four States (California, Delaware, Rhode Island, and Alaska) now collect a small payroll-based training

tax from employers.1 These States use what has been called a levy-grant system to fund training.2 Most of the tax

is used to train unemployed workers, but some of the tax can be used to support firm-based training if it would serve

certain objectives (e.g., reduce the likelihood of a plant closing or layoff). In contrast to the French approach, the

firm does not receive credit for the training expenses it incurs; instead, the employer pays the money into a

government fund that is redistributed in grant form. Only a few firms—those who apply for and receive a

grant-directly benefit from the tax.

These States collect the training levy when firms pay their Unemployment Insurance (UI) payroll tax.

However, the training taxis not part of UI. The four States first imposed the training tax at a time when they could

lower the unemployment insurance tax rate firms’ pay. Since the employers’ payroll tax rate was no higher than

the year before, political opposition was lessened.

The State levies are not large; they amount to just 0.1 percent of that portion of payroll that is subject to UI

taxes. The largest amount raised is in California, which has about $100 million available in its training fund.3 (By

contrast, the training tax component for payroll levies in France, the Denmark, Sweden, Ireland, Singapore, South

Korea, Japan, and West Germany range from about 1 percent of payroll to about 2.5 percent.)4

Other States could impose such training levies—provided they are kept separate from the Unemployment

Insurance trust fund. However, training levies are only likely in States that have a surplus in the trust fund. States

in deficit—those with the greatest recent demand from claimants—would not have the option of offsetting

scheduled tax reductions as the base for the levy. Thus, any payroll-based approach would constitute an increase

over current tax rates for nonsurplus States.

Of course, States have other options-such as the levy approach used in France-that they could pursue and

some States already fund programs out of general revenues. The levy might only be collected if companies failed

to spend the required amount on eligible training activities for their employees. Funds collected from the levy could

be made available as grants to companies or organizations involved in training of employees, or pooled to defray

publicly supported training of (among other possibilities) displaced workers, contingent workers, older workers, or

employed workers in industries or occupations vulnerable to displacement.

ISee Peter A. Creticos, Steve Duscha, and Robert G. Sheets, “State Financed Customized Training Programs: A Comparative State

Sumey,” report prepared for the OffIce of Technology Assessment under contract No. L3-381O. In addition, New Jersey uses penalties and fines

collected from its Unemployment Insurance system to finance training. Five States use lotte~ funds to fmnce industry training. The Kmining

States with customized training programs fmnce the programs through general revenues.

2Robefi J. Gitter, “A Review of Financial and Non-Financial Incentives for Apprenticeship programs,” COIMEiCtOr Epofi pmprd for

the U.S. Department of Labor Bureau of Apprenticeship and Training, September 1988, p. 25.

3This includes some carryover.

4s= c~ptti4 and he co~ssion on the s~s of tie American Workfome, America’s Choice: High Skills or LOW wages! (Rochester,

NY: National Center on Education and the Economy, 1990).

As mentioned, a levy could be crafted to meet Still, the levy approach merits greater consideraobjectives such as improving the basic skills of tion in the United States than it has received

employees or providing lower level workers with

access to training. In this event, some strings would

have to be attached, with an accompanying need for

some paperwork and administrative oversight to

assure compliance. The French simply ignore this

issue by leaving it to the firm to decide the kind of

training to provide-a circumstance that would not

necessarily direct training to the desired areas. In

countries that have targeted the levy (e.g., Ireland

and South Korea), firms encounter more reporting

requirements.

heretofore. As in the case of a tax credit, there are

enough uncertainties about a national training levy

that a good deal of spadework would need to precede

full-scale implementation. For example, without

sound information on firms’ training expenditures,

there is little basis for determiningg whether the

overall objective of the levy should be to assure that

firms spend, say, 1.0 percent or 1.5 percent of payroll

on training. Nor is there a basis for estimating

differentials in training by industry sector.
52 ● Worker Training: Competing in the New International Economy

Rather than simply study the issue, however,

Congress might consider proceeding with a national

levy in a two-stage process. During the first phase,

lasting perhaps 3 years, firms would have the choice

of either paying the levy or reporting their training

expenditures. Firms that did report their expenditures would owe nothing, even if they spent nothing

on training. By the end of the first phase, policymakers would have detailed information on which

to base a decision about whether to proceed with the

levy. Of course, it might be possible to obtain the

needed data through a special survey of firms,

without imposing the levy. However, the very

existence of the levy during the first phase would

prompt large numbers of firms to begin keeping

closer track of their training activities. Moreover,

during the trial period, industry-sector training

information could be made public, so that firms

would have a basis for comparing their training

activities with their competitors’.

ISSUE AREA B: RETRAINING

INDIVIDUAL WORKERS FOR

CAREER ADVANCEMENT

(Table 2-3)

In contrast to the education system, where social

equity and fairness issues are of much concern to

policymakers, equity concerns get much less consideration in the debate about human capital development and the workplace. Training can make a major

contribution to career advancement for individual

workers. (See ch. 8.) Several measures suggest that

training is associated with long term positive effects

for the subsequent income of trainees.17 One study

comparing trained and untrained workers with 12

years of experience found that the trained workers

had wages averaging 9.5 percent more than their

untrained counterparts at any point during the ten

years following training. (Trained workers with

more experience also fared better, although not so

dramatically.) While company training, especially,

had a major impact, with increased earnings observable for over 13 years, vocational training at a school

also had a positive effect. Moreover, the benefits of

training extended across a broad spectrum of the

workforce. Managers experienced the greatest increase in earnings following training, while semiskilled workers had the longest duration of benefits.

Training is also associated with a lower likelihood of

unemployment. Moreover, trained workers who do

experience unemployment are more likely to return

to work more quickly than their untrained counterparts. These findings suggest that public support for

training will be partly repaid by higher levels of

taxable income, and less need for services to the

unemployed.

Yet, many workers get little training from their

employers, at least in broad, transferable form that

can help them make worklife transitions when

needed. Part-time or temporary workers who do not

work for temporary service firms often get little

training except on their own. Nonsupervisory workers also get little training, as do both older workers

and very young workers. Minorities and people with

less education also get less training. At least in the

past, women also received less training than men.

While the United States has a large adult education system, many barriers, including financial

constraints, scheduling problems, insecurity, and

poor basic skills, impede participation. In this

section, several options to encourage more employers and employees to address the training needs of

individuals are discussed, including: 1) expanding

apprenticeship, 2) funding of postsecondary vocational education, 3) supporting workplace basic

skills programs, 4) extending favorable tax treatment for employee education, and 5) evaluating

support for continuing education.

Option 5: Expand Traditional Apprenticeship

(Table 2-3)

Apprenticeship, which combines supervised training on the job with some classroom instruction, can

be a very effective way to produce highly skilled

workers who have a sound grasp of the theory and

practice of their trade. In contrast to the school-towork transition apprenticeship systems that prevail

in European countries like West Germany, apprentices in the United States are typically workers in

their 20s and older who have been out of school for

some time.

ITSee he A. Li~d and Hong W. Taq Private Sector Training: Who Gets It and What Are Its Effects, report prepared fOr the U.S. Department of

Labor (Santa Monicz CA: The Rand Corporation, 1986). C)f course, many other factors are relevant. Employers can be expected to invest more heavily

in the workers they believe to be most capable and most likely to benefit fromtraining. It is also possible that workers who seek training on their own

may be more motivated, more capable, or more ambitious than workers who do not seek training.
Chapter 2-Policy Issues and Options ● 53

Table 2-3-Issue Area B: Retraining Individual Workers for Career Advancement

Option 5: Support efforts to expand apprenticeship concepts:

● As a starting point, more funding could be

given to the U.S. Department of Labor’s

Bureau of Apprenticeship and Training to

promote expansion of traditional apprenticeships. (BAT’s staff and budget have

declined in recent years). BAT also could

be directed to begin collecting information

and statistics on the continuing training of

journeymen. Some funds could also support Department of Labor efforts to work

with industry and unions to develop national standards for certification of skills

among trainees in industries that do not

now have strong traditions of apprenticeship.

Option 6: Adequately fund Federal support for vocational programs:

. The Carl D. Perkins Vocational Education

Act (or the reauthorized version of the

vocational education law) has several provisions related to adult education and

retraining, including employee training.

Option 7: Fund workplace basic skills

programs:

. One possibility: recast Federal support for

workplace literacy training from a demonstration grant approach (as now authorized under the Adult Education Act) to

on-going programmatic assistance. As part

of that effort, earmark some funds for: 1)

cooperative basic skills development efforts by small businesses and other consortia; 2) industry specific projects aimed

at developing and administering basic

skills projects to meet specific needs within

industries; 3) research, evaluation, and

dissemination on the most effective approaches (including technology based approaches) to industry.

Option 8: Extend favorable tax treatment

for employee involvement in continuing

education:

. Make Section 127 of the Internal Revenue

Code permanent, so that workers receiving employer provided educational assistance will not need to declare this assistance as income in filing their Federal

income taxes.

. Allow workers to fully deduct job-related

education expenses, and allow them to

take the deduction on the short form.

Advantages:

● The portion of the U.S. workforce that

has gone through apprenticeships is

small. A revamped Federal effort, if

successful, might raise the status of

traditional apprenticeships.

● Structured approaches for work-based

training might well be appropriate for

industries that seldom have been involved in traditional apprenticeship programs. If certification standards were

developed, benefits for both workers and

firms would likely accrue; workers would

receive credit for the training they completed -- a factor that could help them

make job transitions; certification could

make it easier for employers to select

qualified personnel.

Advantages:

● Bills proposed in the House and Senate

to reauthorize the Perkins Act would

authorize some support for employed

worker retraining, including apprenticeships. These activities could be beneficial for both firms and workers.

Advantages:

. Workbased projects have the potential to

expand provision of services to the fraction of the employed workforce with

basic skills deficiencies.

● Earmarking funds to small business and

consortia could assure that the benefits

of this program do not accrue disproportionately to large firms and their workers.

. Earmarking funds for industry specific

materials and approaches also appears

desirable, since research suggests that

basic skills developed in occupationally

specific contexts are more likely to be

transferred back to the job.

Advantages:

. Section 127 is one of the few Federal

incentives for continuing education of

workers. Making the exclusion permanent would assure that workers would

not discontinue training programs they

enter on their own simply because they

might have to pay taxes on the assistance they receive from their employers.

● Section 127 has expired several times

before Congress has renewed it—and

made its coverage retroactive. By making the exclusion permanent, Congress

could end confusion among employers

about reporting requirements and underscore its commitment to continuing education.

● Workers can not now deduct job-related

education expenses that they pay for

themselves unless these expenses (and

other miscellaneous expenses) amount

to 2 percent of their adjusted gross

income.

Disadvantages:

. Prior efforts to expand apprenticeshiptype approaches in this country produced little effect. Further efforts might

simply deflect attention from other constructive efforts to develop workforce

skills.

Disadvantages:

● Even if fully funded, the amounts made

available would not have much impact

on employer based training, and could

deflect limited funds available for improving secondary vocational education.

Disadvantages:

● Workplace based approaches have not

been extensively evaluated; this is needed

so that the most promising approaches

can be disseminated to others. It maybe

premature to proceed with an on-going

program of support for workplace literacy until evaluations of initial demonstration grants have been completed.

. Turning what is now a demonstration

grant into a continuing program of reguIar assistance could result in competition

for limited Federal funds for basic skills

programs between employers and individuals seeking adult basic education

courses on their own.

Disadvantages:

. Section 127 may cost the Federal Government $255 million or more per year in

foregone tax revenues. If the purpose of

Section 127 is to help low-wage workers

with continuing education, there may be

more appropriate and direct ways to

accomplish this.

(continued on next page)
54 ● Worker Training: Competing in the New International Economy

Table 2-3-issue Area B: Retraining Individual Workers for Career Advancement-Continued

Option 9: Evaluate ways to help workers Advantages: Disadvantages:

finance continuing education: ● Thorough evaluation would be needed to . More study is not likely to resolve the

● Among the possibilities that could be cov- determine which would be most likely to fundamental issues, which concern eduered by the evaluation: human resource be cost effective and successful. cation philosophy.

investment funds for workers, surcharges

on individual income taxes to repay education loans, and approaches for guaranteeing a specified amount of postsecondary education to all Americans.

SOURCE: Office of Technology Assessment, 1990.

Apprenticeship in the United States is not in very

good shape, and apprentices represent a declining

proportion of the workforce. During the 1980s, the

proportion of enrolled apprentices fell by one half,

from about 0.3 percent to about 0.15 percent, as

manufacturing companies discontinued long standing apprenticeship programs in the midst of layoffs

and downsizings. Many companies that discontinued their apprenticeship programs in the recession

years of the early 1980s have yet to begin them

anew.

18

Despite its problems, apprenticeship has served

industry and a small segment of the workforce well

for over 50 years; it continues to be one of the most

important means available to supply the United

States with highly skilled craft, trade and repair

workers. Efforts to rebuild apprenticeship-with

nonunion as well as union employers—will be

needed. The Federal Government might help by

doing more to promote apprenticeship and by

offering technical assistance through DOL’s Bureau

of Apprenticeship and Training. DOL also is evaluating ways to expand apprenticeship concepts to

nontraditional industries, which could require funding for demonstration projects and certification

efforts 19 (see box 2-D and ch. 8 on old and new

approaches to apprenticeship).

While apprenticeship has many strong points,

expanding or even maintaining the current level of

apprenticeship could be difficult unless existing

problems are solved. Some problems relate to

image; many nonunion employers see the formal

apprenticeship system as dominated by unions, and

are reluctant to become involved, even though there

are many successful apprenticeship programs in

nonunion fins. Federal and State roles in registering new programs and supporting existing ones are

not clearly defined, and there is little oversight of

program quality. Most apprenticeship programs

have rigid time requirements; trainees must complete all hours of training even if their performance

shows they are fully competent. Some formal

requirements—such as a requirement for 144 hours

of classroom training per year-appear inflexible

and unnecessarily prescriptive.

It is difficult to see how the Bureau of Apprenticeship and Training (BAT) could do much to expand

apprenticeship into new areas (as proposed in the

Department of Labor’s Apprenticeship 2000 activity), let alone promote traditional apprenticeship,

without more funding. BAT’s staff has been cut in

half since fiscal year 1978—from 495 full time

positions to 245 today—while its budget has stayed

about the same ($14 million). (In constant 1982

dollars, it’s budget has declined by 60 percent.)

President Bush’s fiscal 1991 budget proposal (noting budgetary constraints and high priority staffing

needs) also calls for further (albeit modest) reduction

18~e united s~te~ ~~ long ~~~~ea he b~tt~~ ~~~g Western ~dus~~~ed nations in civilian wor~oree apprenticeship prO~tl131S. h 1977,

before the decline in the 1980s, the United States ranked 14th among 16 industrialized countries in the proportion of its workforce enrolled in

apprenticeships according to the Bureau of Apprenticeship and Training.

IW.SO Dep~ent of ~bor, Work-Ba~ed~arnin8: T~~iningA~~~~’~ Workers (was~gto~ DC: U.S. Gover~ent tithg Offt@, 1989) p. 17.
Chapter 2--Policy Issues and Options . 55

Box 2-D—Apprenticeship: Old and New Models

In late 1987, the U.S. Department of Labor announced its “Apprenticeship 2000” initiative to find ways to

apply apprenticeship concepts in raising skill levels of American workers. Broadly speaking, the initiative has two

components: strengthening traditional apprenticeship, which is concentrated in construction and manufacturing,

and extending apprenticeship-like concepts to other industries and to nonunion firms. To achieve the second

component, DOL’s newly established Office of Work-Based Learning has given demonstration grants to

organizations like the AFL-CIO, the 70,001 Employment and Training Institute, and the National Alliance of

Business.

It remains to be seen whether the projects will have a lasting impact on trade associations, unions, or industry

groups. However, earlier efforts by DOL to expand apprenticeship to “nontraditional’ industies had mixed results.

DOL’s “New Initiatives in Apprenticeship” program, launched in 1973 and expanded in 1977, was not so much

a demonstration as a continuing program, lasting several years. DOL contracted with 18 unions and trade

associations to develop new apprenticeship programs. Of these, nine programs, aimed at fire fighters, emergency

medical technicians, police officers, electrical workers, machinists, auto sales representatives, auto mechanics,

vending machine repair technicians, and cooks, were evaluated in 1979 and 1980.1

The evaluation concluded that promoting apprenticeship through existing industry organizations was a

“valuable and workable concept,” but that it had “inherent limitations. ”2

In general, the union programs had

positive outcomes, while those operated by national industry associations did not. The problems with those run by

industry associations, such as the National Auto Dealers Association and the National Automatic Merchandising

Association arose from a lack of cohesive structures within the associations themselves. For example, staff levels

were inadequate to reach the many small shops belonging to the Automotive Service Council.3

While some industry associations have long and extensive involvement in training, most do not. Hence,

building up the capacity of the staff of these organizations will be critical if industry groups are to deal with training

issues at a broader and deeper level. There are special problems in reaching small businesses. Small employers are

less likely to belong to national associations than larger firms and are less likely to be aware of the training resources

these associations might make available.

l~scber ASSocia@S, be., Evaluation of the National Industry Apprenticeship Promotion Program, prepared for Employment ad

Training Administratio~ under Contract Number 23-11-78-04 (Wasbingto~ DC: National Technical Information Service, 1980), p. ix.

2

1bid., p. xii, xiii.

31bid., p. 59.

(with staff positions reduced to 239 full time Option 6: Adequately Fund Federal Support for

employees). If Congress wishes BAT to expand its

efforts, BAT will need more funds to increase staff,

to provide technical assistance, and to develop and

register new programs. Congress also might direct

BAT to work with employers, employees and State

agencies to revamp quality standards for apprenticeship programs, a move that could enhance the

portability of the apprenticeship credential. If BAT’s

technical assistance capabilities are to be strengthened, the agency will also need an adequate travel

budget, and money to train and develop current and

new staff. (As noted in Option 6, proposed amendments to Federal vocational education programs

would authorize some funds to be used for apprenticeship.)

Vocational Education Programs (Table 2-3)

The Federal Government has supported vocational education since 1917. Over the years, Congress has periodically revised and expanded vocational education programs-although Federal vocational funds account for less than 10 percent of total

expenditures. In 1984, Congress passed the Carl D.

Perkins Vocational Education Act, a law that,

among other things, placed somewhat more emphasis on vocational opportunities for adults. On

average, the States used roughly 40 percent of the

Federal funds they received under the Perkins Act to

support vocational programs at post-secondary educational institutions.
56 . Worker Training: Competing in the New International Economy

A need to reauthorize the Perkins Act has

provided the 101st Congress with the opportunity to

consider some new priorities for Federal support for

vocational education. The House and Senate passed

quite different vocational education bills (H.R. 7 and

S. 1109). As this report went to press, a HouseSenate conference committee had just reported a

vocational education bill, the proposed Carl D.

Perkins Vocational and Applied Technology Education Act Amendments of 1990, to resolve the

differences. 20 The conference committee’s version

of H.R. 7 would authorize a $1.6 billion package of

support for vocational education in fiscal year 1991

(and such sums as needed for subsequent fiscal years

through 1995). Nearly 80 percent of the authorized

funding for fiscal year 1991 would be for basic State

grants. These basic grants would be used to, among

other things:

●

●

●

●

support better integration of vocational and

academic curricula in vocational education to

give students both academic and occupational

competencies;

promote partnership efforts among industry,

labor, community based organizations, and

education groups;

support so called tech-prep partnerships covering the 2 years before high school graduation

and 2-year postsecondary or apprenticeship

programs;

support leadership and instructional programs

in technology education.

The bill also authorizes several special grants to

States of relevance to school-to-Me transition programs, apprenticeships and employer involvement

in vocational education. (See ch. 8 for discussion of

these issues.) The tech-prep education special program would be authorized at the $125 million level

for fiscal year 1991. Another special program

(authorized at $10 million for fiscal year 1991)

would provide cost-sharing support for business-laboreducation partnerships in training. Among other

things, these partnerships could be used to provide

apprenticeships and internships in industry, to encourage business and labor representatives to be

involved in the classroom, and to provide training

and counseling that would help workers retain or

upgrade their jobs. (The Federal cost-share would be

somewhat higher when small business were involved.)

Several national or federally administered programs would be authorized by the bill. Among

others, these programs would support:

●

●

●

●

development of national standards for competencies in industries and trades. The Secretary

of Education, in consultation with the Secretary

of Labor, would be authorized to make grants

to trade associations and labor organizations to

organize business-labor-education technical committees, which in turn would propose the

standards.

development of interactive teaching materials

that could be delivered through telecommunications. (Projects serving workers in need of

improving basic or vocational skills to retain

employment would be among those given

priority).

model programs for regional training in the

skilled trades, including prejob and apprenticeship training and career counseling and upgrade

training in specialized crafts.

cooperative demonstration programs, including

cooperative efforts between the private sector

and vocational education agencies to address

school-to-work transitions.

Assuming that the conference version of the bill

is ultimately enacted, the issue of funding for

vocational education will continue. A high level of

overall funding may well be needed if the new

special and national programs discussed above are to

be fully implemented. In this regard, it is worth

noting that Congress authorized (but never funded)

a special State program for adult training and

retraining when it originally enacted the Perkins Act

in 1984. This unfunded special program was not

proposed for reauthorization in the 1990 bill.

Option 7: Fund Workplace Basic Skills

Programs (Table 2-3)

As discussed more fully in chapter 6, the basic

skills problem in the United States affects many

employed workers. Inadequate basic skills are no

longer seen as the problem of the individual worker

alone; many companies have discovered that onefifth or more of their workforces need basic skills

upgrading before participating in technical training.

Demographic change in the workforce-in particular the smaller number of new workers who will

-eSemte passed the conference eornmittee version of H.R. 7 on August 2, 1990.
Chapter 2-Policy Issues and Options .57

enter the workforce in the next few years-will also

make it harder for employers to be selective,

assuming that relatively low levels of unemployment continue.

While the long-term solution to the basic skills

problem lies in better preparation of primary and

secondary school students, major efforts will be

needed to upgrade the basic skills of adult workers

for the foreseeable future. Even if new high school

graduates in the next few years have far stronger

basic skills-an outcome that, despite years of

curriculum reform, has been slow in coming-the

workforce over the next two decades will still have

many employed workers with basic skills problems

that need to be remedied. Many Federal literacy

programs do not focus on the employed, although,

by some estimates, half of the adults with limited

basic skills are working.21

Workplace basic skills remediation is not likely to

happen without more government support. Despite

expressions of concern, few employers see development of the basic skills of their employees” as a

primary training responsibility-nor should they

necessarily see it so. While firms often encourage

workers to improve their basic skills or get a high

school equivalency diploma, it is doubtful that even

10 percent of large firms make a significant effort to

upgrade the reading, writing, arithmetic, and oral

communication skills of their employees. (See table

6-2 inch. 6.) Smaller firms are far less likely to have

such programs.

Support for workplace efforts has been ad hoc

until recently. As part of the 1988 amendments to the

Adult Education Act,22 Congress authorized a

workplace basic skills demonstration program. The

demonstrations aim to foster partnerships that include educational institutions and business or labor.23

Interest in this program has been keen. For example,

in fiscal year 1988 when $9.5 million were available

for award, the U.S. Department of Education received over 350 applications requesting nearly $100

million for workplace-based literacy programs. Just

37 projects in 26 States were selected.24

Bills pending in the 101st Congress when this

report went to press would, in essence, elevate

Federal support for workplace literacy beyond the

demonstration phase. A Senate-passed bill, S.131O,

the proposed National Literacy Act of 1990, would,

among many other things, authorize $50 million in

fiscal year 1991 (and such amounts as necessary in

fiscal 1992 and 1993) for business, industry, labor,

and education partnerships for workplace literacy.

The workplace literacy program would continue to

be administered by the Department of Education, in

consultation with the Department of Labor and the

Small Business Administration. (Priority would be

given to partnerships that include small businesses.)

On the House side, an adult literacy initiative is

contained in Title V of H.R. 5115, an omnibus

education act passed by the House in July 1990. Title

V of H.R. 5115 would, among many other things,

make up to $40 million in grants available annually

through fiscal year 1995 for large-scale, strategic

approaches for improving the basic skills of the

current workforce. One purpose would be to develop

and evaluate approaches to improve workplace basic

skills that would encourage business investment and

be cost-effective for individual employers to use.

The emphasis would be on regional, State and

industrywide cooperative ventures.

H.R.5115 would also authorize appropriations of

up to $15 million annually through fiscal year 1995

for a National Institute for Literacy. The Institute

would conduct basic and applied research on literacy. It would assist in developing, implementing

and evaluating adult literacy policy. It would also

provide technical, policy and training assistance to

government agencies to help improve the effectiveness of literacy programs. The bill also has provisions for coordination of Federal and State literacy

efforts.

Both the Senate and House bills would increase

funding for other Adult Education Act activities.

ZIAS is discussti in Forrest p. Chism, “me Fede~ Role in Developing an Effective Adult Literacy Syste@” Leudershipfor Literacy, Op. cit.,

footnote 13, p. 244. The explanation appears to be that Congress, in the last few years, has given literacy mandates to several social service programs

serving specific groups of people (e.g., welfare recipients, immigrants) that are not generally available to employed workem. Most Federal assistance

for employed workers is through the Adult Education Ac~ the oldest and, until recently, the largest Federal program for adult literacy.

~~blic law 1oo-297.

~’~e WOI-@kKX Literacy prom” U.S. Department of E!ducatiou mimeO, no date.

~CoWess amrop~t~ $1 l.g ~lionfor a s~ond ro~d of demonstration projects in fiscal year 1989. Due to dekys fi aPPmv~ of o~erre@atiom

related to the Adult Education Ac~ implementation of tbis program was delayed. Grants were not awarded until May 1990.
58 ● Worker Training: Competing in the New International Economy

Whether or not a new bill is enacted, continuing

oversight and monitoring of the existing workplace

literacy demonstration projects would be useful. It is

not clear at this point that these projects will provide

the kind of experience base needed to enlist significant employer involvement in upgrading the basic

skills of their workers. After the first demonstration

grants have been evaluated, Congress may want to

review progress to determine whether fine tuning is

needed to address the needs of employed workers

and their fins.

It is important to recognize that basic skills

upgrading programs in the workplace need to be

customized to meet the needs of both business and

workers:

●

●

It

In many workplaces, the problem is not an

illiterate workforce, but rather an essentially

literate workforce that needs upgrading. Often,

the need for upgrading may not be apparent to

anyone, including the worker, until a workplace

change (such as adoption of a new technology

or management approach) requires formal training for which the worker does not have the

requisite basic skills to complete. In such

instances, the traditional adult basic education

approach could be quite inappropriate.

The most effective workplace-based approaches

often involve materials and tasks that have

direct relevance to the workers’ current jobs.

This relevancy helps initiate learning and

makes it more likely that learning will transfer

back to the job. Also, workers and employers

often perceive benefits stemming from the

program.

will be particularly important to see that the

needs of small business and its employees are met.

Very few of the initial workplace demonstration

grants focused specifically on small business. This

is unfortunate, since small firms face special difficulties in supporting basic skills education. Unlike

training intensive large fins, which may assign

staff to seek out government assistance for training,

managers at small firms seldom have the time or

resources to seek out such programs. Yet, employees

of small firms, on average, have less education than

their counterparts at larger fins. Setting aside some

funds for small business projects may be essential if

appropriate ways to involve small firms are to be

developed. Beyond this, it will require outreach

services and technical assistance to get small firms

to participate.

Option 8: Provide Favorable Tax Treatment for

Continuing Education

How the Internal Revenue Code treats education

expenses can affect workers who take courses on

their own time to improve their jobs skills or to learn

new ones. One issue concerns how the tax code

treats tuition assistance employers provide. A second issue is how the tax code treats money the

employee spends on job-related education.

(a) Employer-Assisted Education: Many employers provide tuition assistance or other educational

benefits to their workers. About 300,000 workers, or

2 percent of all post-secondary students taking

classes in fall 1986, received some financial assist25 Under a provision in the ance from their employer.

Internal Revenue Code, workers do not have to treat

this assistance as taxable income when it is provided

under an employer’s educational assistance program

that meets Federal requirements. This exemption

covers most courses, even those not directly related

to a worker’s current job. It is due to expire at the end

of September, 1990. Unless extended by Congress,

assistance received thereafter could be subject to

Federal income taxes, unless related to the employee’s current job.

The exemption was frost authorized in Section 127

of the Revenue Act of 1978.26 Since then, Section

127 lapsed several times before Congress acted to

temporarily extend the exemption, usually with

retroactive coverage. The current law places a capon

the amount of tax-free tuition assistance and excludes graduate level courses from the tax exemption.27 Participation in tuition assistance plans offered in some joint labor management training

assistance programs fell off when companies began

to withhold income tax on the value of tuition

benefits after Section 127 lapsed temporarily. (See

figure 8-2 inch. 8.)

=Steven R. ~em~ Library of Congress, Congressional Research Semice, “Employer Education Assistance: A Profile of Recipients, Their

Educational Pursuits, and Employers” (January 1989), p. 7.

‘Public law 95-600.

27~e ~u~o~zation ~t exp~~ at tie end of 1988. ~s most ~ent extemion was p~vided ~der tie -bus Budget Reconciliation Act of 1989,

which made the provision retroactive to cover the tuition assistance employees received after Dec. 31, 1988.
Chapter 2-Policy Issues and Options ● 59

With the exemption again slated to expire, Congress might consider making Section 127 permanent. In weighing such a decision, Congress may

wish to consider several factors, including the

original objectives of the law, its cost, and its

benefits. The legislative history suggests that Congress had several objectives for frost enacting

Section 127—to simplify the tax code and remove

burdensome paperwork, to make treatment of taxpayers more equa128, and to enhance upward mobility by encouraging employers to provide transferable training. The first goal has been achieved;

Internal Revenue Service personnel, employees, and

employers no longer have the cumbersome administrative burden of determining whether the assistance

is job-related.

There are mixed views about the second goal—

the extent to which Section 127 benefits less

educated or lower income workers.29 One recent

study contended that Section 127 has done relatively

little to help those with the least previous education;

however, this study compared the income of Section

127 beneficiaries with the income of other students,

including full-time students who are not employed.30

A more recent study comparing the incomes of those

benefiting from Section 127 with those of other

full-time workers concluded ‘benefits do not accrue

disproportionately to higher paid employees.”31

While the costs of Section 127 to the Federal

treasury are not known precisely, Congress’ Joint

Tax Committee estimates that, if Section 127 were

made permanent, Federal revenue losses would be

$255 million in fiscal year 1991 and $331 million in

fiscal year 1992, with the amount increasing to $372

million in fiscal year 1995. By making Section 127

permanent, Congress would forego this amount to

make continuing education more attractive to workers at all income levels. Although they may benefit

less, some less-educated and lower level workers do

benefit from the tax exemption. If Section 127 were

repealed, some less-educated workers who took

training to prepare for new jobs or occupations might

face tax payments for employer-provided educational assistance.32

If Congress made Section 127 permanent in its

current form, workers at all levels, including those

with higher incomes, could be assured that they

would not be taxed on these educational benefits. If

Congress is more concerned with increasing access

to education for those with the least skills and

incomes, it could target Section 127. For example,

the tax exemption could be made available only to

workers earning $25,000 annually or less.

(b) Individual Investments in Training: Section

127 is not the only, tax incentive for worker training

that has been affected by recent changes in tax law.

Many workers enroll in training at public and private

schools and colleges at their own expense for

courses directly related to their current jobs. They

have long been able to deduct these expenses as a

cost of employment when calculating their income

tax. However, under the 1986 Tax Reform Act, these

expenses are considered deductible only to the

extent that they and all other miscellaneous deductions exceed 2 percent of the individual’s adjusted

gross income.33 To encourage workers to invest in

their own training, Congress might place the job

related education deduction among the items that are

fully deductible and allow them to record the

deduction on the short form. Otherwise, the benefits

of the change would accrue exclusively to tax payers

who can itemize deductions on schedule A.

Option 9: Evaluate Ways to Help Finance Workers’ Continuing Education (Table 2-3)

Only part of the education needs of workers are

likely to be met by employers. Structural changes in

the economy, the likelihood that most workers can

expect to develop new job skills during their work

lives, the aging of the workforce, and the growth of

the contingent workforce all suggest the kinds of

employment security concerns that might attract

individual workers to seek education and retraining.

Often, these workers may not be able to get

~Mor to emctment, only job-related educational assistance was tax-exempt. RS e-ers decided onacase-by-casebasis which expenses qualifkd

as job-related.

z~nited Stites Code Annotated, vol. 6, Legislative History, “Revenue Act of 1978, Senate Report,” p. 6864.

30MaU op. cit., fOOtnOte 25, p. 14.

qlcoopers & Lybrmd, section 127 EmploJee EducatioMl Assistance: Who Bene@.?At What Cost? (W~hingto~ DC: Coopers& Lybrand, 1989).

321bid.

qsRic~dH.M-field ~, “Tr~g and the Law,” Robert L. Craig, cd., Training and Development Handbook, 3rd Ed. (New Yor~ NY: McGraw

Hill, 1987), p. 101.
60 ● Worker Training: Competing in the New International Economy

education assistance from their employers. Moreover, workers may not be willing to make education

investments on their own if they are concerned about

possible loss of employment.

The Federal Government might evaluate alternative incentives for post-secondary education and

training, expanding on the existing system of

education loans and grants. With some modification,

a payroll-based levy (see discussion of Option 4)

could be made to serve the continuing education

needs of employees as well as the needs of employers. The payroll tax could be levied on employers,

employees, or both to create a human resource

investment account that workers could tap when

needed during their work lives.34 Another option

would be for funds to be loaned to workers, subject

to repayment through a surcharge on their income

tax while they work.35 Various forms of individual

training accounts or funds also have been proposed.

Yet another approach would be to guarantee financing of a specified amount of post secondary education and training for all Americans at some point

during their lives.

ISSUE AREA C: LINKING

TRAINING AND TECHNOLOGY

ASSISTANCE (Table 2-4)

As discussed in chapter 4, training can make an

important contribution to efforts by firms to implement new technologies and work practices aimed at

improving quality and productivity. Yet, many

companies-by no means all of them small-have

difficulty in adopting and using technology effectively. Some managers underestimate the training

that may be needed when introducing new technology. Others may avoid new technology because of

uncertainty about whether their workforces have the

skills to use it.36 Many firms are unaware of the

training practices used by leading edge companies.

Effective use of new technology often requires

firms to change their management practices and

human resource policies. Yet few small firms have

the resources to identify the needed changes or to

implement them-a circumstance that may partly

explain the relatively slow pace of diffusion of new

technology among small firms.

Small and medium-sized businesses typically

have been slow to adopt new technology-with such

exceptions as small firms in high technology areas

or supplier firms facing customer pressures to

revamp their operations. This may change as more

companies that were once shielded from international competition are thrust into it.

There is a large gap between the best practices for

training and the training that usually takes place in

industry. Much existing training fails to be effectively transferred back to the job. Often, training

decisions are made in a haphazard way, so that the

purposes of the training are neither well defined, nor

closely related to changes in technologies or management practices. Many firms depend almost entirely on equipment vendors for training when new

technologies are installed.

While knowledge about effective training is

increasing, the process of diffusion can be quite

slow. Few firms share successful techniques with

potential competitors. Expansion of government

efforts to disseminate information and provide

technical assistance could help speed the diffusion

process. The discussion that follows looks at options

Congress might consider to better coordinate Federal technology and training activities and to support

State government efforts to provide training and

technology services to business.

Option 10: Coordinate Technology and Training

Assistance (Table 2-4)

Several Federal agencies, including the Commerce, Labor, and Education Departments, administer programs, mostly small, that provide technology

or training assistance to firms-either directly or

through the States. Other agencies, e.g., the Small

Business Administration (SBA), also administer

assistance to fins. Most of the existing training and

technology services are funded at a low level or are

demonstration projects. If these programs are expanded along the lines discussed in this report, the

~For discussio% see Training America: Strategies for the Nation, Op. cit., fOOtnOte 10, P. 60.

Sscommission on tie SkillS of America’s Workforce, op. cit., footnote 14, Supporting information V.

MFor e=ple, one Swey ofdWest v~~a~found inability of workem to make good use of new t~~ologi~ to be one of tie toP b~ers

to adoption of computer numerically controlled machinery. See Phil Shapira and Melissa Geiger, “Survey of Technology Use in West Virginia

Manufacturing-Prehminary Report” (Morganto~ WV: Regional Research Institute, 1990) pp. 3-4.
Chapter 2-Policy Issues and Options . 61

agencies will need to coordinate services to a greater

degree than currently.

The recent report by the Commission on the Skills

of the American Workforce called for all Federal

assistance to employers to be coordinated through a

Commerce Department clearinghouse.37 At least in

theory, such an approach might permit better integration of Federal assistance with the needs of firms

and their workers.

Option 11: Help States Expand, Combine

Industrial Services With Training (Table 2-4)

Several States now offer technology services to

fins, as well as separate training services, either

through State agencies or through other providers

(such as community colleges). There is good potential for better coordination of these services at the

State level. Although the current level of State

activity is modest, expansion could occur in the

future, especially with Federal incentives.

It would be logical for State industrial services to

help firms identify their training needs during their

consultations about manufacturing technology. In

reality, most extension services do little more than

make referrals to local training providers.38 There

are exceptions. The Michigan Modernization Service (MMS), set up in 1985 to help firms adopt

programmable automation, is the most salient example. MMS field representatives (engineers with

manufacturing experience) help firms develop a

technology deployment strategy. Usually, the engineer is accompanied by a training specialist, who

will evaluate the clients’ training needs, prepare a

training plan, and help the customer apply for

training assistance through the Governor’s Office

for Job Training. This special grant program supports training of current employees for company

modernization.39 Firms receiving grants may use the

funds for in-house training or outside training from

community colleges, equipment vendors, or consultants.

As pointed out in the recent OTA report, Making

Things Better: Competing in Manufacturing40, the

United States, in contrast to Japan and West

Germany, does not provide extensive institutional

support for technology diffusion to small enterprises. State technology transfer and technology/

management assistance programs for all business

amounted to about $58 million in 1988, with the

Federal Government contributing a small amount

through its own programs. It would cost between

$120 million and $480 million to provide a modest

level of extension services to 24,000 small firms per

year-or about 7 percent of the Nation’s small

manufacturers. I-f the Federal Government picked up

30 percent of the costs (as it does in agricultural

extension), the cost to the U.S. Treasury would be

$36 million to $144 rnillion.41

More than likely, an increase of this magnitude

would need to be phased in over a few years to give

State and Federal officials time to expand programs

incrementally. Congress, in the 1988 trade act,

authorized a small amount of assistance ($2 million

annually) for State industrial extension programs;

funding in fiscal year 1990 amounted to $1.3

million, but the Bush Administration sought no

funding for this program in fiscal year 1991.

If Congress were to expand this program along the

lines discussed above and in Making Things Better,

it could call on States to better integrate training

assistance with their technology extension services.

It could also direct the Commerce Department to

move aggressively in implementing the State technology extension clearinghouse called for in the

trade act. This function also might be performed by

one of the organizations representing the States. The

move would also facilitate coordination with State

industrial training activities.

State industrial training programs, like industrial

services, reach only a tiny portion of firms and

workers. OTA’s survey of State programs found that

the median program reached only 64 employers—

sTCo~ssion on tie Stis of tie Amerimn Workforce, Amen-ca’s Choice: High Skills or L.OW Wages! op. cit., fwtnote 14.

ss~a ~cent ~ey, more ~n~of~e Swe ind~~ extension services said they often or frequently referred clients to _somc~. Howevert

only 24 percent helped f- identify training needs, and less than one-ftith actually provided the training. See Phil Shapir& Towards Industrial

Extension: Modernizing American Manufacturing, January 1990.

sgJack Rmsell, “Manufacturing Base Mode-tion: A Michigan Strategy,” Ann Arbor, MI, Industrial Technology Institute, November 1988.

%.S. Congress Office of Technology Assessment M&”ng Things Better: Competing in Manufacturing, OTA-ITB-443 (WashingtoXL DC: U.S.

Government Printing OffIce, February 1990). The report discusses these State technology assistance programs, along with policy issues and options

associated with expanding their coverage, in detail.

411bid., p. 27.
62 ● Worker Training: Competing in the New International Economy

Table 2-4-issue Area C: Linking Training and Technology Assistance to Firms

Option 10: Coordinate Federal technology and training assistance to firms:

● Several Federal agencies now have programs (mostly small) that assist industry,

either directly or through the States, in

such areas as manufacturing technology

transfer, training technology transfer,

workplace literacy, and small business

development. If Congress expands these

programs, better coordination, with the

possibility of one-stop shopping for firms

or industry groups seeking assistance,

could facilitate integrated provision of services. One possibility: give the Commerce

Department, now involved with technology

transfer, lead agency responsibility for

coordinating with other agencies (especially Labor, Education and the Small

Business Administration).

Option 11: Help States expand industrial

●

●

●

services, combined with training:

Substantially expand the Commerce Department’s now tiny State industrial services program, administered by the National institute of Standards and Technology (NIST). The purpose would be to help

States expand their technology services to

firms (now less than $50 million per year)

with added support for assessment, consultation, and referrals on training. This

Option would not be meaningful unless

current funding (just $1.3 million) were expanded many fold over the next few years.

Direct Commerce to work with Labor and

the Department of Education to help

States expand and better integrate training, education, and industrial extension

services available to small firms. The NIST

industrial extension program might also be

a vehicle for training technology transfer

through close coordination with another

Commerce Department agency, the National Technical Information Service, and

the Department of Education’s newly established Office of Training Technology

Transfer.

Fundevaluation research on the effectiveness

of State training assistance to private

industry, and establish a single clearinghouse to disseminate best practice information to industry and State governments.

One of the national organizations representing the States might be willing to

undertake the clearinghouse function. The

effort would complement other state clearinghouse activities on industrial extension

and basic skills. A modest level of funding,

less than $1 million per year, would be

needed.

Advantages:

● Better coordination of services would

make it more likely that firms would get

assistance in the most useful manner.

Advantages:

●

●

Small-firms frequently need impartial

advice about the most suitable technology and training choices. Very few small

businesses are currently served by state

training or technology extension services, let alone combined services. A

more supportive Federal role could help

more States offer one stop consulting

services to small business. This type of

assistance could increase the quality

and productivity of small and medium

size supplier firms, helping them compete against firms in other countries.

Few firms now undertake evaluations of

training activities; this option would provide a low-cost way to conduct evaluations and disseminate information on

what works best in firm-related training.

It would also help policymakers at the

State and Federal levels assess relative

success and failure of different kinds of

public support for private-sector training.

Disadvantages:

● Coordination efforts are often exercizes

in paper shuffling, with few real results.

Disadvantages:

●

●

Federal support, unless well balanced,

might further exacerbate competition

among individual States for new business, to the detriment of other States. If

the individual State programs are biased

in favor of attracting new businesses into

the State, existing businesses within the

state could be adversely affected. Federal funds could substitute for State and

private funds.

There are now a plethora of clearinghouses on an assortment of human

resource topics. Adding one more could

simply add to the confusion. Coordination efforts are often haphazard.
Chapter 2-Policy Issues and Options ● 63

Option 12: Support creation of an em- Advantacges:

●

ployer institute for work-based learn- ● By and large, trade and industry associaing: tions and other employer-institutions in

To encourage employer involvement, the the United States have not been heavily

Federal Government could cost-share startup costs for a nonprofit institute with

employers. The institute could be structured to include: 1) employer involvement

in direction of the institute (with the Federal Government serving as a member by

virtue of its status as an employer); 2)

institutional location outside any Federal

agency; 3) sufficient start-up funding guarantees for several years of operation.

Once underway, the institute might perform some technical services otherwise

provided by government. Initially, the Federal cost-share might be $10 million out of

general revenues, with private employers

providing a similar amount. The employercontribution also could come from a national training levy (see Option 4 in Table

2-2).

involved in developing training for firms.

This proposal would attempt to draw

employer-institutions (including small business groups) more directly into the effort

to improve training. The organizations

could work with specific industry sectors

to build their training opacities. The

institute would be outside the government, with extensive private sector involvement in setting research priorities

and activities-an arrangement likely to

be favored by employers. The fact that

government could join the institute as an

employer would facilitate close interactions and more rapid spread of best

practice approaches between the public

and private sector.

Disadvantages:

● Employers could set up such an organization ‘on their own if they wished; the

Federal funds going to start up the

institution, therefore, might have little

impact. If the start-up phase were successful, on the other hand, pressures to

continue Federal funding would mount.

The public interest in supporting such an

institute rests in activities that would

benefit a broad spectrum of the workforce, while employers might see the

institutes mission as narrower.

●

SOURCE: Office of Technology Assessment, 1990.

and just under 4,000 employees—per year. The

Federal Government could help States develop and

diffuse information about what works and what

doesn’t work in these programs. This could pay off

not only through more effective use of State funds,

but also improved employer understanding about the

relative effectiveness of different training approaches,

and the impact of training on corporate performance.

Very few firms evaluate training. Those that do

are reluctant to share the results. State-supported

training projects can be useful sources of information about effectiveness. They, too, however, have

received little evaluation, and States have few

channels for communicating results. The National

Governor’s Association, with funding from the

Federal National Commission for Employment Policy, has undertaken some research on the feasibility

of evaluating State training assistance at specific

firms.

However, there is no existing program of ongoing

evaluation, research, and information dissemination

on best training practices to States and firms. The

Federal Government could help States perform this

clearinghouse function. Not much money would be

required. If a total of up to $1,000,000 were available, much useful information for firms and States

to consider in designing and implementing training

programs would be produced. The clearinghouse

could be run by the National Governor’s Association

or another organization representing State governments. Or, it might be part of the mission of an

employer institute on work-based learning. (See

Option 12.)

Option 12: Support Creation of an Employer

Institute for Work-Based Learning (Table 2-4)

Although technical assistance and other government supporting roles can help, employers will

continue to have the primary responsibility for

workplace training. It seems logical, therefore, that

an institute representing employers could be very

important in encouraging more firms to develop new

approaches to work-based training. Yet, few industry associations or other employer-based institutions

in this country consider training a top priority. A

recent report by the American Society for Training

and Development found that only 6 percent of

American trade and professional associations offered training programs; 3 percent provided training

as part of a certificaation program.42 With some

exceptions like apprenticeship, there are also few

national-level committees or other employer-based

institutions focused on training in specific industry

sectors or more broadly.

Nor are there many equivalents in the private

sector (or in the civilian agencies of government) to

the human resource research institutes that advise

the U.S. military with its training requirements (e.g.,

42 ~~ony p. c~nev~e,~fiaJ. G~er, Janice Villet, and Shari L. Holland, Training Partnerships: Linking Employers and Providers (Memdri%

VA: American Society for Training and Development, 1990), p. 25.
64 ● Worker Training: Competing in the New International Economy

the Human Resources Research Organization, the

Institute for Defense Analyses). A few universities

and organizations now have small programs that

explore work and learning relationships-largely

funded by the Federal Government. However, these

programs tend to be small in scale, with limited

funds, or too narrowly focused in mission to address

the full spectrum of workforce related learning needs

now emerging. Many of these centers exist on

short-term Federal grants.

A more visible institution to focus the attention of

employers on human resource issues associated with

the rapidly changing American workplace could be

helpful. Such an institution, to accomplish its

purposes, would need to encompass more than

employee training and development; it would need

to address work organization questions, incentive

systems, and management approaches, as well as the

ways in which employers address technology needs.

To succeed, such an institution would need extensive employer involvement.

Ideally, employers would act on their own to set

up and fired such an institution. The fact that they

have not done so suggests that public funds could be

needed not only for start-up but to share in the costs

of sustaining the organization in its frost few years.

However, employers and labor representatives would

need to play major roles in the direction of the

organization, and a substantial amount of the funding would need to come from employers. (With

public funds, there would need to be public accountability to assure that the institute benefited a broad

spectrum of the workforce. Once the institution

became self sufficient, the Federal Government’s

role in direction could be as an employer.) With

strong sectoral involvement, the institute might be

able to address industry specific needs, e.g., building

and strengthening the training capacities of trade

associations and other employer groups.

If given sufficient resources-say $10 million or

$15 million per year-the institute could begin to

develop the linkages among employers, the educational system, and the training community needed to

improve workforce effectiveness. The organization

could support research, development and diffusion

of best practices. It could encourage private research

through cost-shared projects with private fins. The

institute could also encourage more use of learningtechnology innovations, such as distance learning

and computer-based training, in small business, at

homes, and in other places convenient for adults.

The institute could also work to enhance the

development of the training profession through

support of graduate programs.

If Congress were to adopt a national training levy,

some money from the levy might be used to fund the

institute. How much impact the institute would have

in the long term would depend on how useful its

work was to industry.

ISSUE AREA D: IMPROVING THE

QUALITY AND EFFECTIVENESS

OF TRAINING (Table 2-5)

The high cost of training and its uncertain quality

may keep many companies from expanding training

beyond the minimum. Poor timing of training, lack

of reinforcement at the work site, and other factors

often prevent effective transfer of knowledge to the

job. Moreover, there are a limited number of people

who are conversant with the best ways to integrate

training techniques with the subject matter to be

taught.

Training can be improved when systematic approaches are used. This way, companies can select

the most appropriate and cost-effective training

techniques from the many choices available. These

choices range from traditional pencil-and-paper

approaches to use of instructional technologies e.g.,

computer-based training, interactive videodisk, and

satellite delivery with one- or two-way video and

audio links.

New instructional technologies also have the

potential to expand access to company-provided

training. As discussed in chapter 7, the growing

presence of personal computers in the workplace

make them well suited for use in training. In time,

they can help bridge the gap between formal and

informal training by bringing sophisticated performance support systems to the workstation. Many large

corporations already run satellite and other communication networks that could be used more extensively for training. Small firms, too, can benefit from

the use of new instructional technologies. The costs

of satellite receiving dishes are coming down to the

point where smaller businesses can afford them. It is

possible that, working through consortia or trade

associations, small businesses could pool the costs

of developing courses to be delivered by computer

or by satellite.
Chapter 2-Policy Issues and Options ● 65

The Federal Government has long played a major

role in supporting training research and instructional

technologies, primarily through the military. An

expanded Federal role, with more emphasis on the

civilian sector, could benefit not only private-sector

employers but also government agencies in training

their personnel. It also could benefit job training

programs aimed at the unemployed and the disadvantaged.

Option 13: Encourage Adoption of Best Practice

Training Techniques and Technologies (Table

2-5)

Best-practice instructional approaches and technologies are relevant to most of the options discussed in this chapter—whether for workplace basic

skills, industry training consortia, or industrial

extension. Whether or not Congress adopts these

options, it could direct relevant Federal agencies and

departments-whether Education, Labor, or Commerce-to develop and disseminate information

about best practice approaches and technologies.

Thus, for example, the Department of Labor, in

offering planning and technical assistance to multifirm training consortia of the sort discussed in

Option 1, might direct the consortia to information

about best-practice approaches, as might the Department of Education, in offering workplace literacy

grants discussed in Option 7. Projects using bestpractice approaches and technologies might be

given funding priority.

There are some specific activities now underway

or proposed that could contribute to better dissemination of information. As is discussed in chapter 6,

a National Basic Skills Consortium has been proposed to help States and local service providers

share information about the best techniques, including technology-based techniques, for basic skills

instruction. Officials at several Federal agencies,

meanwhile, have set up a roundtable which meets

periodically to share information on training technology. Both activities are now undertaken informally, with no funding sources. With modest funding, the two activities could be placed on a freer

foundation. If the two shared resources, initial year

funding of $350,000 to $500,000 would be sufficient

for them to build a small staff and undertake

outreach activities. In time, the State consortium

could be supported by membership fees.

The Federal Government could also continue to

play a supporting role in gaining industry acceptance

of standards for training technologies and related

software. Federal agencies have a major stake in

standard setting efforts because they are major

purchasers of training products. Some technologybased training products acquired by Federal agencies have been incompatible with other systems,

thus limiting their use. Support for standard setting

activities by the Commerce Department’s National

Institute of Standards and Technology and various

industry groups could end up benefiting trainers in

Federal agencies as well as the private sector.

Option 14: Fund the Training Technology

Transfer Program (Table 2-5)

As mentioned, many companies do not apply

systematic approaches to their training functions.

Yet, these approaches are well known-the outgrowth of earlier research and development on

training, much of it sponsored by the Federal

Government, in particular, the military. (See ch. 7

and report appendix.)

The Department of Defense (DoD)-the largest

single trainer in the United States-has made major

contributions to the development of effective training techniques and technologies. A conspicuous

example was the U.S. Air Force’s role in the

development of instructional systems design (ISD)

in the 1950s and 1960s. Originally conceived as a

component of ‘‘programmed instruction,” ISD has

proven useful in the development of all types of

training, whether delivered by hardware or more

traditional methods.43 Instructional systems design

approaches have slowly diffused to the private sector

and are widely used in training intensive companies.

DoD funding for research and development of

educational technology averaged $42 million per

year in the 1970’s and $56 million per year in the

1980s, far more than the National Science Foundation and the Department of Education, which together averaged $4 million annually in the 1970s and

$7 million per year in the 1980s.44 Military agencies

supported development of computer-assisted in43c~le~ Bl~&ke et ~., “Support for Educational Technology R&D: The Federal Role,’ contractor report prepared for the Office of Technology

Assessment, Sept. 30, 1987, p. ix. (Report prepared for Power On: New Toolsfor Teaching and Learning, OTA-SET-379, September 1988.)

441bid., p. vi.
66 ● Worker Training: Competing in the New International Economy

Table 2-5-issue Area D: Improving the Quality and Effectiveness of Training

Option 13: Encourage adoption of bestpractice approaches and technologies:

. For example, Congress could direct the

Departments of Labor and Education to

give funding priority to projects that use

best-practice approaches, and to support

dissemination of research findings, including research directed at evacuating the

effectiveness of work-based programs,

and instructional technology use where

cost-effective and appropriate.

Option 14: Fund the Federal training technology transfer program:

. The 1988 Trade Act assigned the U.S.

Department of Education responsibility for

a governmentwide training technology transfer program, but no funds have been

appropriated for this purpose to date.

Congress could provide initial funding (beginning at $3 million per year) to get the

transfer office started. Subsequent funding levels would need to be evaluated

when realistic estimates have been made

about the potential for training technology

transfer.

Option 15: Fund more civilian sector learning research/technologies:

. One possibility: earmark at least 1 percent

of Federal education and training program

funds for R&D activities (in addition to

continuing to fund existing research programs). Another possibility: establish a

special institute for learning technology

and research. A third possibility: direct the

Department of Education’s Office of Educational Research and Improvement to

give more priority to work-based learning

in its funding of research centers, A final

possibility: give the National Science Foundation a mandate to conduct research on

connections between new technology adoption, work organization, and training.

Option 16: Improve information on workbased learning:

Provide funds to the Bureau of Labor

Statistics and the Census Bureau to periodically update surveys of workers about

the training they receive in relationship to

employment;

provide funds to the Department of Education and the Census for updating the

survey of adult education (last completed

in 1984) on a 3-year schedule;

Provide funds for continued longitudinal

studies of worker careers and education;

Provide funds to the Census Bureau to

undertake special surveys and studies of

technology adoption by firms and associated human resource development practices, such as training;

Require an overall review of Federal statisAdvantages:

. Identification and dissemination of bestpractice approaches would help improve

the quality of training. Research could

bring long term improvements in quality

and effectiveness of education and training practices in both the public and

private sector.

Advantages:

. Initial funding would help to determine

how much relevance training technologies developed to meet the mission

needs of Federal agencies (such as the

U.S. military) have for private sector

trainers and the education system. If

funded, the program could in time transfer promising training approaches and

technologies to the private sector.

Advantages:

. Even highly effective transfer of military

research and instructional technologies

would only meet a small part of civilian

sector needs. These alternatives would

complement the training technology transfer efforts by creating a research and

technology base for civilian needs.

Advantages:

● Much of the current data on workplace

training is dated, incomplete, or based

on proxy data. The steps listed, if undertaken, could begin to remedy this situation.

Disadvantages:

● Requirements for best-practice application could become micromanagement if

rigid criteria were applied. Rapid expansion of research could result in funding of

duplicative or poorly thought out projects.

Disadvantages:

. The transfer activity could divert some

resources and staff from primary agency

missions. The inventory would be of Iittle

use unless the quality and utility of the

materials were assessed.

Disadvantages:

. While earmarking funds at the 1 percent

level would have Iittle impact on program

functions, it might contribute to more

frequent use of this tool, and overly

prescriptive micromanagement in the

long term.

Disadvantages:

. There probably never will be fully satisfactory information on these topics; a

data collection effort, if it resulted in

postponement of needed actions, could

be counterproductive.

tical priorities, including whether the Federal statistical agencies need to give greater

priority to workplace, education and training statistics.

SOURCE: Office of Technology Assessment, 1990,
Chapter 2-Policy Issues and Options ● 67

struction, research on human cognition, and the

development of simulations for skills training.45

With DoD still the largest sponsor of learning

research and educational technology development,

there is continued interest in transferring promising

DoD sponsored approaches to the private sector and

to educational institutions. Several other Federal

agencies, including the Department of Energy and

the Office of Personnel Management, also develop

training technologies that might be relevant to users

outside government as well as to other Federal

agencies.

As part of the Omnibus Trade and Competitiveness Act of 1988, Congress called for the creation of

a formal mechanism for transfer of training technology from Federal agencies to the private sector and

educational institutions.* The law gives the Education Department major responsibility for coordinating the development of a government-wide mechanism for training technology transfer, including the

Departments of Defense and Energy.

To date, progress in implementing the Trade Act

initiative has been slight. No funds have been

allocated to the Education Department for fulfilling

this purpose. As this report went to press, the

Department had yet to act on the law’s requirement

for an Office of Training Technology Transfer

(OTTT), although a plan for organizing OTTT was

under consideration. Another Education Department

office, the Office of Educational Research and

Improvement (OERI) has taken up some of the slack.

It is, for example, preparing a report for Congress

(due in August 1990) on conversion of education and

training software. It has also been working informally with other agencies to setup training technology information transfer processes.

However, OERI cannot assume the full responsibilities given to OTTT and its Director (still to be

appointed) under the Trade Act. In theory, the law

gives the Director powers intended to spur commercialization of federally sponsored training technology. Specifically, the Director could sell or lease

public domain copyrights and patents for Federal

training software to commercial users and could

waive the purchase price or lease fees when the

commercial user agrees to pay to make the software

usable by nonprofit education or training groups.

The law’s requirements for developing a clearinghouse on federally developed education and training

software will require funding to fulfill as will efforts

to convert training technology to non-Federal use.

While OTTT has the formal governmentwide

responsibility, other agencies also play a role. For

several years, the Commerce Department’s National

Technical Information Service has disseminated

information about Federal training technology to

interested parties. All of NTIS training technology

transfer activities, however, are undertaken on a cost

recovery or reimbursable basis with clients. NTIS

does not have funds to maintain or update products.

Nor does NTIS have the power to assign copyright.

Other agencies, including the Department of Labor’s

Center for Advanced Learning Systems and the

Smithsonian Institution, collect, disseminate, or

have demonstration facilities for training technologies.

Obviously, it takes money to conduct a detailed

inventory of federally developed training products

or to set up a training product evaluation process or

to fulfill the other requirements of the Act. A 1987

study estimated that it would cost about $1,500,000

to undertake a comprehensive inventory of federally

developed training products; far more money would

likely be required if the quality of the materials were

assessed. If Congress wishes these activities to

proceed, initial funding at the beginning level

authorized in the Trade Act ($3 million per year)

would no doubt allow staffing of the office, completion of an inventory, and further work on the

feasibility of transferring training products on a

regular basis.

Whether or not funds are appropriated for a

training technology transfer office, private sector

trainers might benefit if individual Federal agencies

did abetter job of keeping track of their own training

materials. Most Federal agencies, including some

that are extensively involved in training, do not have

policies for agency-wide inventorying of their training packages.47 This inefficiency can lead to dupli45UOS0 conge.~, OffiW of Tec~OIO~ ~~e~~men~ PO~er On: New Tools for Teaching and &arning, OTA-SET-379 (Wwh.@to@ DC: U.S.

Government Printing Office, 1988), p. 152.

~~eTr-Tecbnolo~ Tr~sfer Act of 1988 was one chapter in Public Law 100-418.

47~ ~Wption is tie DW~ent of Ener~, ~~ch& developed ~on-line da~b~e covering 3,~_ packages. Recently, the Department

of Defense has taken some steps to collect more complete information about its training products.
68 ● Worker Training: Competing in the New International Economy

cation of effort, since some training programs are

generic in nature and could be applied in many

settings. If more agencies developed inventories of

their training packages, and made this information

publicly available, private-sector access could be

increased. This information would be particularly

useful if evaluation information were included.

Federal agencies occasionally cooperate to transfer training technologies on an ad hoc basis. One of

the more ambitious of these efforts (involving the

Departments of Defense, Labor and Education) aims

to adapt the Job Skills Education Program (JSEP), a

computer-based remedial education program developed by the Army for about$11 million in the early

1980s, to civilian use. This conversion process,

formally underway since 1987, has been protracted

and expensive, entailing $600,000 in Federal funds

to date, and legal issues associated with transfer of

JSEP to commercial use are still in negotiation

between the Army and JSEP’s developer. Although

this effort may in the end pay off the process is by no

means predictable.

Even if transfer activities are stepped up, only a

small part of the Nation’s need for better training

materials can be met by converting materials developed for one purpose and mission to another

purpose. In each case, developers and users need to

evaluate whether it would be better to take existing

training programs and convert them to other uses or

to develop new materials.

Option 15: Fund More Civilian-Sector Learning

Research/Technologies (Table 2-5)

While military training approaches and technologies may continue to provide models for the private

sector, there could be significant risks in over

reliance on military funds to support the Nation’s

learning research and instructional technology needs:

. Some of the military’s research and development (R&D) is too specialized to have much

immediate relevance to private sector training.

Also, even general purpose instructional programs developed for use in the military often

have to be modified before they can be widely

used in civilian settings. As the JSEP example

above suggests, the expense involved can make

the routine transfer of military training technol-

●

ogies to the private sector difficult, expensive,

and time consuming.

Military resources are more limited now than in

the past. During the 1980s, both the Army and

Navy reduced expenditures for learning and

training research, while Air Force expenditures

increased only slightly .48 The Defense Advanced Research Projects Agency, which

played a unique role in support of research in

cognitive and computer science, has redirected

its R&D to more strictly military applications.49 These trends may reduce the opportunities for continued transfer of state-of-the-art

training techniques to the private sector even

though a formal process for technology transfer

is in place.

Thus, broader support for adult learning and other

training research and for civilian development of

learning technologies would be useful. Various

possibilities are listed under Option 15 in table 2-5.

(See also the discussion of adult literacy under

Option 7, and an employer institute for work-based

learning under Option 12.) These include:

●

●

●

●

establishing a national learning and technology

institute (an approach proposed in S. 2114

introduced in the 101st Congress);

earmarking a portion of Federal agency education and training budgets to research and

development. Earmarking 1 percent of program

budgets would result in a substantial supplemental increase in research now conducted

primarily through separately funded research

programs. Of course, funding levels in the

existing research programs would need to be

maintained for this to do much good.

directing the Education Department, through

the Office of Educational Research and Improvement, to give more attention to workplace

and adult learning issues in its research agenda.

(Two of OERI’s 18 educational research and

development centers focus primarily on

workforce issues.) This should not come at the

expense of other education research, which has

generally been funded at a low level.

giving the National Science Foundation (NSF)

a role in research on work organization and

training. For example, if Congress were to

upgrade the status of manufacturing sciences at

4sBlasc~e et al., op. cit., footnote 43, P. 59

@PoWer on, op. cit., footnote 45, p. 157.
Chapter 2-Policy Issues and Options . 69

NSF from the Divisional to the Directorate

level, it could specify that part of the mission

would include research on shopfloor training

and work organization.50

A special need, given the aging of the workforce,

is for more research on the older worker. If Congress

were to earmark research funds for adult learning,

research on the older worker could be one important

component. Alternatively, Congress could increase

funding (now minimal) for older worker research in

the budgets of the Department of Labor or the Health

and Human Services Department’s Administration

on Aging.51

Option 16: Improve the Information Base on

Work-Based Training (Table 2-5)

As is discussed in chapter 5, data on private sector

training (including the amount of money firms spend

on training and the nature and quality of training) is

limited. Most national estimates about training in

firms is based on proxy data—some 10 or more years

old-or very limited empirical information that has

been extended to the economy as a whole. While

there are many uncertainties, information deficiencies are not so great as to preclude rational debate

about policy now. Whether or not Congress expands

the Federal role, better information would help

inform future choices made by decisionmakers in the

public and private sectors.

The need for better information is clear. Therefore, Congress might choose to direct Federal

statistical agencies—such as the Bureau of Labor

Statistics, the National Center for Education Statistics, and the Bureau of the Census—to prepare and

regularly update surveys of industry training or adult

education and earmark funds specifically for this

purpose. Since many firms do not track their training

expenses carefully, there would more than likely

need to be an initial effort to develop an appropriate

survey instrument. (This need would exist even if

firms reported training data to the government as

part of a national training levy, discussed in Option

4.)

There also is a growing need for regular collection

of data about adoption of new technology by firms

and about changes related to work organization and

human resource practices. The Census Bureau,

which undertook an initial survey of manufacturing

technology in 1988, would be a logical organization

to develop this information. A relatively modest

amount of money—say $750,000 per year-would

give the Census Bureau the resources needed to

undertake periodic surveys on new technology

adoption by firms and special studies on training,

work organization, and other human resource practices in fins.

From time to time, the government also collects

information from individuals about their training.

However, this information quickly becomes dated.

The Survey of Adult Education, issued by the

Education Department’s National Center for Education Statistics, contains information about the portion of adults who received company-provided

education. The last survey, however, was conducted

in 1984. Similarly, the last detailed survey of how

workers get their training, conducted by the Bureau

of Labor Statistics in conjunction with the Census

Bureau, was undertaken in 1983.52

The shortcomings in the available data about

industry training are just one of many areas that

complicate public and private sector decisionmaking on human resource policies. Several recent

studies have pointed out the attrition in Federal

statistical series during the 1980s. Without increases

in funding, it will be extremely difficult for the

Federal statistical agencies to develop new information series without cutting into existing programs.

As an example, the Bureau of Labor Statistics, which

has suffered significant budget cuts since the late

1970s, has eliminated many of its data collection

programs and now devotes much effort to maintaining the integrity of existing data series.53 Similarly,

~or further discussio~ see U.S. Congress, Office of Technology Assessment, ‘‘U.S. Manufacturing: Problems and Opportunities in Defense and

Commercial Industries,” staff paper, May 1990.

slFor a more detailed dis~sion of the range of issues and options for older worker researc& see Frances R. Rothstein and DOIUM J. Rati, Training

and Older Workers: Zn@icationsfor U.S. Competitiveness, report prepared for the oftlce of Technology Assessment under contract N3-1630, March

1990.

szRes~ts wererepo~~ inmCmey and AIanEC~ How Workers Get Their Training, U.S. Department of Labor Bureau of Labor Statistics, Bufletin

2226, 1985. Earlier BLS surveys were conducted in 1977 for metalworkers and in 1964 on occupation training.

53As &scuwti by the Commission on Workforce Quality and Labor Market Efficiency. The CO* sion noted that BLS curtailed 19 data series in

1982 alone. See Investing in People: A Strategy To Address America’s Workforce Cn”sis, op. cit., footnote 7.
70 . Worker Training: Competing in the New International Economy

the Education Department’s National Center for

Education Statistics has had a hard time maintaining

some of its data series, including longitudinal

studies.

The need to periodically reexamine workforce

statistics-to establish new priorities where needed—

would remain even if the Federal statistical agencies

had not lost ground. While the Bureau of Labor

Statistics and the Census Bureau do reexamine their

priorities, the last major external review of

workforce statistics-conducted by a congressionally mandated commission with members appointed

jointly by Congress and the President-was completed over a decade ago.54

In another report, OTA examined Federal statistical series and possible measures for improving data

on a governmentwide basis, and found a pressing

need for an organization to reexamine Federal

statistical priorities.55 While the Office of Management and Budget has formal responsibility for

statistical policy, its implementation effort has been

flawed. Not much effort is made at present to

evaluate whether current statistical efforts really

meet contemporary needs. If Congress elects to

redirect Federal statistical policy, it might emphasize the need for Federal agencies to expand their

perspective to encompass previously underreported

areas, like work-based training. Congress also might

wish to direct the Administration to appoint an

external review group on workforce statistics as part

of its efforts to review Federal statistical policy.

The options discussed in this chapter are only a

small fraction of the possible actions available if

Congress wishes to provide broader support for

work-based training. The issue of work-based training itself is only one part of the broader spectrum of

human resource development issues now facing the

Nation. Nonetheless, the issue is an important

one-one that cannot be safely ignored.

~For a review of c~ges in data needs since r.b.is group-tie National Commission on Employment and UnemplOpent Stitistic=Ompleted its

work see Sar A. Levitan and Frank Gal.10, Workforce Statistics: Do We Know What We Think We Know-and What Should We Know?, U.S. Congress

Joint Economic Committee, Dec. 26, 1989. Levitan cbaired the Commission.

55u.s. co~~s, Offlceof T~~olonAssessmen~ Stati~tica/NeedsforA c~nging Us. Economy, backgro~dpaWr, CYJA-BP-E-58 (Washingto~

DC: U.S. Government Printing Office, Septemb= 1989).
Chapter 3

Human Resources for

Competitiveness
CONTENTS

Page

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

THE SKILL POOL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Labor Market Dynamics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Workforce Demographics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TRAINING AND COMPETITIVENESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Competing in the New International Economy . . . . . . . .

Reorganizing Production: Costs, Quality, Flexibility . .

FOREIGN TRAINING SYSTEMS: HOW DOES THE UNITED

. . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . .

STATES COMPARE? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Competition: Training Systems Abroad . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Educational Preparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Government Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Lessons From Abroad . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CONCLUDING REMARKS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

APPENDIX 3-A: THE CHANGING STRUCTURE OF U.S. EMPLOYMENT . . . . . . .

Boxes

Box

3-A. Training in the Textile Industry . . . . . . . . . . . . . . . . . . . . . . . . . .

3-B. Impacts of the German Training System on Productivity and

Two Examples . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3-C. National and

Figure

International Skills Competitions . . . . . . . . . . . .

Figure

3-1. Unemployment Rates, 1988 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

73

74

76

78

81

81

82

83

83

92

93

95

95

96

Page

. . . . . . . . . . . . . . . . . . . . . 84

Competitiveness:

. . . . . . . . . . . . . . . . . . . . . 88

. . . . . . . . . . . . . . . . . . . . . 91

Page

. . . . . . . . . . . . . . . . . . . . 80

Table

3-1.

3-2.

3-3.

3-4.

3-5.

3A-I.

3A-2.

Tables

Page

Skill Dimensions and Examples . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

Employment Growth by Size of Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .77

Occupations With Heavy Minority Representation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

Worker Training Compared . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . 86

Rank Ordering in Mathematics and Science Tests at Age 13 . . . . . . . . . . . . . . . . . . . 93

Projected Labor Force Shifts, 1988-2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .96

Employment Growth by Sector, 1988-2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

3A-3. Occupations With Greatest Number of New Jobs, 1988-2000 . . . . . . . . . . . . . . . . . . 97

3A-4. Fastest Growing Occupations, 1988-2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .97
Chapter 3

Human Resources for Competitiveness

SUMMARY

Principal findings of this chapter

following:

include the

1. Quite independently of skills required for

dealing with new technology, turnover and

new business formation create a continuous

need for training—a need some American

companies meet much better than others. Some

of this training entails little more than introducing new employees to the workplace. Some

seeks to build commitment to corporate goals.

Other training programs include extensive instruction in task-specific technical skills-e. g.,

operating a nuclear powerplant.

2. Small firms-those with 100 employees or

less-create many of the new job opportunities

in the U.S. economy. Such firms face special

training problems. Many lack experience with

training, and the resources to afford it. Typically experiencing higher than average rates of

turnover, small companies are reluctant to

invest in their employees. Policies that support the training needs of smaller firms have

a special claim, particularly because these

establishments provide so many entry-level

jobs for younger workers.

3. Four classes of workers likewise have a special

claim on training: young, entry-level employees; older Americans; displaced workers; and

minorities.

●

●

Because younger workers change jobs so

frequently, many employers give them only

the minimum training necessary. Given the

importance of early training<. g., in forming attitudes toward work and motivating

continuing learning-there is a clear public

interest, independent of the interests of

employers, in supporting training for younger

workers.

With the labor force steadily aging, there

is an equally clear public interest in

training for older Americans. In the past,

companies have been reluctant to invest in

training for older blue- and grey-collar employees. With fewer entry-level workers, this

will have to change.

- .

●

●

Displaced workers typically find themselves

unemployed through circumstances outside

their control, while training opportunities of

any kind drop sharply during recessions

(because employers seek to cut costs). This

conjunction of layoffs and declines in training points to a need for public policies that

pay consistent attention to the training

needs of displaced workers and that kick

in added support during business downturns.

In the past, access to the best training (e.g.,

apprenticeships) was largely limited to white

males. With new workforce entrants more

likely to be minorities and immigrants—

many of whom have relatively poor basic

skills (e.g., reading, arithmetic)-new training practices and programs suited to their

needs will be required. Training is particularly important because, more so than in the

past, the right certificates, diplomas, and

degrees will be needed to start on an upward

career track.

4. The outcomes of international competition—

particularly the success that countries like West

Germany have had with relatively formalized

systems—suggest that the United States will

need a much stronger commitment to training

in the future. Indeed, the U.S. training system

seems remarkably underdeveloped compared

with our leading competitors. Most American

companies look frost at the costs of training, and

at the time workers spend away from the job.

To them, shorter training programs are better

training programs. In both Germany and Japan,

in contrast, training is viewed as an investment.

The German and Japanese systems are very

different, but both are more extensive and more

effective than that of the United States.

For many decades, the United States drew

strength from a remarkable pool of skills, one fed by

immigration and by long standing commitment to

universal education. Immigration still contributes,

particularly in engineering and science, but today

other countries can boast of superior primary and

secondary education. And if the U.S. economy is the

most dynamic the world has ever seen, the Nation’s

–13 –
74 ● Worker Training: Competing in the New International Economy

training system is not. Companies have been reluctant to invest in training. Other institutions have

failed to keep up with emerging needs. As a result,

the United States is operating with a glaring weakness in international economic competition. That

half of the labor force that is below average in

education, training, and skills is poorly prepared

compared to their counterparts in a number of the

Nation’s principal economic competitors.

Nearly half of all Americans now take some

college courses. The education and training system

serves these people relatively well, especially those

who complete college and goon to white-collar jobs

in the professions or in management. The system

does a poor job of meeting the needs of people who

do not pursue higher education, who may not even

graduate from high school. Countries as different as

Germany, Japan, and South Korea work much harder to educate and train, not only the upper half of

their labor forces, but the lower half.

For the United States, the message conveyed by a

multitude of surveys-of educational credentials

(high school graduation rates, table 1-3 in ch. 1),

achievement (basic skills, ch. 6), workplace capabilities (ch. 4)----is simple and direct: the training

system and the schools—more properly, society as

a whole-do a poor job of serving the economically

disadvantaged, particularly blacks and other minorities. In the years ahead, the drive to raise productivity and improve the competitiveness of U.S. industry

could help transform the ongoing debate over social

equity into one over economic growth. For the first

time since World War II, the needs of the workplace

and those of the disadvantaged could merge. This

will not happen by itself. It will take commitment to

better preparation for work—by individuals, by

schools, by employers, by government.

Lack of skills not only hurts the people in the

bottom half as individuals, it hurts the economy.

These people will lose the most if U.S. industries

continue to decline competitively: they will be laid

off first, or find the pressure of international

competition forcing their earnings downward. Many

have already found ladders of upward mobility

pulled down, as the invisible logic of computerbased systems makes abstract thinking more important than manual skills, and companies rely on

educational credentials to find trainable workers.

In the end, the Nation’s economy must support

everyone at some level. This simple fact creates the

fundamental justification for public investments in

training. The lagging quality of the U.S. labor force

slows economic growth and drags down the standard

of living for everyone-not just those who suffer as

individuals from poor education and training. By the

same token, abetter qualified labor force will benefit

society as a whole.

THE SKILL POOL

Companies hire from local, regional, and national

labor markets, and draw on internal labor markets

when they promote current employees or move them

laterally into new jobs. A company’s choices reflect

the pool of people and skills available to it externally

and internally, relative to its needs. Those needs

depend on its place in the economy. Service

industries employ a mix of people differing from that

in manufacturing; the knowledge-based services

(including education, finance, and business services) draw on quite different sets of skills than the

traditional or tertiary services (e.g., retailing, transportation).1 As summarized in app. 3A, at the end of

this chapter, U.S. employment has been growing

rapidly in knowledge-based services (and in a few

knowledge-intensive manufacturing sectors). But

because high-technology industries remain small

compared to the overall economy, job creation

concentrates in sectors such as retailing and occupations such as clerk and custodian.

The skills available in the labor market drive

economic growth and competitiveness. The United

States has always revered its inventors and entrepreneurs, Edison and Carnegie in the past, Steven Jobs

and Mrs. Fields today. Nor is it only the storybook

figures that matter. Nearly any enterprise will need

a substantial range of skills to survive and prosper:

‘‘unskilled’ blue-collar workers; middle-level grey -

collar employees (e.g., technicians); white-collar

salespeople and bookkeepers; supervisors, administrators, and managers.

Iu.s+ conge~s, (jffi~e of T=~oloOA~~essment, ]nter~tio~lCompetition in Se~ice~, OTA.ITE-328 (Washington, DC: U.S. Government

Printing Office, July 1987), ch. 7 and 8. See especially pp. 228-230 for tbe distinctions between knowledge-based and tertiary services, as well as

traditional and knowledge-intensive manufacturing. Also see table 3A-2, in the appendix to this chapter.
Chapter 3-Human Resources for Competitiveness . 75

People’s skills expand and develop over time, as

they attend school, enter the labor market, gain

experience, move from company to company. Some

of the practical skills essential in the workplace

come largely from everyday experience. People

learn one set of problem-solving, social, and communications skills in school, quite a different set at

home, on the playground, learning to cook and to

ride a bicycle. Both sets are important.

Simple tests exist for measuring simple skills:

manual dexterity; visual acuity. Basic skills can be

surprisingly difficult to measure. Such skills remain

important, but competitive manufacturing and service firms in a high-wage economy also require

higher order skills-judgment, reasoning, interpersonal communication. These are still more difficult

to measure, to teach or train for.2

Table 3-1 classifies skills from lower order

(manual) to higher (cognitive, social), and from the

academic skills associated with schooling to the

practical skills learned in daily life (of which school

is part). The three broad classes in the left hand

column build on one another in the sense that people

normally employ mental/cognitive skills in the

course of activities that also call for manual skill.

And by definition, social and communications skills

have mental/cognitive dimensions. Because higher

order skills are harder to measure with tests,

employers today rely more heavily than they once

did on interviews, even when hiring unskilled or

semiskilled workers. As the examples in the table

suggest, many everyday or practical skills can be just

as important in the workplace as academic skills

learned in school or technical skills learned in

specialized training programs.

As more American companies in both manufacturing and the services adopt production systems

that call for people to work in groups, social skills

and communication become more important. (Ch. 4

explores patterns of work organization in some

detail, while box 7-F inch. 7 discusses technologies

for automated training in interpersonal skills.) Work

groups, moreover, are typically expected to help

solve problems involving not only routine but

unexpected events (e.g., equipment breakdowns).

Because measures of skill, and testing procedures

for skills, remain primitive, employers frequently

use educational credentials as surrogates (even

though education often fails to predict on-the-job

performance). This trend has begun to widen the

split in the U.S. labor market between a lower tier of

poorly paid unskilled and semiskilled jobs, many in

the services, and an upper tier, or superstructure, of

well-paid jobs, many of them professional and

managerial. 3 To the extent that employers rely on

educational credentials as a screening device, passage from the lower tier to the upper grows more

difficult. Although the upper tier is growing rapidly,

many people lacking a saleable combination of

educational credentials, motivation, and training and

experience (a moving target as the economy changes)

will never get a chance to compete for these jobs, or

to show their ability to take on more challenging

work. Fewer ladders will extend from the lower tier

to the upper—a trend already quite evident in sectors

ranging from textiles to retailing. Compared with

earlier decades, the middle levels will be sparser.

Reorganized manufacturing firms, for example,

frequently cut back or eliminate jobs for first-line

supervisors (ch. 4)-jobs once filled largely by

promoting production workers. As illustrated by

examples from the textile industry, later in this

chapter, grey-collar technical jobs increasingly require education or training credentials secured

outside the workplace; on-the-job experience might

suffice for learning to repair wholly mechanical

machines, but not those that incorporate digital

electronics.

%I@her order skills are poorly understood, and so too teachingltminin@eaming. See, for example, Thinking andLearning Skills, Volume 1: Relating

Instruction to Research, Judith W. Segal, Susan F. Chiprmq and Robert Glaser, eds. (I%llsdale, NJ: Erlba~ 1985), especially Peter G. Poison and

Robin Jeffries, “Instruction in General Problem-Solving Skills: An Analysis of Four Approaches,”ch. 12, pp. 417-455; Pracn”cal Znte21igence: Nature

and Origins of Competence in the Eve~day World, Robert J. Steinberg and Richard K. Wagner, eds. (Cambridge, UK: Cambridge University Press,

1986); and Richard E. Nisbett, Ge&freyT. Fong, Darrin R. h~~ and Patricti W. Cheng, “TeachingReasoning,” Science, Oct. 30, 1987, pp. 625-631.

qFor a more extensive discussio~ see International Competition in Services, op. cit., footnote 1, chapter 7. -’% a shpk exmpk of the shifts -g

place, note that early generations of computer systems deskilled many jobs in services like banking and insurance. Companies replaced clerical workers

and bookkeepers with tita-entry clerks (fewer relative to the volume of work) plus a srnallcoterie of supervisors, and the systems specialists who oversaw

the rnainflame computem of that era. With later generations of decentralized computer systems, much of the routine data entry work also disappeared.

The remaining jobs tend to require at least some problem-solving skill. Nonetheless, these remaining jobs have carefully delimited boundaries,, offer

Ihnited opportunities for upward mobility, and can be nearly as routinely repetitive as yesterday’s keypunching.
76 ● Worker Training: Competing in the New International Economy

Table 3-l—Skill Dimensions and Examples

Skill type Academic Technical Everyday/practical

Manual . . . . . . . . . . . . . . . . . Penmanship Welding; short-order cooking Painting walls; changing a flat tire

Mental/cognitive . . . . . . . . . . Writing an essay Inspecting welds; institutional menu plan- Furnishing a room; driving in traffic

ning

Social/behavioral . . . . . . . . . Teaching composition Designing playground equipment; serv- Giving a dinner party; managing a

ing meals in a restaurant car pool

SOURCE: Office of Technology Assessment, 1990.

These shifts, already underway if slowly paced,

could have profound implications, not only for the

competitive ability of U.S. industry, but for social

stability. More than likely, the mismatch between

job opportunities and labor force abilities will

continue to widen. Through lack of training and

channels for upward mobility, industry may be

cutting itself off from needed skills. Even when

unemployment stood at 9 or 10 percent, in the early

1980s, a million or more jobs remained unfilled

because employers could not find people with the

right skills. Meeting the needs of both individuals

and industry will require better training in taskspecific skills, as well as problem-solving capabilities and social skills. Basic skills and education must

provide the foundation.

Labor Market Dynamics

The Demand for Training

Churning in the economy far exceeds net job

creation as a driving force for training. The number

of newly hired people entering a given industry (or

occupation) in a single year can easily exceed the net

total of jobs created in that industry over a full

decade. This is true even for rapidly growing

industries and occupations. Labor mobility makes

employers reluctant to provide training.

Of the nearly 20 million Americans that take a

new job each year (in a civilian labor force approaching 125 million), no more than one-quarter can claim

previous experience in the same occupation (these

tending to be managers, professionals, or technical/

craft workers).4 Some 15 percent of the labor force

may need training each year simply because of

mobility and churning. Many, unfortunately, do not

get it.

In good times and bad, mobility in the U.S.

economy remains high. When unemployment rates

fall, people move voluntarily-often to take jobs at

higher wages. When unemployment rises, people

hold onto their jobs but may lose them involuntarily

to layoffs. Young people switch jobs much more

frequently than older workers. Nearly 80 percent of

teenagers have been in their current job for less than

a year, compared with just under 10 percent for those

aged 60-64. Workers under 30 account for about a

third of total employment, but 56 percent of those on

the job for less than a year. Lateral moves by older

workers, particularly men with blue-collar manufacturing experience, are likely to be a consequence of

layoffs rather than choice.

A good deal of the total need for training, then, as

opposed to ongoing workplace learning, arises

simply from churning. People move from job to job;

entrepreneurs start new companies; existing companies grow, promote people, move them horizontally.

These events occur with much greater frequency in

the United States than in Western Europe or Japan.

American companies must integrate new employees, many of them young workers with relatively

little experience, into their organizations on an

ongoing basis.

Even firms with shrinking employment levelsbecause they have lost business, because they have

sold off divisions, or because of productivity improvements—may have to bring in new people to

stay ahead of attrition. Companies laying workers

off may need to reassign and retrain those remaining.

Births and deaths of firms also add to labor market

turbulence. New small firms face special training

needs: most of them lack experience in providing

training and the resources to pay for it.

dJ~es P. Markey and William PZ@S n, ‘‘Occupational Change: Pursuing a Different Kind of Worlq’ A40nthlyZ-ubor Review, September 1989, pp.

3-12, which analyzes data collected in the January 1987 Current Population Survey-source of the most recent information on U.S. labor mobility.
Chapter 3-Human Resources for Competitiveness ● 77

Job Creation and Small Firms

Net growth in employment equals the sum of jobs

created by new firms, plus expansion by existing

firms, minus the jobs that disappear when establishments close their doors or lay off workers. In recent

years, small enterprises-those with less than 100

employees—have accounted for a near-constant

35-36 percent of total U.S. employment.5 Births and

deaths of these firms number in the hundreds of

thousands each year.

Over the 1976-86 period—the latest for which

such data are available-the United States generated

slightly more than 22 million new jobs. This total

was the result of 45 million new jobs created by

startups, and 14 million jobs generated through

expansions, offset by 29 million jobs lost through

establishment ‘‘deaths’ and 8 million lost to contractions. Table 3-2 shows that, over this entire

10-year period, firms with fewer than 100 employees

and those with more than 500 employees generated

roughly equal numbers of jobs. However, during the

recessionary period of 1980-82, very small firms—

those with fewer than 20 employees-created almost all the net new jobs. Big firms tend to cut back

on training during recessions, and small firms do

little formal training under any circumstances, so

that training opportunities drop sharply when business slumps.

New small firms tend to grow by fits and starts,

often responding differently to changing economic

conditions than their larger, better established counterparts. In a young computer software or biotechnology company, a rapid growth spurt may be

followed by employment decline, as the firm struggles to develop its products, begin production, enter

the marketplace, and finally expand (at which point

it may begin generating many new jobs). Other

enterprises remain small by choice: many are started

by people who prefer to be their own boss, but have

no particular desire (or ability) to turn a small

business into a large one. Neighborhood retailers

and franchise outlets typify these enterprises, a much

Table 3-2—Employment Growth by Size of Firm

Employment Percentage share by size of firm

growth (number of employees)

Period (millions) 1-19 20-99 100-499 500+

1976-86 22.3 26.2% 17.470 13.6% 42.8%

1980-82 1.5 97.8 -5.9 3.5 4.5

SOURCE: Handbook of Small/Business Data (Washington, DC: U.S. Small

Business Administration, 1988), table 8-13, p. 259.

larger group than entrepreneurial startups; when

they disappear, it is more likely because of poor

management (or retirement, a lost lease, or some

such reason) than that they have over-reached.

High rates of births and deaths among small firms

contribute to a rate of labor market mobility in the

United States exceeding that in economies with a

less pronounced entrepreneurial dynamic. This form

of churning creates background noise that can make

it difficult for both companies and workers to detect

labor market signals. Businesses may downplay the

need for training if contractions and closures elsewhere continually replenish their labor supply, while

workers lacking stable occupational prospects may

be reluctant to invest in training on their own.

In part simply because of their high labor turnover, small companies invest less in training than

large firms. Many workers leave small firms because

they can earn more by moving to a bigger enterprise. 6 But smaller establishments provide a major

port of entry to the labor force for young people (men

especially-women are more likely to take jobs with

large enterprises), who get general training as well as

job experience, then ‘cash in’ by moving to another

employer. This puts a double burden on small

companies, in addition to their typical lack of

resources and training experience. First, small enterprises rarely have enough workers in need of training

at any one time to justify an organized effort.

Second, those workers who do get training will,

everything else the same, be more likely to leave a

job with a small firm. As a result, small firms

SHan~bookofS~l/B~iness Data (Washingto~ DC: U.S. Small Business Administration, 1988), table 6-6, p. 143. The job creation ti~in the n-t

paragraph come from table 6-12, p. 257. The Small Business Administration maintains the only U.S. database linking job creation with fro-level

business activities.

6David Dn~ry, wrill~ Dickens, and Christopher *> “Labor lhrnover and Worker Mobility in Small and Large Firms: Evidence from the

SIPP,’ report prepared forU.S. Small Business Administration by Berkeley PI arming Associates, Berkeley, CA, December 1988. Data from the Survey

of Income and Program Participation (SIPP) show that turnover rates for 1984-85 were higher in companies with fewer than 100 employees, after

adjustments for differences in industry, occupatio~ wages, and hours worked, and that employees who leave a small fm for a larger one earn higher

wages on the average.
78 ● Worker Training: Competing in the New International Economy

provide less formal training than larger companies.7

It seems fair to conclude that it is often not in their

interests to do more.

Workforce Demographic8

Demographic changes will compound the growing needs for training created by international

competition and new technology. At a time when

labor force projections show growth rates of about 1

percent annually, the economy is expected to

continue growing at two or three times that rate.

Labor shortages may arise in some regions and some

sectors. Average ages will increase, with the graying

of the labor force combining with an increasing

fraction of minorities to create a new set of training

needs.

Shifts in Composition

Over time, as the labor force expands, its composition shifts (see app. 3-A, table 3A-l). Young

people leave school and seek jobs, immigrants enter

the labor market, older workers retire. With the baby

boom bulge past, overall labor force growth has

slowed. During the late 1970s, the civilian labor

force grew by almost 3 million people each year; by

the late 1980s, the increase had fallen to 2 million per

year.

9

In other ways as well, the U.S. labor market has

changed quite dramatically over the past decade.

Unemployment has been cut almost in half, to 5-plus

percent compared with nearly 10 percent in 1982 and

1983. At the same time, labor force participation has

reached a new high. Until the middle 1970s,

participation had remained relatively stable at 58-60

percent. Today, two-thirds of Americans aged 16

and over hold a job or are actively seeking work. The

big change: more women in the workplace. Nearly

twice as many women held jobs in 1989 as in 1969

(53 million compared with 29 million).l0

During the 1990s, women will account for nearly

two-thirds of U.S. employment growth. Younger

women now join the workforce at rates approaching

those for their male counterparts.11 Historically,

black women have been more likely to work than

white women, except in the youngest age groups.

This difference in participation rates will probably

shrink somewhat, as more white women work.

Although more women have been finding jobs in

traditionally male occupations-e. g., the professions—women’s wages relative to those of men

have improved only slightly over the last two

decades. Still, with the rise in employment opportunities for women, the past becomes a poor guide to

the future. For example, considerable uncertainty

attaches to future labor force participation rates of

older female workers, which BLS predicts will rise

for those aged 50 to 64, but decline for those over 65.

Many women work part-time or take temporary

positions, sometimes (like men) because this is the

only work they can find.12 From the middle 1960s to

TSheldonHaber, Joseph Cordes, and James B*, ‘‘Employment and Training Opportunities in Small and Large Firms,” report prepared for the U.S.

Small Business Administration by Sirnon & CO., Potomac, MD, June 1988. This report also draws on SIPP data, which show, for 1984, that only 5.4

percent of workers in companies with fewer than 100 employees had ever participated in a formal training program with that employer. The percentage

of workers reporting such training was twice as high (10.4 percent) for those with jobs in firms having more than 100 employees. About 15 percent of

each group had received tmining outside of their present fm, suggesting that workers with previous training are hired in roughly equal proportions by

small and large firms, but that those in large fms are twice as likely to receive jobspecific, in-house training.

gMuch of the analysis in this section is based on Willie Pearso~ Jr., “Demography of the wor~or%” Working Paper #1, Office of Technology

Assessment, Mar. 22, 1989. Unless otherwise noted, data and projections come from the moderate growth scenario of the Bureau of Labor Statistics

(BLS), as summarized in the November 1989 h40nthly Lubor Review. This scenario assumes a 2.3 percent (I@) amual increase in gross mtional product,

1.2 percent annual increase in the labor force, and 5.5 percent unemployment.

Following BLS practice, all Hispanics are treated as a single group in the discussion and tables in this chapter. Nearly 95 percent of people of Hispanic

origin are classed as white, but in the text and tables that follow,‘‘white” refem to non-Hispanic whites only.

gErnp/OYmenr utiEar~i~gS, vol. 37, January 1990, table 1, p. 160.

loEmp/oyment and Earnings, vol. 37, J~uary 1990, table 2, p. 161.

AkhoughBLS expects participation rates to edge upwards towards the 70 percent marlq a relatively low level of population growth means that labor

force growth could be no more than one percent annually during the early 1990s. And depending in part on future rates of immigratio~ the labor force

growth rate could drop to zero by 2020. See U.S. Congress, OffIce of Technology Assessment, Technology and the American Economz”c Transition:

Choicesfor the Future, O’E4-TET-283 (Washington, DC: U.S. Government Printing Office, May 1988), pp. 474-475.

llBe&een 1975 and 1986, labor force p~cipationrates for mothtis of chil&en less~ a ye~ old doubled, from 26 percent to 50 percent; more

than half of all married women with children aged one and up now work most of them full time. Today, mothers with children under age six represent

the fastest growing segment of the labor force. See “Needed: Human Capital,”Business Week, Special Report, Sept. 19, 1988, pp. 100-141; William

B. Johnston and Arnold W. Packer, Wor~orce 2000: Work and Workersfor the 21st Century (Indianapolis, IN: Hudson Institute, 1987), p. 95. Fifty-two

percent of mothers hold full-time jobs, but only 13 percent want to.

lzon temporw and pm.~e emplowent, see ]nternarional Competition in Services, OP. cit., footnote 1+ PP. 243-250.
Chapter 3-Human Resources for Competitiveness ● 79

the middle 1980s, the fraction of the workforce with

part-time jobs increased from about 15 percent to

more than 20 percent. The increase in contingent

employment—part-time, temporary, and contract

work, plus self-employment-reflects, on the one

hand, the choices of people seeking time to be with

their families and the freedom to pick and chose

what they wish to do. But it also reflects the drive for

flexibility in business and industry. As noted in the

next chapter, by moving from a large core workforce

to a smaller group of more-or-less permanent

employees, coupled with temporary and contract

workers brought in as needed, businesses can adjust

more easily to shifting competitive circumstances.

They can also save on their wage bills: part-time and

temporary employees rarely receive the fringe benefits that go to permanent staff.

The people who will hold jobs in the first decade

of the next century have already been born; most of

them are working now. Many of the new workers

will be black, Hispanic, or members of some other

minority group. Nonetheless, three-quarters of the

U.S. labor force will be (non-Hispanic) white.

Because of the size of the workforce, it takes many

years for its composition to change much. Even so,

as table 1-2 in chapter 1 showed, by 2000, women

will make up nearly half the labor force, and

minorities one-quarter. There will be far fewer

young people, and swelling numbers of middle-aged

and older workers.

By the end of the century, those in the baby boom

generation will be entering their 40s and 50s. As this

group passes into and through their middle years, the

median age of the workforce will move upward from

36 currently to 39-plus by 2000.13 Those aged 45-64

will reach a peak expected to be about 28 percent of

the workforce in 2010, after the last of the baby

boomers pass into this age range.14 As these people

move on into the over-65 category, it will expand

rapidly-horn 13 percent of the population in 2010

(only slightly above the current level), to more than

20 percent in 2030.

While labor force participation rates have been

declining for men over 50, the training system will

plainly have to adapt to a steadily aging population

during the frost several decades of the next century.

Employers have traditionally been reluctant to

invest in training for older workers. On the other

hand, older workers tend to be much less mobile,

which should help dampen employers’ fears of

training people only to see them move on to other

jobs.

Minorities

New labor force entrants will come increasingly

from minority groups simply because of population

trends: blacks, Hispanics, and recent immigrants

represent growing fractions of the overall U.S.

population. Other factors are secondary, although

not insignificant. For instance, falling labor force

participation rates among black men mean that black

women and Hispanic men could outnumber them in

the workforce by the end of the century.15 Already,

labor shortages in some suburbs stand alongside

high levels of central-city unemployment, predominately among minorities.

Minorities (like women) will be most heavily

concentrated among younger workers in entry-level

jobs—in principle, prime candidates for training. In

1988, blacks and Hispanics made up 23.6 percent of

the labor force aged 16-24, a share expected to

approach 30 percent by 2000.

With exceptions including a number of Asian

groups, minorities enter the labor force with less

schooling than average, and often with educational

attainments below average for their grade level.

Many more students drop out of high school in cities

and States with heavy concentrations of minorities:

nationwide, about 85 percent of young people

lsme median age was even Mgher in the euly 1!360s, peaking at 40,5 years-a consequence of low birth mtes d-g the depression of tie 1930s.

Howard N. Fullerton, Jr., “New Labor Force Projections, Spanning 1988 to 2000,” Monthly Lubor Review, November 1989, table 6, p. 10.

14Projection$ of the Population of the United state~, @ Age, Sex, ~~ Race: ]988 to 2080, current population Reports, Series P-25, No. 1018

(Washington, DC: Department of Commerce, Bureau of the Census, 1989), table 4, Middle Series.

lsproje~tiom for Hispanics are sensitive to assumptions concerning future levels of immigratio~ both legal and illegal. Immigrants as a whole

represent an extraordinarily diverse group, one that includes scientists and engineers born in India and China, and physicians and nurses from the

Phillipines, as well as both skilled and unskilled workers from Latin America. (Rates of business ownership are much higher for Asians than for other

minority groups-55 per 1,000 in the populatio~ versus 13 per 1,000 for blacks and 17 per 1000 for Hispanics. Wendy Ma.nning and William O’Hare,

“The Best Metros for Asian-American Businesses,’ American Demographics, August 1988, pp. 35-37, 59.)

On immigrants in the U.S. labor force more generally, see International Competition in Services, op. cit., footnote 1, pp. 250-252. Also The Effects

of Imnu”gratz”on On the U.S. Economy and Labor Market, Immigration Policy and Research Report 1 (Washingto~ DC: Department of Labor, Bureau

of International Labor Affairs, 1989).
80 ● Worker Training: Competing in the New International Economy

graduate from high school, but the rate in Louisiana

is barely 50 percent.l6 A growing mismatch between

the skills of this part of the labor force and the jobs

available in the U.S. economy will place far greater

demands on the training system (and the schools). A

glance at the unemployment rates in figure 3-1

suggests the difficulties faced in assimilating younger

blacks, in particular, into the workforce. This is the

stiffest test the Nation’s education and training

system will face in the years ahead-a test that it

shows little sign of being prepared to meet.

Employers rely heavily on educational background in deciding who to hire, particularly when it

comes to young people with little or no job history.

On average, more years of schooling mean higher

earnings. People with more education are more

likely to participate in the labor force, less likely to

experience bouts of unemployment. 17 It is no

surprise, then, that blacks and Hispanics earn less

than other workers, and find jobs that tend to be

concentrated in occupations expected to grow at

below-average rates (App. 3A) or to decline. Demographic patterns are largely fixed. If they will not

change, the education and training system will have

to.

What kinds of occupations have minority workers

traditionally found? Blacks comprise 10 percent of

the workforce. Table 3-3 lists the occupations in

which blacks held 15 percent or more of all jobs in

1988. They tend to be low in pay and in skill

requirements. Employment in the health services

will expand rapidly in the years ahead, but as noted

in app. 3A (table 3A-4) the fastest growing occupations will require credentials. Meanwhile, opportunities for operators, fabricators, and laborers will

remain static, and household workers will decline in

number.

Demographic shifts are reinforcing the trend

toward a two-tier structure in the U.S. labor market.

With minorities comprising a growing fraction of

25

20

15

10

5

0

Figure 3-l—Unemployment Rates, 1988a

Unemployment rate (percent)

White Hispanic Black

I All workers ~~! Aged 16-24

a Adding discouraged workers who have given up seeking jobs would raise

these percentages somewhat; the U.S. Government defines the unemployed as including those seeking work and unable to find it, but not people

who have stopped looking for jobs. The latter are also excluded from labor

force totals. In 1988,94.5 percent of white men aged 25-54 were counted

as Iaborforce participants, compared with 88.7 percent of black men in the

same age group.

SOURCE: Ronald E. Kutscher, “Projections Summary and Emerging

Issues,” Monthly Labor Review, November 1989, table 5, p. 72.

Table 3-3—Occupations With Heavy Minority

Representationa

Percentage of jobs held by

Blacks Hispanics

Health services . . . . . . . . . . . . . . . 28% 6%

Custodial . . . . . . . . . . . . . . . . . . . . 23 15

Household workers . . . . . . . . . . . . 23 17

Mail clerks and messengers . . . . 22 9

Operators, fabricators,

and laborers . . . . . . . . . . . . . . . 15 11

Occupations in which blacks held 15 percent or more of all jobs in 1988.

Blacks made up 10 percent of the workforce in 1988, Hispanics 7

percent.

SOURCE: George Silvestri and John Lukasiewicz, “Projections of Occupational Employment, 1988-2000,” Month/y Labor Review, November 1989, table 11, p. 84.

IGRobert B. Reich, Ed~c~~iOn andthe N@ Economy (Washington, DC: National Education Association 1988), p. 19. Americans living in the SoU@

regardless of race oretbnic background, report less education than those living in other parts of the country; more than 35 percent of all adult Southerner

Iackahigh school diploma. Employment and Training Reporter, Dec. 7, 1988, pp. 344-345. Black Southerners get less education than white Southerners,

and rural residents less than city dwellers.

For the country as a whole, 57 percent of black and about half of Hispanics (but only on~quarter of whites) live in central cities with generally poor

schools and poor job prospects. Four in ten blacks reside in one of 11 cities, of which only two, greater Los Angeles and Atlanta, have experienced

relatively high rates of economic growth in recent years. Workjorce 2000:” Work and Workersfor the 21st Century, op. cit., footnote 11, p. 91.

17~ 1988, 88 Pmcent of ~co~ege ~duates aged 25-64 were ~ the labor fome, but o~y 61 percent of people ag~ zs-6Ll who kid not completed

high school. The jobless rate for college graduates aged 25-64 was only 1.7 percent, compared with 9.4 percent for bigh school dropouts. Yet 3.3 percent

of black college graduates were unemployed, more than twice the level for whites. ‘‘Educational Level of U.S. Labor Force Continues to Rise,” News,

Department of Labor, Bureau of Labor Statistics, Aug. 29, 1988.
Chapter 3-Human Resources for Competitiveness ● 81

new entrants to the labor force, and with labor

shortages in fast-growing occupations and regions,

some companies in some parts of the country will be

forced to reexamine their hiring and training practices, finding an accommodation between two very

different extremes:

bidding up the wages of well-educated younger

workers, most of whom will be white, and/or

providing more training and retraining for older

workers; or

adopting more aggressive training programs for

assimilating young minority workers into their

organizations.

Companies, of course, may not pose the question

this way, and most will chose some combination of

these two alternatives.18 Furthermore, the context

for their decisions is broader. It includes such

alternatives as automation to reduce labor requirements (in service industries as well as manufacturing), moving to parts of the country where labor is

less expensive and/or better educated, and moving to

foreign countries in search of cheap labor. Visible

success over the next few years in the education and

training of young minority workers could substantially influence future decisions by companies—

decisions that are likely to have impacts on American society going far beyond employment and

competitiveness.

TRAINING AND

COMPETITIVENESS

The international competitiveness of U.S. goods

and services depends on the value for money offered

by American firms compared with foreign products—

as judged in the marketplace. Customers vote with

their dollars and deutsche marks. When Americans

buy cars produced by Honda or Hyundai, their

purchases register in the ledger of competitiveness.

Much the same is true when Citibank underwrites a

bond issue for a West German corporation.

Products that do not trade internationally also

count in the ledger of competitiveness, although not

so directly. First, American companies that export,

or that compete with imports, buy goods and

services from other domestic fins. The prices

charged and quality provided affect competitive

outcomes downstream. For example, about 15,000

American firms sell parts and components to motor

vehicle manufacturers. Thousands of other companies sell to this group of direct suppliers. A few of the

suppliers are relatively large; they may produce and

sell tires or electronic components or structural

plastics overseas as well as at home. But most are

smaller firms that make sheet-metal stampings,

fabricate equipment and tooling to order, or provide

contract services ranging from engineering to plant

security.

There is a second reason why the productivity and

efficiency of smaller firms matters, along with

services that do not trade internationally. The more

productive each U.S. industry is, the higher will be

average U.S. living standards. All else the same,

more productive industries can pay higher wages,

produce goods and services at lower costs, and sell

them at lower prices. Greater efficiency in fast-food

restaurants means American consumers get more for

their money.

Competing in the New International Economy

If national welfare depends on productivity,

efficiency, and competitiveness aggregated throughout the economy, these depend, among other things,

on the education and training of the workforce.l9

Better educated workers have learned to learn: that

is a major reason why employers rely on educational

credentials for screening. Even if the subject matter

is irrelevant to the task at hand, more years of

schooling generally translate into more trainableand retrainable-employees.

Education seems especially important (e.g., as an

indicator of receptiveness to training) when

workplace technologies are changing rapidly .20 When

lgFor~ere~ts of a survey conducted during early 1990 onemployerexpectations of skill needs and availability, =“WO~Ome2~ompeting

in a Seller’s Market: Is Corporate American Prepared? A Survey Report on Corporate Responses to Demographic and Labor Force Trends,” ‘Ibwers

Perrin and Hudson Institute, July 1990. The survey suggests that few companies have, as yet begun to implement humanresources strategies keyed to

changing labor maflcet demographics.

l~wmd Deniso~ fi MS S*study Why Growth Rates Difler (Washington, DC: Brookings, 1967), found that mktive leve~ of edumtion

accounted for a signifkant share of differences in productivity growth rates among mtions.

~~ p. Bartel and Frank R. Lichtenberg, “The Comparative Advantage of Educated Workers in Implementing New Technology,” Review of

Economics and Statistics, Vol. I-XIX, February 1989, pp. 1-11; Hong W. Tan, “Private Sector Training in the United States: Who Gets It and Why,”

National Assessment of Vocational Education discussion paper, February 1989.
82 ● Worker Training: Competing in the New International Economy

the

Photo credit: Diamond-Star Motors Corp.

Robots on automobile assembly line install tail lamps.

technology is fluid, as it is today in computerintensive industries, company-provided training takes

on greater significance because needed skills are less

likely to be taught in the schools (see ch. 5).

Larger, more competitive firms can often pay

above-average wages to attract the talent they seek.

Even so, the pressures of international competition

have forced many such U.S. firms to reexamine their

hiring practices and redesign their workplaces. New

hiring criteria go hand in hand with production

systems intended not only to reduce costs, but to

improve product quality and organizational flexibility. Chapter 4 discusses the new practices, which

have begun to ripple through the economy as they

diffuse from innovating companies.

In the years ahead, employee skills will be

particularly important for building organizations

with the ability to respond quickly to new market

opportunities. Restructuring and work reorganization place new demands on employees. Two decades

ago, lack of literacy was no great handicap in a

textile mill; in many mills today, operators of

high-speed looms must be able to read and write

(box 3-A). In this industry, as in others, lower costs

and greater flexibility come both from technology

and from a workforce that is asked to know more and

do more.

Reorganizing Production:

Costs, Quality, Flexibility

In industry after industry over the last two

decades, familiar U.S. brand names have lost market

share to aggressive competitors from abroad. Even

in industries like textiles, market segments that once

seemed safe attracted new competitors. The reasons

are many. American firms had become rather

relaxed, not only about manufacturing quality, but

about the quality of their product designs. Managements underinvested in plant and equipment, sometimes failed even to maintain existing facilities.

In the future, American firms will have to do

better on three dimensions of manufacturing: costs,

quality, and flexibility. Costs are central: everything

else the same, American products cost too much to

design, develop, and build. But everything else has

not been the same. American goods have also fallen

behind in quality-first in quality of manufacture

(conformance to design spectifications), more recently in quality of design (functional attributes and

performance). Finally, many U.S. firms lag behind

their competitors in introducing more flexible production systems permitting smaller lots to be produced without cost penalties.

costs

Xerox’s experience is typical of many American

companies that have found themselves falling behind their rivals. In the late 1970s, Xerox was in

danger of being pushed out of all except the top end

of the copier market. In extensive comparisons of its

copiers with those produced by Minolta, Sharp, and

others, Xerox found its manufacturing costs to be as

much as 50 percent higher, and its defect rates 10 to

30 times greater.

21 Given this, even a near-generic

brand name could do the company little good.

Xerox concluded that about half its cost disadvantages lay in product design and half in the production

process. While the company has now managed to cut

costs very substantially, it cannot relax: to keep up

with the competition, the firm expects to reduce

costs a further 50 percent by the mid- 1990s. Training

21J3. B~Bebb, “Q~ty Design Eqjn~ring: The Missing Link in U.S. Competitiveness, ” paper presented at the NSF Engineering Design

Research Conference, University of Massachusetts, limhers~ June 11-14, 1989. Also see “Pushing To Improve Quality, ” Reseurch-Technology

Marzugement, May-June 1990, pp. 19-22.
Chapter 3-Human Resources for Competitiveness ● 83

has played a substantial role in bringing costs

down-e.g., through reducing defects, scrap, and

rework.

Quality

American companies in industries ranging from

autos to semiconductors have fallen behind in

quality. Chasing moving targets, some have closed

the gap part way, but few have managed to pull even.

Manufacturers have always known that they give

quality short shrift at their peril. Still, over the past

two decades, customers have become more demanding.. 22 At the same time, Japanese firms have made

quality a major corporate objective and marketing

tool.

Xerox has given each of its production employees

28 hours or more of quality-related training-a total

of 4 million man-hours. Three-quarters of the fro’s

workforce participates in quality circle activities. At

the same time, by working more closely with fewer

suppliers, Xerox has cut defect rates for purchased

parts and components from 10,000 ppm (parts per

million) to less than 300. The company’s target for

1992-93 is 30 ppm. As the size of these reductions

suggests, the competitive game has truly changed.

Flexibility

Companies in many industries, finally, have

begun pursuing strategies emphasizing frequent

product redesigns. Traditionally, low costs were the

result of standardization and long production runs:

cotton sheets, in white only; Model T Fords in black.

Henry Ford had to go along when dealers and

customers clamored for color, but he did so reluctantly, and Alfred Sloan’s product differentiation

strategy enabled General Motors to overtake Ford.

The approach of the American automakers then

changed relatively little until the Japanese onslaught

of the 1970s. Since the 1930s, models and indeed

entire car lines had been distinguished from one

another largely through cosmetic changes—trim,

styling, sometimes engines. Pontiacs commanded

higher prices than Chevrolets even though production costs were nearly the same. Today, automobile

manufacturers differentiate their products through

both style and function. Automakers have introduced new nameplates, developed vans and light

trucks that can substitute for the family car. Consumers can choose from hundreds of models, rather than

dozens.

With more consumer goods becoming fashion

items-e.g., athletic shoes marketed like women’s

clothes-manufacturers in many industries must be

able to react quickly, earn profits on smaller

volumes. These trends place a premium on short

design and development cycles and rapid changeovers on the factory floor. Organizations must be

able to respond quickly to both success and failure,

ramping up production when demand warrants,

replacing products that fail to sell. So far, Japanese

manufacturers have proven most adept. It currently ‘

takes Xerox 24-36 months to develop anew copier,

compared with 12-18 months for the firm’s rivals in

Japan.

FOREIGN TRAINING SYSTEMS:

HOW DOES THE UNITED

STATES COMPARE?

In many other nations, including the Federal

Republic of Germany (FRG) and Japan, public and

private training systems function more effectively

than in the United States. There is no question that

these two countries, and several others, train their

workers to higher average standards. Table 3-4 (an

expanded version of table 1-5 in ch. 1) briefly

compares U.S. and foreign education and training

systems. (Because of the lack of reliable figures for

the United States, OTA has not attempted to

estimate training expenditures in other countries.)

The Competition: Training Systems Abroad

Germany and Japan pursue markedly different

approaches to training. The contrast between the

United States and Germany is particularly striking.

The FRG not only has the best apprenticeship

system of any major economy, jointly financed by

public and private sectors, but policies and traditions

that give status and respect to blue- and grey-collar

work. In Germany, the prestige associated with a

college education works against broad vocational

~when asked for the “main forces acting on a global consumer products company like yours,” the Chairmanof L’Oreal, IIXlkCrS of perfumes and

cosmetics, replied “One of the most striking things is the increasing desire of customers in all parts of the world for quality productband their ability

to perceive quality differences. Even in product categories like cosmetics, which everyone used to think of as driven by the whims of fashiou consumers

are now carefully buying those products that are, objectively, technologically superior.” Gerard J. Tlndliez, ‘The View from France: French CEOS Look

Ahead,” McKinsey QuarterZy, Autumn 1989, pp. 2-45 (quote on p. 40).
84 ● Worker Training: Competing in the New International Economy

Box 3-A—Training in the Textile Industry1

Since the mid-1970s, U.S. textile firms have sought to meet international competition through automation,

work reorganization, and greater product variety. Two decades ago, mills were organized for long runs of a few

standard products. The workforce was largely unskilled or semiskilled. Recent work reorganizations, along with

computer-based automation, have placed greater demands on employee skills. Some jobs now require operators to

read manuals and enter or record information on electronic control panels.2 Machine repair has become much more

demanding.

Textile firms have had limited success in recruiting better educated workers. Forced to improve the skills of

current employees, they have begun to implement training programs in basic skills and in grey-collar technical work.

Forces for Change

Since the mid-1970s, three sudden shocks have hit the U.S. textile industry. First, styles began to change at

an accelerating pace. Many American textile suppliers had specialized in a limited range of standardized goods. Now

apparel manufacturers (and retailers and consumers) demand variety even in denim; cotton “white goods” come

in hundreds of styles rather than dozens. Survival has meant adaptation. Second, import competition has grown

steadily more intense, not only from low-wage Asian economies (China, Korea, Hong Kong), but from mills based

in Europe and Japan that concentrate on high-quality, high-fashion fabrics. Third, after several decades of relatively

stable production technology, a wave of innovation hit. Water-jet and air-jet looms operate many times faster than

traditional shuttle looms. Microprocessor-based controls enhance consistency and quality. Inexpensive computer

systems track product flow.

Automation and Organizational Change

In earlier years, U.S. textile firms had sought to keep their costs competitive by moving to the Southeast, where

organized labor was weak and wage rates low. Investments in the new generation of automated equipment helped

the industry increase its productivity by 5 percent annually between 1975 and 1987, a much higher rate than for U.S.

manufacturing as a whole. But imports also grew, and employment fell.

Some American firms, unable to compete either with cheap fabrics coming in from Asia or with high-fashion

textiles entering from other advanced economies, began to search out market segments where their capital-intensive,

vertically integrated plants would create advantages. They found them particularly in fabrics for home furnishings

and in industrial textiles-categories that, together, accounted for 52 percent of U.S. textile production in 1980,60

percent in 1985, and 63 percent in 1988. Within their chosen niches, firms began offering greater variety. One

spinning mill went from three active styles to 35 in 2 years; another now offers 300 furniture fabrics rather than 100.

These strategies depend on fine-tuning the flow of production: computers have literally revolutionized production

planning and control in the mills, where they are now used for tracking in-plant inventories as well as handling

ordering and invoices. Some firms have also reorganized by replacing traditional functional departments, one for

each step in the production process, with product-oriented departments that carry out a lengthy sequence of

operations for a given product class.

Work and Skills

Textile jobs were much the same in 1975 as in 1955. The work was repetitive, and, despite high levels of

mechanization, largely manual. With the technological flux of the 1980s, jobs for operators, for maintenance and

repair workers (’‘fixers’ ‘), and for supervisors have all changed. For instance, threads break far less often in spinning

and weaving, so that operators now spend less time tying them back together-a task requiring dexterity and

experience. Operators spend much more of their time monitoring automated equipment. Errors in such tasks as

recording information and entering new instructions can have serious consequences; to minimize machine

stoppages, operators must understand something of the production process and their place in it. Some companies

IBased on “Training and Competitiveness in U.S. Manufacturing and Services: Training Needs and Practices of Lead Firms in Textiles,

Banking, Retailing, and Business Services,” report prepared for OTA under contract No. L3-3560 by Lauren Bentow Thomas Bailey, Thierry

Noyelle, and Thomas M. Stanbac~ Jr., Columbia University, February 1990, pp. 60-89. The productivity levels and market share figures in this

box come from unpublished data of the American Textile Manufacturers Institute.

2For a complemen~ discussion focusing on apparel, especially in Europe, see Jonathan Zeit.lin and Peter Totterdill, “Markets,

Technology and LQcal Intervention: The Case of Clothing,” Reversing IndustrialDecline? Industrial Structure and Policy in Britain and Her

Competitors, Paul Hirst and Jonathan Zeitl@ eds. (Oxford, UK: Berg, 1989), pp. 155-190. In some apparel plants, each worker now has a keypad

at his or her workstation for recording production flow information. Among other things, these systems automatically calculate each workers’

pay on a piecework basis. Clive Cookso~ “A Good Fit on the Facto~ Floor,” Financial Times, June 6, 1990, p. 13.
Chapter 3-Human Resources for Competitiveness ● 85

are training operators to diagnose machine problems (e.g., stoppages) and enter a corresponding code from a

multipage manual. They must use good sense in deciding when to call in a supervisor or fixer. They must also have

the basic skills needed for looking up the codes and punching them in; if the plant is to run smoothly, operators must

not only be able to diagnose equipment problems, but read and write-skills rarely needed in the old days. In some

cases, even loom cleaners, who are among the lowest paid of mill workers, must be able to follow written

instructions and punch numbers into a key pad.

In maintenance and repair, the balance has tipped still farther from manual toward mental skills. At one time,

tinkering outside the workplace coupled with informal on-the-job training could suffice to earn a promotion from

operator to fixer; lack of basic skills was no bar. Fixers could see how older machines worked; today, with invisible

electronic logic replacing electro-mechanical controls, they need conceptual understanding. Textile firms are

seeking graduates of 2-year associate degree programs, and increasing the formal training they give their

technicians. Promotions of operators to the next level without formal training, once common, have become rare.

Upward Mobility

In earlier years, unskilled workers could enter the mills in service jobs (cleaning) or as laborers (unloading

bales) and move upward through progressively more demanding positions. People with aptitude and interest could

look forward to becoming operators, then fixers, perhaps eventually a supervisor. Most training was informal.

Companies saw no need for a high school diploma. On-the-job experience would serve, whatever a person’s formal

education, given the unchanging nature of the work. These traditional job ladders have broken down. Most textile

firms still post openings internally, and try to recruit from within, but they have had trouble finding enough qualified

people internally to fill the growing need for fixers and technicians who can cope with the latest equipment.

Education and Training

The industry has trouble finding skilled workers in part because it is concentrated in the smaller cities and towns

of the Southeast. Wages have always been low, and textile firms buffeted by cheap imports argue that they have

little scope for raising them. The industry also seems trapped by its past practices of hiring unskilled, poorly

educated workers. It now needs better educated employees, but can offer neither the image nor the wages nor the

opportunities that would attract them.

Vocational schools and community colleges have been little help, in part because textile firms rarely tried to

work with them in the past. Few community colleges have kept abreast of the industry’s technical needs; students

attend these schools in part to escape the mills. Of 75,000 students in 1985-86 taking technical courses in North

Carolina community colleges, 5,000 were studying for occupations in demand in the textile industry, while 35,000

were preparing for office jobs in service industries.

Unable to hire from existing labor pools, textile firms have responded in three ways: 1) by seeking to improve

basic skills in local labor pools, through participation in literacy programs and strengthened relationships with

secondary schools; 2) through technical training, both internally and in conjunction with community colleges; and

3) by contracting for training provided by equipment manufacturers. Companies with workplace literacy programs

have aggressively pursued funds from Federal and State programs. In South Carolina, for instance, the Governor’s

Initiative for Workforce Excellence has established literacy programs at several textile firms, including Milliken.

The literacy initiative is playing a key role at Milliken’s Kingstree, SC plant, which has installed 400 new weaving

machines and begun reducing the number of job classifications from 38 to four. Employees must know three of the

four new jobs to be promoted; an off-hours basic skills program helps them prepare.3

While community colleges rarely took the initiative in developing technical courses suited to the needs of the

industry, they have been more responsive to firms asking for specialized programs; these help the schools attract

students and justify State funding. Companies have also sent employees to training programs, typically several

weeks long, offered by equipment manufacturers. Some firms have then used these courses as models for in-house

training on other types of machinery.

New skill requirements caught most U.S. textile firms off guard. As companies discovered they could not

recruit the workers they needed, they began turning to training. If these efforts-which remain in early stages-do

not succeed, American textile firms stand to lose still more ground to imports.

3“Basic Skills ~ucation in Business and Industry: Factors fOr Success Or Failure, “ report prepared for OTA under contract No. L3-1765

by Paul V. Delker, January 1990, p. 41. On Milliken’s overall labor force strategy, which includes reorganization around work groups, reductions

in supervisory ranks, and tighter links with fewer suppliers, see ‘‘Pushing To Improve Quality, ” Research-Technology Management, May-June

1990, pp. 19-22.
co

m

●

Table 3-4—Worker Training Compared

United States Germany Japan Korea Canada

Primary and secondary Local control contributes to Excellent for those in High quality; uniform Strong core curriculum Wide range in quality

schooling wide range in course academic high school; curriculum; emphasis on and basic skills

offerings and quality generally good for rote learning emphasis evident in

others international test scores

School-to-work transition Left mostly to chance; some Apprenticeship for most Personal relationships Employers recruit from Left mostly to chance;

employers have ties with non-college-bound youth between employers and vocational and apprenticeships

local schools local schools academic high schools available for some young

people

Vocational education

Extent Available inmost urban areas Near-universal Limited; mostly Widely available Available in most urban

availability assumed by employers areas

Quality Wide range: poor to Uniformly good Fair to good Vocational high schools Wide range: poor to

excellent uniformly good excellent

Adult education

Extent Moderate; community Limited but growing Widespread; self-study Limited Widespread

colleges offer widespread common

opportunities

Relationship to work Relatively common Nearly universal Common Common Common

Employer-provided training

Extent Emphasis on managers and Widespread at entry level Widespread at all levels Limited; employers rely Limiteda

technicians (apprenticeship) and to on public vocational

qualify for promotion institutes

Quality Sometimes excellent, but Very good Very good Generally poor Not evaluated

more often weak or

unstructured; many firms

do not train

Public policies Federal role limited; State Governs Subsidies encourage Directive--some Limited, but growing; aid

aid to employers growing apprenticeship; training by small firms employers resist to trade association and

supports further training government policies union training efforts

Wne estimate is that Canadian firms spend less than half as much per employee on formal training as do U.S. firme-Success in the Works (Ottawa, Ontario: Employment and Immigration Canada,

April, 1989), p. 2.

SOURCE: Office of Technology Assessment, 1990.
Chapter 3-Human Resources for Competitiveness ● 87

training, but not nearly so strongly as in the United

States.

In Japan, rigorous academic preparation coupled

with extensive company training yields a highly

qualified workforce. Firms and individuals absorb

most of the costs of training. Stable, long-term

employment relations, particularly in large corporations, mean that Japanese companies can invest in

their workers with little fear of losing them. For

employees, training is more than a means for

advancement: in Japan, a host of subtle and not-sosubtle pressures encourage continuous, life-long

learning.

Japanese and German managers embrace broad,

ongoing training as a way to enhance productivity,

quality, and competitiveness. Although the two

countries rely on very different training systems, the

net effect is much the same. Most workers have

broad skills: they can do more than one job, and

participate effectively in the ongoing search for

better production methods. Because many U.S.

employers fear they might lose skilled workers to

another employer, or have to pay higher wages,

company training is spotty (see ch. 5). In smaller

firms, many employees receive no formal instruction; larger firms slant their training towards supervisors and managers. U.S. apprenticeship programs

have been in decline (ch. 8), while other forms of

vocational education and training have not picked up

the slack. Although Japan’s vocational education

system is weak, pervasive employer-provided training makes up for this.

Germany: Apprenticeship as a Foundation

The strength of the German training system lies in

its integration of training with education, in contrast

to Japan, where schools and employers function

independently to create a high-quality labor force.

The vast majority of the German work force boasts

formal training; 60 percent have completed an

apprenticeship.23 Today, these long-established programs have been reinforced with incentives for

post-apprenticeship training.

The FRG Government works with trade associations and unions to define uniform national curricula

and examinations for apprentices in over 400

occupations. Most apprenticeships last three years,

combining on-the-job training (for a small wage)

with at least 1 day per week of classroom instruction.

Certification requires passage of written tests and

demonstration of practical skills. Trade associations

have always played a central role: beginning as a

compulsory system of artisan guilds in the Middle

Ages, Germany’s apprenticeship system evolved

into one jointly regulated by employers and government, ‘‘with the changeable consent of the

unions." 24 

All apprentices must attend Lander-supported

vocational schools 1 day per week. The structure of

the rest of the week depends on the firm. In large

companies, apprentices spend much of their time in

training centers, often licensed and partially funded

by Lander governments; these supplement vocational school curricula.25 Apprentices in smaller

companies spend more time on the factory floor,

often interspersed with periods of a few days to

several weeks at area training centers supported

roughly half and half by local chambers of commerce and the Federal Ministry of Education and

Science.

Training beyond the apprenticeship has traditionally taken the form of night classes delivered by

local trade associations; governmental bodies often

pay the bills. Employees who pursue such opportunities, and pass the required tests, can win certification as a master craftworker. Among other things,

this qualifies him or her for promotion to foreman.

Workers normally attend these courses on their own

time (in the United States, first-line supervisors

often get their training on company time). In

addition, many certified apprentices go back to

school, graduating from vocational institutes or even

~Bem@~ld~ng~b~~chf 1988 (Bonn: Federal Ministry of Education and Science). P. W.

~Arndt Serge and hlalcohn Warner, Comparative Factory Organisation (Brookfield, VT: Gower, 1986), P. 192.

Although apprenticeships have existed in Germanyforhundreds of years, they were not formalized and regulated until 1969. ‘l%o forces lay behind

legislation passed at that time: 1) shortages of apprentices (young people had turned away from vocational training); and 2) labor union concern that

apprentices were being exploited (working for low wages while learning relatively little). The 1969 law led to mtionwide standards for each

apprenticeable occupation specifying both the content of training, and testing following completion of the three-year program. The Federal Vocational

Training Institute develops curricula in consolation with unions and trade associations.

25~thony p. Cwnevde arid J~et W. Johnstoq Training America: ~~ategiesfor f~e ~a~on (Alex~dri~ VA: American society for Training ~d

Development and National Center on I%lucation and the Economy, 1989), p. 27.

Germany’s ti”nder correspond to our States.
88 ● Worker Training: competing in the New International Economy

Box 3-B—Impacts of the German Training System on Productivity and Competitiveness:

Two Examples

Comparisons With British Industry1

A series of studies carried out by British investigators offers perhaps the most careful and comprehensive

examination of the effects of training and skills on the performance of manufacturing firms ever undertaken. These

studies demonstrate in striking fashion the impacts of the German training system on costs, productivity levels, and

quality. Intended to help diagnose the competitive problems of British industry, the comparisons covered a set of

quite different sectors: metalworking (45 companies producing small parts such as screws, springs, and drill bits);

fitted kitchen furnishings (23 companies making such products as countertops and cabinets); and women’s clothing

(22 matched plants). The results demonstrate that German firms perform better than their British counterparts

because of their better trained workers.

The average labor productivity in German metalworking firms was more than 60 percent greater than in the

British sample. About half the shopfloor workers in the German metalworking companies had earned apprenticeship

or similar qualifications, compared with one-quarter in Britain. German furniture-making firms were 50-60 percent

more productive, and turned out higher quality goods. In every German furniture company sampled, 90 percent or

more of the shopfloor workers had, as their minimum qualification, certification following 3 years of training; in

none of the British firms did more than 10 percent of the employees have any formal qualification. Higher skill levels

in the German apparel industry helped firms move into short runs of specialized, highquality clothing for export,

while British firms continued to mass produce lower priced, standard goods for the domestic market. In the apparel

sample, 80 percent of German maintenance workers had completed an apprenticeship program, while not a single

British worker had earned any form of certification. Machinery breakdowns were far less frequent in the German

plants.

Plant visits and surveys revealed no possible source for the differences except training. The British firms, for

example, typically had comparable manufacturing equipment—indeed, had sometimes made heavier capital

investments. But British workers and supervisors were unable to use their equipment as effectively.

Training in a German Machine Tool Firm2

When faced with stronger Japanese competition in the late 1970s, Scharmann, a machine tool manufacturer

located near Dusseldorf, made worker training a central element in reshaping its corporate strategy. The firm decided

to specialize in automated equipment for producing relatively large parts, rather than the standard tools emphasized

by Japanese competitors. Scharmann won a major order from Caterpillar’s Belgian factory in 1980, helping the

company move in this new direction.

Scharmann was able to build on its own earlier experience. Like many machine tool builders, the company

designs and fabricates much of its own production equipment. During the 1970s, the company had automated

internally while trying to save on payroll costs by hiring unskilled workers (including several who had completed

apprenticeships in unrelated fields like baking). When this effort failed, Scharmann decided to strengthen its

apprenticeship program.

In the new program, a 16-year-old apprentice could expect to spend a day-and-a-half each week in one of

Scharmann’s own classrooms, another day at a nearby vocational school studying the principles of machine tools,

plus 2 days at work in the company training center. After completion of the program, Scharmann sends selected

workers to a technical college for 2 years of further study in industrial electronics. The company’s unskilled work

force has dropped from about 230 to fewer than 40 (of 800 total). Scharmann has been able to draw on its employee’s

IThis sectionsummarizes the following articles, each from the noted issue of National Institute Economic Review: A. Daly, D.M.W.N.

Hitchens and K. Wagner, “Productivity, Machinery and Skills in a Sample of British and GermanManufacturing Plants,” February 1985, pp.

48-61; Hilary Steedman and Karin Wagner, ‘‘A Second Jmok at Productivity, Machinery and Skills in Britain and Germany,” November 1987,

pp. 84-95; Hilary Ste4rnan and Karin Wagner, “Productivity, Machinery and Skills: Clothing Manufacture in Britain and Germany,” May,

1989, pp. 41-57. MO see the broader comparisons between British and German educatior@dning practices likewise appearing in National

Znstitute Economic Review: S .J. Prais and Karin Wagner, ‘‘Some Practical Aspects of Human Capital Investment: Training Standards in Britain

and Germany,” August 1983, pp. 46-65; S.J. Prais and Karin Wagner, “Schooling Standards in England and Germany: Some Summary

Comparisons Bearing on Economic Performance, ’ May 1985, pp. 53-76; S.J. Prais, “Educating for Productivity: Comparisons of Japanese and

English Schooling and Vocational Preparation” February 1987, pp. 40-56; and S.J. Prais and Grin Wagner, “Productivity and Management:

The Training of Foremen in Britain and Germany,” February 1988, pp. 3447.

2fia Magminer and Mark Pa*, The Silent War (New Yorlc Random House, 1989), pp. 12@136.
Chapter 3-Human Resources for Competitiveness ● 89

new skills to make the steady, incremental improvements in work methods and production practices necessary to

achieve its cost and quality targets.3

3comptiSom of British and German machine tool producers matched by size have shown that a broadly-skilled work force, capable of

both progmmming and maintaining automated equipment, helps German firms compete more effectively. Cwparafive Facrory Orga?u”zation,

op. cit., footnote 24, p. 164.

universities. Among those who completed apprenticeships during the 1960’s, nearly 20 percent have

now either been certified as master craftworkers (9

percent) or graduated from a vocational institute or

university (10 percent).

As international competition and the need for

top-quality products has grown, more West German

employers are offering on-the-job training, as well

as paying for outside courses that may not be tied

directly to certification as a master craftworker.

Government support for such training has grown. At

the same time, more German workers are enrolling

in classes on their own time, sometimes at their own

expense, sometimes with government assistance.

For example, between 1980 and 1985,23 percent of

employed adults took at least one job-related course

(other than courses to become a master craftworker),

an increase over the 1974-79 period, when 20

percent did so.

German employers view completion of an apprenticeship as evidence of motivation and willingness to

learn. Nearly half (43 percent during the 1980s) of

certified craftsworkers find themselves in occupations other than those for which they apprenticed,

but they are nevertheless much less likely to

experience unemployment than unskilled workers.26

Although a substantial fraction of apprentices leave

the firm in which they train, nearly 80 percent of all

firms with at least 20 employees participate in

apprenticeship programs.

27 Growing numbers Of

German workers have also been participating in less

traditional forms of continuing education and training-e.g., short courses in data processing, or sales

and management.

BOX 3-B summarizes an extensive series o f

comparisons between training and measures of

costs, productivity, and competitiveness in German

and British industry, as well as outlining changes in

employment and training practices in a mediumsized German machine tool firm. The GermanBritish comparisons demonstrate in convincing

detail the shopfloor benefits that German manufacturing firms get from better trained workers.

Japan: Training Integrated With Work28

Employer-provided training in Japan contrasts

sharply with that in the United States: large Japanese

fins, and many smaller ones as well, pursue

training with unmatched zeal. Managers and supervisors deliver much of the training-an approach

that has paid substantial dividends by integrating

ongoing learning into corporate cultures.

Japanese firms provide extensive training for both

new recruits and seasoned hands. After hiring in,

blue-collar workers in larger firms typically begin

with a week or so in an off-the-job motivational

program. These programs are intended to impart not

only the essentials of their employer’s history,

organizational structure, and product lines, but its

culture and “philosophy’ ’-based, in many cases,

on the thoughts of the original founder. Employees

then rotate through several jobs, a few days at a time,

so they can develop a broad view of the company’s

business. During this period, they get systematic

on-the-job instruction, commonly making use of

training manuals prepared by supervisors or by a

work group (e.g., as part of quality circle activities).

After a few weeks, each recruit is assigned to a

group, beginning with simpler tasks under the

supervision of an experienced employee.

Production workers as well as managers are

taught to embrace the concept of continuous improvement (kaizen) and hence continuous learning

as a foundation for economic success. Quasi-public

~Be~fSbildUngSberichr 1988, op. cit., footnote *3, P. 65.

27zur Fimnz.emng der Bemf~aU~bi/dU~~ (BO~: K~~tOfi~ & deutschenwirtsc~t fier B@Sbild~g, 1985), P. A, WS w= the peKZlltige in

1983.

2S~s section is based on ~ ~Employ~Tr~gfiJ~a~t~~Wfiprepm~ for OTA~der ~n~act No. L3-4335 by David Cairncrossand Ronald Dore,

March 1990.
90 ● Worker Training: competing in the New International Economy

industry bodies, such as the Japan Management

Association and the Japanese Efficiency Association, have provided training to blue-collar workers

since the 1950s; in recent years, they have offered

courses for managers as well. With the recent rapid

expansion of foreign direct investment by Japanese

firms, many companies (40 percent according to one

survey) now provide language training, not only to

managers and sales staff, but to technicians and other

skilled workers. Increasingly, such employees may

not only be asked to respond to technical inquiries

from overseas but be sent abroad temporarily (e.g.,

to aid in new plant startups, or train foreign workers).

The distinctive Japanese approach to training is

relatively recent. Following a period of conflict after

the Second World War, industry and labor reached

an accommodation. The mostly male core employees of large firms, especially skilled workers and

supervisors, won the benefits of ‘lifetime’ employment (and systematic training) in return for an end to

labor strife. Although lifetime employment is by no

means universal for Japanese workers, the precedents and practices set by the largest firms strongly

influence employment and training practices throughout the economy.

American experts helped establish the Japan

Productivity Center and the Japan Industrial Training Association to meet growing training needs,

especially in smaller firms. The initial focus on

training supervisors as instructors helped shape the

practice of integrated on-the-job training that has

proven so successful. As with Japan’s adoption of

quality control practices pioneered in the United

States, these postwar training efforts frost borrowed

U.S. practices, then refined and extended them.

Smaller Japanese firms sometimes benefit from

assistance that large corporations provide to associations of frost-tier suppliers.29 For example, each of

the three largest construction companies in Osaka

has helped its leading subcontractors establish a

local training center. Government grants also channel financing to these training centers. Finally, small

firms in Japan often pool training resources through

producers’ cooperatives.

Training in Japan tends to be structured in terms

of content, although delivered by managers and

supervisors rather than specialists-both on the

shopfloor and during the day or two per year that

employees typically spend in a classroom setting.

Their role as trainer helps managers stay in touch

with the shopfloor and keep workers informed of

company plans. It is no surprise that Japanese

managers have more confidence in the usefulness of

training than their U.S. counterparts. Moreover, the

benefit/cost ratio is higher in Japan because so much

training takes place on the job with little loss of

working time. Employees quickly grasp the connections between new skills and their everyday work.

And, as noted in chapter 1 (see box l-B), many

Japanese workers get more hours of training than

their American counterparts. Not only is training in

Japan more effective, there is more of it.

Vocational Credentials and Status

Other countries also work harder than the United

States to maintain the quality of vocational education programs, seeking to keep them attuned to the

needs of the labor market and to overcome widespread biases in favor of academic education. For

example, Germany, South Korea, and to a lesser

extent Japan, use skill certification as an incentive

and symbol of achievement. The governments of

Japan and Korea also support young people who

participate in skills competitions (box 3-C).

Unrealistic attitudes and overemphasis on college

help explain the disappointing record of high school

vocational education programs in the United States

(see ch. 8). Although post-secondary vocational

education has a somewhat better track record, many

graduates of such programs find their newly acquired skills ill-suited to the job market. Germany,

in contrast, has been quite successful in creating and

maintaining respect for blue- and grey-collar work:

the concept of vocation is deeply ingrained, the link

between formal qualifications and occupational

status far stronger than in most countries. After 10

years of schooling, as required by law, about 90

percent of West Germans continue in some sort of

formal education/training program-either an apprenticeship (three-quarters of the 90 percent who

continue), an academic high school in preparation

for university (20 percent), or a vocational high

zgone.q~er of ,s~I. ~d medim-siz~mantiactig firms responding to a 1984 survey reported that an affiliated parent fiihad helped hem

with training. “New Technology Acquisition in Small Japanese Enterprises: Government Assistance and Private Initiative,” report prepared for OTA

under con~ct No. J3-4950 by-D.H. ‘%’hittaker, May 198-9, p. 23. -
Chapter 3-Human Resources for Competitiveness . 91

Box 3-C—National and International Skills Competitions

In 1950, Spain initiated the International Vocational Training Competition (called the International Youth Skill

Olympics, or IYSO, in the United States). Entrants, who must be under age 23, compete biannually in areas ranging

from welding to graphic design. In 1989, more than 400 people from 21 countries participated.

From 1975, when a U.S. team first entered, until 1983, the Americans finished last. Teams from South Korea,

Japan, and Taiwan earned the highest scores, while European countries with apprenticeship systems also did well.

By 1985, a U.S. team reached the middle rank.1

IYSO results mirror government policies for the support of vocational education and training. Japan, Korea,

and Taiwan, among others, support national and international skills competitions to help encourage young people

to enter skilled trades. In each of these countries, a government training agency sponsors the IYSO team; American

entrants have been sponsored by the Vocational Industrial Clubs of America, a private nonprofit group. In other

countries, government training agencies coach the contestants, sometimes provide living allowances, and may

provide cash prizes to winners at local, national, and international levels. Korea, for example, uses money from a

payroll levy both to support public vocational institutes (as discussed later in the chapter) and to provide substantial

cash awards to winners of national and international skill Olympics.2

l~e A.meficm te~ ftished llth among 18 competing nations in 1985, 13th out Of 19 thrw y=s later, and lath of 21 in 1%9.

“International Youth Skill Olympics Fact Sheet” Vocationrd Lnduslrial Clubs of America, January 1990.

2winners at the natioti level get about $9,200, and are automatically certifkd as “Class II” craftsmen. Those who win in the HSO

contest get a sum twice as large, plus exemption from military duty, special housing privileges, and scholarships. The Korean Government also

gives winners seed money for starting their own businesses, Although these rewards may not have changed the views of Korean parents and

students, who place high values on a college education, they have undoubtedly spurred on the teams that have won seven IYSO competitions.

See “Training of Private Sector Employees in South Kore~’ report prepared for OTA under contract No. L3-4180 by Joe W. Lee and Youngho

Lee, March 1990, p. 90. (Most of the information on Korea elsewhere in the chapter comes from this report.)

school (the remaining 5 percent). Skill certification ing informal evaluations by supervisors carry more

helps encourage young people to prepare for occupations ranging from bartender to machinist to office

assistant.

In Japan, many more young people—some 95

percent—go onto an academic high school than in

Germany. Of the 90 percent that graduate, two-thirds

attend an academic or vocational post-secondary

institution; the others enter the labor market immediately. Vocational credentials get less emphasis than

in Germany, although Japan’s Ministry of Labor

(MOL) established a national testing system in

1959, declaring its intent to “raise the social status

of blue-collar workers by giving public recognition

to the skill level which they have achieved. ”30 The

MOL administers examinations covering 130 occupational skills, with industry bearing most of the

testing costs. In addition, the Ministry of International Trade and Industry oversees a special set of

tests for skills needed in the electronics industry.

Many firms have also created internal certification

procedures as incentives for their employees. Japan’s

testing and certification standards tend to be much

more specialized than those in Germany, and ongoweight within a company than formal qualifications.

Other Examples: South Korea and Sweden

Like a number of developing Asian nations,

Korea has made education and training a central

element in economic planning. Over the past 20

years, 3-year vocational high schools and l-year

training institutes, established under government

auspices, have helped train some 2.4 million workers, half of Korea’s current workforce (about 60

percent of whom are high school graduates).

Korean training practices draw on the German

example. As in Germany, the Korean Government

has sought to counter bias against occupational

rather than academic skills through testing and

certification programs, and by requiring government

bodies at both local and national levels to preferentially hire workers with such credentials. Even more

than in the FRG, training in Korea has been driven

by government policies. Companies have often been

reluctant partners, although it seems plain that the

remarkable performance of the Korean economy—

where labor productivity has grown at an average

~Cited in “Employee Training in Japa@” op. cit., footnote 28, p. 28.
92 ● Worker Training: Competing in the New International Economy

Photo credit: National Training Fund,

Sheet Metal and Air Conditioning Industry

Student practicing flame cutting.

rate of 10-12 percent annually and exports at 25-30

percent-owes much to education and training.

In Sweden, as in most countries with welldeveloped training systems, high-quality general

education provides the foundation. Vocational preparation in Sweden bears the stamp of the country’s

strong trade unions, closely allied with the Social

Democratic party. Swedish unions have traditionally

opposed apprenticeships in private companies, fearing that employers will stress narrow job- and

firm-specific skills. Instead, Sweden relies heavily

on school-based vocational education through “integrated upper secondary schools’ that provide both

liberal arts and vocational courses.The government

has recently added a third year to the vocational

track, during which students spend at least half their

time in on-the-job training.31 About 55 percent of

Swedish young people graduate from high school

with a vocational specialty, after which they can

expect extensive on-the-job training and easy access

to adult education.

Educational Preparation

It is no news that education in the United States

compares poorly with a number of our economic

rivals-a sad irony given the historic U.S. commitment to free and universal schooling. Although the

schooling system helped support industrialization

during an earlier era, the United States has fallen

behind during the last several decades. The most

dramatic evidence comes from international comparisons on standardized tests (table 3-5). Not only

did American 13-year-olds rank near the bottom in

the latest such comparison, but if Japanese and

Taiwanese students had been included, U.S. performance would no doubt have looked even worse.

Other tests have shown similar results, with widening gaps between the performance of U.S. and

foreign students as grade levels increase.32

Today, the best American high schools continue

to graduate students well-prepared for elite colleges

and professional careers. Many others offer a decent

education to students with the initiative to take

advantage of it. But the quality of instruction varies

greatly across the Nation, and American schools,

generally speaking, do a poor job of serving average

and below-average students. This hurts not only the

people who find themselves entering adulthood

lacking basic skills and the willingness to work and

to learn but the competitive ability of U.S. industry.

Japan offers a sharp contrast, with a tightly controlled nationwide curriculum completed by most

young people. While the regimented Japanese educational system has its own dark side, the bottom

half of Japan’s labor force maybe the best qualified

in the world.

Compensating in part for weaknesses in primary

and secondary schooling, and in employer-provided

training, the United States can claim a welldeveloped system of adult education. Enrollments

have grown from 8 percent of all adult Americans as

sl~e schools, not the companies, control the content of this on-the-job traiuing. “WOrtig Classes,” The Economist, Nov. 12, 1988, p. 18.

szs~dents ko~er ~mtries might gettigheraverage scores in thehighergrades if poorer students are selected out for early exits fito tie labor market.

However, Americans test poorly even in the primary grades. For instance, gaps in performanee between America Japanese, and ‘lh.iwanese children

in reading and mathematics have been found to grow between the first and fifth grades. Harold W. Stevenson et al., “Mathematics Achievement of

Chinese, Japanese, and American Children,’ Science, Feb. 14, 1986, pp. 693-699. In mathematics and science tests conducted by the International

Association for the Evaluation of Educational Achievement (J.AEEA) between 1983 and 1986, the relative rank of U.S. students fell, from low at ages

IOand 14, to ahnost always the lowest at age 17. KennethRedd and Wayne Riddle, “ComparativeEducation: Statistics on Education in the United States

and Selected Foreign Nations,”Congressional Research Service, November 1988, pp. 54,57,59. In the IAEEA tests, Japanese students were at or near

the top in both age groupings.
Chapter 3-Human Resources for @repetitiveness ● 93

Table 3-5-Rank Ordering in Mathematics and Science

Tests at Age 13a

Mathematics Science

South Korea (568) South Korea (550)

Spain (51 2) United Kingdom (520)

United Kingdom (510) Spain (504)

Ireland (504) United States (479)

United States (474) Ireland (469)

%y average score (in parentheses) on the International Assessment of

Mathematics and %“enee, administered during 1988 by the Educational

Testing Serviee to random samples of about 1,000 students in each

country (from both public and private schools). In addition to the countries

listed, the tests were given in four Canadian provinces; beeause no

aggregate results for Canada are available, that country has been omitted

from the table.

SOURCE: A.E. Lapointe, N.A. Mead, and G.W. Phillips, A Wor/d of

Differences: An International Assessment of Mathematics and

Science (Princeton, NJ: Educational Testing Service, 1989).

long ago as 1957, to 14 percent in 1984.33 Still, some

nations show up better. Canada, for example,

estimates that a quarter of employed people overage

17 participated in adult education during 1983 (the

latest available year); nearly half of those surveyed

were enrolled in job-related courses, with nearly half

of those courses provided by employers.34

Germany has an extensive system of adult education, offering advanced technical courses at convenient times and often at no out-of-pocket cost to the

worker. And given the near-reverential view so

many Japanese have of education, it is no surprise to

find widespread and effective adult education in that

country. Many Japanese companies encourage or

require employees to take courses in off hours, while

the government pays firms that help their employees

with the costs. Nihon Denso, like many other larger

companies, also pays its employees a small stipend

(about two-thirds of the minimum wage) for the time

they spend on home study or in off-site classes.

Correspondence schools cover subjects from steelmaking to bookkeeping. Given that self-study is

widely valued throughout their society, many Japanese need little encouragement from employers.

Government Policies

Policy choices underlie many of the contrasts

summarized in table 3-4 and discussed above. In the

United States, the Federal Government rarely seeks

to influence company training or to support training

directly. In Germany, however, a partnership of

employer associations, labor unions, and Federal,

Lander, and local governments designs, delivers,

and pays for apprenticeship, and increasingly, further training. Area training centers, funded equally

by the Federal Government and local chambers of

commerce, provide short courses for certified craftworkers as well as apprentices. They house training

advisors who work directly with companies to

design and deliver both apprenticeship and upgrade

training programs. In addition, some firms and

workers receive direct subsidies for training from a

Federal payroll tax levy. The FRG also encourages

firms to provide advanced programs through direct

subsidies, technical assistance, and regulations.

In recent years, Japanese policies have shifted

from their earlier focus on pre-employment training

to emphasize upgrading the skills of employed

workers. For example, many of the Skill Training

Centers that once trained young people as craft

workers now function as schools offering short

courses for employees of nearby firms. Government

bodies at both national and prefectural (local) levels

channel payments to individuals, companies, and

industry groups (such as the associations of first-tier

suppliers mentioned earlier). To be eligible for MOL

funds, companies must first submit an Enterprise

Skill Development Plan. Smaller firms qualify for

larger subsidies-e.g., half the cost of hiring teachers and purchasing in-house training materials,

versus one-third for bigger companies. In total,

Japan’s prefectures spend about two-thirds as much

on training as the MOL, supporting vocational

colleges, skill development and training centers, and

testing and certification programs.

Other governments have also looked to industry

and trade associations for delivery of training,

especially to smaller fins. Canada and Australia

provide technical assistance for identifying training

needs and designing training programs for groups set

up jointly by unions and trade associations. Korea

offers a package of incentives-including construction financing, low-cost land, subsidies for instructors’ salaries, and free training equipment-to or33fJ~anT. ~,Tre~~ in Adult EdWation 1969.1984 (W@@to~ ~:Dep-ent of ~ucatio~ Center for Education StatktiCS, 1987), pp. 6-7.

These are the most recent data available, gathered as part of the May 1984 Current Population Survey. The 1957 data is fromhmnChsrner and Bryna

Shore Fraser, “Access and Barriers to Adult Education and Training,” report prepared for OTA under contract 1986, p. 46.

~M.S. Devermm, One in E~eV Five: A SumqO$Adu/t Education in ca~~,(()~wa: s~~tics Carom ~d the Dep~ent Of tie SeCre~ Of

State, 1984), table 7, p. 18. (Somewhat lower participation by men tban women evidently accounts for the title of this publication.)
94 ● Worker Training: competing in the New International Economy

ganizations such as the Korea Machinery Industry

Association.

Payroll-Based Levies

West Germany and a number of other countries

tax payrolls to help pay for training. The FRG’s

4-percent payroll tax-half charged to the company,

half to the employee-goes to the Federal Employment Institute. Most of the Institute’s budget provides income support for unemployed workers, but

about 15 percent is spent on three types of training:

1) post-apprenticeship programs; 2) training in new

technologies; and 3) retraining of unemployed

workers. Most payments go to workers individually.

On launching its program of support for further

training in 1969, the West German Government

expected that most funds from the levy would be

used to help firms retrain employed workers to use

new technology and meet growing international

competition. However, as long-term unemployment

has grown and persisted, a growing fraction of the

money has been targeted to displaced workers—

during 1988 and 1989, over half (55 percent) of the

participants were unemployed. Many of the employed participants are studying for certification as

master craftworkers, while others are enrolled in

on-the-job training. In addition to the payroll levy,

the German Government supports the area training

centers discussed above. Another source of government assistance is the Lander, which provide tuition

aid to some workers for outside courses. Some

Lander now require firms to give employees 1 or 2

weeks per year of paid ‘‘training leave’ to attend

outside seminars.

In France, Korea, and several other countries,

payroll taxes are used to encourage company training: if a fro’s training expenditures equal or exceed

the levy, no payment is required, French companies

employing 10 or more workers must devote 1.2

percent of their payroll costs to employee training.35

(Another 0.5 percent is collected for apprenticeship

training.) Firms can meet this ‘‘obligation to spend’

by providing training themselves, by contracting

with outside providers, or by joining in a multifirm

training fund. Government has little control over

what is taught or who is selected for training; some

French companies take these programs much more

seriously than others.

Korea requires all firms with over 300 employees

to either spend a certain percentage of payroll

(varying with industry sector and firm size) for

training or pay a tax. Most of the tax money goes to

support the extensive system of public vocational

training institutes that provide a year of preemployment training for young people. In part

because of stringent requirements on the type and

amount of training necessary to avoid the levy, and

in part because it was originally quite low, most

Korean companies simply paid the tax, whether or

not they provided any training. In the 1980s, with

Korea’s first wave of industrialization completed

and the economy beginning to shift from laborintensive industries such as textiles towards those

requiring higher skills, the government passed new

legislation. Current law makes it easier for companies to satisfy the government’s requirements, while

raising the levy substantially. As a result, many more

Korean fins, including smaller enterprises, have

established in-house training programs complying

with government standards. Funds raised through

the levy help pay for cooperative training programs

involving companies and the public training institutes. In these programs, entering 15-year-olds get 3

years of training and must then spend 4 years

working for the participating firm-a “dual system’ modeled on German apprenticeships.

Older Workers

Among the major industrial nations, only the

United States and Japan have implemented employment and training policies specifically for older

workers. 36 Evaluations of U.S. programs funded

under the Older Americans Act and the Job Training

Partnership Act indicate that they have been sucSsolivier B~nd, “Employment and Education Statistics in the Service Sector in France,” report prepared for the Organisation for Economic

Cooperation and Development July 1988.

Companies can include the wages of those in training as part of the required expenditures, which were set at 1.1 percent of payrolls until 1987. Any

company spending less than the current 1.2 percent requirement is supposed to pay the difference to the treasury, but most f- report spending more.

Indeed, the government’s figures show that payroll percentages devoted to mining have increased steadily since since the law was passed in 1971, and

now exceed 2.5 percent of payrolls. (For 1987, 2.5 percent of French payrolls would be equivalent to about $4.3 billion.)

36(Tm&$S govement does fid a NatiO~ ~bor M~ket ~OvatiO~ fiogT~tit SUppOrtS pilot programs fOr tr~g and employing older

workers. Mary Trueu “Training of Older Workers in Canada,’ ILO discussion paper, International Labour OffIce, Genev% May 1989.
Chapter 3-Human Resources for Competitiveness ● 95

cessful in placing older workers in jobs.37 Nonetheless, most American firms have been reluctant to

train older workers, nor do Federal programs encourage them to. The aging of the U.S. labor force will

no doubt force both corporate officials and government policymakers to pay more attention to these

issues over the next decade or two (see ch. 8).

In Japan, the government has urged firms to

continue training their older employees, providing

special subsidies for companies that train workers

aged 45 and up.38 These and other measures are

intended to encourage large Japanese companies to

offer training as part of life-long career development

plans, rather than "farming out" middle-aged workers at lower pay to subsidiaries.

Lessons From Abroad

In Germany, widespread participation by companies, government bodies, and labor unions has kept

the training system responsive to shifting demands

for skills. Both business and labor have a stake in the

system; both understand the need to adapt to

ongoing changes in technology and international

competition.

Japan’s experience shows that comprehensive

training need not carry a high price tag. If American

firms embedded training in day-to-day operations

like Japanese firms, using frost-line supervisors as

instructors, some would find they spent less on

training than they do now (once they had trained

their supervisors). But such an approach, by itself,

would not be enough. As many Japanese firms have

discovered, automation means that on-the-job training must be supplemented with classroom instruction to develop the broader and deeper skills needed

by those who work with the new equipment. Despite

such limitations, the Japanese approach suggests

that many American firms could benefit from

structured, on-the-job training as part of the daily

routine for supervisors and shopfloor workers.

In addition, the payroll levies adopted by a

number of countries show that such policies can spur

increases in employer-provided training. But these

levies also have limitations. Korean companies

viewed the original requirements as onerous; few

complied, preferring simply to pay the tax. In

France, on the other hand, government allows

companies a great deal of latitude, with the result

that some “training” consists of junkets for top

management.

CONCLUDING REMARKS

High levels of mobility in the U.S. labor market,

driven by both supply (people seeking new or better

jobs) and demand (new companies, established

enterprises seeking new workers), create continuing

needs for training. At a minimum, newly hired

employees need an introduction to the workplace

what the job requires, how the company views task

assignments and responsibilities. Over and above

these routine activities, new workplace technologies

and new organizational practices entail training or

retraining. Finally, American companies increasingly find they must provide some basic skills

training, in addition to instruction in particular tasks.

In their efforts to cut costs, improve quality, and

enhance flexibility, companies are also relying on

training to help motivate employees.

Most of the new jobs created in the U.S. economy

over the next several decades will be in the services;

relatively few service products trade internationally.

Small firms will create more jobs than large fins;

few small companies face direct international competition, regardless of whether their products are

goods or services. Even so, the link between skills

and competitiveness is a vital one. Each and every

industry counts, regardless of whether firms in that

industry are exposed to international competition.

The need for training and retraining is pervasive; it

is not just a matter of meeting the needs of growing

sectors, growing occupations, or sectors beset by

international competition.

Under intense pressure, often from imports, to

improve quality while at the same time lowering

costs, many American companies are reevaluating

the ways in which work gets done, making sweeping

changes in workplace organization. Together with

shifts in consumer preferences and in markets for

producer goods and services, the pressures have

already led to substantial restructuring in U.S.

industry. Like labor market churning, these changes

sTwold L. Sheppmd and Sara E. Rix, “Training of Older Workers in the United States, ” ILO discussion paper No. 31, International Labour OfIlce,

Genevaj 1989.

sg~~o M. @&o, Training of Older kt’orkv-s in Japan (Geneva: International ~bo~ office, 1989).
96 ● Worker Training: Competing in the New International Economy

—the subject of the next chapter—add to the

demand for training.

Better training cannot but help in rebuilding U.S.

competitiveness. Indeed, it is one of the essential

steps. Training has proven central in aggressive

corporate strategies stressing quality, flexibility, and

customer service, as well as cost and price. Dispersed computing power for automating the back

offices of banks places new demands on workers,

just like computers for managing the flow of

production in a textile mill. Management style is at

least as important as worker training itself in

responding to these demands: when a firm reorganizes production, it will probably need to retrain

supervisors along with shopfloor workers. In larger

U.S. corporations, particularly multinationals, highlevel executives increasingly see continuous training as a necessary investment for competitive

survival-on a par with investments in plant and

equipment.

Even so, it remains true that German and Japanese

firms are more likely to view training as an

investment, U.S. firms to see it as a cost. And more

than ever before, the international economy pits

American workers against those in other countries.

If the U.S. labor force fares poorly in this head-tohead competition, American living standards will

suffer. Unemployment levels may rise, particularly

among the disadvantaged. American companies can

move operations abroad. Few American workers

have such alternatives.

APPENDIX 3-A—THE CHANGING

STRUCTURE OF U.S.

EMPLOYMENT

The U.S. economy will continue to create large

numbers of low-skilled jobs in the future, but the most

rapid rates of growth will be in occupations calling for

higher skill levels. This expected pattern of occupational

expansion does not match up neatly with projected labor

force growth.

During the 1990s, nearly 3 in every 10 new workers

will be a member of a racial/ethnic minority (table 3A-l).

One in four of all new workers may well be an immigrant.

Both these groups, which of course overlap, have

historically fared relatively poorly in the competition for

high-paying, high-skilled jobs.

According to BLS projections, nearly all the net new

jobs created over the rest of the century will be in service

industries, which will soon account for nearly 80 percent

Table 3A-l—Projected Labor Force Shifts, 1988-2000a

Number in the labor force

(millions)

Change,

1988 2000 1988-2000 b

All workers . . . . . . . . . . . . . . . . 121.7

Aged 16-24 . . . . . . . . . . . . . 22.5

Aged 25-54 . . . . . . . . . . . . . 84.0

Aged 55 and over . . . . . . . . 15.1

Women, all . . . . . . . . . . . . . . . 54.7

Blacks, all . . . . . . . . . . . . . . . . 13.2

Hispanics, all . . . . . . . . . . . . . . 9.0

Asians and other

minorities, all . . . . . . . . . . . . 3.7

141.1

22.5

101.3

17.4

66.8

16.5

14.3

5.7

19.5

—

17.2

2.3

12.1

3.1

5.3

1.9

aBLS moderate growth scenario.

%ay not equal difference of first two columns because of rounding.

SOURCE: Howard N. Fullerton, Jr., “New Labor Force Projections, Spanning 1988 to 2000,” Monthly Labor /?etiew, November 1989,

table 1, p. 4, and table 7, p. 11.

of nonfarm employment (table 3A-2). Of these new jobs,

somewhat more than half will be in the knowledge-based

services, where health care will account for the greatest

number. Most of the rest will be in the tertiary (or

traditional) services, with retailing making a major

contribution.

Jobs created in both the knowledge-based and tertiary

services will range broadly in skill requirements and pay

scales. Health service occupations include housekeepers

as well as nurses and physicians; likewise, financial

service occupations range from clerks and tellers to loan

officers and investment bankers. In the tertiary services,

too, the range in occupational skills is broad. But here a

much greater fraction of new jobs will be low-skilled and

low-paying, the chief exceptions being managers and

technical specialists (e.g., computer system analysts

working for retail chains). Thus it is the distribution of

occupational skills that distinguishes knowledge-based

from tertiary (or traditional) services: the knowledgebased sector creates high-skilled jobs in substantially

higher proportions. This sector includes law and accounting firms, hospitals, and private schools; the tertiary

services include barber shops, funeral parlors, and movie

theaters.

Table 3A-3 summarizes the job creation picture by

occupation rather than sector. This table, listing the 10

occupations with the greatest expected increase in jobs,

again highlights the extent to which the U.S. economy

will continue creating low-skilled positions in stores,

offices, and hospitals. Of the occupational categories in

which large numbers of new job opportunities will exist,

only two-nurses and managers—normally require posthigh school credentials for entry. The other eight range in

skill requirements from the personal and technical skills
Chapter 3-Human Resources for Competitiveness ● 97

Table 3A-2—Employment Growth by Sector,

1988-2000”

Table 3A-3—Occupations With Greatest Number of

New Jobs, 1988-2000a

Net job creation

(thousands)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Sector 1, Agriculture and Mining . . . . . . . .

Sector II, Traditional Industries . . . . . . . . .

Construction . . . . . . . . . . . . . . . . . . . . . . 760

Manufacturing, except

knowledge-intensive (below) . . . . . . . -390

Sector Ill, Knowledge-Intensive

Manufacturing b 

. . . . . . . . . . . . . . . . . . . .

Sector IV, Knowledge-based Services . . .

Health . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,080

Business services . . . . . . . . . . . . . . . . . . 2,740

Education . . . . . . . . . . . . . . . . . . . . . . . . . 1,200

Professional services

(legal, engineering, accounting, etc.) . 810

Financial services

(banking, credit, securities) . . . . . . . . . 650

Government not included elsewhere . . . 620

Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 300

Real Estate . . . . . . . . . . . . . . . . . . . . . . . . 130

Communications media . . . . . . . . . . . . . 90

Sector V, Tertiary Services . . . . . . . . . . . .

Retail trade . . . . . . . . . . . . . . . . . . . . . . . . 3,770

Personal services . . . . . . . . . . . . . . . . . . 1,870

Wholesale trade . . . . . . . . . . . . . . . . . . . . 910

Transportation and public utilities . . . . . . 660

Lodging . . . . . . . . . . . . . . . . . . . . . . . . . . 410

Other tertiary servicesc

. . . . . . . . . . . . . . 640

18,100

-280

370

70

9,620

8,250

NOTE: Subtotals may not add because of rounding.

aForthis table, the BLS moderate growth projections have been recast into

five broad sectors following the rationale discussed in /nfematiorm/

Competition in Services, OTA-ITE-328 (Washington, DC: U.S. Government Printing Office, July 1987), pp. 228-230.

blnci~es electrical, electronic, and communication equipment (except for

household appliances and electric lighting), instruments and related

equipment, office and computing machines, printing and publishing

equipment.

C[ndudes postal workers.

SOURCE: Projections summarized in Valerie A. Personick, “Industry

Output and Employment: A Slower Trend for the Nineties,”

Month/y Labor Review, November 1989, table 6, pp. 34-38.

expected of secretaries and other office workers, to the

minimal (but perhaps rising) levels needed for custodial

work.

A rather different picture emerges from a listing of the

10 occupations expected to grow most rapidly (table

3A-4). The totals are smaller than those in table 3A-3,

despite much higher rates of expansion. Every one of the

occupations listed in table 3A-4, 7 of 10 of which are

health-related, will require credentials of some sort for

entry, generally from a formal education or training

Net increase in jobs

(percent

(thousands) growth)

Retail salespersons . . . . . . . . . . . . . . . . . 730 19%

Registered nurses . . . . . . . . . . . . . . . . . . 610 39

Custodial workers . . . . . . . . . . . . . . . . . . 560 19

Waiters and waitresses . . . . . . . . . . . . . . 550 31

Managers . . . . . . . . . . . . . . . . . . . . . . . . . 480 16

Office clerks . . . . . . . . . . . . . . . . . . . . . . . 460 18

Secretaries b . . . . . . . . . . . . . . . . . . . . . . . 380 13

Nursing aides and attendants . . . . . . . . . 380 32

Truck drivers . . . . . . . . . . . . . . . . . . . . . . . 370 15

Receptionists and information clerks . . . 330 40

aBLS moderate growth scenario.

b~~~es legal w-Kf medical secretaries.

SOURCE: George Silvestri and John Lukasiewicz, “Projections of Occupational Employment, 1988-2000,” Monthly Labor Review, November 1989, table 6, p. 60.

Table 3A-4—Fastest Growing Occupations,

1988-2000”

Net increase in jobs

(percent

(thousands) growth)

Paralegals . . . . . . . . . . . . . . . . . . . . . . . .

Medical assistants . . . . . . . . . . . . . . . . . .

Home health aides . . . . . . . . . . . . . . . . . .

Radiological technologists

and technicians . . . . . . . . . . . . . . . . . .

Data processing equipment repairers . .

Medical records technicians . . . . . . . . . .

Medical secretaries . . . . . . . . . . . . . . . . .

Physical therapists . . . . . . . . . . . . . . . . .

Surgical technologists . . . . . . . . . . . . . . .

Operations research analysts . . . . . . . . .

62

104

160

87

44

28

120

39

20

30

7570

70

68

66

61

60

58

57

56

55

aBLS moderate growth scenario.

SOURCE: George Silvestn and John Lukasiewicz, “Projections of Occupational Employment, 1988-2000,” Month/y Labor Review, November 1989, table 6, p. 60.

program. Moreover, training will be more demanding in

terms of task-specific technical skills than for most of the

occupations listed in table 3A-3. Rapidly growing occupations like those listed in table 3A-4 are the ones most

likely to see labor shortages. These are the kinds of jobs

for which people who lack basic skills will be unable to

qualify (they will not even qualify to enter training

programs). The mismatch between jobs and skills will be

most acute in such occupations, and in the economic

sectors that depend on them.
Chapter 4

Technological and

Organizational Change:

Implications for Training
CONTENTS

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . .

PRESSURES FOR CHANGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Globalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Japanese Approach to Production ● . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

WORKPLACE ORGANIZATION AND MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . .

Old and New Approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

New Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

RESTRUCTURING FOR COMPETITIVENESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

From Work Redesign to organizational Restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . .

Changing Practices in Employment and Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CONCLUDING REMARKS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

APPENDIX 4-A--COMPUTER-AIDED TECHNOLOGIES IN U.S.

MANUFACTURING . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Toward Computer-Integrated Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Penetration of Programmable Automation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Impacts on Skills . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Boxes

Page

101

102

103

104

105

105

108

112

113

118

119

119

119

121

122

B o x Page

4-A. OEM-Supplier Relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106

4-B. Work Reorganization and Training in U.S. Industry: Two Examples . . . . . . . . . . . . 109

4-C. Organizational Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112

Figures

Figure Page

4A-1. Penetration of Numerically Controlled Machine Tools and Computer-Aided

Design by Plant Size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121

4A-2. Penetration of Numerically Controlled Machine Tools and Computer-Aided

Design Among Defense and Nondefense Firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122

Tables

Table Page

4-1. Investment by U.S. Automobile Producers and Productivity Improvement,

1979-89 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

4-2. New Job and Organizational Design Practices in U.S. Industry . . . . . . . . . . . . . . . . . 108

4-3. Changing Organizational Patterns in U.S. Industry . . . . . . . . . . . . . . . . . . . . 115

4-4. Restructuring in Four U.S. Industries

. . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . 117
Chapter 4

Technological and Organizational Change:

Implications for Training

SUMMARY

When surveyed in mid-1990, half of a group of

401 U.S. firms reported that poor worker skills and

motivation hurt their ability to deliver high-quality

goods and services. 1 To improve employee morale

and create positive attitudes toward quality and

customer service, companies are reorganizing their

workplaces—for instance, by introducing multiskilled work groups with self-management responsibility. This trend, together with a second—the

spread of decentralized computing-is reshaping

the American workplace. To function effectively in

the new environment, employees need adequate

basic skills, competence in interpersonal relations

and communication, and a relatively broad range of

task-specific skills.

Computers and related information processing

technologies accounted for nearly half of U.S.

spending on capital equipment in 1989.2 As PCs,

terminals, and keypads appear on more and more

desks and work stations, employees must be able to

read from them, enter data, interpret prompts, help

screens, and job aids. In automobile plants and

textile mills, banks and department stores, more

employees will be expected to make decisions and

take action on their own initiative.

Some of these people will need relatively advanced technical skills-for weighing alternative

production schedules, debugging programs for numerically controlled machine tools, or distinguishing between faulty instrument readings and a production process that has gone out of control. Others

will have to take greater responsibility for their

work: for inspection and quality control; for routine

maintenance, simple troubleshooting, and ad hoc

problem solving; for dealing with other departments,

and perhaps with customers.

These skills can be hard to transmit, harder to

evaluate. It becomes more difficult to trace success

or failure on the shop floor or in the back office of a

bank to particular individuals. But these are the

skills that U.S. industry will need in order to be

competitive. Not all employees must have them, but

the direction of change seems clear: mental skills

increasingly stand alongside manual skills, sometimes replace them; more jobs will require good

social skills, not only because of the greater importance of working in groups, but because of the

growth of service jobs that place employees in

contact with customers.

Although changing workplace practices have

been heavily publicized, some firms continue to pay

more attention to investments in capital equipment

than to investments in human capital and organizational restructuring. Nothing illustrates this better

than the failure of General Motors (GM) to benefit

more substantially from its investments in plant and

equipment during the 1980s (table 4-l). While many

other factors influenced the productivity figures

shown in the table, ranging from labor relations to

product mix and designs suited for efficient manufacturing, the simple fact is that GM was unable to

utilize its plant and equipment as effectively as its

competitors, for reasons that more than likely lie in

organization and management of production.

I“Higher Wages Not ~jor Factor Holding Back U.S. Competitiveness, Business s~ey Finds, ’ International Trade Reporter, July 11, 1990, p.

1077. Seventy percent of these companies, surveyed by the Gallup organization, had more than 500 employees.

In another survey, mamgers rated employee tra.ining and motivation as the most important factor for improving the competitiveness of U.S.

manufacturing. At the same time, thek responses to other questions revealed that many, particularly in small and medium-simif-, had no more than

a hazy idea of how to go about improving either training or motivation. This survey, conducted by Ernst & Young, is summarized in Lawrence T.

M.ichaels, ‘Priorities for Obtaining Competitive Advantage through Manufacturing,” paper presented at Autofact ’89 Conference& Exposition Detroi4

MI, Oct. 30-Nov. 2, 1989.

Zf)un & Bradstreet Comments on the Economy, April/May 1990, p. 2.

-101-
102 ● Worker Training: Competing in the New International Economy

Table 4-l —lnvestment by U.S. Automobile Producers and Productivity Improvement,

1979-89

General Motors Ford Chrysler

Investment in plant and equipment $72.6’ $41.2 $22.5

(billions of dollars) . . . . . . . . . . . . . . . . . . . . . . . .

Investment per vehicle produced . . . . . . . . . . . . . . $920” $680 $1,090

Change in labor productivity:

Engines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -13% 43% 9%

Stamping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 45 30

Vehicle assembly . . . . . . . . . . . . . . . . . . . . . . . . 5 31 19

al 979-1988.

SOURCES: Investment-annual reports. Productivity-Bruce Beier and Mary Gearhart, “Productivity Vs. Profit

Sharing,” Automotive Industries, April 1990, pp. 53-56, based on lhe Harbour Report:A Decade Later.

In fact, few of the trends outlined in this chapter

have as yet penetrated very deeply into U.S.

industry. 3 Some American firms have moved decisively to implement new forms of work organization. Others are experimenting with statistical process control (SPC) or just-in-time (JIT) production

without understanding that these are techniques for

aiding in reorganization as much as ends in themselves.

Some of the new practices had earlier been

exported from the United States to Japan (SPC is

perhaps the best known example). In emulating

these and other features of Japanese production

systems, American firms are not only chasing

moving targets with no assurance of catching up,

they are, in some cases, adopting features selectively—

and hoping that a system with only some of the parts

in place will function acceptably.

The striking contrasts between U.S. and Japanese

production systems lie, not in the equipment on the

factory floor, but in how companies manage and

train their people, allocate tasks to individuals, to

work groups, and to automated machinery. Most

Japanese managers realize that training must be an

integral part of strategies for automation. Most

American managers do not. When managers treat

their workforce as an adjunct to “technology,” as

many still do, they fail to capitalize on employee

skills, to reap the rewards that can come from

blue-collar innovation (alongside the white-collar

innovation that comes from technical and professional workers).

How far will the new practices outlined in this

chapter eventually spread? The limits will be tested

when restructuring bumps up against adversarial

traditions of labor-management relations. In Japan,

labor is weak, the workforce docile; management

techniques that would be viewed as coercive in the

United States have been common. On the other hand,

the no-layoff policies of Japan’s large corporations

provide a level of employment security seldom

approached here. Will American firms emulate this

aspect of the Japanese system? Successful reorganization and restructuring depends on workers who

view themselves as part of a more-or-less professional undertaking, one tied at providing value to

the firm’s customers. Such beliefs will not last long

if companies respond to the next recession with

immediate layoffs. It is one thing to treat and train

ordinary workers as professionals, or at least try to

convince employees that the company views them

this way. It is another thing to pay them when there

is no work to do.

PRESSURES FOR CHANGE

The skills and training required of shopfloor

employees have changed a good deal over the past

two decades.4 Technological change-notably the

computer in the workplace-is part of the reason.

But it is new technology as reflected in the redesign

and reorganization of work, more than simply new

3~eenpermnt ~f~encmf-~e~on~g t. a ~ey ~ e~ly 1990 were us~g some form of self.manag~ work group, with another 4percent

reporting plans to move in this direction. “Workforce2~ompeting in a Seller’s Market: Is Corporate American Prepared? A Survey Report on

Corporate Responses to Demographic and Labor Force Trends,” ‘lbwers Perrin and Hudson Institute, July 1990, p. 27. This survey covered 645

companies, in both manufacturing and the services. Bmause most of the responding companies were relatively large, and large companies have been

in the lead in adopting work groups, these percentages probably should be regarded as upper bounds.

d’rhis c~pter draws heavily on “Corporate Strate~ and ~dustrial T raining,” report prepared for OTA under contract No. L3-5240 by Robert R.

Miller, Feb. 28, 1990. Interviews and plant visits for that repo~ and by OTA staff, underlie much of the discussion that follows.
Chapter &Technological and Organizational Change: Implications for Training ● 103

machines or processes, that creates new needs for

training. (In this chapter, work organization refers to

the design and management of the production process, with the more inclusive term restructuring reserved for the enterprise and its strategy as a whole.)

In earlier years, most training had a simple

function: to teach unskilled or semiskilled workers

how to perform specific tasks and operate particular

pieces of equipment. Today, companies put more

emphasis on flexibility and adaptability; they seek

workers who can master a variety of tasks. In many

redesigned production systems, people work in

groups; collectively, the group takes over some of

the responsibilities earlier vested in first-line supervisors (foremen), and some of the tasks once the

province of grey-collar technicians and maintenance

workers. By replacing some of their skilled workers,

companies not only save money, but gain flexibility:

group members can rotate from one job to another,

help each other out, fill in for absentees. Workers

must have the social and communications skills to fit

into the group and contribute. For such reasons,

firms seeking to implement new competitive strategies based on new forms of work organization

typically find they must modify their approach to

hiring as well as to training.

Computers and computer-based equipment also

require new and different skills-whether they are

part of highly automated systems, or when simply

used as adjuncts to traditional plants and processes.5

Nonetheless, it is the changing context for work that

puts the greatest demands on trainers and on

managers and supervisors. Work reorganization

forces lower level employees to take more responsibility, sometimes including self-supervision and

group supervision, cooperate more closely with one

another, understand their place in the production

system and in the organization. This can be unsettling for some people, including first-line supervisors—

who may in fact find their jobs vanishing. Responsibilities broaden. So do skills. People are less likely

to be pinned down by a narrow job classification.6

Reorganization calls for somewhat more technical

training, but most of all for new forms of behavior.

Much of the training is indirect, embodied, for

instance, in courses in SPC or JIT. In manufacturing,

the forces driving these changes stem largely from

international competition. In the services, they stem

primarily from domestic competition.

As they pay more attention to training, managers

find themselves paying more attention to the costs of

training. When most worker-level training was

one-on-one in the factory or the office, the costs were

buried, while the only measure of effectiveness was

whether new employees learned to perform their

assigned tasks. Today, more companies view training as a cost center, work harder to contain costs and

measure effectiveness.7

Globalization

With imports and exports growing faster than the

economy itself, more American goods and services

face foreign competition each year. Globalization, a

trend that goes well beyond simply investing in

foreign subsidiaries for production and distribution,

accelerated markedly during the 1980s. The objective: to combine and integrate operations in the

major industrial nations. Often, this involves decentralization, with such functions as design, development, manufacturing, distribution, and marketing

located in different parts of the world. Instead of first

developing products for home markets, and then, if

these prove successful, moving abroad, companies

now design products for world markets, modifying

them only slightly for different countries. New

products may be simultaneously introduced in

Japan, Europe, the United States, and elsewhere.

To compete in this environment, American firms

must control costs and raise quality (ch. 3). They

must also build more flexible organizations, able to

provide the variety that consumers now expect and

the just-in-time deliveries demanded by corporate

swhenM~ Marietta adopted MRP 2 (Material Review PlanniII g (sic)), a computerized method for production planning and control, the company

spent five times as much on trainingas on the hardware and software required. William B. SCOC “Aerospace/DefenseF irms See Preliminary Results

From Application of TQM Concepts,” Aviation Week & Space Technology, January 8, 1990, pp. 61-63.

6Automobile plmt5 owmt~ by the major u-s. producers have traditio~y had l~ge numbers of job classiflcdions+o-g%with S~Ct lllk

governing who could do what. Some ‘‘transplants’ ‘—U.S. factories operated by Japanese automakers-have only two classifications, for production

workers and maintenance staff; none has more than four. Foreign Investment.’ Growing Japanese Presence in the U.S. Auto Industry,

GAO/NSLAD-88-111 (Washington DC: U.S. General Accounting Oftlce, March 1988), p. 52.

l’~ 1985, ~M conducted a co~orat~~de s~dy of training expenses, fmd~g hey to~ed $900 million exclusive of lost work thllfi50 percent

more than expected. Over the next 2 years, the company cut $150 million from its educatiodtraining budget. Ralph E. Grubb, Academy for Educational

Development personal communication% May 11, 1990.
104 ● Worker Training: Competing in the New International Economy

customers. Multinationals are both expanding and

decentralizing, while seeking alliances with customers, with putative rivals, and with suppliers. Firms

are simultaneously integrating globally and disintegrating by farming out more production, contracting

for services once provided internally, and pursuing

joint ventures and other intercorporate linkages

(e.g., cooperative R&D and technology development). Truly international corporations have begun

to emerge-IBM and Citibank, Sony and Honda.

Although the notion of a rootless multinational

remains an exaggeration, borders have less significance for many companies today than in the 1970s.

Globalization means that American plants will have

to achieve overall productivity levels superior to

those abroad, else lose work to overseas locations

with lower costs, superior quality, or quicker and

more responsive customer service.8

The Japanese Approach to Production

Japanese companies have been highly visible in

the United States, first as exporters, and more

recently through direct investments in onshore

plants. Both American and European managers have

been forced to rethink their global strategies, especially in production. Japan’s prowess in manufacturing has particular significance for training. Success

in producing high-quality goods at low cost—

computer chips or supertankers-stems from highly

developed production systems that effectively couple product and process design, work organization,

and shopfloor management. The better workers

know their jobs and understand their role in the

system, the better the system will function.

In automobile assembly, the best Japanese production systems have been termed “lean” because

they attempt to minimize buffers of work-in-process

(WIP) inventory that might obscure production

problems and slow their resolution.9 These systems

depend heavily on employees trained to avoid rather

than detect and correct product defects.

Even more than in the textile examples in chapter

3 (box 3-A), mistakes by shopfloor workers in an

automobile plant can be disruptive and costly. With

little backup, one mistake can shut down an entire

line, idling dozens of workers. Japanese firms not

only accept the risks of such systems, they exploit

them to cut labor and inventory costs to a minimum,

keep the system under control, and keep the pressure

on the workforce.

Lean systems require skilled, flexible, and motivated workers to anticipate possible problems,

eliminate bottlenecks and production shutdowns,

ensure quality. Training plays an intrinsic role in

terms of motivation as well as for transmitting

concrete skills. These systems also depend on

products designed for ease and speed in manufacturing, and on a management style stressing employee

involvement and job rotation. Work groups, kaizen

(continuous improvement) programs, and quality

circles are common. Among other functions, these

help create communications channels between the

factory floor and engineering to achieve true designfor-manufacturability.

In contrast, the “robust” systems common in

U.S.-owned auto plants rely on large inventory

buffers as safeguards against unforeseen events

(e.g., machinery breakdowns, late delivery of parts).

In robust systems, workers typically have relatively

tightly defined task responsibilities, few engineers

spend time on the factory floor, and organizational

barriers impede the flow of ideas between product

design and manufacturing engineering, as well as

between the shop floor and engineering.

Lean systems attempt to avoid problems, robust

systems to guard against their consequences. On the

evidence of plant performance, lean systems perform better, exhibiting higher levels of both productivity and product quality than the robust systems

With the spread of automation, direct labor cost has become less important in decisions on location. At Tandy COrp.’S Fofi WO@ TX pkn~ dir~t

labor accounts for less than 2 percent of the cost of each PC produced. “North American Profiles,”Datamation, June 15, 1990, p. 67. In automobile

pmductio~ direct labor now comes to about 10 percent of total costs, indirect labor (includiog management) adding another 15 percent. Bruce Beier

and Mary Gear- “Productivity Vs. Profit Sharing,” Automotive Industries, April 1990, pp. 53-56. But if the relatively high wage levels of U.S.

production workers serve as less of a handicap, competition to control indirect costs will be no less fierce.

gJohuF. Kmfc~ “Triumphof the Lean Production System,” Sloan ManagementReview, Fall 1988, pp. 41-52. Also see Haruo Shima@ “Japanese

Mamgement of Auto Production in the United States: An Overview of ‘Humanware Technology’,” Japanese Zrwestntent in the United States: Should

We Be Concerned? Kozo Yamam ura (cd.) (Seattle, WA: Society for Japanese Studies, 1989), pp. 183-205.
Chapter 4-Technological and Organizational Change: Implications for Training . 105

Photo credit: Diamond-Star Motors Corp.

Automated welding of automobile bodies.

favored by American firms.l0 Indeed, productivity,

quality, automation, and training are found together

in the best-performing auto plants—in U.S. transplants as well as in Japan. Honda, Nissan, and

Toyota give their American workers substantially

more training than do American automobile manufacturers (box l-B, ch. 1), and achieve higher

productivity levels. The transplants, moreover, seem

to be operating at quality levels slightly better than

sister plants in Japan.

In effect, the production systems developed by

Japanese automakers combine work organization

built around semi-autonomous groups with substantial training and careful attention to shopfloor

management to achieve outstanding quality and

productivity. Nonetheless, while making some changes

in work organization in some plants (GM calls its

version of JIT synchronous production), the American automakers continue to operate traditional,

robust assembly plants, and, as figures 1-1 and 1-2

showed (ch. 1), provide relatively little training.

Even so, some American firms have begun imitating

some aspects of Japanese production systems. GM,

for instance, invested in its joint venture with

Toyota, NUMMI (New United Motors Manufacturing Inc., Fremont, California) with the explicit intent

of learning from its partner’s approach to shopfloor

organization and management.

In the automobile industry, and in many others,

American firms have also emulated Japanese practices by reducing the ranks of their suppliers, and

seeking closer working relationships with the most

capable of them (see box 4-A). Stable, long-term

links with a relatively small group of frost-tier

suppliers help keep the overall chain of production

flexible, responsive, and well controlled, much as

JIT production helps isolate defects and other

systemic problems within a given plant. Xerox now

buys from fewer than 500 suppliers, compared with

5000 a decade ago. As major American corporations

continue to emulate Japanese production strategies,

their suppliers will have to revamp their own

production systems—and in many cases retrain their

employees-or lose business to more nimble rivals,

some of them foreign-owned.

WORKPLACE ORGANIZATION

AND MANAGEMENT

Old and New Approaches

The design of most U.S. production systems

continues to reflect the scientific management paradigm descending from Frederick Taylor, whose

book on the subject appeared in 1911.11 Particularly

in labor-intensive mass production of consumer

goods (automobiles, apparel, appliances), unskilled

workers have been assigned to a particular work

station—tied to a machine, or to one position on an

assembly line. Their job: to repeatedly carry out a

single task or a short sequence of simple tasks.

Specialists designed the work. Foremen oversaw it.

Large inventories between stations and lines provided “robust’ protection against disruptions that

might stop the flow of production. Inspectors

10~ ~Training and me Auto rndustry: hltelTMtiOIUd COmp~SOnS,’ ‘ report prepared for OTA under contract No. N3-191O by John F. KrafcikG

Competitive Manufacturing Research, February 1990. This report summarizes results of surveys conducted by MIT’s International Motor Vehicle

Program, most of them in 1988, covering 45 automobile assembly ptants. The 45 plants included 12 in the United States operated by U.S. automakers,

8 in Japan operated by Japanese firms, and 3 transplants operated by Japanese automakers in the United States. (Most of the 22 others were in Europe.)

Also see John F. Krafcik and John Paul MacDtile, “Explaining High Performance Manufacturing: The International Automotive Assembly Plant

Study,” International Motor Vehicle Policy Forum, Massachusetts Institute of Technology, May 1989; and John F. Krafcik and John Paul MacDufile,

“Effect of Design Manufacturability on Productivity and Quality: An Update of the IMVP Assembly Plant Study,” IntermtionaI Motor Vehicle Policy

Forurq Massachusetts Institute of Technology, January 1990. Comparisons of design-for-manufacturability in the latter study found Japanese

automakers ranking high with two of the three major U.S. producers in the bottom half of all firms surveyed.

llFr~erick W. Taylor, The Principles of Scientifi”c Management (New York: Harper& Brothers, 1911).
106 . Worker Training: Competing in the New International Economy

Box 4-A-OEM-Supplier Relationships

OEMs, or original equipment manufacturers, buy raw materials, parts, components, and subassemblies from

other firms. Automakers, for instance, purchase steel, glass, plastic resins, and paint. They also buy carpeting and

trim materials, catalytic converters and air bag systems, microprocessors and fuel-injection nozzles. Seeking to

match Japanese standards of cost and quality, American OEMs are trying to integrate suppliers more fully into their

own operations.

The process begins with technical requirements and specifications developed by the OEM’s engineering

department. “Buyers” then solicit bids and select suppliers. Until a few years ago, the buyer’s job was

well-structured, much of the work relatively routine-a matter of soliciting bids, managing the selection process,

processing contracts, orders, and invoices. While the purchasing department had to know which firms promised to

be reliable, monitor those chosen, and help solve delivery and quality problems as they arose, bids were evaluated

primarily on costs. (Excess capacity during the 1980s made it particularly easy for automakers to play vendors off

against one another.)

Today, the selection process is changing. Price remains important, but competitive bidding has been

de-emphasized. In evaluating prospective suppliers, OEMs examine their history of providing consistently

high-quality products, and often their internal engineering capabilities. Candidates may be asked to conduct

self-assessments and provide detailed information on cost structures, quality control procedures, factory equipment,

and workforce capabilities. The OEM may inspect each candidate’s plant.2

If they pass the initial screening, suppliers become candidates for long-term contracts, perhaps on a sole-source

basis; in the automotive industry, such arrangements might extend over a 5-year model run or longer. Suppliers can

expect a steady flow of orders so long as their shipments meet the OEM’s quality and JIT delivery targets (suppliers

may be expected to provide just-in-time deliveries in small lots several times per day). The OEM may consult them

at an early stage in the design of new products, ask the supplier’s own engineers to take over or share in development

work, and stand ready to make modifications during production. Parker-Hannifin, for example, a major producer

of hose assemblies for automotive air conditioners, now designs many of these assemblies; in earlier years, OEMs

provided Parker-Hannifin with detailed drawings and specifications. Major U.S. automakers have asked suppliers

to install computer-aided design equipment compatible with their own to speed exchanges of technical information.

For the OEM, dealing with a smaller group of more broadly capable vendors promises reductions in the upfront

cost and time of product development; the OEM shifts some of the risks of development to suppliers (the product

may not sell, and the supplier may lose its investment in design, in worker training, even in new production

equipment). More important, OEMs hope that common interests will motivate their suppliers to work harder to meet

cost, quality, and delivery goals. In return, the suppliers get implicit or explicit guarantees of future sales, with

monitoring by the OEM replacing repeated bidding. Pressure to reduce costs has been replaced by pressure to

provide JIT delivery and ensure quality (SO the OEM does not have to inspect 100 percent of incoming goods).

Although OEMs now find themselves helping suppliers with technical problems, few offer direct assistance in

training beyond providing materials (e.g., manuals, videotapes).3

l~@~~pment m~~ac~em, or OEMS, sell end product~.g., cars, computers, airplanes. Cate@kW for ~t~ce, offers a broti

range of construction equipment as an OEM. It purchases many parts from its own suppliers, and also sells diesel engines as a supplier to builders

of heavy trucks.

The discussion in this box is based on “Corporate Strategy and Industrial Training,‘‘ report prepared for OTAundercontract No. L3-5240

by Robert R. Miller, Feb. 28, 1990, pp. 12-14; and “Supplier Relationships and Training, report prepared for OTA under contract No. L3-2850

bylmuis G. Tornatzky, Rocco DePietro, and James Jacobs, The Industrial Technology Institute, Ann Arbor, MI, Dec. 15, 1989. Also see Foreign

Znvestnzent: Growing Japanese Presence in the U.S. Auto Zndus~, GAO/NSIAD-88-l 11 (Washingto~ DC: U.S. General Accounting OffIce,

March 1988); and David N. Burt, “Mamging Suppliers Up to Speed,” Harvard Business Review, July-August 1989, pp. 127-135.

2Japanese-oWed subsidies fi the Ufited States put particular stress on q~ty. ~ a recent s~ey, 62 percent of @arlSplaIlt respondents

(engineers and mamgers in Japanese-owned automobile plants, more than half of them Americans) ranked quality as the most important factor

in purchased components, while 83 percent viewed a comprehensive SPC program as the most important criterion for chosing suppliers. Daniel

J. Hol$ “Selling to the Transplants,” Automotive Engineering, April 1990, p. 8.

3~ 1985, Ford spm off an ~-house tr~g adtecfical assist~ce group to form the not-for-profit American Suppfier rIIStitUte, which

now sells services to all comers. The Institute specializes in quality control practices, and has become perhaps the best-known U.S. apostle of

Taguchi methods-a set of techniques that stress life cycle quality, reliability, and customer satisfaction. For a nontechnical introduction see

GenichiTaguchi and Don Clausing, “Robust Quality, ” Harvard Business Review, January-February 1990, pp. 65-75.
Chapter 4-Technological and Organizational Change: Implications for Training . 107

Many smaller suppliers have had trouble meeting the new requirements. Surveys reveal sharply differing

perceptions among OEMs and suppliers concerning the need for such manufacturing practices as JIT, SPC, and

kaizen (continuous improvement), with suppliers uninformed or negative compared with OEMS.

4 Such findings

suggest that, on the whole, movement towards more streamlined supplier networks will be relatively slow in the

United States. They also suggest that many small and medium-sized manufacturing firms, at sea amidst the

confusing choices posed by an array of new technologies, shopfloor practices, and customers seeking more

responsive service, will have trouble surviving. These companies will have to reorganize their own production

operations or look for less demanding customers. Over the next decade or two, thousands of such firms will probably

be bought out or merged. Others will simply shut their doors.

4A reCentDelp~ swey ~onducted by Andersen Consulting with 288 respondents from vehicle manUfactUr~ and 431 from mppliers,

found wide agreement (90 percent) on the importance of structured programs for continuous improvement such as kaizen. But few respondents

from the supplier group placed much weight on ~, kanban, and similar production practices+ven though these are necessary tools, goals,

and yardsticks for measuring progress in any continuous improvement effort. In another indication of the relatively slow pace of change in the

motor vehicle and parts industry, Andersen’s Delphi panels have seen JIT as a constant 2-3 years in the future ever since the early 1980s. Peter

C. Van Hull, “Results of 1989 Survey of Automobile Trends: Putting the Pieces Together,” paper presented at Autofact ’89 Conference &

Exposition Detroi~ Oct. 30-Nov. 2, 1989, summarizing Andersen’s proprietary report.

checked quality at various points. Supervisors called stations, employees typically need broader skills.

in technicians or maintenance workers to handle

problems as they arose.

In these traditional production systems, unskilled

workers might need some minimum level of manual

dexterity, but the work was more likely to be

boringly repetitive than technically demanding.

Grey-collar employees—toolmakers, electricians,

machine repairers-analyzed problems, exercised

judgment, made decisions. So did supervisors and

manufacturing engineers. But not ordinary workers.

Particularly in unionized plants, the tasks each

employee could do were tightly circumscribed by a

plethora of work rules.

The era of mass production is not over, but work 1.

reorganization together with flexible automation

(discussed in app. 4-A, at the end of the chapter) has

made shorter production runs economical, and

encouraged product differentiation. In assembly,

where the inroads of automation have been slow,

more companies have turned to work groups to

improve quality and flexibility, while reducing the 2.

number of first-line supervisors to cut costs. Typically, supervisors have been assigned managerial

and liaison tasks earlier exercised at higher levels

(e.g., interdepartmental coordination). 3.

Table 4-2 summarizes the primary features found,

singly and in various combinations, in redesigned

production systems, taking the view that it is the

organization of production, not the computer methods summarized in appendix 4-A, that distinguishes

the best performing companies. As noted in the

table, when work groups replace individual work

Sometimes, shopfloor-workers may even be asked to

deal directly with customers (perhaps their counterparts in other fins). Supervision in the traditional

sense often recedes, with hourly paid group leaders

given responsibility for internal coordination and

conflict resolution, as well as liaison with other

departments.

Rarely will the production system in any one

company include all the characteristics listed in table

4-2. Partial, halting, and piecemeal implementation

has been the rule. But many American companies

are experimenting with at least some of these steps.

This generally calls for three types of training:

Basic skills. With more employees required to

read information from computer terminals and

enter data correctly, companies that reorganize

as outlined above typically screen employees

for competency in reading, writing, and simple

arithmetic, followed by refresher courses or

intensive instruction for those who need it.

Task-specific technical skills. Companies seeking a multiskilled workforce must necessarily

provide more training in the operation of

particular pieces of equipment.

Organizational training. Intended to set each

individual’s job in overall context, demonstrate

its importance for achieving the firm’s goals

(i.e., cost, quality, customer service), and motivate workers, this kind of training is by far the

most difficult to deliver effectively. Companies

frequently rely on indirect methods--e. g., training in SPC—to prepare workers to take more

responsibility.
108 . Worker Training: Competing in the New International Economy

Table 4-2—New Job and Organizational Design Practices in U.S. Industry

1.

2.

3.

4.

5.

6.

7.

Seeking flexibility, firms define jobs more broad/y, with multiskilled groups often taking over responsibility for a number of tasks.

Sometimes broader skills and responsibilities follow more or less directly because computer automation permits each person to do

more.

Training exposes employees to corporate goals and enhances motivation, sense of belonging, and commitment. These objectives often

merge into the development of the contextual/ /knowledge employees need in order to understand how their work affects the rest of the

firm and its customers.

Employees at lower levels maybe granted a say in decisions on procedures, and perhaps equipment, as well as day-to-day operations.

Often, participation takes the form of consultation between employee representatives and the company’s technical and managerial

staff.

Managers may give groups of workers some or all of the authority formerly vested in first-line supervisors, including responsibility for

quality and for coordination with other departments.

In selecting new employees, companies may weigh motivational and attitudinal/ factors, as well as social and communications skills,

more heavily than experience. Some American firms have adopted multiple levels of screening, with aptitude and perhaps psychological

tests followed by interviews with both supervisors and prospective co-workers.

Pay sea/es may reflect an employee’s skills (pay for skills) and/or performance (payment for results).

In decentralizing, some companies have replaced functional with product-centered organizations, intended to channel work smoothly

and directly from input to output of the system, creating a faster, more flexible (through-not necessarily less costly) production process.

SOURCES: Technology and Structura/ Unemployment: Reernp/eying Displaced Adu/ts, OTA-ITE-250 (Alexandria, VA: National Technical Information

Service, February 1986), pp. 356-357: International Competition in Services. OTA-ITE-328 [Washington. DC: U.S. Government Printing Office,

July 1987), pp. 278-284. “ “

Much organizational and motivational training

aims to modify attitudes concerning employee

responsibility, encourage awareness of the link

between workplace tasks and the company’s overall

success or failure, and build loyalty to the organization. The intent is to persuade people that their jobs

are vital for the continuing prosperity of the firm,

and that management values their contributions,

small or large. Although some of this training

smacks of paternalism-and some companies admit

this-it should not be viewed solely in that light.

Box 4-B gives examples of two American manufacturers, pressed in different ways by international

competition, that have taken some of the steps

outlined above. To the extent that cost-benefit

tradeoffs can be evaluated, more firms are making

careful efforts at measuring them; they are finding

that training helps workers learn on the job, that

careful attention to integrating new employees into

the organization can reduce the time required for

them to become fully productive.

New Responsibilities

With work groups taking on self-management

responsibility, companies have eliminated foremen,

or placed them over several groups (totaling perhaps

80 or 100 employees, rather than a dozen or so). As

the number of job classifications declines, production workers also take over some of the responsibilities of technicians and craft workers (e.g., inspection, simple maintenance). Finally, those few plants

,

that have undergone more-or-less complete transitions to work groups have had to change their

‘‘management’ information systems in rather fundamental ways. Some have begun transmitting

customer orders (and sales projections) directly to

the factory floor.

Production Workers

In the United States, management has traditionally given orders and labor has followed them. As

once-sharp lines blur, companies call on a loosely

Photo credit: UAW-Chrysler National Training Center

A joint union-management team develops training plans.
Chapter 4-Technological and Organizational Change: Implications for Training ● 109

Box 4-B—Work Reorganization and Training in U.S. Industry: Two Examples1

Motorola: Microprocessor Production

Managers at Motorola pride themselves on their success in taking on Japanese competition, both at home and

abroad. A 1988 recipient of the Malcolm Baldridge Quality Award, Motorola was quicker than most U.S. electronics

firms to recognize that manufacturing would be critical during future rounds of international competition. The

company’s managers realized that training had to be part of their plans for improvement in manufacturing, as

illustrated by the reorganization of the firm’s Austin, Texas, microprocessor plant.

The Austin factory is currently in the midst of a two-stage program to cut costs and improve quality and

customer responsiveness. The first stage, largely completed during 1989, entailed a complete redesign of facilities

and operations, but little in the way of new capital outlays. During the second stage, Motorola will invest in a new

generation of flexible manufacturing equipment. The company believes it makes no sense to automate until the

production process is already functioning well. (This is also one of the hallmarks of Japanese manufacturing

practice.)

Although cost reduction was a major goal, this could not be achieved simply by cutting direct labor, which

accounted for no more than 5 or 6 percent of manufacturing costs. Motorola sought improved quality (fewer bad

parts, greater customer satisfaction), shorter delivery times, and greater flexibility-as well as better employee

morale-by organizing production around work cells and work groups. Each cell, manned by 6 to perhaps 20

employees, performs a particular set of tasks. Since the plant operates around the clock, the equipment within a cell

might be shared by as many as four work groups. The product mix varies, so that different shifts may be making

different chips. In the words of one manager: ‘‘The strategy was to make the product mix problem more manageable

. . . to inculcate a strong sense of ownership and accountability in which participative management principles could

be applied.”

There are no foremen in the Austin plant. Instead, group leaders, who are hourly employees, have taken over

the supervisory tasks; planning the flow of production based on incoming orders is one of their primary

responsibilities. Each group is accountable for its own output quality, for productivity improvements, and for

meeting in-plant delivery schedules (e.g., to the next cell). Technicians and engineers have been assigned to work

with most of the groups. Group members must be comfortable with SPC, with a constantly changing mix of

products, and with frequent product/process changes. Sometimes they must placate angry customers. Computer

systems bring business data directly to the factory floor.

When a skills assessment showed that nearly one-third of the existing Austin workforce was weak in reading,

writing, and arithmetic—which had not been apparent in the old work environment-Motorola instituted a 300-hour

internal basic skills course. Like their counterparts in other firms, Motorola managers would prefer not to spend time

and money making up for what they see as deficiencies in the public education system. But, short of culling

employees on the basis of present skills-which no company really wants to do-there was little choice but to

proceed with remedial education.

With the first phase of reorganization largely complete, a plant that had been approaching capacity at some

1.5 million microprocessors monthly now produces more than 4 million. Direct labor has been reduced by half, and

on-time delivery performance greatly improved. Quality has increased steadily toward the firm’s ‘‘six sigma” goal

of near-zero defects. Additional training will be required during the second phase, when sophisticated new

equipment is installed.

Caterpillar: Heavy Industry in Trouble

In many countries, Caterpillar’s familiar yellow earthmoving and construction equipment has traditionally held

more than half the market, but in the early 1980s the firm’s position came under severe attack. First, Japan’s

Komatsu expanded its product range far beyond the lower end of the market and into Caterpillar (CAT) territory.

Komatsu moved aggressively into Far Eastern countries, and began lining up dealers in the United States. Next, the

exchange rate moved against CAT. With the dollar gaining some 40 or 50 percent against major currencies, and

much of its production in U.S. plants, CAT found itself in a severe cost-price squeeze. Finally, U.S. contractors,

loyal Caterpillar customers, were steadily losing their dominance of international construction markets.

(continued on next page)

I~~coworate Shte=~d ~du~~~Tr~g,’repo~ prepared for OTA under contract No. I-3-5240 by Rob= R. Miller, ‘eb” 28? 19W.

Also Robert L. Rose,” Caterpillar Sees Gains In Efficiency Imperiled by Strength of Dollar,”Wall Street Journal, Apr. 6, 1990, pp. Al, All;

Nick Garnett, “Caterpillar Gets Dug in to $2bn Factory ModernizatiorL” Financial Times, June 6, 1990, p. 14.
110 . Worker Training: Competing in the New International Economy

Box 4-B—Work Reorganization and Training in U.S. Industry: Two Examples-Continued

Over 3 years in the mid-1980s, CAT lost more than $1 billion. With the return of the dollar to lower levels, the

company’s income statement improved. Nonetheless, the huge losses were traumatic. CAT has substantially altered

its business practices, seeking to reduce exchange rate risks by moving production overseas and purchasing more

components abroad. In departing from its past practice of making most of its own parts and components, CAT has

sought to shift risks to suppliers. Today, the company continues to operate 17 plants in the United States, but it

produces components internally only when it has a substantial cost advantage or wishes to preserve core

technological capabilities. Worldwide, Caterpillar now has only 60,000 employees (two-thirds in the United States),

compared with 100,000 at the beginning of the 1980s.

To bring down overall production costs, CAT is investing more than $2 billion in its own manufacturing

operations. Much remains to be done, but the company has moved toward a JIT system, and reorganized plants

around machining and assembly cells fitted with state-of-the-art flexible production equipment. Inventories have

been reduced substantially. Although 60 job classifications remain, the number had earlier been more than four

times greater. Work groups have been given responsibility for quality, productivity improvements, and meeting JIT

delivery schedules. As an example of the results, transmission assembly at CAT’s Peoria, Illinois, plant now takes

a few days rather than 3 months.

Given a lengthy history of labor discord, the long-term success of the new practices remains to be seen. Less

supervision, flatter organizational structures, and ever-sticter demands for higher quality and lower costs require

new skills throughout the workforce. CAT’s training has traditionally targeted skilled workers and supervisory

personnel, but this has begun to change: the company has introduced new programs to help unskilled and

semiskilled workers cope with the group-oriented approach to production, which has far less formal structure than

found in the company’s old plants.

CAT has also begun helping its U.S. suppliers with training, providing them at cost with courses in SPC,

blueprint reading, and geometric dimensioning and tolerancing. The company would like to avoid in-coming quality

inspections, relying instead on annual certification of vendors, but many suppliers have been unable to meet the new

quality targets.

Recently, CAT has become concerned that it may not be able to find enough machinists and other skilled

workers in the years ahead. while the firm has revived its apprenticeship program, halted in 1980s as losses

mounted, qualified candidates have been scarce.

related group of ‘‘soft’ technologies-continuous applying the results where possible-but the priimprovement (kaizen) and employee involvement mary purpose is motivational, aimed at selfprograms, SPC and JIT-to help employees feel discipline.12 SPC thus becomes a tool for workers to

comfortable in their new roles. SPC and JIT, for

example, frequently function on two levels: as

well-defined technical methods, and also as tools for

impressing on workers their roles and responsibilities in the redesigned production system. For engineers and managers, SPC functions as a rigorous,

quantitative method for monitoring and controlling

production. Shopfloor workers may be asked to

help-by recording SPC data, trying to analyze it,

understand what they are doing and find ways of

doing it better. Indeed, SPC in an American firm

may not differ much from kaizen in a Japanese firm.

Box 4-C discusses in more detail these methods for

helping organize and manage complex production

systems.

The organizational technologies outlined in box

4-C serve as preliminaries to automation, helping

companies avoid mechanizing wasteful or ineffiIzThis is me not only in the United States, but in Japan, where:

Groups begin by learning a number of statistical procedures which the forwna.nhas been taught in special courses-tree diagrams, Pareto

curves, how to use, if not actually how to do regressions. This is partly for real; these are indeed the techniques which-depending on

the nature of the work-plac~maybe used to identify problems for the group to tackle. Partly, also, they are symbolic-ways of absorbing

and expressing a scientilc attitude to work an initiation into a confraternity, a little like the Boy Scout learning his knots.

“Employee Training in Japa~” report prepared for OTA under contract No. L3-4335 by David Cairncross and Ronald Dore, March 1990, p. 15,

For an extensive comparative study of quality circles and their diffusio~ see Robert E. Cole, Strategies for Learning: Small-Group Activities in

Amen”can,Japanese, andSwed”sh Industry (Berkeley, CA: University of California Press, 1989). On current quality con~ol procedures inU.S. industry,

particularly for semiconductors and opticaJ fibers, see “U.S. Investment Strategies for Quality Assurance,” Planning Report 91, Quiclq Finan &

Associates for the National Institute of Standards and Technology, April 1990.
Chapter &Technological and Organizational Change: Implications for Training . 111

cient processes. Once a firm understands its processes and the needs that a reorganized production

system must satisfy, it is in a far better position to

specify new equipment (recall the Motorola example, box 4-B). In this light, computer-integrated

manufacturing (CIM) is evolutionary, not revolutionary.

These stages of refinement and streamlining nee d

not require extensive training in task-specific skills.

They do require attention to problem-solving, singly

or in groups, and to skill breadth. With JIT or

JIT-like systems, there is no time to wait for a

supervisor to assess a problem (defective parts, a

machine breakdown) and a specialist to fix it.

Workers should be in a position to diagnose and

solve most such problems themselves. Maintenance

training, for example, then serves multiple ends,

helping employees understand how equipment operates, and thus how it may fail, as well as enabling the

company to reduce its maintenance staff.

How much training is needed when work is

reorganized? What makes for good training in

support of continuous improvement or employee

involvement? These questions have no general

answers. But it does seem clear that techniques like

those summarized in box 4-C are more likely to

prove effective when part of a company-wide

reorganization, one that the workforce will accept

and believe in. Typically, this means linking reorganization in convincing fashion to the company’s

competitiveness-hence job security for shopfloor

workers. If employees sense a quick-fix effort, or

think they will be blamed for future problems,

reorganization more than likely will fail.

Supervisors

The supervisor’s role in a reorganized factory

differs fundamentally from that of the line foreman.

There is less need for such traditional supervisory

tasks as motivating and disciplining workers, or

monitoring performance. When supervisors oversee

a number of work groups, becoming coordinators

and facilitators, it is more as if the supervisor works

for the group rather than over it. For example, the

supervisor may become the liaison with the personnel department. Ideally, persuasion replaces authority, with teaching and training added to the supervisor’s role. Supervisors also need better diagnostic

skills, and, if they work with engineers, some

familiarity with technical issues.

Some companies have found that fewer than half

their supervisors can adjust, even after training in

human relations, participatory management, and

organizational technologies like SPC or JIT. Supervisors who cannot make the transition have sometimes found themselves out of work. Other companies have tried to train redundant supervisors for

technical support jobs, where interpersonal skills are

less important. But these jobs have grown considerably more demanding with the spread of computerbased equipment, and few supervisors, especially

those promoted from the factory floor, have an ideal

background for filling them. Indeed, the simpler

support jobs, like quality control, tend to disappear

with reorganization, while others may now call for

a college degree (using sophisticated computer

models for planning and scheduling-e. g., computeraided process planning, or CAPP—see app. 4-A).

Engineers

Reorganization, finally, alters the relationship

between shopfloor workers and engineering staff.

Both product engineers and manufacturing specialists may be expected to act on suggestions and ideas

from production workers, join in quality circle and

kaizen meetings, and otherwise treat shopfloor

employees more or less as equals. Many companies

have found this to be a painful experience for their

engineers, who tend to view themselves as fountains

of expertise and the workforce as receptacles.

In the scientific management ideal, there was one

best or optimum way to organize production, that

way known to the initiates. To the extent that this

view still shapes the attitudes of American engineers, they will continue to have trouble working

effectively with shopfloor employees. When it

comes to process design, engineers often concentrate on the hardware-machinery and equipment—

treating the workers as adjuncts, there to do whatever is too complex or expensive to automate. In the

extreme, engineers may view automation as a way to

get people out of the system because they are sloppy,

unpredictable, inefficient-the source of errors. A

recent survey finds manufacturing engineers poorly

prepared for CIM because interested only in the

technology, not in how people can use it.13

lsDeflef K. Kos~, “Tec~ology’s ~pact on tie Mantiactig Engineer in the Year 2000, ” paper presented at Autofact ’89 COnfmenCe &

Expositio~ Detroit, MI, C)ct. 30-Nov. 2, 1989. The survey was conducted by the A.T Kearney consulting fii.
112 . Worker Training: Competing in the New International Economy

Box 4-C-Organizational Technologies

Statistical Process Control

The goal of SPC is to reduce variance in the production process, resulting in more consistent output with fewer

and less serious defects, minimum scrap and rework.1 American firms developed the fundamentals of SPC during

the 1920s and 1930s, but the methods have been much more visible since their reimport from Japan, beginning in

the 1970s.

By measuring process parameters (e.g., the moisture content of cookies as they enter a baking oven), and

examining trends over time, SPC defines the limits past which product attributes begin to deteriorate (e.g., the

cookies leave the oven too hard or too soft). Once these limits have been determined, the process can be monitored

to keep the critical parameters in the proper range. Seemingly simple, SPC can become quite complicated when

dozens of variables are involved, or the process goes out of control and the causes cannot be located.

Many if not most such problems are matters for the engineering staff. Companies train shopfloor workers in

SPC methods in large part to impress on them the need for continuous and disciplined attention to their work. Rarely

do they expect employees to actually learn anything about statistics beyond a few simple terms like averages and

ranges. The intent is to socialize them, integrate them into the production system, and create a self-managing work

environment. Still, basic skills are necessary if workers are to enter data and read the control charts that tell them

whether or not they are doing a good job.

The example of Plumley Companies, an auto parts supplier in Tennessee, illustrates the impacts of SPC and

the training required. During the early 1980s, Plumley was shipping parts with defect rates of 1 in 300; the company

had lost its oldest and one of its best customers-Buick. When Plumley tried to implement SPC in conjunction with

the installation of new manufacturing equipment, it discovered that nearly half of its 500-person workforce had not

completed high school; many employees, including supervisors, were unable to read. The company embarked on

an employee education program. With its investments in new equipment, plus SPC, Plumley was eventually able

to reduce its reject rate to 1 in 10,000. The firm has won back business from Buick, and gained such demanding

new customers as Nissan.

In another example, at a cookie factory, introduction of SPC proved troublesome, but not because of basic skills

problems. 2 Managers neither explained the goals of the program adequately, nor provided appropriate training.

Bakers, mixers, dough rollers, and machine captains focused on maintaining particular target values for moisture

content, line speed, and temperature in each of eight oven zones, without regard for the process as a whole. This

missed the point: actions at each stage affected those downstream; turning out cookies with the desired weight,

shape, color, and consistency required attention to ranges and trends, rather than specific values. Most parameters

must in fact be slightly “off-target:” “tithe dough is too moist, oven temperatures must be a little higher, and perhaps

the line speed a bit slower, else the cookies will be too soft. It was only when management attempted to improve

the situation through a course in problem solving skills that they realized workers not only misunderstood the

purpose of SPC, but resented the way it had been implemented (some, for instance, felt they were simply being asked

to do needless paperwork).

Just-In-Time

The central idea behind JIT production (sometimes known, especially in Toyota’s version, as kanban) is

simple: materials, components, and subassemblies should be delivered (to the factory, assembly line, workstation)

only as needed. Because JIT minimizes work-in-process inventory and buffers of parts between production stages,

it is an essential element in the lean production systems for automobile assembly described earlier in the chapter.

JIT saves money directly through lower inventory levels and reductions in factory floor area (since less storage

space is needed). With on-line inspection, bad parts and other production problems surface immediately, rather than

days or weeks after the fact. While any disruption serious enough to interrupt the flow of parts can shut down

production, this seeming disadvantage lies, in fact, at the heart of the JIT approach: the goal is to prevent disruptions;

this is achieved by making them intolerable. As with SPC, the objective is to keep the process always under control

and running smoothly. The costs of disruptions become so high in a JIT system that all workers understand the need

to avoid them.

lk a ~ical e~ple, a Wtiacwer of nylon stockings reduced defects by more than 80 percent over 7 monthstiughSK, with no

increase in production cost. W. Edwards Deming, (2w o~the Crisis (Cambridge, MA: MIT Press, 1986), pp. 380-387.

2< ~Tr~g FactoVWorkers: Three Case StUdieS,” report prepared for for OTAunder contract No. N3-2670by Larry Hirshhow Wharton

Center for Applied Research, October 1989.
Chapter 4-Technological and Organizational Change: Implications for Training ● 113

Because a full-blown JIT system marks such a big change in the production process, introduction typically calls

for considerable training. For example, workers may need multiple skills so they they can help one another out when

necessary. JIT also requires more sophistication on the part of purchasing departments, which, as noted in box 4-A,

must select suppliers on the basis of reliable delivery and consistent quality so that inspections of incoming parts

can be minimized (and because a batch of bad parts can shut down the plant).

Rather than simply a matter of minimizing inventories, JIT methods actually comprise a broad set of guidelines

for designing and coordinating factory production. Understood in this fashion, JIT becomes another way of

continually examining each and every piece of the manufacturing process, in all possible lights, looking for potential

problems and potential sources of improvement. Toyota’s kanban system, for instance, evolved through a quarter

of a century of experience-based learning. When the automaker decided to automate this informal system (named

kanban after the tags used for scheduling), Toyota engineers realized they would first have to spend 2 or 3 years

figuring out the logic embodied in the actions of the people running around the plant with their kanban tags.

Continuous Improvement

Kaizen, or continuous improvement programs, even more than SPC or JIT, should be seen as “philosophy”-a

way of keeping workers focused on the need for cost reduction, quality improvement, reduction of waste and scrap.

Group problem-solving sessions (e.g., quality circles) and employee suggestion programs have been among the

most popular methods for fine-tuning production operations. Workers may meet with supervisors, production

planners, or members of the engineering staff to seek and solve problems and make suggestions for improvement

(better hand tools, reductions in set-up time).

At the NUMMI plant, for example, small groups of production workers meet periodically to seek ways of

modifying assembly tasks or eliminating wasted motion. Improvements may be as simple as rearranging a work

station to allow easier access to parts, or as complex as persuading engineers to alter component designs for ease

of production. Work groups at NUMMI also help plan training, which has ranged from task-specific skills to human

relations and problem-solving. Experience at many companies shows that kaizen-like programs prove most

successful when they include training in both technical skills and group dynamics.

RESTRUCTURING FOR From Work Redesign to Organizational

COMPETITIVENESS Restructuring

At Motorola (box 4-B), managers believe that the

This section examines restructuring more broadly, days of long production runs of standardized microincluding human resource practices in service indus- processor chips are pretty much over. They see more

tries. While the sources of competitive pressure

differ, competition in the services centers on costs

and prices, quality and flexibility, just as in manufacturing. Retail banks, for example, advertise

low-cost checking accounts, organize production to

minimize bookkeeping errors, and invest in automatic tellers to provide round-the-clock service (and

cut labor costs). Banks now ask ‘‘customer service

representatives to engage in active selling, using

computer simulations to demonstrate the virtues of,

say, an individual retirement account.14 As this

example suggests, service fins, like manufacturing

companies, have begun to manage, train, and motivate their employees in ways that would have been

quite foreign 15 or 20 years ago.

customization, requiring a production system that

can respond to constantly shifting market demands

without cost or quality penalties. In this light, the

reorganization of Motorola’s Austin plant simply

marks the first step in adjusting to the competitive

realities of the 1990s. Subsequent steps maybe more

difficult. The first phase was limited to the factory

floor. Later phases will extend beyond the factory,

affecting engineering, marketing, and finance. Bureaucratic obstacles seem inevitable. In this, the

future for Motorola resembles that for most of

American industry.

New organizational forms emerge gradually, taking on different shapes in different industries and

different parts of the world. While the picture

14u.s. Congess, Offlce of Tec~olo~ &sessment, Zntermtiom/ Competition in Semices, (3TA-ITE-328 (W~hhgto~ DC: U.S. Government

Printing Ofilce, July 1987), pp. 288-291.
114 ● Worker Training: Competing in the New International Economy

remains cloudy, at the most general level the overall

shift can be described as one from ‘‘Fordist” mass

production to more flexible organizational structures.15 There is no need to accept the theorizing that

goes with so many of the discussions of both

Fordism and flexible specialization to sketch out the

implications for training.

Table 4-3 (a slightly abbreviated version of which

appeared in ch. 1 as table l-l) traces the shift by

contrasting two ideal types: an older model characteristic of U.S. mass production industries in the

1950s and 1960s, and anew model that encompasses

many of the changes described in this chapter. Old

and new approaches to training appear at the bottom

of the table. The new model has been termed flexible

decentralization to underline two primary points: 1)

investments in flexible automation make shorter

production runs possible with little sacrifice in

efficiency; and 2) decisionmaking authority is being

transferred downward and outward, to semiautonomous divisions and to the factory floor.

Labor-Management Relations

Organized labor has been ambivalent or opposed

to several of the changes summarized in table 4- 3

(e.g., reductions in job classifications, outsourcing).

In some cases, their suspicions have good cause: not

a few companies have implemented aspects of the

new model, or closed old plants and built new ones

in States where organized labor is weak, as part of

antiunion strategies. Given continued opposition not

only from some union members, but from managers

who would prefer not to yield authority to line

workers, attempts to reorganize existing plants along

the lines outlined in table 4-3, particularly plants

with strong unions and a history of labormanagement discord, have sometimes proved impossible.

Although many companies seek to avoid unions

when restructuring-a number of Japanese transplants have located in rural areas where labor unions

have little support-in other cases competitive

pressures have spurred cooperation between unions

and management. Organized labor has been generally supportive of one of the key elements in table

4-3—transfer of authority downward to the shop

floor. At NUMMI, for example, management agreed

to hire a majority of workers from among the laid-off

employees of GM’s old Fremont plant-known for

troubled labor relations—while the United Auto

Workers (UAW) agreed to accept flexible work rules

and only four job classifications. About 240 hourly

workers spent 3 weeks at Toyota’s facilities in Japan

for classroom and on-the-job training prior to plant

start-up. These workers then became trainers for the

rest of the 2,000-person workforce. NUMMI has

maintained high quality standards, while productivity exceeds the GM average by 40 percent.

At GM’s own factories, joint labor-management

training and quality programs have also had positive

impacts. In the company’s Hamtramck plant, all

assembly is performed by work groups, a Joint

Activities Committee meets weekly to evaluate

quality and productivity, and employees regularly

attend the UAW-GM off-site Paid Educational

Leave program. 16 In other examples, a g rOUP organized through the UAW-GM Human Resources

Center found ways to cut costs of body sealer at the

Lansing (Michigan) Body Plant from $8 to $3 per

car, while joint committees at stamping plants have

managed to dramatically reduce die change times.

As discussed in chapter 8, the UAW has negotiated

joint training funds with the three major U.S.-owned

automakers. These funds are used to promote

teamwork as well as provide technical training.

Genuine Change or Cosmetic?

Companies that take a piecemeal approach to

reorganization risk failure, particularly those that

pick and choose Japanese production practices

according to whether managers feel comfortable

with them. It is entirely possible that the new

ISM,ic~el J. Piore ~d~lesF. Sabel, The Second Indusm”a/ Divide (New York: Basic Books, 1984); Charles F. Sabel, “Flexible s~i~tition

and the Re-emergence of Regional Economies, ’ Reversing Industrial Decline? Indusm’al Structure and Policy in Britain and Her Competitors, Paul

Hirst and JomthanZeitlin (eds.) (Oxford, UK: Berg, 1989), pp. 17-70; Richard Florida and Martin Kenney, “HighTechnology Restructuringin the USA

and Japan,” Environment and Planning A, vol. 22 (February 1990), pp. 233-252; Paul Milgrom and Jobn Roberts, “The Economics of Modern

Manufacturing: Technology, Strategy, and organizatio~” American Economic Review, vol. 80 (June 1990), pp. 511-528. Also see International

Competition in Services, op. cit., footnote 14, pp. 253-287.

16Joseph M. CW- ~ 6Soli~& ~ PoletoW!’ Auto~tive Indmt~e~, J~e 1989, p. 71. Also see “UAW-GMJoint Activities at the plant Mel,”

Work in America Institute, Inc., Apr. 19, 1989.

Unions in chemicals, steel and the airlines, among others, have agreed to flexible job assignments, including material handling, repair, and

housekeeping tasks. Harry C. Katz and Jeffrey H. Keefe, ‘‘Industrial Restructuring and Human Resource Preparedness in Unionized Settings,” Peter

B. Doeringer et al., (eds.), Zhrbulence in the American Workplace (New York NY: Oxford University Press, forthcoming).
Chapter 4-Technological and Organizational Change: Implications for Training . 115

Table 4-3—Changing Organizational Patterns in U.S. Industry

Old model New model

Mass production, Flexible decentralization,

1950s and 1960s 1980s and beyond

Overall strategy

● Low cost through vertical integration, mass production, scale . Low cost with no sacrifice of quality, coupled with substantial

economies, long production runs. flexibility, through partial vertical disintegration, greater reliance

. Centralized corporate planning; rigid managerial hierarchies. on purchased components and services.

● International sales primarily through exporting and direct . Decentralization of decisionmaking; flatter hierarchies.

investment. . Multi-mode international operations, including minority joint

ventures and nonequity strategic alliances.

Product design and development

. Internal and hierarchical; in the extreme, a linear pipeline from . Decentralized, with carefully managed division of responsibility

central corporate research laboratory to development to manu- among R&D and engineering groups; simultaneous product

facturing engineering. and process development where possible; greater reliance on

. Breakthrough innovation the ideal goal. suppliers and contract engineering firms.

● Incremental innovation and continuous improvement valued.

Production

. Fixed or hard automation. ● Flexible automation.

. Cost control focuses on direct labor. ● With direct costs low, reductions of indirect cost become critical.

● Outside purchases based on arm’s-length, price-based compe- . Outside purchasing based on price, quality, delivery, technoltition; many suppliers.

. Off-line or end-of-line quality control.

ogy; fewer suppliers.

● Real-time, on-line quality control.

. Fragmentation of individual tasks, each specified in detail; ● Selective use of work groups; multiskilling, job rotation; few job

many job classifications. classifications.

● Shopfloor authority vested in first-line supervisors; sharp ● Delegation, within limits, of shopfloor responsibility and authorseparation between labor and management. ity to individuals and groups; blurring of boundaries between

labor and management encouraged.

●

●

●

Hiring and human relations practices

Workforce mostly full-time, semi-skilled. ●

Minimal qualifications acceptable.

Layoffs and turnover a primary source of flexibility; workers, in

the extreme, viewed as a variable cost. ●

●

Smaller core of full-time employees, supplemented with contingent (part-time, temporary, and contract) workers, who can be

easily brought in or let go, as a major source of flexibility.

Careful screening of prospective employees for basic and social

skills, and trainability.

Core workforce viewed as an investment; management attention

to quality-of-working life as a means of reducing turnover.

Job ladders

. Internal labor market; advancement through the ranks via ● Limited internal labor market; entry or advancement may

seniority and informal on-the-job training. depend on credentials earned outside the workplace.

Governing metaphors

● Supervisors as policemen, organization as army. ● Supervisors as coaches or trainers, organization as athletic

team. (The Japanese metaphor: organization as family.)

Training

. Minimal for production workers, except for informal on-the-job ● Short training sessions as needed for core workforce, sometraining. times motivational, sometimes intended to improve quality

● Specialized training (including apprenticeships) for grey-collar control practices or smooth the way for new technology.

craft and technical workers. ● Broader skills sought for both blue- and grey-collar workers.

SOURCE: Office of Technology Assessment, 1990.
116 . Worker Training: Competing in the New International Economy

approaches work because the elements are mutually

interdependent. With only some of them in place, the

system may perform poorly. Or improvement may

be temporary, with the organization later sliding

back into its old ways—particularly if higher management does not buy into the entire agenda, but

treats it as another way of manipulating employees.

A 7-year business expansion has made it relatively easy for American industry to invest in

training and experiment with innovations like those

outlined in tables 4-2 and 4-3. The test will come in

the inevitable downturn. Some companies in some

industries (including, for example, IBM, HewlettPackard, Motorola, Pacific Telesis, and a number of

large banks) have had long-standing policies of

adjusting employment levels through attrition, retraining and redeploying their existing workforce

when product or process technologies change, rather

than laying off one group while hiring another with

needed skills.17 Facing potential layoffs in its

electric motor and transformer plant in Fort Wayne,

Indiana, General Electric moved some of its growing

production of aircraft engine controls to Fort Wayne,

finding it less expensive to retrain hundreds of

employees with 20-plus years of seniority than to lay

them off and train new people.18

Still, overcapacity or recession will from time to

time force large cutbacks in the output of some U.S.

industries. How will employers respond? A few

companies have begun to experiment with concentrated training on company time during periods of

slack demand, hoping to upgrade worker skills for

the long-term good of the organization. Such policies remain the exception, with many more American firms still subscribing to start-stop practices in

training. One point seems plain: firms that seek to

adopt Japanese production methods in a full-blown

way will not be able to close entire plants for weeks

or months.

Sectoral Comparisons

Table 4-3, while cast in terms of manufacturing,

could just as easily incorporate terms appropriate for

service fins. Table 4-4 givess summary descriptions

of the changes underway in four U.S. sectors—two

in services (banking and retailing), and two in

manufacturing (textiles and automobiles). These

help fill in the general picture of restructuring, while

illustrating differences among industries. Textile

manufacturers, for example, appear the least sophisticated by far in their approach to training.

In both banking and retailing, the forces driving

change have been domestic more than international:

deregulation in the case of financial services; greater

consumer buying power, shifting tastes, and migration to the suburbs in the case of retailing. Financial

service firms and retailers have adopted aggressive

training and human resource strategies, although, as

the table indicates, necessarily quite different from

those of manufacturing firms.

Automobile manufacturers pay wages well above

the average, and offer attractive fringe benefits

(about the same in union and nonunion plants); they

have had little trouble finding people with adequate

basic skills who can be trained to work effectively in

their production systems.19 In contrast, most lowlevel jobs in banking and retailing pay far less, yet

employers want personable, competent workersable to deal with the public and convey the desired

image.

Not only can few service firms pick and choose

their workers, many must live with annual turnover

rates of 50 percent or more. As a result, training

17’’Layoffs Called Wrong Approach to Saving Money During Hard Times,” Daily Labor Report, Sept. 22, 1986. On the other hand, companies

including R.J. Reynolds, Eastman K- Bank of tieric~ and Chase Manhattan have abandoned earlier no-layoff policies. John Hoerr and Wendy

Zellner, “A Japanese Import That’s Not Selling,” Business Week, Feb. 26, 1990, p. 86. Even IBMhas used early retirement incentives to cut its labor

force in recent years.

lgJerome M. ROSOW and Robert Zager, Training: The Competitive Edge (San Francisco, CA: Jossey-Bus, 1988), PP. 209-212.

One analysis, based on data from several companies, found retraining 100 redundant employees and keeping them on the payroll (doing maintenance

and security work) for 6 months to be less expensive than laying them off and then rehiring them when demand picked up. Roxane Dean and Daniel

W. Prior, “Your Company Could Benefit horn a NoLayoff Policy,” Training and Development Journal, August 1986, p. 40. Part of the reason was

the expectation that some of the laid-off workers would fmd new jobs, so that the company would have to fully train 25 new people as replacements.

Otherfactorsrnaking the layoff alternative more expensive included greaterUnemployment Insurance charges, separationpayments, administrative costs

of both hiring and ftig, and lost production due to lower morale among those employees who were retained.

l% me ~te 1980s, D~ond-S@Motors, me ~t~bis~-c~slerjoint venture in Bloomington-No~, IL, tied a Workforce averaging IMX@ 14

years of school@ more than 50,000 people applied for fewer than 3,000 jobs. Mazda’s Flat ROCIL mplang which employs 3,100 people, received

nearly 100,OOO applications. Richard Child Hill, Michael Indergaard, and Kuniko Fujita, “Flat RoclL Home of Maz&: The Social Impact of a Japanese

Company on an American Community,”The Auto Industry Ahead: Who’s Driving?, Peter J. Arnesen (cd) (Ann Arbor, MI: University of Michigm

Center for Japanese Studies, 1989), pp. 69-131. The Mazda plant began production in late 1987; Diamond-Star’s first cars left the factory in 1988.
Table 4-4-Restructuring in Four U.S. Industries

Textiles Automobiles a Banking Retailing

Response by U.S. firms to competitive pressures, domestic as well as international

● Product variety within narrower market ● Renewed emphasis on larger family . Aggressive movement into offshore . Diversification, expansion into

segments cars; introduction of small trucks, vans, markets, and in some oases into specialized stores and market niches

● New investment in automated and utility vehicles foreign commercial banking (fast foods, luxury goods), and new

production equipment . Strategic alliances with Japanese and . New financial instruments for both regional and local markets; smaller

Korean automakers for small car retail and corporate customers stores

design and production . Heavy use of information technologies, . Heavy use of information technologies

. Investments in automated production often proprietary (e.g., cash

equipment; closing of high-cost plants management services)

Restructuring and reorganization

● Tighter links with suppliers and . New plants somewhat smaller . Functional organizations with front and ● Decentralization of decisionmaking to

customers ● Closer working relationships with back office collapsed store managers

. “Quick response” production systems, smaller groups of suppliers . Greater stress on safes, marketing, . Integrated, computer-based inventory,

with more attention to fashion trends . Limited vertical disintegration, with customer service ordering, and point-of-safe systems

selected engineering tasks farmed out

to suppliers

Labor market supply conditions (Many of the shortages noted reflect prevailing wage levels)

● Shortages of workers with adequate . Continuing reductions in both white- . Shortages of workers with adequate

basic skills, high school education

. Shortages of workers with adequate

collar and blue-collar workforces basic and social skills for customer basic and social skills, especiafly in

. Shortages of skilled technical workers . Shortages emerging in some skilled service jobs in retail branches some urban areas, for jobs requiring

and entry-level supervisors trades due to cutbacks in apprentice customer contact

training during the recession years of . No consistent source for managerial

the early 1980s tracks

Recruiting and human resource strategies

. At lower levels, take all comers ●

● Efforts beginning to work with

community colleges

High prevailing wage levels help ●

automakers recruit young workers with

high school and beyond ●

●

Hire more female, temporary, and part- .

time workers

External hiring for management ranks

(e.g., directly from college), rather than ●

promotion from within

Eliminate low-skilled jobs through

automation, self-service ●

Seek new sources of temporary and

part-time workers-e.g., women,

students and retirees

Internal promotion to management

levels, but increasing insistence on

college as a prerequisite

Elimination of low-skilled jobs through

automation, self-service (e.g., in

gasoline stations)

Skill changes and job design

. More operator responsibility for quality, . Selective use of multiskilled work . Lower level employees assigned . Safes clerks responsible for credit card

monitoring of equipment performance, groups broader range of tasks (e.g., selling) verification, data entry

and routine maintenance; basic skills . Operator responsibility for quality, some ● Computer literacy may be needed . Some computer literacy may be

needed routine maintenance, simple desirable

. Repair work more complex troubleshooting

Training strategies

● Basic skills programs . More cross-training; emphasis on . Basic skills for entry-level workers . Brief but intensive training for entry-level

. Technical training through community quality control practices (e.g., SPC) ● Training in proprietary information workers

colleges and equipment vendors ● Training programs used to build systems . Extensive training for managers as they

employee allegiance to corporate goals ● Intensive training for managerial progress upward

● Basic skills and adult education candidates

courses through joint unionmanagement training programs . 

aVehicle manufacturers, including Japanese+mmed transplants, but not suppliers.

SOURCE: Based in part on “Training and Competitiveness in U.S. Manufacturing and Services: Training Needs and Practioes of Lead Firms in Textiles, Banking, Retailing, and Business Services,”

report prepared for OTA under contract No L3-3560 by Lauren Benton, Thomas Bailey, Thierry Noyelle, and Thomas M. Stanback, Jr., Columbia University, February 1990, Table 01.
118 ● Worker Training: Competing in the New International Economy

programs are brief but intensive, stressing basic

skills, firm-specific workplace technologies (e.g.,

point-of-sale terminals), and customer relations.

Although both banks and retail outlets have traditionally employed many women, longer business

hours (themselves in part a consequence of the

greater number of working women) have led to an

even greater focus on women as part-time workers.

Firms in these sectors, finally, as in a number of

other services, place demands on supervisors and

managers quite different from those in manufacturing organizations. As noted in the table, large banks

and retailers have developed formal procedures for

selecting managerial candidates, and training them

at successive levels of the management track.

Changing Practices in Employment

and Training

Supply and Demand

Generally companies retrain existing employees

when they redesign their production processes.

Moreover, in high-turnover industries, like many of

the services, half the workforce is new each year, so

that training must be built into ongoing operations.

As illustrated by the examples in box 4-B and

elsewhere in the chapter, training an existing

workforce is not so easy as it might seem. Many

companies have found that existing skill levels have

simply not been good enough. Even so, few executives in major corporations see poor basic skills as a

barrier that cannot be overcome. What frustrates

industry is the double burden of providing remedial

education to improve the skills of high school

graduates who cannot read or do simple arithmetic

(and who may show no interest in learning), before

being able to train in job-specific technical skills. To

avoid this, companies in a position to be selective

build more filters into the screening process before

they hire.

No longer is a high school diploma accepted as a

meaningful credential. Some personnel departments

have also adopted tests intended to measure how

well people perform in a small group setting, while

applicants may have to be approved by the production group they will join. As such trends imply, in the

longer term, hiring and training practices, particularly in manufacturing, will probably change quite

substantially. Wage levels may have to rise, if

manufacturing firms-many of which pay much less

than in such traditionally unionized sectors as autos

or steel—are to attract workers with the needed

capabilities. Many young people who once might

have taken jobs in manufacturing now go on to a

junior or community college; fewer seem interested

in pursuing a factory-bound career. It has become

difficult for many U.S. firms to find, not only

production workers with adequate skills, but technicians and engineers willing to work on the shop

floor. Still, managers of large companies generally

see the most serious problems, not in their own

organizations, but in their suppliers-particularly

small firms that not only pay low wages but do little

or no training.

Contingent Workers

As noted in tables 4-3 and 4-4, American companies have begun relying more heavily on contingent

workers—those without formal or long-lasting ties

to an employer. During the 1980s, temporary and

part-time employment grew at roughly twice the rate

of permanent, full-time employment, and now accounts for about one-quarter of all U.S. jobs.20 For

employers, replacing full-time staff with short-term,

project-related, or part-time employees provides a

simple way to adjust for variations in demand. Work

may be subcontracted to small fins, or to individuals. Subcontractors, in turn, may have people on call

so that they can respond quickly. Firms that rely on

contingent workers can lay off part of the workforce

when times are bad, while avoiding some of the costs

(e.g., fringe benefits) of a larger core of permanent

employees.

Much as in more primitive economies where

casual work is common, contingent workers act as

buffers. Employers have been able to push much of

the risk associated with business downturns, illness,

and other interruptions in people’s ability to work

onto individuals. (While some contingent workers

eventually become eligible for fringe benefits such

~Ric~dBeloUs, “FU~e ~bor Force F&@ements,’ presentational Congressional Research Service, July 26, 1989. ~clud@filegd immigrants,

work in the underground economy (most of which is simply unreported, not illegal or otherwise illicit), the self-employed, and those who work at home

would increase the fraction significantly. See Internuti”onal Compefi”a”on in Services, op. cit., footnote 14, chapter 7, from which portions of the discussion

below draw.

Twenty percent of the 645 fiis in the 1990 Towers Perrin/Hudson Institute survey reported that they have a core/contingent workforce; another 11

percent are moving in this direction. “Workforce 2000-Competing in a Seller’s Market: Is Corporate American Prepared? A Survey Report on

Corporate Responses to Demographic and Labor Force Trends,” op. cit., footnote 3, p. 24.
Chapter 4-Technological and Organizational Change: Implications for Training ● 119

as retirement plans, health insurance, and paid

vacations, most do not.) Rarely does a contingent job

represent one step on a career ladder; indeed, almost

by definition, contingent workers have no access to

internal labor markets, and thus little opportunity for

on-the-job training.

But, like the “fire-and-hire” approach, reliance

on contingent workers may be more expensive for

companies than first appearances would suggest. By

definition, contingent workers are hard to integrate

into group-based production systems. Not only do

they lack company-specific training, and commitment to corporate goals, they may not have needed

task-specific skills-a particular problem in periods

of rapid expansion. When companies design standardized jobs that can be performed by temporaries,

whether brought in for 2 days or 2 months, they may

be sacrificing efficiency. Over the longer term,

companies that rely too heavily on part-time and

temporary employees may find that they have

substituted flexibility in numbers for the flexibility

created by a workforce rich in experience-based

skills and know-how.

CONCLUDING REMARKS

New technology in the workplace, new forms of

work organization, and the overall shift towards

service industries have accelerated the need for

training in the U.S. economy. As companies move

toward more flexible systems of design, development, and production, they must complement their

investments in computer-based technologies with

investments in better-trained workers. The needed

training goes beyond skills for operating particular

pieces of equipment. Restructured organizations

cannot function without a workforce that is both

well-trained and well-motivated. Increasingly, managements encourage shopfloor employees to view

themselves as individually responsible, each in their

own small way, for the continued success of the

enterprise. Allocating more responsibility and authority to individuals and groups requires attention

to both hiring practices and training.

While many plant managers believe that upperlevel executives continue to undervalue manufacturing, a growing number of American companies

realize that it will take renewed attention to the

factory floor to solve their competitive problems.

One result: training managers may become members

of strategic planning groups-a status unheard of

just a few years ago. With more training, workers

become more comfortable in learning environments

and better able to adapt to new production technologies. Companies that recognize this virtuous circle

for what it is have taken a major step toward

continued competitive success.

APPENDIX4-A-C0MPUTER-AIDED

TECHNOLOGIES IN U.S.

MANUFACTURING

Advanced manufacturing technologies come in many

varieties. Companies seek lower costs through near-net

shape processing (e.g., precision castings in place of

machined forgings) and better functional performance

through improvements in heat treatment or surface

hardening. They specify new materials, including fiberreinforced composites, which require new processes, and

look to automated inspection procedures to locate one-ina-million defects that would be impossible for human

operators to spot.

This appendix first outlines major categories of computer-aided technologies used in manufacting-with no

attempt to be comprehensive. The context is one of

metalworking rather than the chemical or electronics

industries (although many computer-aided technologies

can be employed in a surprising variety of production

settings). Later sections of the appendix discuss diffusion

within American industry and the effects of programmable automation on skills.

Toward Computer-Integrated Manufacturing

Many if not most of the thousands of processes found

in U.S. manufacturing share a common attribute: they

depend, in one way or another, on computer-based control

systems. For many years, the chemical industry has used

automated process controls. Once, a control system would

have had to be specially designed for a given application.

Today, generic components can be programmed via

software for abroad range of applications. In steelmaking,

optical and electronic sensors monitor the chemistry and

temperature of molten metal, feeding information to

process control computers. In machining, numerical

controls (NC) that once required off-line programming

are giving way to controllers that can be used much like

a PC.

The great advantage of the computer for automation

lies in its flexibility: computers can be reprogrammed, not

only for new applications, but to make minor modifications in existing processes. For many years, computers

were too expensive to find many applications on the

factory floor, but with the development of, first, minicomputers, then the microprocessor and the PC, hardware cost

is no longer the chief obstacle. Rather, the cost barriers lie
120 . Worker Training: Competing in the New International Economy

mostly in software, and in integration. Software programs

must not only be written for each new application, they

must be debugged and maintained. Integration-locating

and assembling equipment that can be linked together,

devising software that effectively coordinates equipment

from different vendors-often proves much more difficult than initially expected.

Computer-integrated manufacturing (CIM) thus remains an objective more than a reality. Yet many firms

have moved quite a long ways down this road over the

past two decades. And if some of the past efforts to

implement computer-integrated manufacturing now seem

overambitious, that should be no surprise. Technological

innovation of any stripe brings with it unanticipated

difficulties more frequently than unexpected serendipities.

The great difference between adopting computer-based

control systems for factory automation and computerbased systems, for, say, aircraft flight control is simply

that American companies would normally put their best

technical people to work on aircraft flight controls, and

give them ample budgets, while leaving manufacturing

systems to less competent people with less than ample

budgets.

Programmable automation began in the 1950s and

1960s, with NC machining and early computer graphics

systems. Gradually, these and other stand-alone applications began to be linked through networks and common

databases. While the process of integration remains a long

way from completion, CIM will eventually be commonplace. The companies that can most quickly and most

effectively make something useful of acronyms such as

those below will move ahead in international competition:

CAD, or computer-aided design. In fact, most CAD

systems remain limited to computer graphics, the

automation of drafting and preparation of bills of

materials. Some can generate NC part programs.

Such tasks as maintaining databases of drawings

and specifications, and making the changes called

for during development-often running into the

dozens, if not hundreds, for a single part-have

become much more manageable.

CAM, computer-aided manufacturing. Descendants

of NC machining, CAM installations today typically link several machines, along with robots and

materials handling equipment, to create an automated machining cell or a flexible manufacturing

system (FMS-the difference is simply one of

scale). Only a few hundred large FMS systems have

thus far been built.

●

●

drafting system.

CAPP, computer-aided process planning. Many

shops now schedule jobs and manage work-inprocess inventories with the aid of small computers

and commercially available software packages.

More American firms make use of CAPP than any

other computer-based manufacturing technology.

CIM, computer-integrated manufacturing. CIM implies combining CAD and CAM, and typically

CAPP as well. The primary objective: moving from

design to production without an intervening stage of

paper drawings and process plans-from CAD to

CAM more-or-less automatically. For practical

purposes, such systems do not yet exist, except for

a few specialized cases such as very large-scale

integrated circuits.

As these technologies develop and diffuse, some

workplace skills will become obsolete-because taken

over by automated equipment-while demand will grow

for others, including systems analysis, programmingg, and

maintenance of both hardware and software. A big part of

the job for analysts, designers, and programmers is to put

together CIM systems that are easy for unskilled workers

to use. To the extent they are successful, training and

retraining for users will be straightforward.
Chapter 4-Technological and Organizational Change: Implications for Training ● 121

Penetration of Programmable Automation21

Surveys indicate that no more than10or11 percent of

installed machine tools in the United States have NC

capability (about the same as in Japan, although the

Japanese machine tool inventory is substantially newer).

Over 30 percent of these NC machines are at least 10 years

old. Nearly 40 percent of the total consists of simple

models that can read instructions but do not incorporate

computer controls-technology that has been available

for more than 25 years.

None of this should be very surprising. Machine tools

have useful lives measured in decades. The stock turns

over slowly, with companies retaining older tools as

back-ups, even if they rarely use them. Moreover,

investment in CIM-related equipment (including CAD,

CAPP, programmable controllers, and local-area networks, as well as NC machines) grew at about 15 percent

annually during the years 1983-1989-quite a high rate.

Two-thirds of U.S. manufacturing establishments have

implemented at least one CIM-related technology (and

nearly half have at least one NC machine tool). More

companies have invested in CAD and CAPP than in NC

machinery because the investments are smaller-at the

minimum, simply a PC and an off-the-shelf software

package. In sum, computer-based manufacturing technologies seem to be diffusing at about the pace that would be

expected based on past experience with other technological innovations. Vexing problems in practical application

tend to counterbalance the economic driving forces. At

the same time, many smaller companies have plainly

failed to grasp the logic of programmable automation, and

thus have not made investments that would be costeffective.

Penetration varies with plant size and industry sector,

with a relatively few firms, mostly large, accounting for

most investments. In 1984, for instance, more than half of

all industrial robots could be found in the plants of IBM

plus the Big Three U.S. automakers. In 1986, one-quarter

of all manufacturing establishments accounted for nearly

85 percent of the CIM-related investment total. According

to the Census Bureau survey cited in footnote 21, large

establishments make more use of programmable automation than smaller plants (figure 4A-l). Ninety-four

percent of manufacturing establishments employing 500

or more people have invested in at least 1 type of

computer-assisted technology, versus 67 percent of firms

with fewer than 500 employees. Larger plants tend to have

Figure 4A-l—Penetration of Numerically Controlled

Machine Tools and Computer-Aided Design

by Plant Sizea

Small plants

Medium plants

Large plants

k- ----7

—– ‘ T— ‘~1

o 20 40 60 60 100

Percent of establishments

m Numerically controlled m Computer-aided

machine tools design

a Small plants have 20-99 employees; medium, 100-499; large, over 500

SOURCE: Current Industrial Reports: Manufacturing Ttinology, 1988

(Washington, DC: Department of Labor, Bureau of the Census,

May 1989), pp. 31,35.

more types of programmable automation in place; 80

percent of the large establishments sampled had at least

five different advanced technologies, but only 20 percent

of small and medium-sized firms.

Companies that do most of their business with the

Defense Department or other Federal agencies (e.g., the

National Aeronautics and Space Administration) make

greater use of advanced technologies than those selling

primarily to the private sector (figure 4A-2). In the Census

survey, 87 percent of plants that viewed government as

their primary customer had installed at least one CIMrelated technology, compared to 62 percent of plants

selling in other markets. Prime contractors and subcontractors show broadly similar patterns of adoption;

regardless of their size, firms that make products to

military specifications rely more heavily on programmable automation than others.

Most companies surveyed report that improvements in

product consistency and quality (more than 80 percent)

and reductions in labor costs (78 percent) have motivated

their investments. Nonadopters often believe that available technologies are not applicable to their operations, or

are not cost effective. Two-thirds of managers in establishments without computer-based equipment reported

that their production mix (number of different part

designs, average lot sizes) did not just@ automation. In

21This section summarkes the results of several recent surveys of the adoption by J.S. manufacturing f- of computer-assisted technologies. Most

of the information comes from Maryellen Kelly and Harvey Brooks, “’fhe State of Computerized Automation inU,S. Manufacturing,” JohnF. Kennedy

School of Govermnent Hatwrd University, October 1988; and Current Industrial Repom: Manufacturing Technology 1988 (Washington DC:

Department of Commerce, Bureau of the Census, May 1989), as summmized in “U.S. Manufactming: Problems and Opportunities in Defense and

Commercial Industries,” staff paper, Office of Technology Assessmen~ May 1990. Also see Edith Wiar@ Frostbe2tAutomation: The ZTZStatus Report

on GreatL.uk-es Manufacturing (Ann Arbor, MI: Industrial Technology Institute, September 1987). On the situation of smaller firms, see Philip Sbapir&

Modernizing Manufacturing: New Policies to Build Indusrn”al Extension Services (Washingto~ DC: Economic Policy Institute, 1990).
122 0 Worker Training: Competing in the New International Economy

Figure 4A-2—Penetration of Numerically Controlled

Machine Tools and Computer-Aided Design Among

Defense and Nondefense Firms

I I

DoD contractor

Not a DoD contractor

o 10 20 30 40 50 60 70

Percent of establishments

~ Numerically I controlled = Computer-aided

machine tools design

SOURCE: Current lnoMM Rem: Manuf@uring T&noiogy, 1989

(Washington, DC: Department of Labor, Bureau of the Census,

May 1989), pp. 31,35.

many cases, these perceptions are no doubt accurate, but

the survey results also suggest that some managers do not

grasp the capabilities of programmable automation and

the benefits to be gained.

Both adopters and nonadopters report difficulties in

financing purchases. At the same time, some companies

have invested in NC equipment, not because it fits their

strategic plan or makes economic sense, but simply on an

ad hoc basis when replacing worn-out conventional tools.

One-quarter of companies that have purchased automated

equipment made no further investments during the past 5

years. The surveys, finally, suggest a widening gap

between adopters and nonadopters, with most of the new

investments over the next few years likely to be made by

companies that already have experience with programmable automation. Fewer than 1 in 10 of the establishments

reporting no such equipment as of 1987 planned to make

purchases over the next 3 years.

Impacts on Skills

Automation not only affects job opportunities, it

changes skill requirements, sometimes in the direction of

deskilling, sometimes upskilling.22 At the level of the

firm, automation often correlates with new hiring rather

than layoffs because companies typically invest in new

technologies when business is good Overtime, of course,

since the intent is to increase productivity, the firm’s

employment may decline. For the economy as a whole,

the effects of automation depend on the relative rates of

growth in output and productivity. Both are uncertain, and

none of the many predictions made over the past decade

has won widespread acceptance.

When it comes to skill requirements-and the longrunning debate over deskilling (whether or not automation, by reducing overall skill requirements, forces a

growing fraction of workers to function simply as

machine tenders)-the patterns are equally complex.

When CAD programs ran on mainframe computers, for

example, they were used mostly by engineers and

computer specialists, who looked to CAD for help with

complex geometrical tasks. In an aerospace company, the

same people would often use the CAD system and modify

the program (sometimes without telling anyone).

Today, high school graduates with relatively little

specialized training can use the turnkey CAD systems

available from numerous vendors.23 So far, these systems

have had most of their impact through the automation of

such labor-intensive tasks as production of finished

drawings based on preliminary sketches. In earlier years,

these sketches would typically have been passed along

from engineers to drafters who worked at a drawing

board. Now the drafting function takes place at computer

terminals. Not only drawings of mechanical parts and

components, but architectural renderings, electrical, piping, and plumbing layouts, and highway routings can be

produced in 10 or 20 percent of the time once necessary.

Though good basic skills are required to use these

systems, it takes less training to become a capable CAD

operator than to become a competent drafter. While CAD

opens up new avenues for the design engineer, the

drafter’s job has been deskilled. Companies that rely

primarily on CAD systems commonly hire people with

vocational-technical schooling, but no more than, say, a

year’s manual drafting experience. They feel that those

with more experience will be overqualified (and perhaps

overpaid), and unable to adapt as well to an automated

work environment.

Early generations of NC technology, somewhat similarly, depended on skilled technicians and engineers to

keep the equipment running and improve performance

(e.g., through efficient programming). The paper tapes

that guided the machines had to be prepared using

specialized and complex computer languages. The part

programmers who prepared these tapes needed some

design skills, as well as knowledge of machining prac-

~or a recent summary focusing on conceptual issues in this long-running debate, see Paul AtteweU “Skill and Occupational Changes in U.S.

Manufacturing,” draft prepared for the confenmce on Technology and the Future of Work Stanford University, March 28-29, 1990. For sharply

contrasting interpretations of data and projections for the future, see Lawnmce Mishel and Ruy A. Teixe@ “The Myth of the Coming Labor Shortage:

Jobs, Skills, sndhwomes of America’s Workforee 2000,” Economic Policy Institute, WsshingtoQ DC, 199Q snd John Bishop and Shsni Carter, “TIE

Deskilling vs Upskilling Debste: The Role of BLS Projections,” draf$ July 18, 1990.

~lnter~tio~lCowetition in Servz”ces, op. tit., foo~o@ 14, p. 274.
Chapter 4-Technological and Organizational Change: Implications for Training ● 123

tices. They also had to be well versed in programming.

Skilled maintenance workers were needed to oversee the

balky and unreliable electro-mechanical tape readers.

Machine operators, however, became machine monitors.

They were deskilled because the equipment was viewed

as too complicated to permit them to write programs or

intervene in operations; they loaded and unloaded parts,

and watched for malfunctions.

Current generations of microprocessor-basedNC equipment feature help screens and prompts, much as found in

software packages for word processing. With a week or so

of training, most workers can begin using the simpler

systems. Because the equipment is straightforward and

reliable, semiskilled shopfloor workers can now do a

good deal of programming themselves, limited not by

their computer skills but by their knowledge of machining

(just as word processing software can catch simple entry

or spelling errors but not syntactical mistakes). Maintenance requirements have also changed with the shift from

tape readers to direct computer control.

The surveys cited earlier in the appendix (footnote 21)

indicate that about two-thirds of NC machine operators

have at least “some programming” responsibility, with

one-half having “major programming’ responsibility. In

effect, part programming has now been deskilled; operators and machinists can take back some of the responsibility. Machinists who prepare and debug programs find

their jobs have been reskilled. Operators who once simply

tended automated machines but now take on some part

programming find their jobs upskilled. While few companies cite skill deficiencies as a barrier to purchases of CIM

equipment, some report lack of skills to be a barrier to

implementation, especially when it comes to maintenance.

Many of the mid-level skills will disappear, as NC

systems grow still more sophisticated. Today, CAD

systems can automatically generate only simple NC

programs. As development of integrated CAD/CAM

proceeds, more complex programming tasks will be

automated. Eventually, the system will do everything

except handle the exceptional cases. Because they are

exceptional, these will have to be routed to highly skilled

workers, perhaps engineers, who can resolve ambiguities

and make decisions requiring trade-offs and design

compromises.

As both the CAD and NC examples suggest, programmable automation deskills some jobs and upskills others.

When, for example, GM’s Linden, New Jersey, assembly

plant installed robots for welding, painting, and glass

sealing, skill requirements for production employees

decreased while those for maintenance workers increased

Effective application of CAPP requires considerable

training, because complex scheduling algorithms replace

the rules-of-thumb previously used. Interpreting the

results and making effective use of them demands at least

as much expertise and judgment as the older procedures—

but expertise of a different sort.

Programmable automation shifts the mix from repetitive tasks (loading/unloading, checking dimensions, monitoring) toward set-up and maintenance, as well as

preparing and editing programs. Skill shifts, moreover,

may be cyclical, as in the case of NC machine operators—

whose work was first deskilled through automation, then

upskilled as programming became simpler, and in the end

will probably be deskilled again, as programming itself is

more fully automated. The general pattern appears to be

one in which much of the early technology development

is done by users. Typically, those users are highly

skilled-often engineers. As the technology matures,

vendors take over most of the development. The highly

skilled work migrates from users to equipment suppliers,

with jobs in the user firms generally being either deskilled

(CAD operators in place of drafters) or reskilled (NC

programming in place of manual machining).

At the same time, looking at the effects of new

technologies on a task-by-task basis can be misleading.

While any one task-or all the tasks for a given

worker—may become easier, the job as a whole may

become more difficult because of the mix of tasks or the

speed of production. Often, new equipment operates

faster. Moreover, the company will seek to keep it running

to maximize the payback on its investment. Operator

errors and downtime become more costly. (Japanese

factories are notorious for the pressure placed on individual employees.) Preventive maintenance and process

quality are likely to become more important. Emphasis on

quality and avoiding mistakes requires a broad understanding of the production process. With companies

pushing for flexibility (shorter production runs, more

frequent product change), employees will find themselves

engaged in a wider range of activities. These activities

will change more frequently, putting a greater premium

on alertness and diligence, as well as continuing on-thejob learning.
Chapter 5

Delivery of Training by U.S. Firms
CONTENTS

Page

SUMMARY ● . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . 127

HOW MUCH TRAINING IS DELIVERED? . ................,.......,****+.****+ 128

Training in Small Firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .130

Economic Barriers to Workplace Training ... ... ... ,, ... . *,,.****,***,**,*,**, 130

THE IMPACT OF EMPLOYER- PROVIDED TRAINING . . . . . . . . . . . . . . . . . . . . . . . . . 132

Effects on Job Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132

Linking Training to Management Strategy . . . . . . . . . . . . * . . . . . . . . . + * * * + +, ***,.,... 133

Evaluation of Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134

TRAINING PROVIDERS ... ,. ... ... ... ... ... *., ..*. .*** ,.   +** * **, *.*+ e, **. 135

Equipment Vendors ... ... ... ... ... ... ... ... ... .. ... .. . ** +** 0*****. ****c 137

Private Training Consultants . . . . . . . . . . . . . . . . . . . . ...,.....*..,,.....******,**, 139

Proprietary Schools . . . . . . . . . . . . . . . . . . . . . . . . . .. .........,.....+**.**,.,**”,.++, 140

SHARED TRAINING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

Unions and Professional Associations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

Trade Associations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...................+,**@*,* 141

Educational Institutions ... ... ... ... ..*. ... ... ... ... *.*. ..46 ... +

.. c.** . *e*.***.* 142

THE GROWING STATE ROLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144

Funding ● . . . . . . . . . . . . . . . . . . . . . . . . . . . ... ... .. ... ... .., ... .+. ... .+. +++, ,. 144

Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... ... ... ... ... ... +*. *+, **, e<. . * 145

Community Colleges and Vocational- Technical Institutes . . . . . . . . . . . . . . . . . . . . . . . 146

Training and Technology Extension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148

The Substitution Question . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149

Box

Box Page

5-A. The Federal Government as Trainer . S . . . . . . . . . . . * . . . * . . . . . . . . . * . . *, ,.*,,..* 137

Tables

Table Page

5-1. Estimates of Employer Investments in Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129

5-2. The Skill-Training Life Cycle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135

5-3. Selected Characteristics of State-Financed Customized

Training Programs ... ... ... ... ... ... ... ... .+

. ... ... ... .**. *++* *.** *@. *+ *m.*** 145
Chapter 5

Delivery of Training by U.S. Firms

SUMMARY

U.S. companies spend billions of dollars each

year to train workers. Still, the extent and quality of

training vary dramatically, and firms seldom evaluate their efforts. Only 35 percent of workers say they

had any form of training while at their current job.

As interest and investment in training grow, a few

pioneering companies, large and small, are designing training programs to support strategic corporate

goals. These firms often find that new instructional

technologies can deliver high quality training at less

cost than traditional teaching methods. Both effortsto systematically integrate training with business

strategy and to apply instructional technologiesare still in their infancy, however. (See ch. 7.)

New training organizations and support structures, including State assistance programs and industry consortia, are emerging. While these sources

promise to enhance the scope and quality of training,

their efforts are fragmented and not widespread.

While the data are poor, recent estimates of the

total annual employer investment in formal classroom training range between $30 billion and $45

billion. Expenditures on informal on-the-job training could be greater, because few U.S. workers

receive training in a formal classroom or laboratory

setting. Most on-the-job training is unstructured—

left to chance. Some U.S. firms have found that rapid

technological change increasingly requires workers

to have broader, more theoretical job knowledge that

can be provided best through formal training.

(Formal and informal training can be merged at the

worksite through job aids, simulators, and other new

forms of instructional technology).

Formally or informally, U.S. employers provide

little training partly out of fear that well-trained

employees will sell their skills elsewhere for higher

wages. Human capital theory and subsequent empirical studies suggest that employers can use a variety

of mechanisms to protect themselves from such

risks. There is some evidence that the most highly

trained workers are those least likely to quit or be

laid off. Still, the fear of losing their investment as

well as a lack of training knowledge and experience

make many managers reluctant to spend major sums

on formal or structured informal training.

U.S. workers receive training from many sources:

colleagues and supervisors, in-house training de -

partments, equipment vendors, private training companies, and public and private schools and colleges.

When firms introduce new technologies and redesign jobs, they rely primarily on in-house training

and training by equipment vendors. Once job

descriptions become well-established, educational

institutions provide more of the training.

The quality of training delivered by these sources

varies greatly. In many companies, the in-house

training department is seen as a wayside within the

corporate hierarchy, and rising young executives

hope not to be placed there. Outside sources, in

contrast, are eager to serve client companies. However, many equipment vendors give only cursory

training to a small group of employees-the vendor’s frost concern is selling equipment. While many

schools and colleges can provide more comprehensive, general training, employers see it as more than

is actually required, and may not want to pay for it.

Alternatively, there is a huge maze of for-profit

training companies and consultants-3,500, by one

estimate-and no way to judge their quality except

by word-of-mouth. They sell both high quality

products and services and untested, off-the-shelf

training materials.

Over the past two decades, the States have

expanded their business development efforts to

include modest support for training. Today, State

investments in worker training are aimed not only at

wooing new firms to boost the State economy, but

also at inducing existing employers to create new

jobs or to avoid layoffs.

By the 1988-89 fiscal year, 44 States operated 1

or more company-customized training programs,

with annual budgets totaling about $375 million. In

addition to these formally budgeted programs, a few

States have spent large sums on training as part of a

package of incentives to attract new industries,

especially new auto plants. Many State-subsidized

educational institutions also provide customized

training for employers on an ad hoc basis outside of

any formal, statewide program.

-127-
128 . Worker Training: Competing in the New International Economy

Despite this growing investment, few States have

evaluated their training efforts. One preliminary

study indicates that State assistance has played a

positive role in achieving the goal of enhancing the

competitiveness of existing firms.

Small employers, who are most in need of training

assistance, often need better technology and improved management techniques as well. However,

current State technology assistance programs (which

provide consulting services to firms seeking to

upgrade their hardware, software, and management

systems) are limited in scope and poorly linked with

State training assistance. Neither State technology

assistance nor State training assistance programs are

adequate to meet growing employer demand. “Onestop” training and technology assistance for small

employers lost in the jungle of public and private

training providers is available only in Michigan,

Massachusetts, and a few other States.

Growing State involvement in worker training

raises important policy questions. Perhaps most

fundamental is: Should government intervene in the

training marketplace, and what criteria should govern its assistance given that State resources will

never be adequate to aid all firms? Closely related is

the question of substitution: Are companies using

State training funds to support nontraining activities? If the money is being used correctly, would the

firms have trained their workers anyway in the

absence of State subsidy?

Raising these questions may be less necessary if

companies are required to prove financial need and

are limited to subsidies for formal training or

systematic on-the-job training (such as trainers’

salaries while on the shopfloor) which can be clearly

identified as training time.

HOW MUCH TRAINING IS

DELIVERED?

Accurate estimates of the extent of worker training do not exist. There are several reasons:

●

●

●

Not

Few firms respond to surveys; only a handful of

firms keep track of training expenditures and

these firms account for training costs in very

different ways.1

In employee surveys, workers’ memories and

perceptions of training events maybe unreliable.2

Employers more often train their workers

informally on the job than in formal classrooms, making it hard to differentiate between

“training time” and “work time.”34

surprisingly. therefore, estimates of the total

employer investment in training vary greatly. (See

table 5-l.)

Estimates of U.S. employers’ investments in

formal training range from $30 billion to $44

billions While these estimates could be off track,

there is no doubt that employer-provided training is

a large enterprise. How large is a matter of interpretation. The $44-billion estimate is less than 1 percent

of 1988 Gross National Product (GNP) ($4.88

trillion). Averaged across an employed workforce of

114 million, investments in formal training are, at

most, $385 per worker per year.

In contrast, the total cost to educate America’s 58

million full-time students (those in primary, secondary, post-secondary education) in 19876 

was

about $311 billion7-$5,400 per student, or 13 to 20

times greater than the amount spent on workers.

Because training is only a small component of most

workers’ jobs, its costs should not be nearly as great

as those of the full-time education of students.

IAMP. J3artel, “utilizingCorporate Survey Data to Study Investments in tiPIoyee Training and Development’ discussion paper for the National

Assessment of Vocational Educatiom February 1989.

?Nell P. Eurich, Corporate Classrooms (Princeto~ NJ: The Carnegie Foundation for the Advancement of Teaching, 1985), p. 7.

3~~ony p. ~nev~e et ~o, Best practices: Wtit work in Traim”ng & D~elop~n&rga~”~tion and Strategic Role, ~Ofi P~Wed fOr U.S.

Department of Labor (Alexan@ VA: American Society for Training and Development March 1989), p. 36.

4u.s. Co=ss,~lmof T=.OIOW ~~es=en~ Technology ad the A~n”can Econo~”c Tra~”fi”on, OTA-TET-283 (Springfiel& VA: National

Technical Information Service, May 1988), p. 129.

5~e most ~ent es~te, for 1989, is $44 billion.~sto~ was ex@olated from a ~ey of ~mpanies w’iti 100” or more employ~ which

received only a 16 percent response rate. The low response rate makes the accuracy of the extrapolation questionable. The survey was published in

Training Magazine, October 1989.

6u.s. Dw~at of ~u=tiom Natio@ Center for ~uation statistics, Digest oj~&cution sz~tistics 1989 (Washington, DC: U.S. Gov~ent

Printing CMtlce, 1989), p. 29.

%id., p. 9.
Chapter 5--Delivery of Training by U.S. Firms ● 129

Table 5-l—Estimates of Employer Investments in Training

(total annual investment by U.S. employers)

Total Format Informal

Author (dollars in billions) Comments

Oberle (1989) a . . . . . . . . . . . . . . . . . NE 44.4 NE The survey was sent to 20,000 business units with 100 or

more employees in early 1989; 3,130 responded for a 16

percent response rate; estimate excludes wages of trainees. Three-fourths of the total was for wages of trainers.

Excludes government training.

Mincer (1989) b.. . ..............105-210 NES NES This study used wages while in training as a proxy for

training costs. Includes government training.

Bartel (1989)C . . . . . . . . . . . . . . . . . . NE 55 NE The survey was sent to 7,765 business units in early 1987;

493 responded (6 percent response rate). One-third to

one-half of responding units had formal training programs.

Some respondents may have included trainees’ wages in

their cost estimates. Excludes government training.

ASTDd . . . . . . . . . . . . . . . . . . . . . . . . 120-210 30 90-180 The formal training estimate is based on average training

costs multiplied by the number of trainees and courses

from the 1978 Current Population Survey. ASTD excludes

wages of trainees and government training from its formal

training estimate. The low end informal estimate is based

on a Bureau of Labor Statistics survey which found that

informal training was cited three times more frequently than

formal training as a source of qualifying training.e The high

end informal estimate is based on Mincer’s 1989 estimate

($210 billion) minus ASTD’s formal training estimate ($30

billion).

Carnevale & Goldstein (1985)f . . . . NE 10-21 NE The study used 1978 case study survey data from 12 large

firms, to determine training costs. This was multiplied by

the number of courses from 1978 Current Population

Survey. Includes government training. Higher estimate

includes wages.

Craig & Evers (1981)9 . . . . . . . . . . . NE 30-40 NE Assumes average firm spends half AT&T’s 1981 average

per employee training expenditure of $1,500, and that half

of all U.S. employees receive training. Includes government training. Excludes wages of trainees.

NOTE: NE -not estimated; NES not estimated separately.

aJoseph Obefle, ‘~raining Magazine’s Industry Report 1989,” Ta”ning Magazine, vol. 26, No. 10, Oetobr 1989, P. 32.

bJ@b Minmr, U~~r M~et Efl~ of Human ca@~ and of Its Adjustment to T~hnoiog~ change,” diwssion paper for the National ASSWKWllWlt Of

Vocational Education, February 1989, pp. 17,33. A Deeember 1989 analysis by Mincer, using much the same methodology, resuited in a revised total of $240

billion to $330 billion for formal and informal training combined.

CAnn p. Bartel, tt~ilizing co~rate survey Data to S@ lnvestmen~ in EmplOy~ Training and Development,” dimssion paper for the National ASSeSStllent

of Vcreational Education, February 1989, p. 5.

dc!Amount Spnt on T~~ning by Ameri~n Businesse~F~ sheet” (Alexandria, VA: American sOCiety fOr Training and Development, no date).

%4SX L. Carey, HOW Workers Get Tbeir Training, U.S. Department of Labor, Bureau of Labor Statistues, bulletin no. 2226, March 1985.

fAnthony p. Carnevde and Harold GoHstein, Employee T~~jnjng: /fs c~angj~g Ro/e a~An Ana/ysjs Of NW Data (A[exadria, VA: ASTD Press, 1985), pp.

77-82.

9As cited in Carnevale and Goldstein, in footnote f above.

SOURCE: Office of Tdnology Assessment, 1990.

However, training expenditures are also quite mod- formal training while others spend nothing. Overall,

est when compared with other employer investments employers spent more (2.8 percent of payroll) on

in their workers. Forty-four billion dollars equals 1.8 coffee breaks, lunch, and other paid rest time for

percent of the total compensation that American their employees than on formal training.9

firms and other private employers paid their workers When the costs of informal trainin g are included,

in 1988 ($2.4 trillion). A few companies spend cost estimates range from $105 billion to $210

amounts equal to 4 or 5 percent of their payroll on billion or more per year (see table 5-l). However, the

gsuwey of Current Business, vol. 69, No. 7, July 1989, table 1.14, P- 45.

W.S. Chamber of Commerce, “Employee Benefits,” Survey Data From Benefit Year 1988 (Washington DC: 1989), p. 27.
130 ● Worker Training: Competing in the New International Economy

$210 billion estimate is not comparable with the

other estimates in table 5-1, because, unlike the

others, it assumes that workers share in the costs of

training by accepting a lower wage than would

otherwise be paid during the training period.

Most informal training is unstructured, consisting

of experienced co-workers and supervisors showing

newer employees how to do their jobs. Such training

does not compare favorably with the highly structured informal training and the growing amount of

formal training provided by firms in competitor

nations (see ch. 3).

Training in Small Firms

Training is delivered unevenly across firms and

among workers. While a few large corporations

spend major sums on employee training, many small

companies spend little or nothing.l0 Larger firms are

more likely to provide structured training because

they have lower labor turnover and greater access to

capital to finance training.

11 It is also possible that

the training tends to further reduce their labor

turnover.

Although smaller firms invest little in formal

training, they nonetheless do train their employees

informally. Typically, workers at firms with less

than 100 employees have greater training needs

because, in comparison to workers at large fins,

they tend to be less well-educated and have a less

stable employment history. These needs are usually

met by supervisors or co-workers informally teaching new hires.12

Strong management commitment at some smaller

firms drives investment in formal as well as informal

training. A few even develop their own in-house

training. For example, General Tool, a familyowned machine tool job shop in Cincinnati, has a

full-time training manager who designs and delivers

both an apprenticeship program and ongoing offhours courses for the company’s 300 employees.13

The company defrays part of these costs by allowing

nonemployees to enroll in its classes for a fee.

Economic Barriers to Workplace Training14

According to human capital theory, worker training extends across a spectrum ranging from “general’ training, which ‘‘is useful in many firms

besides those providing it,”15 to “specific” training, which is useful only in the firm where it is

provided. Because firms could lose part of their

return from general training investments if a newly

trained worker took a job with another firm, the

theory states that, although firms might provide such

training, they do not pay for it. Instead, employers

pay a lower wage during the training period to cover

the training costs. Employees accept the lower wage

because they recognize that they will benefit from

the general training. Another theorem of human

capital theory is that firms and workers share the

costs of specific training (the workers’ share is paid

in the form of a wage lower than their productivity

would otherwise justify) since both parties benefit.16

To guard against turnover, the theory says, firms pay

higher wages following specific training than would

be warranted based strictly on productivity.

Some subsequent empirical studies have called

both of these basic premises into question, suggesting that firms sometimes pay for general training and

that firms and workers do not always share the costs

of specific training. More importantly, however,

these studies found that, when firms do take the risk

of investing in both general and specific training,

they are less likely to lose their investment through

quits or layoffs than the original human capital

theory would suggest. This suggests that, at least in

loJerome M. ROSOW and Robert Zager, Training: The Competitive Edge (San Francisco, CA: Jossey-Bass, 1988), p. 1.; Etic4 OP. cit., foo~ote 2,

p. 9; Sheldon Haber et al., “Employment and Training Opportunities in Small and Large Firms” (Potomac, MD: Simon & Co., under U.S. Small

Business Administration Contract No. SBA-8587-AER-84, 1988), p. viii.

llJo~H. Bishop, “On-th&JObTraining of New Hires,” working paper #89-1 1, Center for Advanced Human Resources Studies, Cornell Universi&,

presented at the symposium on market failure in x,LaFOllette Institute of Public Affairs, University of Wiscons@ Madisoq May 1989, p. 33.

12, cm Iowent and ‘r’r@ Oppotities in Small and ~ge ‘tis* P “ op. cit., footnote 10, p. 90.

13J~es Stew@ D~ector, ~n~ac@ and Engin~g, &ner~ TOO] CO., Per,$oti comuniciitio~ my 4, 1989.

14~s di5cus510n is b~d on a wo~g paper by Michel J. Feuer, OTA, “Economic Analysis of Workplace Training: HumanCapital Theory and

Beyon&” August 1989.

ISG~B~k~, Huron Capital:ATheoretical ~~EmpincalA~lysisWith specia[Reference toE&cation, Zd d. (New Yo&, NY: National Bureau

of Economic Research and Columbia University Press, 1975), p. 19.

1

6

’’Eeonomic Analysis of Workplace Training,” op. cit., footnote 14, p. 30.
Chapter S-Delivery of Training by U.S. Finns .131

some instances, training is less risky as an investment than many employers believe.17

A study of scientists and engineers found that

those whose firms financed their general training (by

paying for outside courses) earned just as much

during training as those who were paying for their

own education.18 The same study found that quit

rates were no greater among scientists and engineers

whose firms paid for general training than among

those who paid the costs of general training themselves, either through lower wages or by paying

tuition for courses out of their own pockets.19

Another study, based on a 1982 survey of over 3,000

employers, provides further evidence that firms do

indeed pay at least some of the costs of general

training. 20 T. recapture some Of these costs, wage

rates following training were lower than the increased productivity of the workers would warrant.

Despite the low wage, the workers were still unlikely

to quit or be hired away by rival firms because their

new skills were poorly “signaled” to the labor

market-that is, rival firms were unaware of these

skills and how they might benefit from them.21

An earlier study of manufacturing workers found

that when workers financed a greater share of their

specific training (by accepting lower wages), they

were less likely to quit. When the firms paid a greater

share of specific training, they were less likely to lay

off the workers.22

In actual practice, firms rarely offer training that

is purely general or purely specific. Instead, the two

types of training blend along a continuum. Some

empirical studies suggest that when general and

specific training are offered jointly, turnover rates

are reduced, so the likelihood of losing the investment is lowered.23 More importantly, the “risk” of

providing general, transferable skills may be outweighed by the benefit to the firm from increased

24 Because employers efficiency in specific training.

are most likely to capture the benefits of specific

training, and the costs of specific training are lowest

when the employee possesses broad, transferable

skill, the investment in general training may be

worthwhile.

Both in its original formulation and in many

subsequent studies, human capital theory suggests

that employers can use a variety of mechanisms to

minimize the real or perceived risks of training

investments. Even so, some managers view training

not as a strategic investment to improve human

capital, but as either an avoidable expense or an

expensive benefit. When profits are up, training

increases; in lean years, it is cut back.25

Cost is not the only barrier to worker training.

Many employers are reluctant to provide training

because they do not know the best approach. Senior

managers may not fit training into their plans to

introduce new technology and/or new work processes.

26 Production managers are often reluctant to

disrupt operations by releasing employees for training in the hopes of an elusive future benefit. Many

inexperienced managers fear training will fail, while

others who have had bad experiences with previous,

ill-conceived training efforts are even more wary.27

Despite these barriers, the competitive pressures

outlined in chapter 3 are forcing companies of all

sizes to reevaluate their training needs. Small and

mid-sized suppliers to larger companies will need

better trained workers to meet the stricter quality

requirements of the purchasing fins.

171bid., p. 37.

lg~c~el Feum,HqGlic~ and AnandDes~ ‘Is Firm-Sponsored Education Viable?” Journal ofEconomz”cBehavior and Organization, vOl. 8,

1987, pp. 121-136.

l%id.

W3ishop, op. cit., footnote 11.

Zlrbid.

‘Donald Parsons, “Spec~lc Human Capital: An Application to Quit Rates and Layoff Rates,” Journal of Political Economy, vol. 80, No. 6,

November/December 1972, pp. 1120-1143.

~~c~el Feuer, Hemy Glic~ and Anand Desai, ‘‘Firm Financed Education and spec~lc Human Capital: A Test of the Insurance Hypothesis,”

invited paper, symposium on market failure in x,LaFollette School of Public Affairs, University of Wisconsin, Madisow May 1989.

W!cimlori Hashimoto, personal commticatiow June 1989.

~E~Ch, op. cit., footnote 2, p. 5.

~Peter A. Creticos and Robert G. Sheets, “Evaluating State-Financed, WorkplaceBasedRe training Programs,” forthcoming report to the National

Commission for Employment Policy and the NationaJ Governors’ Association March 1990, p. 56.

‘Ibid., p. 58.
132 ● Worker Training: Competing in the New International Economy

THE IMPACT OF EMPLOYERPROVIDED TRAINING

A few companies have made major commitments

to training. For example, International Business

Machines Corp. (IBM) and Xerox Corp., spend 4

percent or more of payroll on training. Motorola, Inc.

has a corporatewide policy of budgeting 1.5 percent

of payroll for training and in fact often spends more

(2.4 percent in 1987).28 Motorola is now proposing

that each employee receive at least 40 hours of

education and training each year.

One recent study29 urged American employers to

spend 2 percent of their payroll on human resource

development, with the ultimate goal of reaching 4

percent nationwide. However, simply throwing more

money at training will not help firms function better.

Some companies have been able to reap substantial savings by evaluating their training programs in

light of company goals. For example, in 1985,

IBM’s top managers found that they did not know

what the corporation’s total annual expenditure on

training was. It took a 3-month study to reveal that

IBM was spending $900 million a year (or 4.7

percent of total compensation) on education.30 Top

management called for a follow-up study to determine whether the $900 million total was justified in

terms of the quality of training and its contribution

to productivity.

With top-level commitment to acting on the

results of the subsequent study, training was “recentralized,’ under a Director of Education reporting to

top management; training courses were redesigned,

eliminated, and/or created to match them more

closely to company jobs; and cost-effectiveness

studies led to greater use of distance learning

technologies. A new 5-year strategic plan for education, closely linked to business goals, is now halfway

through implementation, and rapidly rising training

costs have been contained.31

Other companies, too, have saved money by

taking a closer look at their training programs and

evaluating the cost-effectiveness of alternative delivery methods. NCR Corp. (formerly National Cash

Register) expects to save $70 million per year in

training costs by producing its own training materials on interactive videodisc.32

Effects on Job Performance

Most efforts to strengthen the quality of training

focus on improved job performance. Recent research

as well as anecdotal evidence from companies

indicate that knowledge gained outside of the

normal job context (such as in a classroom) is

difficult to transfer back to the worksite.33 34 There

are many reasons for this nontransfer: Training

departments are often left out of top corporate

planning, line managers sometimes fail to reinforce

application of the newly learned skills, and, in many

cases, the course itself may not be really focused on

the COW:.L of trainees’ jobs.

There are techniques for more closely relating

training to job performance. Companies that can

afford to undertake job analysis, for example, can

often improve their training programs. IBM’s effort

to create a more responsive training system resulted

in dropping many courses while adding others to

match the 85 major job categories in the company .35

This pruning used Instructional Systems Design

ISD-see ch. 7 for a more complete discussion) to

evaluate the previously existing array of courses for

relevance to the content of specific jobs. Through the

~pa~V. Delker, “WOrkeI Training: A Study of Nine Companies,” contract report prepared for the Office of Technology Assessment, September

1988, p. 47.

29&thony p. Cmnevde ad J~et w. Jo~toU Training America: Strategies for the Nation (Alex~dri% VA: American Society fOr T-~d

Development 1989, p. 5). The study was jointly sponsored by ASTD and the National Center for Education and the Economy.

%alph E. Grubb, “Training in the Workplace: An IBM Case Study,” report prepared for the Office of Technology Assessment under contract

L3-2830, February 1990, pp. 12-14.

slpa~c~ A. G~ag~ “IBM Gets Its A.rms Around BduCatiO%” Trairu”ng and Development Journal, vol. 43, No. 1, January 1989, pp. 35-41.

3ZobertR. Mler, ‘‘Corporate Strategy and Industrial T-g,” contmctorreport prepared for the OffIce of Technology Assessment under contract

L3-5240, February 1990, p. 41.

ssHelen Kelly, “A Primer on Transfer of Training,” Training and Development Journal, November 1982, p. 102.

34~men B. Rwfic~ ~<~m~g~ School ~d@t,’> Educatio~Z Research, No. 16, pp. 13-Z(); and Others cited in David Stew “hls(hltiOnS ~d

Incentives for Developing Work-Related Knowledge and Skill,” paper presented at the Technology and the Future of Work Conference, Stanford

University, Stanford, CA, Mar. 28-29, 1990, p. 6.

3S~ga~ op. cit., f00b30te 31$ P. 39.
Chapter 5-Delivery of Training by U.S. Firms ● 133

use of ISD, the length of some courses was cut by 25

percent. 36

The cost savings from eliminating “nice to

know” information and keeping only “need to

know” information may be substantial. However,

managers seeking greater worker participation as

part of their business strategy often find that the

“need to know’ category is quite large. According

to one recent study of workplace training:

What employees need to learn, beyond their

immediate assignments, depends on what the employer wants them to contribute. Leading companies

. . . tell them a great deal about corporate goals and

plans, the operation of the job site, the jobs of peers

and managers, the functions of adjacent work units,

the technology in use, effective problem-solving

methods, and actual costs.37

In some cases, training does not translate into

improved job performance because other steps, such

as reorganization of work, have not been taken. For

example, operators in a large (900-employee) east

coast cookie factory received training in statistical

process control (SPC), problem-solving, and troubleshooting. However, their jobs remained unchanged, so that they had little opportunity to use

their new skills. Thus, the training had little impact. 38

In other cases, the lack of transfer is due to a lack

of post-training follow up. One study found that

students were most likely to apply time management

skills learned in a short course when they attended a

follow-up session where they set goals for applying

their new skills.39

Linking Training to Management Strategy

Many observers note that training departments of

large companies are often isolated from top management and that training content is often developed

haphazardly, in response only to immediate needs.40

Thus, lower level managers often justifiably doubt

the usefulness of training because it sidetracks

people from their “real” work with no apparent

benefit.41

Responsibility for training is necessarily decentralized.42 A 1988 survey of 12 large corporations

revealed that, in all but one company, line managers

controlled at least 75 percent of the total corporate

investment in training.43 Although local decisions

are important for flexibility, company-wide training

commitments may not develop without some centralized guidance. Some large corporations, like

IBM, may gain economies of scale and tie training

more closely to strategic goals by centralizing

oversight of the entire training process at a point

high on the organization chart. To be avoided is

having a human resource development (HRD) department that produces training videos and courses

that may not be used by operating divisions, while

field managers act on their own to produce or buy a

whole smorgasbord of other training services.

For small businesses, linking training to management strategy may be easier. Because most small

companies cannot afford to hire a fill-time trainer,

there is no danger that training can be isolated from

corporate goals. In fact, top management sometimes

is the HRD department.”

Managers in many U.S. industries rank improving

the quality of their products or services high among

corporate goals. When the correct links are forged,

~Ibid.

37Rosow ~d Zager, op. cit., footnote 10, p. 14.

38-H~schho~ “Tr- Factory Workers: Three C=e Stuti=, “ contractor report prepared for the OffIce of Technology Assessment,” July

1989, p. 5.

s~e~e~N. WeAey and Tjmothy T B~dw-@ “pos~-S~t@es for Facfli~@positive Tr~fer:An Empirical fiplomtio~” &lde~0“

Management Journal, vol. 29, No. 3, September 1986, pp. 503-520.

~omas J. Chmura et al., “Corporate Education and Train@,” SRI International Business Intelligence Program Report No. 753, fall 1987, p. 7.

41 ROSOW and ~ger, Op. d., fOOtnOte 10, p. *5.

‘%ichardGordonet al., “Proposalfor Creation of a Research Planning Group submitted to the Council for European Studies,” December 1988, p. 3.

43~~ony p. Cmevde~fic R. sch~~, Best Practices: Wtit work in Trai~”ng & f)evelop~nt:~counting and Evaluation, ~11 p~pmd

for U.S. Department of Labor (Alexandria, VA: American Socie& for Training&Development Mar. 31, 1989), p. 149.

44Fore~ple, the owner of onesmrdlmanufacturing mmpanyticficinnatinot or.dybudgets for formal and informal tmining, but also deliversmuch

of the employee tmininghirnsdf. Typically, he trains the foremen and coaches them as they train the production workers. George Wiles, Presiden4 Planet

Products, interview of May 4, 1989.
134 ● Worker Training: Competing in the New International Economy

training can play a critical role in quality improvements.

Training has played an important role in Ford

Motor Co.’s quality improvement strategy. Following massive layoffs in the early 1980s, Ford instigated an Employee Involvement (EI) process for its

unionized workforce. Training in joint problemsolving took place on company time, as did a

subsequent program teaching managers how to work

successfully with the more participative workers.

At the same time, Ford and the United Auto

Workers were jointly developing a broad range of

personal development courses offered off-hours. As

discussed at greater length in chapter 8, these

personal development courses made on-the-job training easier by enhancing participants’ self-esteem,

interest in learning, and basic skills. According to

Ford’s former Chief Executive Officer, Donald E.

Petersen, training and EI played a major role in the

firm’s 1986 turnaround from near-bankruptcy to

record profits. Petersen, who retired in 1990, views

ongoing training as a key to the continual quality

improvement needed to sustain profitability .45 (See

box 4-D inch. 4 for further discussion of training in

company efforts to improve quality.)

Training can play an important role in achieving

other corporate goals too. For example, as global

markets mingle, many U.S. corporations seek to

increase exports. This requires employees who can

operate effectively in other cultures and languages.

Aetna’s Corporate Education Institute provides courses

in cross-cultural issues to support the company’s

attempt to break into foreign markets. Motorola’s

Training and Education Center briefs top management on the culture and history of Asia, to better

understand the company’s foreign competitors and

to help tap Asian markets.%

Even firms who are not focused on exporting are

finding that the demographics of their workforces

are changing (see ch. 3). As the number of immigrants grows, language barriers will affect on-thejob training. More companies will need trainers and

supervisors who are adept in multicultural and

multilingual environments.

Evaluation of Training

Evaluation can improve training. Although it is

rare, managers are becoming more interested in

evaluation when they look more closely at their

training expenditures and ponder what they got for

their money.

A 1986 survey of training professionals in major

corporations found that less than half of the training

programs offered by their firms were evaluated at

all.47 Similar results were obtained in 1988, when

ASTD surveyed several large companies known to

keep excellent records of training costs. Of this small

group, only 10 percent actually assessed the impacts

of training on job performance, and only 25 percent

looked at business results. In most of the firms,

evaluation of training was limited to participant

reactions and, to a lesser extent, knowledge gains.48

The ideal evaluation method for training measures:

1. reactions (how participants felt about the

course);

2. knowledge/skill (through competency tests);

3. application (impact on job performance, judged

by interviews with supervisors and peers following training); and

4. business results (such as increased sales or

profits following training).49

The difficulty of applying this four-part model is

illustrated by the experience of New England

Telephone (NET), A rigorous evaluation of a

technician training program took a full year to

complete. With normal job turnover, the managers

who had originally requested the study were gone by

the time the favorable evaluation report arrived.50

Today, NET relies primarily on reaction sheets and

on focus groups held several months after training to

fi’’Donald E. Peterwn Chahman of Ford and Champion of Its People,” Training & Development Journal, August 1988.

Wh.rmmL et al., op. cit., footnote 40, p. 9.

AYT. Me@-BW- E~loyee Training in A~”ca: A Comparative Asses~nt Of Tr~”~”ng a~DeVelOpmetlf (Pri.ncetO@ NJ: @iIliOn Research

Corp., 1986).

*C~neV~e and Schulz, op. cit., foolnote 43, p. 142.

A~o~d ~a~c~ *fE~~~tion of -,” ~ R~. Cfig and L-R Bi~ll (~.), Tr~’ning ad Developme~ Handbook (New yOr~ NY:

Mc~w-Hfi, hlC., 1976).

fiAS cited iII c~ev~e and Sch@ op. cit., foo~ote 43, p. 117.
Chapter 5-Delivery of Training by U.S. Firms . 135

Table 5-2—The Skill-Training Life Cycle

Phase of technology development

Changes in jobs, skills, Phase 1: Phase II: Phase Ill: Phase IV:

and training Introduction Growth Maturity Decline

Tasks . . . . . . . . . . . . . . . . . Complex Increasingly routinized Increasingly routinized Narrowly defined

Job Skills . . . . . . . . . . . . . . Firm-specific Increasingly general General; transferable General; transferable

Skill training provider.. . . . Employer or equipment Market-sensitive Schools and colleges Declining number of

manufacturer schools and colleges more generally schools and colleges;

some skills provided by

employer

Impact on jobs . . . . . . . . . . Job enlargement; new Emergence of new Relatively rigid job hier- Elimination of occupapositions created with occupations archy; occupations as- tions

significant change in sociated with formal edskills needs ucation and related work

experience requirements

SOURCE: Patrioia M. Flynn, adapted from Facilhating Tbnologhxd Change.’ The Human Resource Cha//enge, T.J. Kozik and D.G. Jansson (eds.),

The Worker in Transition: TAno/ogica/ Change (New YorlG NY: Ballinger Publishing Co., 1988), p. 19.

attempt to improve the quality of training and to

increase its relevance to strategic business goals.51

Obviously, many other factors besides training

can affect business results. Nevertheless, it is often

possible to evaluate training in terms of bottom-line

improvements. For example, customer-relations training should bring a reduction in lost customers and an

increase in the accuracy of orders, both factors

quantifiable in dollars.52 When IBM trained all

1,500 employees at its Austin, Texas manufacturing

plant to make better use of its continuous-flow

manufacturing process, cycle time was reduced by

over half, reducing inventory costs and avoiding the

necessity of adding an expensive third shift.53

The potential payoffs of evaluation are great.

Such analyses are necessary not only to justify

growing corporate investments in training but also to

weigh alternative delivery mechanisms and to improve the quality of training.

TRAINING PROVIDERS

When adults were surveyed in 1983 about jobrelated training, the most striking finding was how

few workers received training. About 55 percent said

they had needed training to acquire their current

jobs, but only 35 percent reported receiving any

subsequent formal or informal skill improvement

training. Many adults reported receiving training

from more than one source. Among those who said

they had needed training to acquire their current

jobs, almost 29 percent identified secondary or

post-secondary schools, 28 percent said they were

qualified through informal on-the-job training, and

10 percent obtained their jobs with skills learned in

formal company training programs.54

Those who had received skill improvement training in addition to their basic qualifying training also

frequently reported more than one source of this

training. About 14 percent cited informal on-the-job

training and 11 percent mentioned formal company

training, while 12 percent said their skills were

improved through secondary and post-secondary

schools.

Many of those who used schools for job training

were financially supported by their employers.

Among those who reported that schools qualified

them for their current jobs, 8 percent were sponsored

by their employers, as were a full 41 percent of those

receiving skill upgrading in schools.

Who provides training and where it is done may

move through a ‘‘skill training life cycle” as new

technologies are introduced, develop, and mature.55

As shown in table 5-2, the introduction of newly

developed technology into a workplace can create

‘lIbid., p. 171.

52Dam G~e~ R~bfi~~ and J~ RObfi~ou ‘tT-fOr ~pac$” Training and&velOp~ntJOurna/,VO1. 43, No. 8, Au@t 1989, p. 37.

ssGmbb, op. cit., footnote 30, p. 25.

54= L. Ctiey, HOW Workers Get Their Training, U.S. Dq~ent of~bor,B~~u of ~bor s~tistics, B~efiNo. 2226, Wch 1985, pp. 5-7.

55pa~cia &fa Fl~ Facilitating Technological c~~ge (New York, NY: Ballinger, 1988), pp. 16, 27.
136 . Worker Training: Competing in the New International Economy

complex new tasks.56 With the uncertain quantity

and quality of skills required and the lack of a supply

of appropriately trained workers, managers typically

tack these tasks onto existing jobs. Because the skills

needed are fro-specific, training is usually delivered either in-house or by the equipment vendor.

Later, as the technology matures, tasks related to it

become more standardized, new occupations related

to it may emerge, and the supply of appropriately

trained workers expands. Training for these new

jobs, created by the adoption of relatively mature

technologies, is more general (i.e., transferable

among fins) and is more often provided outside the

firms in schools and colleges.

According to one estimate, employers provide 69

percent of their formal training themselves and

purchase 31 percent from outside providers.57 (See

box 5-A for a breakdown on the Federal Government’s training expenditures on its own employees.)

This reliance on in-house training maybe explained

in part by the skill-training life cycle, which suggests

that firms rely on in-house sources during periods of

rapid technological change.

A 1985 survey of supplier firms to the Michigan

automobile industry found such a pattern. Among

firms that had adopted use of statistical process

control (SPC), computer numerically controlled

(CNC) and computer-aided design (CAD) technologies, most training was delivered informally on the

job. The firms typically sent technicians or line

managers to a formal training class; these individuals then trained the others informally .58

The quality of in-house training is directly affected by the skill of training personnel, many of

whom lack professional training education. As the

number of full-time trainers grows, many trade and

professional associations have sprung up to assist

Photo credit: American Petroleum Institute

Employers provide most of their formal training in-house.

them, including the American Society for Training

and Development (ASTD), the National Society for

Performance and Instruction, the Society for Applied Learning Technology, and the American

Management Association.59 A recent industry directory lists 61 membership organizations serving the

training profession.60 These associations help advance the skills and knowledge of professional

trainers through publications, conferences, informal

networking, and, in some cases, training courses.61

When they turn to outside resources, U.S. firms

purchase training from a wide variety of providers

including equipment vendors, private training consultants, and public and private schools and colleges.

These purchases are estimated to total about $9

billion per year.62

The relationship between in-house and outside

training is complex. In-house trainers may assist in

the design of a purchased course and maybe trained

to teach it. On the other hand, some in-housetraining

departments, such as AT&T’s, have become so

scpa~c~M.FI~ “Introducing New Technology into the Workplace, “ in Investing in People: A Strategy to Adiress Arnm”ca’s Work$orce

Crisis, Background Papm, V. 1 (Washington, D.C.: U.S. Department of Labor, Commission on Workforce Quality and Labor Market Efficiency,

September 1989), pp. 421426.

5TAnthony P. Carnevale et. al., Training Partnerships: L“nking Emp20yers & Providers (washingto~ ~: AmeriC~ SOcietY for - &

Development 1990), p. 1.

5gJaw Jacobs, “meTr- Needs of Michigan Automobile Suppliers” (Ann Arbor MI: Industrial Technology J.U8timte, 1986), P. 7.

s~i=e G~er,ASTD, Persorud communication+ Jdy 27, 1989.

‘%dcewood Publications, Training 1988-1989 Marketplace Directory, p. 306.

61For e-pie, &e_Flofi& @pter of AS~, wor~g ~~ F1ol-i& ~te~tio~ University, develo~ a two-sem~ter ptlrt-the prOglllIIl

leading to certification as a professional trainer. The curriculum included courses in instructional design and evaluation of trainin-Betsy Caster and

Willabeth Jordan, “professional Trainers Go to School,” Training and Development Journal, vol. 43, No. 7, July 1989, p. 78.

6’2Training mag~e~~ 1989 ~dus~ _ey es~tes @t $9.37 bi~on w~ spent on p~~~tr~g tit y~—Training, Op. Cit., fOO~Ote 5, p.

40. Carnevale estimates that31 percent of total employer investments of $30 billiou or $9 billion per year is spent on purchased training-Carnevale

et al., (1989) op. cit., footnote 3, p. 1.
Chapter 5-Delivery of Training by U.S. Firms ● 137

Box 5-A—The Federal Government as Trainer

Federal agencies spent $1.03 billion on training of their 2.1 million civilian employees in fiscal year 1988.1

This amounted to nearly 1.7 percent of the government’s payroll (salary, wages, and lump-sum payments, but not

benefits) in 19882 (By contrast, some training intensive companies may spend 2.5 percent of payroll or more on

training.)

Almost 60 percent of the training dollars was used for internal training by agencies. The other 40 percent was

used to cover the costs of training provided by public colleges and universities, trade and professional associations,

and private training institutions.3 Managerial, executive, and supervisory employees accounted for approximately

15 percent of total training hours and expenditures; nonsupervisory employees accounted for the remaining 85

percent.4

While statistics on training are collected by the Office of Personnel Management, qualitative assessments are

more difficult to find. In the years between 1978 and 1988 the number of employees receiving training almost

doubled, and the hours spent on training increased by 90 percent. The cost per hour of training increased by 20

percent, while the average length of training received by Federal employees decreased by a quarter.5 It does not

appear to be known how much of this to attribute to use of more effective training methods and technologies and

how much to attribute to agency efforts to compensate for rising costs by shortening training sessions.

In the years between fiscal years 1985 and 1987, time devoted to the design and conduct of training by Federal

employees increased 4.5 percent. The mix of personnel involved in training activities shifted to involve more

instructors, and fewer support and administrative staff.

The U.S. military budgeted over $18 billion for training in fiscal year 1990. This includes pay and allowances

to trainees and trainers. As discussed in chapter 7 and in the appendix, the military has been a major source of

research and development funds for learning research and for development of instructional technology. In fiscal year

1990, it spent $22 million on basic research and exploratory development for education and training, and another

$73 million on subsequent or further development. It also spent $81 million for research and development of

simulators and training devices.6

ITMS ~Cl@eS non~o~~ employees of the Department of Defense. It does not include postal crnp@wS.

%formation provided by Oeraldine 1%1.m+ ofllce of Personnel Management, July 1990.

sutitti SEWX ~Ce of pemonnel Managemm~ office of Employee and Executive Developme@ Employee Training in the Federal

Service, Fiscal Year 1988, p. 5.

4

1bid., p. 7.

%id., p. 10.

6E.A. ~ti~L. Richard.s.Means, and E.E. ViCino, Training and Personnel Systems: R&D Program Description, Fiscal Year 1989190

(San Diego, CA: Defense Technical Information Center, MATRIS OffIce, 1989).

successful that they are profit centers, selling necessarily in their economic interest to provide

training to other companies: In a few cases, these

training divisions have been spun off into independent corporations, increasing the ranks of private

training consulting fins. For example, Learning

International, now an independent training vendor,

formerly sold training as a division of Xerox (Xerox

Learning Systems). The American Supplier Institute, which provides training to auto industry

supplier firms, used to be a division of Ford.

Equipment Vendors

Like most training, that provided by equipment

vendors is of mixed quality. Equipment vendors sell

hardware and software, not training. It is not

training applicable to a competitors’ products. But,

because most companies install equipment from

more than one vendor, their workers would benefit

from broader training. When vendors provide initial

training as part of a sales package, they design their

courses to highlight their product’s strengths rather

than its problems. When downtime rises because

workers lack maintenance skills, it can cut into the

gains in productivity that would otherwise result

from the purchase of new equipment.

Typically, vendors provide training on a shortterm basis. Sometimes, companies develop longer

term training relations with their vendors. Even

these can be unpredictable. For example, one small
138 ● Worker Training: Competing in the New International Economy

southern manufacturer of paper and plastic cups sent

small groups of workers to its equipment vendor for

intermittent training in machinery repair for many

years. However, in 1989, the equipment manufacturer expressed reluctance to continue such training,

and the manufacturer had difficulty in obtaining

appropriate training from other outside sources.63

Finally, the firm was forced to establish its own

training center, near the equipment vendor’s facility

in Wisconsin. The manufacturer estimates that it

costs about $1,000 per week, including wages and

travel costs, to send an employee to the new training

center. 64

Despite these limitations, vendors are often the

initial and sometimes the only source of formal

training workers receive when using new technology. Some equipment vendors are in fact major

training providers. For example, Allen-Bradley, a

major manufacturer of programmable controllers,

has trained over 4,000 maintenance workers in a

year. The enrollment compares to a large community

college or vocational school.65

In the “skill-training life cycle” (table 5-2),

vendor-delivered training is especially important

when employers purchase new, innovative technology, because only the vendor knows how to use it.

For example, during the 1950s, some firms adopting

electronic data processing sent their employees to

the computer manufacturers’ schools for as long as

8 weeks to develop the needed skills.66 Today, with

training in data processing available from a wide

range of public and private schools and colleges,

vendor training may last only a few days. An OTA

study of office automation found that, when new

equipment was purchased, vendor training was

limited to a brief orientation; the users were then left

on their own to experiment and learn what applications of the new computer system would best help

them with their work.67

If vendors do not train everyone, they often

instruct the client’s key workers to train coworkers;

unfortunately, the client firm often fails to give these

key workers adequate time away from their ordinary

responsibilities to train others. Worse, these lead

workers may not be skilled trainers and may not

reach all who will operate the equipment. A 1987

survey of large manufacturers and utilities found that

vendors typically trained only the engineers, who

were often poor teachers; they tended to assume a

level of operator knowledge that was unrealistic. As

a result, operators did not fully understand the new

equipment and were not able to cope with system

breakdowns. 68 Similarly, vendors of CNC equipment often train managers in small firms, rather than

line workers who use the technology on a daily

basis. 69

A few equipment vendors are providing more

generic in-depth training. For example, AllenBradley formed a joint venture with Control Data

Corp. in the early 1980’s to develop computer-based

courses on programmable logic controllers, variablefrequency drives, and CNC fundamentals. These

three courses, now marketed separately by the two

firms, are applicable not just to Allen-Bradley

equipment but also to other brands of controllers.70

New instructional Technology can be used to

replace short, vendor-provided courses with ongoing instruction. For example, Control Data has

developed a generic simulator of a programmable

controller, which is produced and marketed by

Amatrol, Inc., a vendor of fluid power systems.

63u.s. CoWess, OH&of Technology Assessmen~ Mak”ng Things Better: Competing in Manufactun”ng, 0~-ITE443 (wadlin@oq DC: Us.

Government Printing Office, February 1990), p. 182.

66pa~c~ ~Flw, ‘CT~~oloW Life ~cles ad ~~pfi,’$ ~ T J+ KOZ& ~d D.G. J~sson (eds.), The Worker in Transz”fi”on: Technological

Change (New Yor& NY: Anerican Society of Mechanical En@eers, 1989), p. 250.

6SROY B. HeKgott, computeriz~Manufac~”ng and Human Resources @x@O% MA: H* 1988)s P“ 39”

@MaryellenR. Kelley and HaIvey Brooks, “The State of Computerized Automation in U.S. Manufacturing” (Cambridge, MA: John F. Kennedy

School of Government Harvard University, 1988), p. V-21.

~osow and Zager, op. cit., footnote 10, p. 100.
Chapter 5-Delivery of Training by U.S. Firms ● 139

Maintenance workers can use the simulator to

practice troubleshooting; they are timed in how long

it takes to repair each of the 47 simulated failures in

the system.71

Amatrol’s participation in this joint venture is

based on its experience in training for its own

equipment. The company trainers learned first that

customers wanted more generic training because

their manufacturing systems were typically made up

of components from a variety of vendors and second

that customers want to deliver more training inhouse but lack the equipment to do so. To fill this

market niche, Amatrol began manufacturing computerized training work stations.72

Private Training Consultants

Private training firms have experienced high rates

of growth in recent years. Annual sales of outside

services and off-the-shelf training programs and

materials grew from $1.5 billion in 1984 to $3

billion in 1989.73 Many entrepreneurs are attracted

to this low-overhead business with its potentially

high earnings.74 One recent industry directory lists

500 training companies and consultants.75 Another

industry source estimates that there are at least 3,500

companies supplying training programs and seminars.

76

As with other training sources, for-profit firms

vary widely in quality. In theory, because of market

incentives, private training firms can rapidly spread

training techniques across the United States. They

often respond to emerging training needs faster than

public educational institutions.77 For example, the

number of private companies selling basic skills

courses, both in print and through computers, is

proliferating (see ch. 6).

The best consultants tailor training to meet the

needs of individual employers. However, many

others sell or rent off-the-shelf packages that may or

may not apply to the employer’s business goals and

workforce. A few offer training techniques whose

effectiveness is unproven. For example, several

firms sell motivational tapes that purport to reach a

deeper level of consciousness by sending messages

separately to the two hemispheres of the brain.

Studies by behavioral psychologists indicate that

this technique fails to enhance learning.78 Independent evaluations, with experimental and control

groups would be needed to substantiate the claims

made about some training products. Such evaluations are seldom conducted.79

Even as more small firms enter the private training

industry, larger, established firms are undergoing a

wave of mergers and acquisitions. For example,

Zenger-Miller, one of the largest supervisory and

management training firms, was acquired in 1989 by

Times Mirror Co., the Los Angeles-based newspaper publisher.80 Times Mirror had earlier acquired

Xerox Learning Systems, specializing in sales training, and Mirror Systems, Inc., an interactive video

disc training firm. Since that time, Times Mirror has

purchased Kaset, Inc., a company specializing in

customer service training.81 With corporate training

directors looking for courses to meet a variety of

strategic goals, including higher quality, better

service, and improved productivity, such mergers

could offer clients a one-stop shop.

Increased centralization of the private training

industry could improve the efficiency of worker

training. The Instructional Systems Association, a

trade group representing the industry, reports that

the most positive results of the merger and acquisition trend are additional funds, which could be used

71~mEWO~ prso~ COlll.lllUfliCdiOQ hdy 20, 1989.

~pa~ pe~, Viw I%xident for hfarketing, Amatrol, kc., personal commti@ou JulY M 1989.

TSAS cit~ in Training ~ugazz”ne, October 1984 ~d October 1989.

T~mnev~e et al. (1989), op. cit., footnote 3, P. 158.

75A5’TD Buyer’s Guide& Consultant Directory, (Alexandr@ VA MT’D, 1%9), P. q.

Tsvin=t W. How et al., “Packages mds eminar8,” in Robert L. Craig (cd.) Traz”ning and Development Handbook, 3d edition (New YorlG NY:

McCkaWHi~ 1987), p. 828.

77pa~c~~Wpa=~ “Occupatio~ ~u~tion ~T-:titi~Pti~, “ in Peter B. Deainger and Bruce Vmneulen (eds.), ~o~.s

and Trairu”ng in the 1980’s (Bostom MA: Martinus Nijhoff Publishing, 1981), p. 64.

78Natio~ R==ch co~~fl, Enhancing H_n Potential (wmhingto~ D.C.: Natio@ hdemy Mss, 1988), p. 21.

%id., p. 17.

~,,=Wer-wm~u~t~Tim= -c Consolidation A T~dJ “ Training, vol. 26, No. 1, January 1989, p. 14.

81TW Bmomfiel~ ~Wutive Dir@or, ~~ctio~ syst~ Assoc~tio~ pwsO~ COmInlUlhtiO@ Jdy 26, 1989.
140 ● Worker Training: Competing in the New International Economy

for research and development, improved delivery

systems, and improved quality .82 However, it is also

possible that mergers and acquisition will lead to

greater emphasis on off-the-shelf packages and

standardized approaches that fail to meet employers’

unique needs.

Proprietary Schools

Privately owned and operated vocational schools

traditionally fill an important niche in preemployment training for young people. These proprietary trade and technical schools serve a population largely unreached by other educational institutions-low-income, young adult minorities-and

have a lower dropout rate than their publicly funded

counterparts. 83 On average, proprietary schools place

81 percent of their graduates, which suggests to

some that their graduates’ skills match labor market

needs. 84 However, graduates of proprietary schools

are more likely to wind up unemployed than are

graduates of public post-secondary institutions.85

Perhaps the narrow training proprietary school

students get is useful for entry-level jobs but does

not provide a good basis for further advancement.

Small firms are more likely than larger firms to rely

on these schools as a source of skilled workers.86

Many proprietary schools have excellent records.

For example, over 95 percent of graduates of one

Washington, DC school are placed as electronics

technicians with large computer manufacturers.87

In contrast, reports of fraud and abuse of Federal

financial aid88 by other schools have hurt the

reputation of the whole system.

For example, a computer school in New York City

arranged for $25 million in guaranteed student loans

for its enrollees between 1984 and 1987. Students

testified that teachers frequently slept in class or did

not show up at all. The school closed in September

1987, leaving its students without any appreciable

skills but saddled with student loans averaging

$2,500 each.89 The U.S. Department of Education

launched a new initiative in June 1989 to try to

control loan defaults at proprietary schools.

Now that enrollment of young adults from the

“baby boom” has ended, proprietary schools are

beginning to offer employers their services as a

source of upgrade training. For example, in 1985,

National Education Corp. (NEC) operated 43 proprietary schools in 10 States and obtained about 65

percent of its revenues from federally guaranteed

loans and grants.90 By 1988, although the chain had

grown to 53 schools, enrollment growth was modest,

and NEC refocused its marketing toward employers.

Through an agreement with United Auto Workers

(UAW) and Ford, NEC launched technical literacy

courses for over 1,000 Ford workers at 17 auto plants

that year.91

The experience of some GM workers with proprietary schools turned out poorly: Shortly after the

UAW negotiated generous tuition assistance payments with GM in 1985, a Lansing, Michigan

computer training firm attracted UAW members to

its classes by offering free computer components,

but it provided little training. The Michigan Department of Education found that the firm employed “a

janitor without experience or degree in the field, a

82Tm Broo~leld, 661SA Smey on Mergers and Acquisitions” (Sunset B~c@ CA: hStrUCtiOIXd systems ~soc~tio~JulY 1989.

SsWomen Comprise approx~tely 10 percent more of the student enrollment than at public postsecondary iIIStitUtiOnS, blacks comprise 13 percent

more, and Latinos approximately 7 percent more. Over half of proprietary school students have household incomes of less than $23,000 per yearis 20 to 40 percent more - the proportion of students with household incomes of less than $23,000 per year in public institutions), and are under 23

years old-U.S. Department of Educatio~ National Assessment of Vocational Education, Final Report, Vol. I (Washington DC, 1989), p. 103. See pp.

104-106 for data on retention rates.

~mLASSoCi~t=,FaC~~ Abou~PriVat~ Care~rSChoOl~, Thei~StudentS, =~th~postseco~~~ucation COnt~t@eth~&D: me aeerFoundatio~ 1989), P. 3.

Ssu.s. Department of Education, op.cit., footnote 6 P. 109.

86u,s. CJm Business A-tratiq Offlce of Advocacy, S~l/Business in the A~~”can Economy ~m~o~ DC: U.S. Go~ ernment Printing

Office, 1988), p.%.

87Ne~ E~ch (cd-), ~arning t. Work: Resourcesfor A&zt T~ainin~ (foficoming from tie C-egie Fo~~tion for the Advancement Of T~ch@,

1990), p. 204.

88About 70 ~mentof ~1 s~denfi emo~~ in proprie~ schoo~ r~ive f~er~y -nteed loa~J’BL Associates, “Facts About priVate c-r

Schools, their Students and the Postsecondary Bducation Context” (Bethesda, MD: JBL Associates, 1989), p. 3.

89GW ~~z ~CS~dy Trade Schools Imperil Federal System of Lou to Students, “ Wa12StreetJournaZ, vol. CCXUI, No. 60, Mar. 28, 1989, pp.

Al, A12.

‘Oppenheimer & Company, “New Recommendation: National Education” (New Yor~ NY, 1985), p. 4.

gl<tNation~ Education CowOra tion 1988 ~~Report” @vine, CA: Natio~ Education COrp., 1989), p. 3.
Chapter 5-Delivery of Training by U.S. Firms ● 141

plumber, a waitress, a construction worker, a real

estate salesperson, advertiser, minister, and dietician

who apparently have no qualifications for the areas

they are teaching.”92 The firm collected over $1

million intuition payments from the UAW-GM joint

training fund before the UAW-GM Human Resource

Center stepped into suspend payments.93

As proprietary schools become more involved in

efforts to upgrade the skills of employees, employers

will need to select carefully. Trade and technical

schools with good reputations and track records

clearly can offer useful training. Moreover, the

better trade and technical schools respond quickly to

changes in the labor market and technologies.

SHARED TRAINING

One way firms can find their way through the

maze of training providers is by pooling their

resources to jointly buy or develop training. Sharing

the high costs of developing new courses could

potentially make training financially feasible for

many more firms, particularly small firms. However,

until recently, such efforts have been quite limited in

the United States. One factor in firms’ general

reluctance to pool their training efforts is the

perceived threat of violating anti-trust laws.94 As

discussed in chapter 2, legislation now under consideration might alleviate this problem.

Despite the limitations, there are several avenues

through which two or more firms can share training.

They include:

● unions and professional associations;

. trade associations; and

. educational institutions.

In addition, as interest in training grows, firms may

begin to form consortia specifically for training

purposes.

Unions and Professional Associations

High quality training is expensive. To support the

costs of such training within a company or an

industry, the firm or industry must, in effect, tax

itself. In unionized companies, collective bargaining

provides a mechanism for collecting such fees.

Because industrial unions typically seek uniform

wages and benefits across an industry, they can be

the catalyst for the formation of industry associations. This is most obvious in the United States in the

construction industry, where local and national trade

associations formed to bargain with strong unions. A

key activity of these trade associations is development and implementation of apprenticeship training

with the unions (see ch. 8).

Without unions, financing shared training can be

more difficult. Industry associations may be unable

to obtain voluntary contributions from member

firms, and a single firm acting alone may be

unwilling or unable to support such extensive

training.95 However, professional associations sometimes play a role similar to that of unions. For

example, the Institute for Auto Service Excellence

(ASE) operates a voluntary certification program for

automotive technicians. Although ASE does not

dictate what type or where the technicians receive

their training, they must pass uniform tests to win

certification. Another example is the National Council for Early Childhood Education, which has

developed a competency-based curriculum for childcare providers. This curriculum includes modules

that can be included or excluded, depending on the

knowledge required to meet varying State licensing

exams.

Trade Associations

Trade associations and industry groups in the

United States are less involved in training than those

in Europe.96 In response to a 1987 survey, State and

national trade association executives said that current training activities cost the associations more in

terms of money and time than they made from the

fees charged for training delivered. National trade

associations were not as concerned as State and local

associations, presumably because they had a larger

funding base. A closely related problem is the

incompatibility between training activities and trade

associations’ mission statements. In cases where the

~Stephen Fra- “GM, Union Learn a Imson on Retraining,” Chicago Tribune, Sunday, Jan. 25, 1987, pp. B-1, B-13.

g%id., p. B-1.

%auri J. Bassi, “Multi-Employer Training Consortiz An Idea Whose Time Has Come” (Washington DC: NFIB Foundation 1990), p. 7.

gSRobert W. Glover, ‘Cfip~ding the use of App~~*ti~eShip,” repofi SUbmitt~d to tie B~~u of ApprentiCeS~p adM, Us. Department Of

Labor, September 1988, p. 26.

MBassi, op. cit., footnote 94, p. 6.
142 ● Worker Training: Competing in the New International Economy

association did not have a specific mandate to

deliver training, funding was available only through

other programs, and a fair amount of work had to be

done voluntarily by staff members with other job

descriptions. 97

These attitudes may help explain why a Federal

effort to promote apprenticeship training through

national trade associations in the late 1970’s had

little long-term impact. Once the Federal funds were

gone, none of the national associations continued

training programs on their own initiative. A few

programs in unionized industries, such as fire

fighters and health care workers, continue at the

local level (see ch. 8). However, the fragmentation

of industries such as auto repair made it impossible

to develop a uniform curriculum and train a substantial number of apprentices.98 There are notable

exceptions to U.S. trade associations’ generally poor

track record in training. The National Tooling and

Machining Association (NTMA) was founded in

1943 expressly to train machinists to replace those

going to war. Today, the association has three

training products: 1) curriculum modules, which

they sell to fins; 2) a 4-year machinery training

apprenticeship, or MTA; and 3) a 12-week, 40-hoursper-week, pre-employment screening and training

program usually offered in conjunction with community colleges. The Chicago affiliate of NTMA

operates a successful apprenticeship program that

has now trained 50 journeymen. Although the effort

received a small seed grant from the State Of Illinois,

it is supported primarily by metier companies.99

Another example is the American Institute of

Banking (AIB), an arm of the American Banking

Association. AIB currently trains about 300,000

workers per year and offers 3 levels of accreditation

in banking skills.

The success of joint union-trade association

training programs in construction has led a growing

number of nonunion construction firms to pool their

resources for training. For example, the Associated

Builders and Contractors (ABC) operates apprenticeship programs for member firms. However, these

programs are less formal and have higher attrition

rates than those in unionized firms.100 In 1989, ABC

joined forces with three other construction industry

trade associations, representing both union and

nonunion construction firms, specifically to address

expected shortages of skilled craft workers. Their

new, nonprofit, Construction Industry Workforce

Foundation, offers promise of developing shared

training approaches throughout the industry.101 The

Business Roundtable, a national industry association located in New York City, launched a major

effort to promote nonunion construction apprenticeship in 1989. This effort focuses on the creation of

heal Users Councils (LUCs), or groups of local

contractors, who would work together to influence

the training curricula of local vocational schools to

match their training requirements. The LUC in

Baton Rouge, Louisiana appears to have had some

success in developing the type of training they

require.

Educational Institutions

Local educational institutions are a natural vehicle through which individual firms may pool their

training resources. As discussed in the following

section, more and more community colleges are

providing training customized to meet the needs of

an individual employer. In some cases, such efforts

spin off improved curricula that can help meet the

needs of a larger group of employers. For example,

some educational institutions work with trade associations to develop generic training for an industry.

In the survey cited above, the few trade association

executives that reported that they delivered training

to their members noted the cooperation of vocational

education personnel as a key element of their

success.

l02 The availability of State funds to back

cooperative training was also cited as a key element

of a successful trade association training program.

customized training for individual firms can, over

time, lead to more formalized structures, in which

firms support the colleges’ training and other

programs on an ongoing basis. For example, the

~Wawe E. Sc~Wder ~d Roy L. Bufler, I~roving Vocational Education Programnu”ng through Greater Involvement of Tr~e Asso~”atio~

(Columbus, OH: National Center for Research in Vocational Educatiou 1987), p. 29.

~Glover, 1988, op. cit., foo~ote 95, p. 28.

%Don E. Frey, Northwestern University, personal comrnunicatio~ May 25, 1990.

IOOBmsi, op. cit., fOOmOte 94* P“ 5“

lolJudy Schriener, “Ganging upon work force problems,” Engineering News-Record, vol. 224 no. 2 (January 11, 1990), p. 39.

Iozschroeder and Butler, op. cit., foomote 97, p. 28.
Chapter 5-Delivery of Training by U.S. Firms ● 143

Unified Technology Center (UTC) at Cuyahoga

Community College in Cleveland, Ohio was initiated by the community college president in the early

1980’ s.103 The new program was aimed at helping

industry with technology adoption and training.

Although it was initially funded through the State

and the community college, it currently receives half

of its support from the private sector, one quarter

from the community college, and another quarter

from State and Federal funds (Federal funds come

from designation as a National Institute of Standards

and Technology technology transfer center). UTC

now sells both training and technology consulting

services, particularly to small and medium-sized

fins.

The Southern Technology Council’s (STC) Consortium for Manufacturing Competitiveness (CMC)

has a similar mission on a regional scale. An

offshoot of the Southern Growth Policies Board,

STC includes representatives of Southern Governors, legislatures, and industry. CMC was formed

with Federal as well as State support in 1988 with

three goals:

1. to demonstrate that public vocational schools

and community colleges can help small and

medium-sized manufacturers with new technology;

2. to provide more information about the training

needed for the factories of the future; and

3. to produce graduates who are able not only to

adapt to technological change but to facilitate

it.

104

The 14 State-supported educational institutions

that make up the CMC have expanded their services

to employers and have leveraged private funding

with consortium monies. For example, Southern

Arkansas University Technical School has received

business support to upgrade its CAD and computeraided manufacturing (CAM) training and to serve as

a demonstration facility for firms who want to pilot

new processes there. The school has also equipped

three mobile training facilities tabletop robotics

laboratory, a CAD/CAM center, and a hydraulics

and pneumatics laboratory-which travel to other

Photo credit: American Association for

Community and Junior Colleges

Community colleges face the challenge of providing

training broad enough to prepare individuals for a technically changing world, but specific enough to meet the

immediate needs of employers.

colleges, vocational technical institutes, and manufacturing firms.105 Thus, each member school in the

consortium acts as a catalyst for its own local

industries, providing a shared source of expertise on

training and technology transfer. On a regional level,

with support from the U.S. Department of Education, the Consortium is conducting an ongoing poll

to assess the skill needs of small manufacturers who

are in the process of automating.106 This information

may be used to revise school curricula throughout

the region, to the benefit of many employers.

Like UTC, the CMC, since 1989, has received

financial support from the National Institute of

Standards and Technology. Funds come through the

Southeastern Manufacturing Center at the University of South Carolina-one of three federally

supported centers whose goal is to bring advanced

loqsa~ H~ge, CUyahOgS Community College, personal communication m. 1, 1989.

104soU~m Gm~PoliciesBo@ Tech~”c~ ad Comm”fy colleges: ~~ing the WqInto the Ninefies (Re- Triangle P~@ NC: SOUthem

Growth Policies Boart 1989), p. 3.

los~id.

106Sou~m~o~PolicieS Bo~~ ~wong t. Techno/Ogy:A ~@ategic~zanfortheNineties (ResesrehTriangle 1%~ NC: SouthemGrowthPolicies

Board, 1989), p. 26.
144 ● Worker Training: Competing in the New International Economy

manufacturing technologies to small U.S. manufacturers. The Southeastern Manufacturing Center plans

to use State community colleges to deliver these

services throughout the region, and the CMC is seen

as the link to these institutions.

THE GROWING STATE ROLE

State governments have fostered cooperation

between educational institutions and employers for

many years. In 1957, North Carolina launched anew

program of customized training that helped induce

New England textile mills to move south.107 In 1964,

this program was formalized in the creation of a

community college system with the dual function of

training young people for jobs in the newly industrializing North Carolina economy while also providing the customized skills needed by employers moving into the State.108 Soon afterward, South Carolina

and Oklahoma created similar networks of schools.

Over the past two decades, the States have

expanded their uses of training as an economic

development tool. Today, training is used not only

to woo new firms, but also to induce existing

employers to create new jobs and to help existing

employers that are not expanding to improve their

business performance.

Funding

In 1989,44 States operated 1 or more customized

training programs, according to an OTA survey.109

The 51 training programs identified in the survey

spent approximately $375 million on customized

training projects during their most recently completed fiscal year. Most of the programs served a

variety of purposes, including industrial recruitment

and aiding expansions of existing businesses. However, the States reported increasing demand for

upgrade training of employed workers: Almost onethird of the State training programs spent more than

35 percent of their funds on in service training for

firms that were not adding new jobs to the State

economy.

ll0

The $375 million that States spent on customized

training programs is only a portion of their total

expenditures on worker training. When recruiting

large industrial firms, some States provide one-time

training subsidies not counted in the figure above.

The State of Illinois made a one-time expenditure of

about $64 million in hiring and training assistance

when it recruited a Mitsubishi/Chrysler joint venture

plant to Normal, Illinois in 1988. 111 Most of this

special spending was not part of the State’s three

customized training programs, which together had

annual budgets of $36.3 million.

OTA also did not identify indirect forms of State

support for vocational-technical institutes and community colleges that perform customized training on

an ad hoc basis at employer request. Employers pay

less for this training than they otherwise would

because the State picks up some of the community

colleges’ costs for facilities and trainers.

The typical State customized training program is

small. Half serve under 4,000 employees, and

involve less than $2,500,000 in State expenditures.

(See table 5-3.) California has by far the largest

program, accounting for one-fourth of the spending.

Three others (Illinois, Iowa, and Michigan) account

for another quarter.

The most common uses for the State training

funds are vocational skills upgrading, teamwork

training, quality control, and managerial or supervisory training. As discussed in chapter 6, some States

also offer workplace basic skills instruction with

industrial training assistance.

The State programs serve companies of all sizes;

however, firms with 200 to 500 employees seem to

get much of the funding. A majority of the programs

spend most of their funds to assist manufacturing

firms.

loTDavid W. Stevens, ‘The Role of vo~tio~~ucation in Missouri’s Economic Development What Can We LearnFrom Ohm sates?” (Jefferson

City, MO: Missouri State Council on Vocational Educatio~ 1989), p, 1.

108cO-sion on the Future of the North Carolina Community College System Gaining the Competitive Edge: The Challenge to North Carolina’s

Community Colleges (Chapel Hili, NC, 1989).

l~e~ey OIIIY included programs that: 1) spend at least 50 percent of their funds for custoti training projects with particular businesses of

groups of businesses and 2) receive at least 30 percent of their funds from State sources. See Peter Creticos, Steve Duscha, and Bob Sheets,

“State-Financed, customized Training Programs: A Comparative State Survey,” report prepared for the Office of Technology Assessment under

contract L3-381O, Feb. 18, 1990, p. i.

llOIbid., p. ii.

llls~te of fl~ois, ~lce of tie Auditor Gener~, “-gement ~d pro- Audit of tie Dep~ent of Commerce and COmrUW@ Aff~

Economic Development Programs,” July 1989, p. 106 (table VII-7).
Chapter 5-Delivery of Training by U.S. Firms ● 145

Table 5-3-Selected Characteristics of State-Financed Customized

Training Programs (most recent fiscal year)

Median Low High

Number of contracts with firms . . . . . . . . . . . . . . . . . . . 64 5 500

Average contract amount per program. . . . . . . . . . . . . $43,313 $6,500 $1,046,000

Range of total program expenditures among States. . $2,400,000 $111,700 $106,000,000’

Number of employees trained in FY 1988-89 . . . . . . . . 3,940 99 55,243

Expenditure per enrollee . . . . . . . . . . . . . . . . . . . . . . . . $460 $75 $3,461

‘lndu~s some carryover.

SOURCE: Peter A. Creticos and Robert G. Sheets, State i%anced, Custonwkecf Tr~”ning Programs:A Comparative

Sfate Survey, report prepared for the Office of Tdnology Assessment under contract #L330810, 1990,

tables 4,6.

Effectiveness

State-subsidized customized training programs

have an uneven track record. This is not surprising

—most of the programs were not designed solely to

train employed workers. Instead, most States expect

the programs to serve mixed, often conflicting, goals

—attracting new industries, avoiding layoffs at

existing plants, aiding in company expansion, enhancing workers’ careers, and providing benefits to

the larger society.

Employed Worker Training

However, a National Governors’ Association

study of four State programs-New York, Illinois,

California, and Missouri-suggests the programs

have helped retain jobs by enhancing the effectiveness of existing firms.112 The four programs represent the newest type of State training programs; they

provide training grants to companies with very few

strings attached, allowing the company to decide on

the content and the provider. The researchers studied

24 companies that received financial and, in some

cases, technical assistance for training. Although the

purpose of the case studies was not to evaluate the

success of the State programs but rather to develop

a methodology for future evaluation, the results

provide preliminary evidence of positive outcomes.

All 24 firms showed improvements in business

performance from the training.113 These improvements were due not to training alone; the training

was part of a broader effort to improve productivity,

quality, and profitability. For example, Northwestern Steel and Wire Co., in Sterling, Illinois, wanted

to raise profits by bringing its costs down to meet

those of other U.S. mini-mills. (An industrysponsored study had shown that Northwestern’s

maintenance costs were much higher than the

industry average). The company used a State grant

to cross-train its maintenance workers; at the same

time, Northwestern changed its product mix and

took other steps to reduce maintenance costs. Taken

together, all of these actions, including the training,

succeeded in reducing maintenance costs.114

The 24 case studies also showed that the State

funds allowed the firms to train more workers more

quickly than was possible using only company funds

and that top managers in all companies came to view

training much more positively.115

Industrial Recruitment

Customized training has proven a valuable tool in

attracting new industries. originally, Southern

States used customized training delivered through

their community colleges to attract northern firms,

especially textile mills. As the pool of recruits has

shrunk, both Northern and Southern States are

recruiting foreign companies. For example, between

1986 and 1988, Michigan provided $19 million to

train 3,000 new workers as part of a package that

attracted Japan’s Mazda Corp. to suburban

Detroit. ll6

The States usually provide tax abatements, new

infrastructure, and other incentives as well as

training to recruit new industry. However, as busillz~eticos ~d Sheets, op. cit., footnote 26, p. 83.

ll%id., p. 83.

IWbid., p. 211.

Ilslbid., p. 85.

ll%otise Kertesz, “Injury, Trsining Woes Hit New Mazda Plant” Automotive News, Feb. 13, 1989, p. 52.
146 ● Worker Training: Competing in the New International Economy

ness interest in a high quality workforce grows,

training is becoming a central part of the incentive

package. When the German silicon wafer manufacturer, DNS, was searching for a U.S. site, the

company chose North Carolina over Colorado and

Texas because of North Carolina’s excellent community college system and its “carte blanche offer

of assistance. ’’l17 This assistance, provided by

Durham Technical Community College, included

hiring new faculty, sending them to DNS’ plant in

Italy, developing new training materials, and screening and training new employees.118

Despite its short-term effectiveness, some State

officials now doubt the value of customized training

in industrial recruitment:ll9

. . . recruitment has been compared to the great

buffalo hunts of the last century. The stampede is

over; herds are no longer plentiful; and 1986 would

be a bad year to go into the buffalo hide business.120

Questions about this economic development tool

arise because many of the firms that initially

relocated to benefit from a low-wage workforce

trained to company specifications have now moved

abroad in search of even lower wages.121 Some

research suggests that branch plants of nonlocal

firms, which provide large numbers of new jobs in

the short term, may offer less long-term benefit to

local economies because of their tendency to relocate again, and because they provide relatively

low-skilled jobs based on standardized production .

1 2 2

Industrial recruitment was, and still is, considered

an important tool for providing jobs in the South’s

rural counties, where wages are low and jobs are

few. However, a detailed analysis of growth trends

throughout the region demonstrates that, between

1977 and 1988, rural counties experienced high unemployment and declining real per capita income,

despite attracting new factories. By contrast, Southern urban counties with better educated populations

experienced strong job growth and lower unemployment. 123

Other concerns have been raised about using

training in industrial recruitment.124 One is that

short-term, company-specific training may not provide the broad skills workers need to survive in

today’s turbulent job markets. Also, existing businesses may suffer when their newly arrived competition is subsidized by the State.125

Community Colleges and VocationalTechnical Institutes

Many (19) of the51 State-customized job training

programs in OTA’s survey relied on community

colleges or vocational-technical institutes.126 These

programs often serve existing as well as new

firms.127 In addition, many post-secondary institutions provide occasional customized training in

response to the requests of individual employers.

Estimates of the fraction of community colleges and

vocational-technical institutes providing training

customized to the needs of employers (whether

through formal State programs or on an ad hoc basis)

range from 63 to 75 percent.128

117~~ Delker, “wOrkerTq: A Study of Nine Compties, “ report prepared for the OftIce of Technology Assessment under contract H3-6785,

September 1988, pp. 14-15.

1181bid., pp. 15-16.

119Sou~mn ~o~Policies Bo~d, “H&ay Home and A ~ng Way ~ Go: The Report on the 1986 Commission on the FU~ Of the SOUth”

(Research Triangle Park NC, 1988), p. 21.

lz~id.

lzlfiid.

lzzW~ciaM. Fl~~~vW.tio~ ~ucationpolicy ~dfionomic Development: B~c@Short-Term ~d~W.TermN~,” Design Papersfor

the National Assessment of Vocational Education (Washington DC: U.S. Department of li?ducatio~ National Assessment of Vocational JMucatio~

1987), p. III-13.

123s~ Rose~eld and ~~~dBer- Making Connection @e~ch Tri~le ~~NC: sou~ern Groti Policies Bo@ 1989), p. ix.

l“’’TaJcing Care of Business” The Economist, vol. 310, No. 7590, Feb. 18,1989, p. 28.

1~1’bid.

lz~etiws,D-and Sheets, op. cit., footnote 109, p. 19.

lzTE_pleS ~clude North c~olfi’s “FOcuSed ~dus~~ Tr@g” pro- md MaaMChUsetts’ Bay Stie Skdk COT.

128Jwet SW*, ~~s~te ~d ~~Response to the Perkins &~” Eport prep- & Abt AsSoc~LeS for the National Assessment Of VO~tiOlld

Educatio% January 1989; personal communication with Jim Pahner, Associate Director of the Center for Community College Educatiom George Mason

University, Mar. 22, 1990.
Chapter 5-Delivery of Training by U.S. Firms . 147

There are numerous examples of community

colleges providing customized training for business.

When the Boulder, Colorado, IBM plant changed its

mission from manufacturing to software development in 1986, Front Range Community College

retrained almost 1,200 of the 2,000 employees for

new positions at the plant.129 IBM now contracts

with Front Range instructors to teach a ‘‘programming fundamentals’ course previously taught inhouse.

In response to the increasing complexity of auto

repairs, General Motors developed the GM Auto

Services Education Program in 1980.130 GM trains

instructors, provides the curriculum, and donates

between $90,000 and $100,000 worth of current

equipment to each of 50 community colleges across

the country. These community colleges in turn train

between 600 and 800 GM technicians annually

through a 2-year cooperative education program.

GM also encourages the community colleges to

design related courses for other local service stations

and for GM technicians interested in maintaining

and upgrading their skills. Other automobile manufacturers are developing similar programs.

Despite these successes, many employers perceive post-secondary schools to be ineffective and

inefficient. A 1983 survey of 522 corporate trainers

in the Southwest (which had a 72 percent response

rate) found that allocations of training budgets

reflected trainers’ perceptions of the most effective

sources of training. Not surprisingly, the trainers

rated their own in-house training as the most

effective source for both technical training and

professional development, followed by private consultants. Trainers preferred delivering training

through workshops, seminars, and custom courses as

opposed to educational institutions’ typical offerings of formal credit and noncredit courses.131

A 1987 survey of manufacturers in the South

reached similar conclusions. Among the 104 firms

responding to the survey, the vast majority (98

Photo credit: American Association for

Community and Junior Colleges

Some U.S. automobile manufacturers have cooperative

education programs with community colleges to train

service technicians.

percent) relied on in-house training, while 84

percent also used training supplied by equipment

vendors. Less than half (41 percent) reported using

community colleges as training providers, and only

10 percent used universities.132 The availability of

community colleges was not considered important

in the location decisions of these firms.133

State-funded post-secondary institutions are not

in business only to serve individual employers with

customized training. Both public and private vocational training institutions try to simultaneously

serve three masters-the individual, the employer,

and society.134 In many States, community colleges

evolved out of junior colleges designed to serve

individuals by providing a broad education in

preparation for transfer to a 4-year college. Since the

1950s, State-supported, 2-year, post-secondary institutions have increasingly emphasized full-time

lz~o~tion~mtie meriean Association of Community and Juoior Colleges Partnership Awds, 1989.

l~o~tion provided by Geneml Motors.

IslfimcMoser ~d Don s~“Implications for Potential Linkages Between Business-Industry and Higher Educatiou” Adult Education

Quarterly, vol. 37, No. 4, S ummer 1987, pp. 225.

132s~A. RO~nfeld& ~., ~a”vjng t&R~~/Factov, ~z: T&Fi~/Repo~(Re~~ l“rknglepar~ NC: SouthemGrowthPokies Bo@ 1988),

p. xii.

l%id.$ p. 53.

l~~~~a F@nn Pannell, op. cit., footnote 77, p. 50.
148 . Worker Training: Competing in the New International Economy

vocational courses for young people: this is now

these schools’ primary focus.135

Providing ongoing training to employed workers

has only recently joined the many other goals of

State-funded community colleges and vocational

technical institutions, and State management of

these institutions reflects this history.136 Most States

subsidize these institutions based on full-time equivalent (FTE) enrollments. Such funding formulas,

originally developed for 4-year colleges whose

students enroll full time, do not reward community

colleges and vocational-technical institutes for providing the short courses employers want. For example, courses offered by Colorado community colleges must last at least 15 hours and use a standard,

Statewide curriculum approved by a State board in

order to qualify as “accredited” courses leading to

FTE reimbursement.137

South Carolina is more lenient, reimbursing

colleges for shorter, noncredit “continuing education’ courses targeted to individual employers.

However, here, too, student contact hours must be

added up into FTEs, and courses must be approved

by a State board.138 These requirements are timeconsuming, yielding relatively small rewards. The

colleges can get more money more easily by either

enrolling full-time students or tapping the State’s

program for new and expanding businesses.

Community colleges typically seek large employers that will fill up their classrooms, offering

economies of scale. At the same time, the larger

employers may have full-time training staff with the

time and energy to seek out training assistance.

Small firms are less likely to seek community

college customized training services.

While some community colleges are beginning to

target small businesses, the training offered is

frequently designed for managers and entrepreneurs,

rather than for nonsupervisory employees. Daytona

Beach Community College, for example, runs the

Mid-Florida Research and Business Center, providing counseling and seminars on topics ranging from

contracts research to trade and export.139 While this

assistance is undoubtedly welcomed by local small

businesses, it cannot replace customized training for

employees.

Community colleges in North Carolina use a

process called “DACUM” (Developing a Curriculum), to match their vocational curricula for fulltime students to the changing needs of local employers. This process involves convening a panel of 8 to

12 expert workers who work with a college coordinator to identify lists of competencies needed in a

particular occupation.l40 The competencies are used

by community college instructors to match the

courses more closely to real-world jobs. Use of such

techniques, which require ongoing communication

between employers and schools, can help overcome

negative perceptions and encourage more companies to use educational institutions to train their

workers.

Training and Technology Extension

Small employers often need better technology and

improved management techniques as well as training assistance. However, current State technology

transfer programs are limited in scope and poorly

linked with State training assistance. About 10

States currently spend an estimated $25 million to

$40 million on industrial extension services, which

provide technical assistance to small manufacturers

installing advanced technology.

141 Although these

programs are often housed in State universities, their

links to State training programs and 2-year institutions are typically weak. An exception is the

Michigan Modernization Service (MMS) which

provides training assistance and helps businesses

obtain funds from State training programs.

On each site visit, MMS sends training and

technology specialists to conduct the diagnosis and

write the report, which includes an assessment of

135UoS+ ~p~ent of ~umtioa National Asses~nt of vocatio~l Education Fi~l Report, VO1. ] (w@iI.@o& DC: hbtiod Assessment o f

Vocational ~UUltiOU 1989), p. ~.

ls~e role of ~S~on@~sti~tiom ~ s~ing individ~s is &WUSSed in chapter 8.

lsTShelli Bischoff, Red Rocks Community College, personal co_UnicatiO~ w. 28, lm.

138JW Hop~,sou~ c~o~Bo~d for T~hni~ ~d Continuing Educatioq personal cornrnunicatio~ hfiir. 28, 1990.

13tiple &am ~mArnericm Ass~~tion of co~~~~d Junior Colleges, K~p@America Working Through P~erSh.ipS ~th SBusinesses.

l~omtion provided ~~~B~er smi@ North Carolina Department of COmmtitY Colleges, Apr. 13, 19*9.

141u.s. CoWess, Office of T~bno@yAsses~en~ Making Things Better, op. cit., footnote 63, P. 177.
Chapter 5-Delivery of Training by U.S. Firms ● 149

training needs, and to help clients design or procure

training. l42

Massachusetts has also started to link industrial

extension with training. The Center for Applied

Technology (CAT), a division of the Massachusetts

State Centers of Excellence Corp., promotes “skillbased automation. "

143 Its agenda includes information and support, research, and technical assistance

to small and medium-sized manufacturers. CAT

consultants conduct audits not only of client firms’

technology but also their workforces. Typically, the

consultant forms a team of managers and shopfloor

workers to identify both training and technology

needs. Although CAT is less than 3 years old and has

provided direct technical assistance to only 15 firms

thus far, its initial efforts look successful.144

For example, at Pneumatic Scale Corp., a 100-yearold manufacturer of packaging equipment, a CAT

consultant helped form a joint union-management

committee. The committee involved shopfloor workers in designing training to integrate their mechanical work with the automated manufacturing cell that

was to be installed. The workers identified a need for

integrated training in machining and electronics.

CAT worked closely with a State training agency—

the Bay State Skills Corp.-to obtain funding for the

training and found a local technical institute to

provide it. The workcell was installed in September

1989, and 70 percent of the company’s 60 shopfloor

workers are currently enrolled in the newly designed

training. The company president feels that CAT

assistance has been vital to his attempts to increase

both domestic and export sales.

In a smaller project for the Southbridge Sheet

Metal Corp., CAT helped the company integrate its

automated design and manufacturing systems. Over

an 18-month period, CAT designed the software to

link the two systems and worked with a private

technical school to train the workers in how to

translate the CAD drawing to the CNC punch.

State and Federal industrial extension services are

slowly learning that small firms need more than just

the latest hardware-they need help in benefiting

from the technology, which includes training the

workers. At the same time, studies of State training

programs show that training is most effective when

it is part of a broader strategy to achieve clear

business goals.145

The Substitution Question

The growing State role in funding employer

training raises important public policy issues. When

the programs are focused exclusively on industrial

recruitment, critics contend that existing businesses

suffer from subsidized competitionl46 In reply, many

States have added programs subsidizing training for

existing firms that create new jobs, and other States

have created training programs for existing firms.

But this effort to spread the subsidies more evenly

can never be completely successful. The States

cannot afford to provide training subsidies to all

businesses, and those who are not helped can

justifiably complain that they are being hurt by

government intervention in the market.

Closely related is the substitution issue. There are

two questions: 1) Are companies using State training

funds to support nontraining activities? and 2) If the

money is being used correctly, would the firms have

trained their workers anyway, in the absence of the

State subsidy?

The first question was raised by unhappy workers

at Mazda Corp.’s Flat Rock, Michigan, plant, which

received $19 million in State training assistance.

The workers contend that many of the hours billed

to the State as “on-the-job training” were actually

spent in other activities, including production work

with the assembly line at full sped, and maintenance.

147 This danger-that the employer can use

the State training assistance for productive work—

was assessed in the NEA study of training grant

programs in California, New York, Illinois, and

Missouri. The study concluded that the danger

would be less if the States limited subsidies to formal

~A21bid., p. 181.

143~a~ ~p~*~S~~-Bm~ Auto@on: Can It Succd in America? A Case Study,” paper p~pared for the 1 lth Annual COngreSS Of the

International Federation of Automation and Control, lldinn, Estoni% July, 1990 (New Yorlq NY: Pergamon Press, forthcoming in 1990).

144Jc)hn Hoops, CAT, perSOti COIIlmuniMtiOQ My 30, 1990.

IAs~etiWs and Sheets, op. cit., footnote 26, p. 7.

lti’’lkking Care of Business,” op. cit., footnote 124, p. 28.

IATKertesz, op. cit., footnote 116, p. 52.
150 ● Worker Training: Competing in the New International Economy

classroom or laboratory training, which can be

clearly identified as training time.148

The second question appears less serious in light

of the case studies of 24 firms that received State

training grants. State funds helped the companies

overcome many barriers to doing their own training—

poor access to training experts, lack of knowledge

about how training might improve business performance, poor labor-management relations, concerns

about the loss of trained workers, and bad experiences with prior training efforts.149

Illinois’ Prairie State 2000 Program requires firms

to demonstrate financial need for the training grant.

Although this requirement is an important way to

safeguard public funds, most of the case-study firms

saw training as a low-priority investment. Without

State assistance, even those companies that did have

the internal funds to support training were unlikely

to spend it for this purpose.150

Photo credit: American Petroleum Institute

Many forces drive the need for increased investment in

worker training. Here, offshore oil platform workers receive

a briefing on safety procedures before starting to clean and

replace a heat exchanger bundle.

lds~eti~s and Sheets, op. cit., footnote 26, p. 84.

14%id., p. 58.

Wbid.
Chapter 6

Basic Skills and the Workplace
CONTENTS

Page

OVERVIEW AND SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .153

WORKPLACE BASIC SKILLS DEMANDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155

Job Skills and Education Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155

How Big is the Problem? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158

The International Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160

Employer Views of Basic Skills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164

Impact on Company Performance ● . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166

WORKPLACE-ORIENTED PROGRAMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167

Company-run Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .167

Joint Initiatives Between Labor and Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170

State Basic Skills Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171

IMPLICATIONS FOR POLICY: BASIC SKILLS, CORPORATE TRAINING,

AND THE EDUCATIONAL SYSTEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176

Boxes

B o x Page

6-A. Immigration and Basic Skills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158

6-B. Evolving Concepts of Basic Skills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159

6-C. Formal Education and the American Workforce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163

6-D. Trying To Transfer Military Training Technology: The JSEP Example . . . . . . . . . 174

6-E. Workplace Literacy and the Adult Education Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177

Figures

Figure Page

6-1. Document Literacy of 21 to 25-Year-Olds Who Work Full-Time for a Full Year,

by Occupation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161

6-2. How Young High School Graduates Fared on Selected Tasks From the National

Assessment of Educational Progress’ Young Adult Literacy Assessment . . . . . . . . 162

Tables

Table Page

6-1. Projected Change in Employment by Occupation, 1988-2000, and

Distribution of Total Employment by Years of School Completed,

March 1988 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .157

6-2. Surveys of Employer Involvement in Workplace Basic Skills Programs . . . . . . . . . 168
Chapter 6

Basic Skills and the Workplace

OVERVIEW AND SUMMARY

Workers need good basic skills-reading, writing, arithmetic, and oral communications-to handle many of today’s jobs or to benefit from most

formal and some kinds of informal training (e.g.,

reading manuals).1 Yet, many American workers

have poor basic skills. Some firms have found it

necessary to frost upgrade the basic skills of 20 or 30

percent of their workers before introducing new

technology or work practices.

Poor basic skills in the workforce affects national

productivity and the standard of living. While the

costs to business of basic skills deficiencies for

business performance can only be crudely estimated,

anecdotal evidence suggests they are high. In some

regions with tight labor markets, employers are

finding it more difficult to hire entry-level workers

with adequate basic skills.

Of course, firms may exercise other options than

remedial training. They can use technology to

replace or deskill jobs, or relocate. American companies are able to take basic skills for granted in their

operations in Japan or West Germany. Production

workers in these countries may be assigned tasks

that only supervisors or technicians perform here.

The fact that several other countries have well

educated (and sometimes less costly) labor forces

will continue to be a drawing card for many U.S.

firms across a range of industries.

As for the use of technology, managers often have

the discretion to increase or decrease skill requirements. But, as is discussed in chapter 4, firms often

underestimate the skills needed to employ new

technology. Moreover, international competition is

forcing firms in many industries to reevaluate past

strategies for using technologies. Many firms that

are most successful in adopting advanced technologies fully develop their workers’ skills to make

production systems more flexible.

In such organizations, workers usually need more

than the traditional ‘Three-R’ basic skills. Because

these workers often receive less supervision, they

need to know when to seek clarification of instructions or information. More so than before, they may

be expected to use their knowledge and skills to

address new situations and unanticipated problems,

or to use information to plan and coordinate with

other work groups. These cognitive skills are important now in many jobs and could well become

essential skills for a sizable portion of future

workers. While some workers with limited basic

education are excellent problem solvers on the job,

strong basics make it easier for a worker to get and

keep a job and to advance.

In discussing the basic skills issue, it is useful to

distinguish between workforce basic skills and

workplace basic skills. The workforce as a whole

includes all people, employed or unemployed, who

are in the labor market. For many years, federally

supported adult basic education (ABE) has been

available for people with poor basic skills, whether

or not they were employed; several other programs

(such as the Job Training Partnership Act and the Job

Opportunities and Basic Skills program) may offer

remedial education as part of training given to

unemployed or economically disadvantaged people.

Very recently, concern about the Three-R’s and new

work requirements have led to experimentation with

basic skills programs that focus on the workplace,

either to prepare job seekers for work in specific

industries or to improve the basic skills of employees in conjunction with their jobs. To varying

degrees, and with varying levels of success, these

programs are intended to reflect the context of the

workplace, and, in some cases, may be customized

to meet specific workplace needs. This chapter

focuses primarily on the workplace basic skills

10W uses the term “basic skills” in this report to refer to use of basic education skills (reading, writing, and basic ~thewtiml concepts and

operations) for work. The term also includes oral communications skills (speaking and listening). Except where required by the context, O’E4 has avoided

terms like “functional illiteracy,” “occupational illiteracy,” or “innumeracy.” These terms can be misleading because they are often used

interchangeably with the te~ “illiteracy.” Few Americans are unable to read or write at all in any language, the deftition of illiteracy, and most

Americans have some ability to add and subtract.

–153–
154 . Worker Training: Competing in the New International Economy

problem and programs designed to upgrade the basic

skills of employed workers.2

Primary findings are:

●

●

●

The problem is large. One-fifth of young adults

(those aged 21 to 25) read only as well as the

average eighth grade student, according to the

federally sponsored National Assessment of

Educational Progress (NAEP). Yet, most jobrelated reading materials require a tenth or

eleventh grade reading level. In a technologically sophisticated economy like the United

States, it would be a mistake to assume the

basic skills problem belongs solely to those

who are deficient or dysfunctional. The NAEP

findings suggest that an unacceptably high

portion of the young adults-half or morecannot handle even moderately complex

quantitative literacy problems.

Very few companies now make much effort to

upgrade their employees’ basic education. A

few companies, primarily large ones, have

developed internal basic education programs.

Some others give employees paid release time

to take classes, or provide materials, facilities,

or financial contributions to leverage limited

public funds. It is far more common for

companies to test job applicants for basic skills

and to not hire applicants who fail. This

strategy worked for firms in the 1960s and

1970s as large numbers of baby boomers

entered the labor market, but is less likely to

work in the future if low unemployment rates

continue. Most companies consider it to be

government’s responsibility to correct deficits in basic education.

Several workplace-oriented programs, mostly

partnerships among employers and/or unions

and educational institutions, have emerged in

the last decade. Some receive Federal support,

largely through demonstration projects funded

by the U.S. Department of Labor or the U.S.

Department of Education. The total spent by

employers, government agencies, and unions

on improving employee basic skills is not

known precisely, but probably does not

greatly exceed $1 billion per year. 3 B y

contrast, employers spend $30 billion to $45

billion per year on formal training at all levels.

The most innovative workplace programs

use materials and exercises that have a

connection to the workers> job. A measure of

success in these projects is whether the worker

can better perform tasks typically needed in

work settings. An even more crucial test will

be whether these projects also give employees the generic basic skills they need to adapt

to changing worklife conditions and their

literacy needs outside of work. In this regard,

the basic skills programs offered jointly by

unions and management-the cooperative programs between the United Auto Workers and

the American auto companies, the Communications Workers of America and the telephone

companies, and most recently by the United

Steelworkers-could provide models for dissemination. At this early stage, the joint programs have put only limited resources into

program evaluation.

Basic skills programs often can be enhanced

through well-designed use of computers and

other forms of interactive instructional technology. Many workers like computer-assisted

instruction (CAI), and the available data suggests that projects using instructional technology compare favorably with traditional classroom instruction. While the amount of courseware specifically designed for adults is increasing, there still is a shortage of high quality

materials. Moreover, evaluation of materials in

terms of their suitability for adult workers is

seldom done.

Given the magnitude of the basic skills problem

in the United States, there is a pressing need for more

research on how to upgrade workplace basic skills

and basic skills generally. This research could help

decisionmakers determine how much workplace

basic skills programs will need to depart from the

?For discussion of basic skill needs of displaced workers, see U.S. Congress OffIce of Technology Assessmen~ Technology and Structural

Unemployment: Reemploying Displaced Adults, OTA-ITE-250 (Washington DC: U.S. Government Printing Office, February 1986), pp. 64-66,

185-186, and pp. 271-314.

SAS &scu,w~ subs~uenfly and in tile 6-C, widely varying estimates of employer involvement in basic skills programs exist, but tie lower end

estimates are more credible. At the Federal level, only a small amount (perhaps $20 to $25 million) is specflcally earmarked for workplace basic skills

programs. However, sevend other Federal programs may serve employed workers in some circumstances. The overall level of Federal spending for adult

basics is not known precisely; funds horn several large social services or employment and training programs can be used to support basic skills training,

but documentation of the amount spent is diffkult. Many of these programs are targeted to specific groups of people in need.
Chapter 6-Basic Skills and the Workplace . 155

traditional model of adult basic education. On a

broader scale, greater emphasis and far more

resources will need to be directed toward learning research, program evaluation, and bestpractice dissemination if the Nation is to ever

realize a goal of eliminating the adult basic skills

problem.

WORKPLACE BASIC SKILLS

DEMANDS

Most workers need basic educational skills

perform their jobs. One study of a cross section

occupations, ranging from forklift operators

to

of

to

executives, found that only 2 percent had no reading

or writing requirements whatever; other surveys

have found that reading tasks consume more than 1

hour of the average employee’s workday.4 Some

surveys of job-related reading materials conclude

that a majority require 10th to 12th grade reading

ability.

What is more, academic skills and the skills

needed to apply the basics on the job are not

necessarily the same.5 To avoid delays, workers

often need to act quickly on written instructions—

and to exercise judgment to recognize, question, or

correct erroneous information. In short, they need to

be confident about their ability to understand what

they read.

In the area of mathematics, basic arithmetic will

suffice for most jobs; more advanced mathematics is

not necessary. However, using arithmetic in practical applications on the job may require work skills

that require choosing, organizing and applying

quantitative information-skills that are very different from the mechanical skills needed to solve

arithmetic problems in a textbook.6 Moreover, the

vocabulary, manuals, forms, charts, and other kinds

of written materials encountered at work seldom

resemble classroom texts. While some reading

materials can be simplified to help workers who are

poor readers, this is expensive and cumbersome.

Also, it is difficult to convey technical information

and complex concepts in written materials tied at

poor readers.

Some poorly educated workers do learn to cope

quite will. Studies have shown that poor readers

who know their business are much better at reading

job-related material than they are at reading other

things. Similarly, workers may learn how to develop

solutions to work problems in practice that would

stump them when written or described on an

academic test. An example comes from Scribners

study of workers at a dairy processing plant who fill

orders by loading different-sized milk containers

into uniform-sized cases. The more experienced

loaders consistently filled the cases quickly and

accurately, using the fewest number of moves and

handling the fewest number of cases. Asked to

reconstruct their reasoning, the loaders said they

visualized the best combination to fit in a case.

Probably, none of the workers understood the

mathematical principles involved, yet they still

came up with practical solutions to the task. Their

better educated supervisors, when substituting for an

absent loader, did not do as well.7

Job Skills and Education Levels

Changing workplace practices (such as statistical

process control) and related demand for technical

training are elevating the level of basic skills needed

for many jobs. Some industries with workforces

with many low-skill workers are confronting a need

to upgrade their workers’ basic skills as they adopt

new technology and work practices. For example,

the textile industry increasingly encourages employees to take advantage of workplace literacy programs offered by State and local agencies. Far from

deskilling work, the industry’s investment in automated equipment has created a demand for more

maintenance and repair people. In 1985, textile firms

had 3.5 laborers, operators, and service workers for

every craft and technical worker-compared to 4.2

a decade earlier. While some low-skill jobs were

eliminated by automation, many of the new jobs

AAs cit~ inqwIec~, “Job Literacy: The Relationship Between School Preparation and Workplace Actuality, Reading Research Quarterly,

vol. 17, 1982, pp. 400-419.

sFor a more extemive disc~sion of this contr~q see Paul V. Delker, Bas”c S&”lls Education in Business andIndurtry:Factors for success or Failure,

report prepared for the Office of Technology Assessment under contract L3-1765, May 1990, pp. 3-6.

GAS disc~~bpad E. Barto~ “SkillS Employers Need: Time to Measure Them?” A Policy Zn..orntation Proposal, ~uCatiOMl Testing SeNice,

l?rinceto~ NJ, June 1990, p. 5.

VAS diSCUSWXI in Stephen F. Hamilton and Mary Agnes Hamilto% “Teaching and _on the Job: A Framework for Assessing Workplaces as

I-earning Environments,” paper prepared for the Bureau of Apprenticeship and Training, U.S. Departm~t of Labor, March 1989, pp. 22-24.
156 ● Worker Training: Competing in the New International Economy

required greater skill. (See box 3-A in ch. 3 for

further discussion.8

)

Firms in several industries (e.g., apparel) are

reevaluating past assumptions that automation and

deskilling of jobs work well together. According to

the Southern Growth Policies Board, 80 percent of

southern factory managers found that advanced

manufacturing technologies increased skill levels.

Many of these firms faced impediments to effective

use of the new technology because their workers

lacked the basic skills for more advanced training.9

Some jobs are being restructured to require more

formal education. For example, Texas Instruments

(TI), a major producer of semiconductors, now

requires its clean-room production workers in some

U.S. plants to have 2-year technical degrees; previously, the company only required a high school

diploma. 10 The change could reflect both more

complex job responsibilities and uncertainty about

the competence of job applicants for entry-level

positions. TI uses high school graduates at its

Japanese facility. Interestingly, new technology for

this operation is introduced in Japan before being put

into production in the United States. Of course, there

could be many reasons why Japan is used to launch

the technology. But, part of the explanation has to do

with the confidence the company has in the educational background of workers in the two countries.

Of course, not all jobs are changing in ways that

require more skill of workers. Some jobs continue to

be deskilled or eliminated by automation, just as

others are upgraded. There is disagreement about the

overall direction of skill change, and how fast and

pervasive the change is likely to be in the years to

come. A recent study by the Economic Policy

Institute, for example, concluded that skills upgrading was limited primarily to best-practice fins. The

study found no evidence to support the notion that

there would bean explosive growth in skill requirements in this decade. It concluded that, while

occupational upgrading is occurring, the overall rate

is slowing down compared to the 1960s and 1970s.11

The Hudson Institute, by contrast, reached the

conclusion that there will be a major increase in

occupational skill and education requirements by the

year 2000.12 Its Workforce 2000 study found that

more than half of the new jobs created between 1984

and 2000 would require people with some education

past high school, and 30 percent of the new jobs

would require a college degree.13 (The comparable

figures for 1984 were, respectively, 42 and 22

percent of all jobs.) But it’s easy to overstate the

implications of the Workforce 2000 projections. It is

not clear how much of the projected increase in

education would reflect skills needed by workers to

perform their jobs versus other factors. For example,

some employers use educational background as a

way to screen job applicants. Moreover, the projected growth in education requirements only pertains to the one in six jobs that will be new in the year

2000; the educational background needed for all

jobs will not change as dramatically.14 Also, there

are jobs in well-paid occupations (e.g., several

construction trades, mechanics, repairers, and many

sales and marketing jobs) that do not require college

degrees that are projected to grow faster than

average, although some of these may entail postsecondary education or apprenticeship.

Both studies rely on data and projections made by

the Bureau of Labor Statistics (BLS). BLS projects

that occupations now filled by people with the most

formal schooling are expected to grow at the fastest

g~mn Batom mom Btiey, Thierry Noyelle, and Thomas M. s~dbac~ Jr.> “Training and Competitiveness in U.S. Manufacturing and

Services: Training “Needs and Practices of Lead Firms in Textie, Bag, Re@.iling and Business Services,” report prqmed for the office of

Technology Assessment under contract No. L3-3560, February 1990, p. 69.

gsouthem GroW~ policies Board, Looking Foward: The Report of the 1989 Committee on Southern Trends, Research Triangle pa~ NC, 1989,

pp. 16-17.

IOAs&scussedinRo~fiR.mm,co~rates~ate~and Industrial Training, report preparedfor the Office of Technology AssessmentUnder con~ct

L3-5240, March 1990.

ll~~ence Mishel and Ruy A. Te&e@ The Myth of the Conu”ng Labor Shortage: Jobs, Skdls and Zncomes of Amen”ca’s WOrkfOrCe 20M

(Washington, DC: Economic Policy Institute, 1990), pp. 65-67

12 WiltiB. Johnston and Arnold H. Packer, WorJ$orce 2000: Work and Workersfor the Zlst Century (Tndiampolis, IN: me HUclSOn Mtitute, June

1987) P. 97

‘31bid., p. 97

ldSee RusSell W. Rumberger and Henry M. hw~ “Schooling for the Modem Work@ace,” Investing in People: A Strategy to Address Amen”ca’s

Worb$orce Crisis, background papers, vol. 1, prepared for the Secretary of Labor’s Commission on Workforce Quality and Labor Market Efficiency,

pp. 95-98 for a discussion of the diff3cuhies involved in estimating educational requirements in association with occupational projections.
Chapter 6-Basic Skills and the Workplace . 157

Table 6-l—Projected Change in Employment by Occupation, 1988-2000, and Distribution of Total Employment by

Years of School Completed, March 1988

Percent of total employment for occoupation

held by workers with:

Percent change Less than 1-3 years 4 or more

Occupation 1988-2000 high school High school of college of college

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 16 40 21 23

Executive, administrative, and managerial . . . . . . . 22 5 27 24 44

Professional specialty . . . . . . . . . . . . . . . . . . . . . . . . 24 2 9 15 74

Technicians and support occoupation . . . . . . . . . . . 32 3 29 36 32

Marketing and sales . . . . . . . . . . . . . . . . . . . . . . . . . 20 13 39 24 23

Administrative support, clerical . . . . . . . . . . . . . . . . 12 7 51 30 12

Service occupations, e.g., household, security,

food service, custodial . . . . . . . . . . . . . . . . . . . . . 23 31 45 18 6

Precision production, craft and repair. . . . . . . . . . . 10 23 53 18 5

Agriculture, forestry fishing . . . . . . . . . . . . . . . . . . . . -5 36 44 12 7

SOURCE: George Silvestri and Volm Lukasiewicz, “Projections of Occupational Employment, 1988-2000,” Monthly Labor Review, vol. 112, No. 11, November

1989, p. 62.

rate through the year 2000.15 There are exceptions,

however. What BLS calls service occupations (which

includes housekeepers, custodians, and other occupations not requiring much education) will grow at

a faster than average rate. (See table 6-1.) Moreover,

the U.S. economy will continue to create large

numbers of low-skill or medium-skill jobs. (See

table 3A-3 and discussion in the appendix to ch. 3.)

Of the occupations projected to add the most number

of new jobs by 2000, just two-nurses and managers

-ordinarily require much postsecondary education.

Others are in the midrange of education requirements (secretaries), or at the lower end (custodial

workers).

In the end, there are several points that have come

out of the debate about upskilling and deskilling:

1. The economy will continue to create many

lower skill jobs. It seems unlikely that skill

requirements for these jobs will change greatly

over the next decade; some may be deskilled, a

few may be upskilled. These jobs also will not

require much formal education beyond high

school.

2. Some jobs in some industries that have traditionally been defined as low-or medium-skilled

will be upgraded as companies adopt new

technologies and work practices. Current workers in these jobs will need retraining to develop

new job skills; outside applicants will find the

hiring process more demanding than in the past.

3. The fastest rate of job growth will be in

high-skill professional, technical, and managerial jobs—jobs that traditionally have required

post-secondary education or that are most likely

to be filled by people with college degrees.

4. In many industries it has become more difficult

for people without post-secondary education to

progress from lower level positions within

firms to higher level positions.

5. Many of the workers who will join the labor

force between now and the year 2000 will not

be well matched to the better jobs created by the

economy. Roughly one-third of the new entrants will come from minority groups that have

traditionally received less and poorer quality

education. Immigrants, many of whom need to

develop English language skills, also will be a

more important source of labor force growth.

(See box 6-A).

Moreover, workers at many levels need effective

strategies for learning new ways of doing things

when companies undergo rapid technological and

organizational change, bring new processes online,

or market new products. Many American employers

see deficiencies in oral communications (giving and

receiving verbal instructions effectively) as a major

basic skills problem in the workplace. Other emerging skills, according to the American Society of

Training and Development, include problem solving

skills and effectiveness in group interactionsl6—

ls~orge Silvestri and John Lukasiewicz, “Projections of Occupational Employment, 1988-2000,” Monthly Lubor Review, vol. 112, No. 11,

November 1989, p. 62.

IG~~ony P. Csrnevale, ~i~ J. Gainer, and Ann S. Melt.zer, Workplace Basics: The Essential Skills Employers Want, AS’I’D Best plllCtiCt%Seri=:

Training for a Changing Work Force (San Francisco, CA: Jossey-Bass, 1990).
158 . Worker Training: Competing in the New International Economy

Box 6-A—Immigration and Basic Skills

There is a growing need to give workplace basic

education to immigrants-especially courses in

English language proficiency. Immigrants accounted

for 22 percent of labor force growth between 1980

and 1987—more than twice their contribution

during the 1970s when baby boomers and women

entered the labor market in large numbers. Immigrants are projected to account for an even higher

portion of labor force growth over the next decade.

On average, immigrants have roughly the same

amount of formal schooling as do U.S. natives.

However, there are differences at the extremes: a

higher proportion of foreign born immigrants attend

college than people born here; roughly one third of

immigrants have only an elementary school education, and 13 percent had not progressed beyond the

fourth grade (compared to 3 percent of people born

in the United States.)1 Many foreign-born immigrants who arrived in the United States between

1970 and 1980 spoke no English at all (this

probably continues to be the case for new arrivals

today). The fraction of non-English speakers varied

by region: 17 percent in the West, 15 percent in the

South, 11 percent in the Northeast and about 9

percent in the North Central region. This influx

helps to explain why English as a Second Language

is the fastest growing component of Federal Adult

Education Act assistance.2

lu.s. D~~@ of Labor, ~~e Eflects ofl~”gration on

the U.S. Economy and Labor Market (Washington, D.C.: U.S.

Government Printing OffIce, 1989), p. 36-38.

z~ido, pp. 59-60. The information on English speaking is

from the 1980 Census.

skills in the past ordinarily only associated with

management. ‘As skill requirements shift, the skills

workers need will continue to evolve. (See box 6-B)

How Big is the Problem?

Estimates of basic skills levels among employed

workers are usually based on data from only a few

companies. In one study, about 20 percent of a

manufacturing fro’s hourly workers were unable to

cope with technical training because of deficient

basic skills; most of these employees were high

school graduates who did not think they had a basic

skills problem.17 Some companies are discovering

that half or more of their workers in some units need

basic skills upgrading before they can train for some

new technologies or processes.18 OTA’s earlier

analysis of displaced workers found that 20 to 30

percent of adult workers entering displaced worker

programs in the mid- 1980s needed to upgrade their

basic skills.

National surveys of the adult population as a

whole are either dated or make arbitrary breakpoints

to define adequate performance. Estimates of ‘functional illiteracy’ made in the 1970s range from 15

percent to over half the U.S. population.19 The

still-used claim that America has 27 million functionally illiterate adults is based on extrapolation of

a 1974 survey to the U.S. population in 1982.20 In the

next few years a better estimate of the nature and

magnitude of the literacy problem among U.S.

adults could be forthcoming. In its 1988 Amendments to the Adult Education Act, Congress directed

the Secretary of Education to develop criteria to

define literacy and to identify basic educational

skills needed for “literate functioning.”21 The

Education Department is to estimate the size of the

illiteracy problem, reporting the results to Congress

in 1993.22

17Larry Mikulec@, “Second Chance Basic Skills Educatio~” Investing in People:A Strategy to Address Americans Worlsforce Crisis, background

papers, vol. 1, op. cit., footnote 14, p. 236.

lgc~dy s~cki,“me Compmy m ~ucator: Firms Teach Workers to Read, Write, “ Washington Post, Sept. 22, 1989, p. G1.

lgAs discussed bRictid L. Vene-, Carl F. ~~fle, and Andrew M. SW The Subtle Danger: Rq5’ections on the ti”teracy Abilities of America’s

Young Adult, (Prineetoq NJ: Educational Testing Service, 1987) p. 14.

me survey referred to was the Adult Perforrnance Level Study (APL), undertaken by the University of Texas in 1973 and 1974 and fundcxi by the

U.S. Department of Education. APL concluded that 20 percent of American adults had such serious basic skills deficiencies as to be functionally

incompeten~ it characterized another 30 percent as marginally competent. By applying APL percentages to the 1982 populatio~ the Education

Department concluded that up to 74 million adult Americans had some need for further basic education.

Zlsection 383@) of public ~w 1~297.

22 ‘l”he Dep@ment of Education ~con~act~ ~~the ~u~tio~ Testing Servim @TS) to ~de~e the survey. ETS expects tO USe the S~e

definition and scales forliteracyas it usedintheNational Assessment of Educational Progresses 1985 young ad~t litemcypmfiles. The deftition: “using

printed and written information to function in society, to achieve one’s goals, and to develop one’s knowledge and potential.” ETS expects to survey

13,000 adults 16- to 64-years of age in 1992. For further details, see “National Adult Literacy Survey,” Education Testing Service, Princetow NJ,

(brochure).
Chapter 6-Basic Skills and the Workplace ● 159

Box 6-B—Evolving Concepts of Basic Skills

Employees who quickly learn new ways of doing things can make a big difference when companies undertake

major changes in technology, work organization, or business strategies. Such skills are especially in demand when

companies seek to implement workteam approaches. Thus, more companies are looking at ways to help their

employees strengthen their interpersonal communications skills, their ability to learn, and their facility with problem

solving.

Many consultants and vendors now offer programs aimed at developing these skills. Often, these programs

were developed for nonindustrial settings. For example, while over 100 ‘‘learning to learn’ programs have been

developed, many have objectives (such as improving standardized test scores) of little use in the workplace.

According to American Society for Training and Development (ASTD), most also are not grounded explicitly in

learning theory and the results are unpredictable.1 Learning-to-learn programs differ from conventional instruction

in that the learning process itself is under scrutiny, and different strategies for learning are explicitly discussed and

applied.

Workplace applications of learning-to-learn approaches are still in their infancy. Some companies find it

helpful to teach employees learning strategies when major change is planned, but specific training needs are hard

to identify. Planters Life Savers Co., for example, made use of a learning management program before new

technology was introduced at an Illinois plant. The training began before job task analysis could be done, when the

manufacturing system for the new technology was still under design.2

More than likely, the concept of workplace basic skills will continue to evolve as the workplace itself changes.

A Stanford University study, based on studies at several worksites, identified 13 competencies-e.g., cooperation,

establishing goals, obtaining and using information-hat are often needed by workers to function effectively in new

work settings.3 These competencies are seldom stressed in U.S. primary and secondary schools. Thus, companies

that stress “new model” work organization (see ch. 4) may find developing these skills to be a growing training

requirement. According to ASTD, the full list of workplace basics could be enlarged to encompass 16 skills in 7

broad skill groups (ranging from the Three-Rs to organizational effectiveness and leadership). Of course, not all

workers need such a broad spectrum of skills in the future. Nevertheless, the demand for such skills will grow if

employers continue to reorganize work in ways that require workers to exercise more responsibility.

l~thony p. c~ev~e, ~i~ J. Gtier, and AIIII S. Meltzer, Workplace Basics: The EssentiaZ SkiZZs Employers Want, ASTD Best

Practices Series: Training for a Changing Work Force (San Francisco, CA: Jossey-Bass, 1990), p. 42.

2

1bid. p.60.

3As discussed in Russell W. Rumberger and Henry M. Leviq “Schooling for the Modem Workplace,” ]nvesting in people: A StrategY

to Address America’s Workjorce Crisis, Commission on Workforce Quality and Labor Market Efficiency (U.S. Department of Labor:

Washington DC, September 1989), p. 103.

In the meantime, the most authoritative survey of more extreme characterizations of the illiteracy

basic skills is limited to young adults (those aged 21

to 25).23 Completed in 1986 by the federally

sponsored National Assessment of Educational Progress (NAEP), the survey profiles literacy skills

(including the ability to perform arithmetic operations to solve problems) among 3,600 young American adults. NAEP found that 94 percent of the young

adults read as well or better than the typical fourth

grader; about 80 percent equaled or surpassed the

average level for an eighth grader, and 62 percent

equaled or did better than the typical eleventh grade

student.24 While the NAEP findings show that the

problem in the United States are unfounded, it is not

reassuring that one-fifth of young American adults

read no better than a typical eighth grader. (The

sports page of most newspapers is written at about an

eighth grade level.)

Perhaps even more disturbing, the NAEP profiles

show that very few young adults are proficient in

moderately complex tasks-as was apparent in the

exercises involving arithmetic. Nearly all (93 percent) of the young adults got the right answer when

the quantities and arithmetic operations were explicit and obvious (such as adding two entries on a

ZM S. Kirsch and Ann Jungeblut, Literacy: Profi”les ofAmerica’s Young Adu/ts Final Report (Princetom NJ: National Assessment Of ~U@iOti

Progress at Educational Testing Service, September 1986).

‘Ibid., p. 40.
160 . Worker Training: Competing in the New International Economy

bank deposit slip). The respondents had far greater

difficulty when numbers had to be extracted from

printed forms or text, or when the arithmetic

operation was not immediately obvious.25 For example, less than two-thirds were able to reach the

correct answer when the addition was part of a

problem in which judgment had to be exercised to

determine which numbers were superfluous.

Those with more years of formal schooling did

better than those with less education; however, poor

problem solving abilities were evident even among

the more educated respondents. Only 52 percent of

those whose education ended with high school

graduation and 70 percent of those with 2- or 4-year

college degrees or more could examine a menu,

compute the cost of a specified meal and, then,

determine the correct change from a specififed

amount. Only 38 percent of those high school

completers with no higher degree could then calculate the tip from the bill or estimate the price of an

item from a grocery unit-price label. Among those

with a 2- or 4-year degree or more, 31 percent were

not able to calculate a price from a unit price label,

and 39 percent were unable to calculate the tip after

first identifying menu items and calculating change.

Figure 6-1 shows sample questions and success level

for high school graduates without a post-secondary

college degree.26

The NAEP survey also gives some benchmark

information about how literacy levels varied among

young adults by occupation.

27 The data given in

figure 6-2 applies to 21- to 25-year-old people who

were out of school and who had worked full time for

at least 1 year. Not surprisingly, professionals scored

highest on the NAEP proficiency scale, followed by

young adults in technical and managerial occupations. What is surprising is the generally low

proficiency in occupational groups generally

thought to be the most able. Of course, the study only

shows the literacy level of people in these occupations, not the literacy level actually needed to

perform these jobs.

The NAEP profiles show that many high school

graduates do not bring to their jobs the caliber of

basic academic skills that employers could reasonably expect. Why these deficiencies exist is poorly

understood. Perhaps these poor readers have not

learned to actively seek out the meaning of what they

read. By contrast, good readers may employ strategies that allow them to extract what they need from

written materials.28 As has been mentioned, occupational requirements require active involvement of

the reader-e.g., to follow written instructions, to

remember information, to solve problems.

Studies that profile workplace requirements, at

least at the same level of detail as the NAEP young

adult profiles, are badly needed but have never been

conducted. The Educational Testing Service (ETS)

is now conducting a literacy profile of unemployed

people for the U.S. Department of Labor, due to be

completed in late 1990. ETS, which developed the

NAEP young adult profiles, will inventory literacy

levels for people enrolled in Job Training Partnership Act programs, people using the Employment

Service system, and people receiving unemployment insurance. However, the inventory will not

focus on the basic skills that employees need on the

job.

The International Context

Very little information exists that allows comparison of basic skills levels among workforces of

different countries. Thus, comparisons of educational levels are often used instead. Differences in

national educational systems complicate analysis.

However, the United States has one of the highest

levels of participation in secondary and postsecondary education in terms of the number of years

of schooling.29 (See box 6-C.) But, as suggested by

the several comparative studies discussed in chapter

3, the American primary and secondary education

fisee vene~, et al., op. cit., footnote 19, P. 28

26~e ~r=n~gefiPe5 cit~ above are ~ed on the actual number of correct and incorrect responses to the mey questions. ~S unpubli*ed da~

was provided to OTAby the Education Testing Service. These figures may differ from estimates based on the probability that a person showing a certain

level of proficiency would get a correct answer on a speciilc question.

zTPa~ E. B~on~d Irwin Kksck WOrkp/a< , ,’)ctencies: The Need to Improve Literacy and Employment Readiness, forthcoming, as cited in

Information for National Peflormance Goals for Education: A Workbook, (Educational Testing Service Policy Information Center, Nov. 30, 1989) p.

47,

‘George A. Miller, ‘‘The Challenge of Universal Literacy,“ Science, vol. 241, no. 4871, Sept. 9, 1988, p. 12%

z~c~d M. Cyefi ~d David c+ MoweV, ~s., Technology and Employ~nt: Innovation and Growth in the Us. Economy (WiMhhgtO~ DC:

National Academy Press, 1988).
Chapter 6-Basic Skills and the Workplace .161

Figure 6-l—Document Literacy of 21 to 25-Year-Olds Who Work Full-Time for a Full Year, by Occupation

Averages

Task examples at

proficiency levels:

Proficiency scale

(0-500)

Use bus schedule to select

appropriate bus for given

departures and arrivals (334.365)

Use sandpaper chart to locate

appropriate grade given

specifications (320)

Follow directions to travel

from one location to another

using a map (300)

Use index from an almanac (278)

350

340

330

320

310

300

290

280

270

260

Locate intersection on a street map (249) 250

z

I

Professionals (323) I

Technical (311) I

Managers (308)

{

Clerical (301)

1

- 1

I

I Sales (297)

I

Service (286)

v [ Operatives (282)

71

I Craft (279)

Laborers (277)

SOURCE: Paul E. Barton and Irwin S. Kirsch, Workplace Competencies: The Need to Improve Literacy and Employment Readiness, prepared for the

Department of Education, Office of Educational Research and Improvement (Washington, DC: U.S. Government Printing Office, July 1990), figs.

1-3, table 2.
162 . Worker Training: Competing in the New International Economy

Figure 6-2-How Young High School Graduates* Fared on Selected Tasks From the National Assessment of

Educational Progress’ Young Adult Literacy Assessment

NATIONAL BANK

Please use your personalized deposit tickets

(Please Print) II “o. “.,(I mm,, see “our c,,,,O”al bank,,*

1 1

i

Name ‘g-mL J

c,4Ec KS ANO O, ”El+ ITEMS A“k RECEIVE(3 FOR DEPOSIT SUBJECT ,“ ,“6 PR”v IS,0N5 OF THE

UNI F O RM COtUME i7c, r,L CODE 0!7 nN” APPL, CALIL E c<,, LEC1 ,“N /4G REEMENT

RECORD ALL CHARGES OR CREDITS THAT AFFECT YOUR ACCOUNT

Soups – Made by our Chef Daily

Onion soup 60

SOUP of the day 60

Vichyssoise in Summer

Beef burgers broiled to order 185

1/4 lb. of the finest Beef available seasoned to perfection

and served on a buttered bun

Wine Cheddar cheese burger 195

Blue cheese burger 195

Pineapple burger 195

Bacon burger 2 10

Wine Cheddar-cheese & Bacon burger 225

Sandwiches

Sliced Turkey – Garnished 130

Turkey Salad – Garnished 95

Chicken Salad – Garnished 95

Tuna Fish Salad – Garnished 95

Sliced Beef Tongue – Garnished 150

Grilled Wine Cheddar Cheese 75

The Lancaster Special 195

Corned Beef, Melted SWISS Cheese, Sauerkraut

on Seeded Rye Need we say more?

Minimum Check at Lunch 1.00

Q. You wish to deposit a $300 check and $57.23 in cash

in a checking account. Fill out your deposit slip to do so.

List both deposits and indicate the total amount

deposited. Date your deposit slip May 22, 1985.

93°/0 of high school graduates without post secondary

degrees answered correctly.

Q. Complete the check ledger for the month of

September. Keep a running total of the balance and

include the following:

$50 deposit on 9/27

check 108 payable to Mr. Davis for $18.49 on 9/27

check 109 payable to Electric Co. for $53 on 9/28

the $5 monthly service fee for your checking account

Correct responses among high school graduates without

post secondary degrees ranged from 73% (for balance on

check 109) to 81 0

/0 (for $50 deposit).

Q. Suppose you had $3.00 to spend for lunch.

If you order a Lancaster Special sandwich and onion

soup, how much change would you get back?

52°/0 of high school graduates without post secondary

degrees answered correctly.

Q. How much should you leave for a 10°/0 tip?

38°/0 of high school graduates without a post secondary

degree answered correctly.

● includes young adults 21 to 25 who completed high school but who had not received post-secondary degrees. The “correct answer”

information is based on unpublished data on the actual percentage of survey participants answering the question correctly. The percent

correct should not be confused with other data from the survey used to identify proportions of young adults performing at different

proficiency levels on scales developed for the National Assessment of Educational Progress (NAEP). Individuals at a specified level on

NAEP’s scale have an 80 percent probability of correctly performing tasks used to illustrate that proficiency level. The percentage of people

demonstrating proficiency at a given level tends to be lower than the percentage who answer a given task correctly.

SOURCE: Survey instrument and questions are from Irwin Kirsch and Ann Jungeblut, Literacy: Profiles of America’s Young Adults, Final Report(Pfinceton,

NJ: National Assessment of Educational Progress, Educational Testing Servicep September 1986), pp. III-29 - III-31. “Correct answer” information

is based on unpublished data provided by the Educational Testing Service to OTA.
Chapter 6-Basic Skills and the Workplace . 163

Box 6-C—Formal Education and the American Workforce

Despite basic skills problems at all levels, the years of schooling the typical American worker receives

continues to increase. Roughly one-fourth of all adults (those between 25 and 64) in the civilian labor force are now

college graduates; another 20 percent have some college, so that over 45 percent have at least some college. This

compares to 37 percent with at least some college in 1978. Those in the adult labor force with less than a high school

education declined from 24 to 15 percent. The remaining portion-those whose education ended with high

school-has remained the same at 40 percent.1

Despite a narrowing gap, major racial and ethnic variations persist in years of formal education. Between 1978

and 1988, the proportion of both white and black workers with 4 or more years of college increased by 5 percentage

points; similarly, there was also a 4 percentage point increase for Hispanic-origin workers. The net result was that

by 1988,26 percent of white, 15 percent of black, and 13 percent of Hispanic workers attended 4 or more years of

college.

The proportion of the adult labor force without a high school diploma also declined dramatically for all groups

over the decade. However, 40 percent of the Hispanic labor force still had less than 4 years of high school in 1988,

as did 23 percent of blacks, and 14 percent of whites.

Formal education is a major indicator of a person’s likely employment history; nearly 90 percent of college

graduates between 25 and 64 were in the labor force in 1988, compared with only 61 percent for those who had not

completed 4 years of high school. Over the 1978-88 period, the labor force participation rates for men in all

educational groups declined with the largest reductions occurring among those who had not attended college. In

contrast, the participation rates for women were higher across the educational spectrum, especially among those

with the highest educational attainment—from 62 to 75 percent for those who had completed 1 to 3 years of college

and from 71 to 81 percent for college graduates. Of course, the amount of schooling by itself says little about

educational quality or proficiency.

Groups with the most formal schooling have the lowest unemployment. The 1988 jobless rate for college

graduates aged 25-64 was only 1.7 percent, compared with 3.7 percent for those with 1 to 3 years of college, 5.4

percent for high school graduates, and 9.4 percent for high school dropouts. Black college graduates still have more

than twice the unemployment rate as white college graduates-3.3 percent compared to 1.5 percent.

There has been a trend toward reduced employment opportunities for the less educated, especially high school

dropouts. 2 In some cities and States with large minority populations, 40 or 50 percent of students do not finish high

school.

There are also significant regional differences. In 1980, for example, roughly 1 out of 4 Southern adults over

age 25 had less than 8 years of school, compared with 1 in 6 adults nationally. Approximately 36 percent of adult

Southerners lack high school diplomas. Within the South, rural residents have higher rates of functional illiteracy

than urban residents.

Educational background is also important in determining whether a worker will qualify for a job requiring

specific training or get upgrade training once employed. In 1983, the only year for which nationwide data is

available, 55 percent of workers said they needed qualifying training to obtain their current job. The figure was just

42 percent for those with a high school diploma or less. Some 62 percent of those with some college, and 84 percent

of college graduates, said they needed qualifying training for their job.4

IAllfiWeS on Yems Of Schootig ~efrorn U.S. I)epartrnmt of Labor, Bureau of Labor Statistics, “Educational ~VdOf Us. ~OrFOr~

Continues to Rise,” ~ew, Aug. 29, 1988.

2Richard L. Venezky et al., The Subtle Danger: Reflections on the Literacy Abilities of America’s Young Adults (Princeto% NJ: National

Assessment of Educational Progress, Educational Testing Service, 1987). See, also The William T. Grant Foundation Commission on Work

Family and Citizenship, The Forgotten Half: Pathways to Successor America’s Youth and Young Fanu”2ies Final Report (Washington DC:

William T. Grant Foundatio~ 1988).

3Natioti Centm for Education Statistics, The Condition of E&cation: 1988, VO1. 1 (WmhhgtoQm:U.S. @v ernment Printing ~lce,

1990), p. 90. me fiWe fak to 13.5 percent for those between the age of 25 to 3A.

4me propo~om ~so Vfidby ~Ce and age. Fif~-sevenpercent of whites tid~eY n=ded q-g@ aining to get their job, compared

with 44 percent of blacks and 54 percent of other minorities. Only 25 percent of the youngest workers (those 16 to 19) and 47 percent of those

20-24 reported that they needed qual@ng training. See Max L. Carey, How Workers Get Their Training, Bulletin 2226, U.S. Department of

Labor, Bureau of Labor Statistics, Februruy 1985.
164 ● Worker Training: competing in the New International Economy

system is no longer a leader in quality. In fact, the

quality of K-12 education in the United States is

lower than several of our major trading partners.

One popular explanation is that the United States

has such a heterogeneous population. However,

even U.S. elementary students in a relatively homogeneous middle class suburb of Minneapolis scored

far lower on standardized tests than comparable

students in Japan and Taiwan.30 Thus, while total

U.S. education costs per pupil (measured in constant

dollars) have nearly quadrupled since the early

1950s, there has been no evidence of a proportional

improvement in scholastic performance.31

Even so, American school students have improved marginally in the basics since the early

1970s. The jury is still out as to whether these recent

gains will continue. The most recent reading assessment shows that students read better in 1988 than

they did in 1971.32 However, some age groups did

better in the early 1980s than in 1988. The most

hopeful news in the 1988 assessment was the

progress in reading levels made by black and

Hispanic students.

American students also made progress in math

and science, compared with their predecessors in the

1970s.33 While encouraging, most of the gain was

from routine exercises—such as elementary arithmetic or recitation of scientific facts-not in using

knowledge effectively to think and reason.34 The

students did no better in inferring relationships or

drawing conclusions from scientific information.

Moreover, the students stayed even or did worse

than their predecessors in computing with decimals,

fractions and percents, solving multiple-step problems, or using basic algebra.35

As discussed in chapter 3, U.S. students do not

measure up to students in South Korea, Japan, or

West Germany. A recent international mathematics

assessment found American 13-year-olds in last

place among five other countries and several Canadian provinces.36

The poor performance of U.S. students has

prompted great concern about the future science and

engineering workforce.

37 But it is alSO worrisome

that U.S. students in the two middle quadrants—

students who will fill many of tomorrow’s factory

and office jobs-did poorly .38 South Korean youngsters scored best; only 40 percent of U.S. students

were at or above the mean, compared to 78 percent

of the South Korean students. (A typical problem at

the mean required the student to select the correct

average age of five students, given their individual

ages.) Of course, educational performance at any age

is not necessarily a predictor of individual performance on the job. However, it is clear that, without

improvement in basic skills, the students who will

comprise the future U.S. workforce are poorly

equipped to keep up with the highly educated (and in

many cases lower paid) workforces of our competitors.

Employer Views of Basic Skills

What skills and education do employers want

most in their workers? What is the connection

between these desires and job performance? The

answers from the research are fragmentary. Most of

the studies focus on what employers think are

%bid.

31~~~ j. pere~% “Res~c~gthe System Is the SolutioIL” Phi Deha Kappan, September 1988, PP. 2@24.

3% v.S. M~lis ad Lynu B. Jeti, The Retiing Report Card 1971-88: Trends from the Nation’s Report Card, @@ton: NJ: Natioti

Assessment of Educational Progress, January 1990)

3SMWN. Appleb~, Judith A. Mnger, and Ina V.S. Mullis, Crossroads inAmencanEducation: A Summa ry ofFindings (Princetou NJ: Educational

Testing Service, February 1989), pp. 7-11.

‘Ibid, p. 29.

351bid, p. 27.

36~c~e E. L~ofite, N~cy A. Mead and G~ WT. philfips,A world of Differences : An Inter~tio~l Assessmnt of Mztkvnatks and SCif??lCe,

(Princetou NJ: Educational Testing Service, 1989) p. 13

37seve~ ()~repo~ ~ve ~scu~sed education~d ~~gismesre~t~to the scien~lc ~den~eefigworkforcecSee, especially: Making Things

Better: Competing in Manufacturing, OTA-ITE-443 (w@.@toq DC: U.S. GovernmentPrinting office, Febrwuy 190), pp. 115-126, and Educating

Scientists and Engineers: Grade School to Grad School, OTA-SET-373 (Washington, DC: U.S. Government Printing office, June 1988).

38Bmic ski~ problms ~e by n. mem limited t. hose who don’t go on to college. ~ 1983-84, one-fo~ of ~1 s~dents entering COllegeS ~d

universities took remedial math courses, one-fifth took remedial writing, and 16 percent took remedial reading; 82 percent of all colleges and universities

saw the need to offer such courses. U.S. Congress, C)ftlce of Technology Assessmen~ Technology and the Ame~”can Econom”c Transition: Choices for

the Future, OTA-TET-283 (Washington, DC: U.S. Government Printing OffIce, May 1988).
Chapter 6-Basic Skills and the Workplace ● 165

attractive attributes in entry-level workers, not the

actual job requirements or the skills that successful

employees need. Also, the surveys typically poll

corporate-level executives or personnel officers who

may view skill needs differently than, say, shopfloor

supervisors or plant managers.

There are also problems in definitions. For

example, employers often have a different concept

of basic skills than the training or education community. A banking industry survey, for instance, asked

employers for specific examples of basic skills

problems in specific jobs (e.g., teller, customer

service representative).39 Many examples offered by

the banking industry respondents-such as “not

properly following procedures on opening accounts

or cashing checks’ ‘-could reflect carelessness,

inattention, or, indeed, inadequate coaching by

supervisors.

A review of 13 surveys found that employers

generally view a positive attitude toward work as the

. most desirable characteristic in entry-level workers.

40 These employers also placed more importance

on basic skills (including communications skills and

problem solving skills) than specific occupational

skills and also wanted entry-level workers to understand the business environment.

Several factors are contributing to employers’

sharpened awareness of basic skills problems among

their own workers. Employers are aware of the

heightened attention the news media and government reports give this issue, and are also becoming

aware of the implications of changing demography

for the educational qualifications of entry-level

workers.

According to a 1989 survey by the Omega Group,

Philadelphia area executives saw basic education

deficiencies reflected by problems in hiring qualified employees, higher wages for qualified entrylevel workers, or the need to restructure work or

downgrade job descriptions.41 One employer found

that some new hires, while able to learn the skills

needed to perform a specific task, were unable to

transfer those skills to different but closely related

tasks.

Some of the executives said that literacy had a

substantial impact on marketing and customer services-especially in telecommunications, banking,

and retailing. In particular, as more companies use

computer-based systems, they need entry-level employees who are able to respond to customer requests

and process orders quickly.

For the most part, the executives did not consider

literacy training to be a corporate responsibility.

Their firms dealt with basic skills problems in

several ways, including screening of job applicants,

accepting higher rates of turnover, living with

service problems or, in some cases, relocating. One

insurance company executive noted that, when

low-skilled workers became an issue, new technology could be employed to do the work, so that the

firm could hire less-able people.

While they worry about basic skills deficiencies

in future workers, employers are less worried about

current workers. Three-quarters of employers responding to a recent survey by the Society for

Human Resource Management said they had yet to

experience a need for remedial training of their

employees; these respondents either did not hire

employees with basic skills problems or found little

need for remedial training among their current

employees. 42 But, employers often do not become

aware that their workers have basic skills problems

until they attempt to make a major change that

requires training. (See box 4-C inch. 4 for discussion

of Plumley Companies, an auto parts supplier that

launched an employee education program on finding

that most of its workers did not have the basic skills

needed to train for or implement statistical process

control.)

Recruiting and retaining skilled workers is a

growing concern of small business. According to a

1989 Dun and Bradstreet survey, small business

chief executive officers (those heading firms with

less than $12 million in sales) who responded put

finding qualified, motivated employees at the top of

q’3Ame~~nBa~er~ A~~~~tio% Executivesumv: The A~rican Banker’ sAssociation’s Suwey on Basic skills in Banking, Spfig 1989, p. A2.

‘Gary Natriello, ‘‘What do Employers Want in Entry-1evel Workers? An Assessment of the Evidence,’ occasional paper No.7, National Center on

Education and Employment, Teacher’s College, Columbia University, April 1989.

AIOmega ~oup ~c, Literacy in the Wor@/ace: The Executive Perspective, A Qualitative Research Smdy, BV ~wr, pA, 1989. TwentY*i@t

top-level executives in manufacturing and service industry firms were interviewed.

AzSocie~ for H~nResowe Mamgemen~ 1989 Training/Retraining Survey, Alexandri% VA 1989, P. 19.
166 ● Worker Training: Competing in the New International Economy

their problem list-followed by solving cash flow

difficulties, containing costs, dealing with government regulations, and meeting increased competition. 43 Most of the respondents stressed in-house

training, rather than more aggressive recruitment.

In similar vein, small manufacturers responding

to a National Association of Manufacturers survey

cited lack of skilled labor and lack of basic education

skills as two of their major problems. Half of the

responding employers said their employees had

trouble solving problems on their own; 37 percent

said math concepts were a problem; 30 percent said

English fluency was a problem; and one-fourth said

their employees had trouble training in operations.

Nearly three-fourths of the responding firms said

they found it fairly or very difficult to fill openings

for skilled workers.44

Impact on Company Performance

While documentation is sparse, anecdotal evidence suggests that poor basic skills cost American

companies quite a bit. One small Illinois company

turned to a community college to teach English skills

to its largely Hispanic workforce when an Hispanic

employee ruined an $8,000 part through a language

misunderstanding.45 Inability to measure also can be

costly. A Florida company that manufactures bellows estimates that it loses $1.2 million per year

because its workers do not read blueprints correctly

or incorrectly calculate the material needed to make

products. 46

Companies that must give workers remedial

courses as a prelude to technical training face delays

in implementing new technologies and work practices. Motorola expects to spend over $10 million

per year for the next 3 years to bring its U.S.

workforce up to sixth or seventh grade reading and

math levels .47 Basic skills problems can also hamper

employee participation in productivity and quality

improvement efforts: for example, one major manufacturing firm found that one-fourth of its quality

circles (which met without management to encourage free discussion) were unable to pass on written

suggestions because no one could take notes well

enough.48 Basic skills deficiencies obviously add to

company costs in screening job applicants and in

hiring new employees.

Although imprecise and subject to great uncertainty, there have been some efforts to estimate the

overall cost to companies of basic skills deficiencies. A study of the Atlanta metropolitan statistical

area concluded that employed workers with educational limitations cost employers $840 million

annually (or about $3,700 per employee) in lost

time, inadequate performance, and higher personnel

costs (e.g., health and safety, training). The study

estimated that the total social and economic cost of

functional illiteracy among all Atlanta area adults to

be $2.6 billion annually.49

At the regional level, according to the U.S.

Department of Labor, the costs of functional illiteracy among 3.6 million employed but undereducated

workers in the eight Southeastern States amounted

to $24.8 billion annually (or nearly $6,900 per

worker) because of time lost, poor performance, and

other employment related problems. It is not clear

from the 2 studies why the regional costs per worker

would be so much higher than those for Atlanta.

(Total costs of functional illiteracy, including the

unemployed, within the region were estimated to be

over $57 billion) .50

Canada, too, has a basic skills problem. A

Canadian business task force estimated that the costs

of functional illiteracy to Canadian business was $4

billion annually. This figure could be used to

43J~es S. HowMd, “Smti Business CEOS: No Shortage Of Worries, ” D&B Reports, November/December 1989, p. 17.

44’ Job SlcillS, Mumtion of Workers Big Problems for Small Manufacturers, NAM Survey Shows,’ NAM News, June 2*, 1989. me NAM S@

Manufacturers Operating Survey was mailed to over9,500 small fms in the spring of 1989. Responses were received from 2,228 f-, for a25.4percent

response rate. About 40 percent of the responding employers had tuition reimbursement programs.

dsJeanne Sadler, “small Companies are Target of Efforts to Improve the Literacy of Employees,” Wall Street Journal, Nov. 3, 1988, p. B2.

‘@’Business Teaching 3 R’s to Employees in Effort to Compete,” New York Times, May 1, 1988.

47( CFOW by Four: How cm Businesses Fight WOrk@aCe ~litemcy?,” Training and DevelopmentJournal, vol. 43, No. 1, January 1989, pp. 21-22.

48As cit~ ~~-lec~, ‘‘S=ond Chance Basic Skills Education, “Commission on Workforce Quality and Labor Market Efficiency,lnvesting

in People: A Strategy to AaUress America’s Workjorce Crisis, Background Papers Vol. 1, op. cit., footnote 14, p. 237.

49’wfl~ A, De~y, Atlanta 2000: Its c~nging Job Mar~t and the Employ~nt Readiness of its wor~orce, A sp~i~ Metropolitan Area Study

Conducted for the Southeast Regional OffIce of the NationaJ Alliance of Business, 1987, pp.4648.

%tichwdA. Mendel, Meeting the Economic Challenge of the 1990s: Wor~orceLiteracy in the South, A Report for the Sunbelt Institute (Chapel Hill,

NC: MDC, Inc., September 1988), p.15.
Chapter 6-Basic Skills and the Workplace ● 167

guesstimate U.S. costs. If a 10-to-l conversion ratio

(the approximate difference in the economies and

populations of the two countries) were used, the cost

in the United States would be $40 billion annually .51

Total costs to Canadian society were estimated to be

$10 billion per year-the equivalent of $100 billion

for the United States.

WORKPLACE-ORIENTED

PROGRAMS52

Since the early 1980s, a number of workplace

basic skills programs have been launched. These

usually involve cooperative efforts by employers,

unions, educational institutions, and government.

The terms ‘‘workforce’ and “workplace” are

sometimes used interchangeably in describing basic

skills programs; in this report, however, OTA

distinguishes between the two terms. “Workforce”

programs are for people not currently employed who

need improved basic skills or work readiness skills

to enter the workworld, while “workplace” basic

skills programs are for employees. The discussion

below focuses mostly on workplace programs.

Company-run Programs

There are many individual examples of arrangements among companies, unions, and local adult

basic education programs to provide services to

adults. Most, however, are not workplace programs

per se. For example, the Business Council for

Effective Literacy, which works to foster corporate

awareness of adult literacy issues, identified more

than 800 corporate literacy actions of all kinds

between 1984 and 1987. However, only 9 percent

had to do with employee basic skills programs.53

Unfortunately, surveys of employer involvement

in basic skills programs have been far from comprehensive. Most surveys have very low response rates.

The surveys probably overstate employer involvement because they do not define such terms as

“basic skills” or “remedial education. ” For example, firms may consider remedial courses in blueprint reading, accounting principles, or statistics to

be basic for specific jobs. Also, few surveys ask

firms whether their basic education activities are

companywide in scope. One common failing in all

surveys is that small firms-those with fewer than

100 employees—are absent as a category or in

proportion to their importance to the economy.

Another shortcoming is the dearth of survey information about the features of the fins’ activities (e.g.,

whether government funds are used, role of local

educational providers, etc.).

Table 6-2 compares findings from four of the

more inclusive employer surveys. The Training

Magazine survey shows clearly that company-based

remedial training often bears little resemblance to

the Three-Rs of adult basic education. When remedial education was left undefined in the survey

instrument, roughly one-third (31.79io) of the survey

respondents (all companies with 100 or more

employees) said they offered ‘‘remedial/basic education. However, when firms were specifically

asked if they provided remedial education in reading, writing, arithmetic, or English as a Second

Language, only 11.3 percent said they did. (The

survey asked respondents not to include such items

as listening, creative thinking, or computer skills.)54

The Towers Perrin-Hudson Institute survey of

large firms found that 8 percent of its respondents

had remedial programs, and that they spent 3 percent

of their training budget on these activities. Another

9 percent were conducting pilot projects.55

The American Management Association (AMA)

found far fewer firms with basic skills programs. In

a 1989 survey of its members, AMA found that

one-third of the respondents tested job applicants or

current employees for basic skills, but only 3 percent

offered remedial training to correct deficiencies.56

Nearly 90 percent of the responding companies said

they refused to hire workers who failed basic skills

test—perhaps an explanation for the few companies

with corrective programs.

51A cited in Mikulwkly, op. cit., footnote 17.

52pofiom of this ~Wtion me &a~ from pal V. De~er, Basic skills Education in B~”ness andInd~~: Factors for success or Failure, Op. Cit.,

footnote 4.

53~omtion p~ovid~ by Gail spa~enberg, Business Council for Effective Literacy, ~ne 1990.

%!hris Lee, “The Three Rs,” Training: The Magazine of Human Resource Development, vol. 26, No. 10, October 1989, p. 68

SSTowers Pe@ Hudson Institute, “l%rkfOrw 2~ompeting in a Seller’s Market: Is Corporate A.nerica Prepared?” A Sunwy Report on

Corporate Responses to Demographic and Labor Force Trends, July 1990.

fiEllen she= “Back to Basics to Improve Basic Skills,” Personnel, JUIY 1989, p. 22.
168 ● Worker Training: Competing in the New International Economy

Table 6-2—Surveys of Employer Involvement in Workplace Basic Skills Programs

Source/Date/Response Rate Business involvement Comments

Training(1989): a Twenty thousand organizations with 100 employees or more were

sent surveys; 3,130 surveys were returned

for an overall response rate of15.7 percent.

However, only half the surveyed firms were

asked special questions in which remedial

education was defined to limit to the ThreeRs.

American Management Association (1989) b

Survey of AMA members, of whom 1,005

responded.

Society for Human Resources Management ( 1989)c Survey was sent to a random

sample of 4,600 SHRM members; 613

usable responses were received for a

response rate of 13.3 percent. Some small

firms (under 100 employees) were included

in the sample.

Towers Perrin, Hudson Institute (1990).d

A questionnaire on human resource practices and concerns was sent to 4,000 firms;

responses were received from 645 firms,

for a 16.1 percent response. Most were

large firms; the median firm had 1,953

employees; 25 percent had more than

6,200 employees; only 25 percent Iess than

765. Most respondents (73 percent) were

in the East or Midwest. financial services

accounted for 22 percent of the responses;

manufacturing, 14 percent.

11.3 percent of respondents said they

offered remedial education in reading, writing, or arithmetic, or basic education for

employees whose native language is not

English; when remedial/basic education

was left undefined, 31.7 percent of companies said they offered programs.

Only 3 percent of respondents said they

provide remedial education in basic skills.

However, more than one-third of the respondents (34 percent) indicated that they

used basic skills testing of job applicants,

new hires, and in some cases, current

employees and candidates for promotion.

Nearly 90 percent of the respondents issuing testing said they do not hire applicants

that fail basic skills tests. None of the

companies said they automatically deny

promotion to candidates when testing shows

basic skills differences; most allowed the

promotion but also assigned the worker to

remedial training.

Roughly one fourth (26 percent) of respondents said they provided remedial training,

defined as “basic skills (i.e., writing, reading, math, English, etc.) that must be

mastered before additional training or retraining can be undertaken successfully.”

Overall, 8 percent of respondents undertook remedial education; another 9 percent

had pilot projects; 14 percent planned

activities. On average, the portion of training budgets for remedial education was 3

percent. Firms with strategic plans for

addressing skills gaps were much more

likely to have remedial programs than

those that had yet to plan measures to

address skills gaps.

Only 2 percent of respondents picked remedial/

basic education as the most critical challenge

for their training and development function

over the next 2 to 5 years. (Of the 13 choices,

the largest challenge, picked by about onefifth, was new market strategies, followed by

technological change-roughly 16 percent;

quality improvement-about 12 percent; and

customer service-about 10 percent).

In addition to the survey, AMA profiled some

30 company programs. Costs of remedial

projects ranged from nothing to nearly $1000

per employee, with the average cost around

a few hundred dollars per employee. Programs averaged one session per week for 3

months or longer. Roughly half the profiled

companies provided remedial training on

company time.

Survey found that firms rely far more on

outside sources for remedial training than

they do for other forms of training and

retraining. (41 percent said all or a majority of

remedial training was provided by outside

providers, compared to 15 percent for other

training and 12 percent for retraining.)

Poor basic skills was a major cause of

rejection of new job applicants. Among firms

hiring at least 150 new employee each year,

40 percent of the respondents had to screen

6 to 10 candidates to hire one worker. Nearly

60 percent of the firms cited inadequate

writing and verbal skills as the most common

reason to reject a candidate, followed by

inadequate adaptation to the work environment (36 percent). Another reason for not

hiring, failure to pass medical or drug tests,

was cited by 10 percent. . ,

W3hris Lee, “The Three Rs,” Training: Tbe Magazhe of Human Resource Development, October 1989, p. 68.

bE]len Sherman. “Back to Basics to Improve Basic Skills,” Personnel, JUIY 1989, P. 22.

c~ety for Human Resour~ Management, 1989 SHRM Tratning/Retraining Survey, Alexandria, VA, 1989.

~owers Perrin, Hudson Institute, Workplace 2000: Competingina Seller’s Matiet: Is Corporate America Prepared?July 1990.

SOURCE: Office of Technology Assessment, 1990.

At the high end, the Society for Human Resource less than one-fifth of the smaller companies (those

Management (SHRM) survey reports that 26 percent with fewer than 500 employees) had remedial

of responding employers provided remedial train- training programs, while a third or more of the larger

ing. As indicated in table 6-2, SHRM’s question companies had programs. Companies tended to use

about remedial education is more open-ended than outside providers to a greater extent for remedial

the Training Three-R survey question. SHRM found training than for their other training activities.57

sTSWie~ for H~n Reso~e Management 1989 SHRM Training/Retraining Survey, Alexandria, VA, 1989.
Chapter 6-Basic Skills and the Workplace . 169

Contrary to the claims sometimes made, firms in

most industries probably spend very little of their

total training budget on remedial education, opting

instead to rely on outside, publicly supported

Federal, State, and local basic education programs.

But there are exceptions. A recent American Bankers Association (ABA) survey found that 38 percent

of bank survey respondents had established basicskills programs for employees. These banks spent

about 23 percent of their training budgets on these

efforts. The ABA estimated that the banking industry as a whole spent between $23 million and $135

million per year on basic skills programs. (The

smaller figure assumes that nonresponding banks

spent nothing on basic skills; the larger figure

assumes that banks responding to the survey were

typical of the industry.58) It seems likely, however,

that a portion of this expenditure would be for

industry specific basic skills-not the Three-Rs.

The ABA, through the American Institute of

Banking (its educational affiliate), is its industry’s

largest provider of basic skills assistance and is in

the process of developing industry specific materials

to enhance its efforts. As trade associations in other

industries (e.g., textiles, printers) become more

involved in developing basic skills materials, more

companies may be encouraged to set up industry

specific programs for their employees.

Some large companies most involved in basic

skills education have developed their own internal

courses-often as part of a broader employee

development or training program. Examples include

Polaroid, Motorola, Eastman Kodak, and Aetna.

Polaroid has offered basic education to its employees since 1970. The company has developed a

fundamental skills program for basic literacy and

arithmetic, and a technology readiness program that

involves some math and science, computer skills,

and so called skills for sustained learning (like

problem solving).59 Most Technology readiness courses

are at the high school level; however, some are

second-year college courses. Courses take place

onsite, mostly on company time.60

Aetna is another company that has developed its

own basic skills curriculum, called the Effective

Business Skills (EBS) School. EBS was developed

by the company’s Institute for Corporate Education

to build employees’ basic skills (math, reading,

writing, and oral communications) and to help them

use computers and apply adult learning strategies. It

is now available to other Aetna divisions. To attract

students who do not wish supervisors and coworkers

to know they are taking remedial courses, Aetna

offers evening courses as well as during shifts (with

the supervisor’s permission). Many employees prefer the evening course because registration is kept

confidential even from supervisors. The EBS program is intended to complement Aetna’s “general

business skills’ program, which is used by employees whose basics are adequate but want to upgrade

their job skills.

One reason why Aetna set up EBS was its concern

that it might not be able to hire as many workers with

good basic skills as it would like. Aetna already has

problems, particularly in the Northeast and in

California, in finding new hires with strong basic

skills. Also, Aetna was concerned that it might have

too few employees with the qualifications and

training needed to move up into better jobs when

vacancies occur. (Job vacancies are made known

internally before being advertised outside the company.)

Another reason is that jobs are becoming more

complex. Many jobs within Aetna that were once

routine in nature now require new skills from

workers. The claims processor job, for example, has

been fundamentally altered by the decentralized use

of computers. Once, paper files moved back and

forth through multiple stations as they were processed. Now, one worker is responsible for multiple

tasks and must possess a range of new skills (such as

keyboard skills, an ability to use electronic mail, or

spread sheets).

While the company offers general skills training

for employees and specifies the skills needed for

new jobs, few lower level employees took the

training needed to qualify for these positions before

EBS. Some of these employees may not have felt

5g~eAmel-icmB&ers Association.L Executive Summa ry: The Amen”cunBankersAssociation’s Survey on Basic Skills in Banking (WashingtonDC!:

Spring 1989).

sgAnne Skageq cd., Work@ace Literacy, AMA Management Brief%, no Wte, PP. 23-25.

@AS cit~ in Natio~ Alhnce of Business, Lasons L,earned: Job Skills Education Program Final Report, report prepared for tie ~ployment ad

Training Administration U.S. Department of Labor, May 1990, pp. 64-65.
170 ● Worker Training: Competing in the New International Economy

themselves qualified to take the general skills

courses. Others may not have gotten their supervisors’ permission to take training on company time.

(Aetna has a corporatewide policy of charging the

costs of training to the cost-code of the department

involved when the training takes place on company

time.)

The company’s basic skills program is highly

job-specific (and even Aetna specific) in content.

For example, in setting up a special EBS program for

security guards, the Institute discovered (from supervisory personnel) that faulty “incident reports”

were a real problem. The incident report is used as

a training vehicle in the EBS program, apparently to

good effect. (By contrast, the general skills course

uses more generic examples.)

Onsite literacy services like Aetna’s are rare.

Partnerships with existing community educational

institutions are more common. In these, employers

may provide some support (e.g., paid release time for

employees to take classes, provision of funds,

materials, or advisory services). Some of these

programs are, in essence, conventional adult basic

education (ABE) classes with that serve the employees of a few companies. As discussed at the end of

the chapter, conventional ABE is seldom the best

model to use when the purpose is to achieve specific,

defined, job-related objectives—such as upgrading

of basic skills for statistical process control.

Joint Initiatives Between Labor and

Management

Joint labor-management cooperative training programs (discussed in detail in ch. 8) support basic

education for many workers represented by the

United Auto Workers (UAW) and the Communications Workers of America (CWA). The joint programs are still in their early stages; the oldest began

in 1982. Nonetheless, their size (over 700,000

workers are eligible for joint program benefits) and

their resources (over $300 million in 1988 for all

training and tuition assistance activities) make them

major training institutions. Depending on how well

they implement their programs, these institutions

could extend the sum of the Nation’s knowledge

about the most effective and appropriate ways to

teach adults basic skills.

Photo credit: UAW-Chrysler National Traiining Center

Using computers in basic skills courses helps to familiarize

workers with a technology increasingly needed at work.

While the joint programs are separate from

corporate training operations, cooperation at the

plant level frequently allows basic skills programs to

be offered in close conjunction with corporate

initiatives. For example, at Ford’s Dearborn Engine

Plant, the UAW-Ford local training committee has

provided basic arithmetic training off-hours to help

workers taking Statistical Process Control (SPC)

training on company time. The SPC training was

developed with union input, although it was initiated

and funded by the company.61

In some cases, the joint programs provide broad

training to develop teamwork or problem solving

skills while upgrading basic skills. Such a combined

program, called “technical literacy,” is offered by

the UAW-Ford National Education, Development,

and Training Center.

Because so many workers might be involved, the

joint programs could obtain valuable data and

information about different approaches. However,

most programs do not yet involve much evaluation.

This could change. The UAW-Chrysler National

Training Center, for example, plans to evaluate the

success of various delivery approaches for basic

skills instruction used for Chrysler employees.

61~gmet~tom~ ‘me Role of ~bor Unions in Training of Employed Workers, ‘‘ working paper #2, OTA Worker Training Projec4 May 28, 1989,

p. 41.
Chapter 6-Basic Skills and the Workplace . 171

The joint programs also could be a testing ground

for instructional technology used in basic skills

upgrading— particularly since some joint centers

have access to in-plant computers or other instructional devices. Options for encouraging more systematic evaluation of basic skills courseware are

discussed in chapter 2.

So far, the most elaborate use of interactive

technology for basic skills at the joint centers is for

motivation, not instruction. The GM-UAW’s Skills

2000 program consists of 8 hours of modules on auto

industry changes that will affect worker skills; tests

and lessons to help workers sample their reading,

writing, numbers, charts, and communication skills;

information about about educational opportunities

available to GM employees; and plant-specific

contacts. The program, partially funded by the U.S.

Department of Labor, may eventually be delivered

to workers at 1000 interactive videodisc terminals in

150 GM plants and worksites.62

An evaluation of the motivational program at two

pilot sites found that it did prompt workers to

consider ways to improve their skills, and that they

were interested in educational development. However, the evaluators caution that Skills 2000 will be

of little help unless it is combined with an overall

strategy for improving worker skills.63 Having

developed the motivational program, the GM-UAW

human resource center is now giving more attention

to the type and quality of services available at local

plants. Because the joint program is decentralized, it

will be up to management and union leadership in

each plant to make sure that employees, once

motivated, get prompt attention and high quality

educational services.

State Basic Skills Program

State governments have long been active in adult

basic education as recipients of Federal Adult

Education Act funds. Other State programs, as well,

have had literacy components. More recently, the

States have launched new literacy initiatives aimed

at developing coordinated literacy strategies. At

least 30 States have set up bodies to plan or

coordinate various literacy activities.64 These bodies

serve several purposes; most, however, are attempting to develop an overall State literacy strategy to

cover the diverse groups (school children, high

school dropouts, employees, displaced workers,

people on welfare) and the numerous government

programs (adult basic education, Job Training Partnership Act, vocational education, Job Opportunities and Basic Skills Program, and so forth) that

charnel funds for literacy programs to one population or another.

While few States now have strong programs for

business involvement, this could change as the

States move to implement the adult literacy component of the National Education Goals that the State

Governors’ adopted in 1990. The Governors’ goal

statement decried the fractured system for delivering

adult literacy services and called for a public-private

partnership in each State to create a “functionally

literate workforce. ’ ’65 (See ch. 2 for further discussion.)

Several States have launched separate workforce

literacy initiatives that complement State adult basic

education programs or job training programs.

66

These programs, for the most part, emphasize

upgrading basic skills of economically disadvantaged people, many of whom are not now employed

but want work skills. To a lesser extent, these

programs also support employer-based activities.

Some States—such as Connecticut-are adjusting

their adult education programs to encourage employer involvement. A few special initiatives aim

primarily at the workplace. State activity in this area

could well increase if Federal legislation now under

consideration in Congress passes (see ch. 2). Also,

if Federal Adult Education Act funds for workplace

literacy grows to $50 million, this program will be

administered by the States, rather than nationally.

(See box 6-E.)

Workplace Initiatives

Several States—Massachusetts, Illinois, and South

Carolina among them-have developed new mechanisms for employer involvement. Created in 1986,

the Massachusetts Workplace Education Initiative

GzDe~er, op. cit., footnote 5, p. 76.

63Jme~ Bo~co, Eva[~n-on Report of skil[~ 2000, Watem ~c~gan universi~, J~e 1989, Executive S~.

64Adu/~ Literacy: program, planning, l~~ue~, Business Comcfl for Effective Literacy, January 1988.

65Natio~ Gov~norsP &sociatio~ National Education Goals, Feb. 25, 1990, p. 9.

66Judi~ K. ~Powe~,En~ncing Lit~~a~~fo~ ~o~$ ~ndp~oductivi~ (WMJI@O~ DC: Council of State Policy ~dPhtig Agencies, 198$0.
172 . Worker Training: Competing in the New International Economy

(WPE) is both a training delivery initiative and a

research demonstration project.67 WPE coordinates

more than 20 workplace literacy programs, documenting each through a formative evaluation. The

evaluation is used to track strengths and weaknesses

of each model, identifying problems and offering

technical assistance on an ongoing basis.

Organizers hope the evaluations will be instrumental in shaping a long term, systematic strategy

for improving workplace literacy. WPE has attempted to develop and evaluate models applicable

to a range of industrial needs, funding programs in

both the manufacturing and service sectors, in

unionized and nonunionized settings, for both native

English speakers and immigrants.

WPE is a joint program of three Massachusetts

State agencies, coordinated through the Commonwealth Literacy Campaign. In fiscal year 1989, WPE

received approximately $750,000 ($600,000 from a

Federal Workplace Literacy Grant and the remainder from State funds) and reached about 1,000

workers. A 3-year evaluation, conducted by an

outside party, recommended that Massachusetts

continue to invest in WPE, despite the current fiscal

crisis facing the State.68

The Illinois Literacy Resource Development Project (ILRD) is a collective effort among six key

literacy entities in Illinois, designed to help volunteer literacy and adult education programs garner

additional resources.69 At its inception in March

1987, ILRD set up task forces of local workplace

literacy and adult education providers to develop

implementation strategies. Examples included:

●

●

●

●

●

marketing contractual literacy programs to

business,

soliciting corporate and foundation support,

seeking individual donations,

impacting local public policy, and

exploring State implementation of literacy

programs.

The task forces put grassroots providers in contact

with prospective sources of support. In addition, the

task forces produce ‘how-to’ manuals and organize

workshops and conferences designed to help local

members raise money, market their programs, and

increase awareness among community leaders, legislators, and other policymakers. ILRD is an independent nonprofit organization supported by grants

from the Illinois State Education Board and private

foundations or charities. In fiscal year 1989, combined funding totaled approximately $130,000, enabling the ILRD to reach over 200 local organizations

and 70 businesses, unions, and foundations.

South Carolina’s Initiative for Work Force Excellence, launched by the governor in 1988, assists

employers throughout the State in offering basic

skills programs to workers. Each of the State’s 16

two-year technical colleges now has a workforce

specialist who serves as a basic skills consultant to

employers and also meets with local business

roundtables. By June 1989, the initiative had identified about 31,000 workers—about 2 percent of the

State’s employed workforce-in need of basic skills

training, a figure considered lower than the overall

need. About 5,000 workers were either in training or

had completed training. The technical institutes,

long involved in industry training, are developing

programs and offering courses for the companies

where the identified employees work.

Customized Training and Basic Skills

The capacity to offer workplace basic skills

instruction in association with other kinds of industry training is an attractive feature of State industrial

training programs. Where the objective is to improve

workplace skills, programs that focus on specific

needs in particular establishments may be more

likely to succeed than general ABE or GED programs.

OTA’S State survey (discussed inch. 5) found that

nearly all State industrial training programs authorize funds to be used for basic skills training, and

two-thirds permit funds to be spent on English as a

second language. While only about one-fourth of the

GTThe following discussion is based on information from the Massachusetts Workplace Bducation Initiative pro-s~and OTA Staff

communications witb Sondra Stein, June 1990.

@patia wuman and Laura SWrazi, Massachusetts Workplace Education Initiative: Year 3 Evaluation Final Repoti (WeUesley, ~: Stone Centm,

Wellesley College), 1989, p. 106.

%s discussions based oninformationfrom~e Illinois Literacy ResomceDevelopment Project TaskForce#l Handbook on Marketing Contractual

Literacy Services To Businesses, (ChampaigrL IL: ILRD), and OW staff communications with Suzanne KneU, Bxecutive Director, June 1990.
Chapter 6-Basic Skills and the Workplace . 173

State customized training programs spend more than

10 percent of their funds on basic skills, there are

exceptions .70

New York’s Employer Specific Skills Training

Program (ESSTP)-a program designed to help fill

gaps between job demands and worker skills—

offers workplace basic skills programs as a regular

component of its assistance to business. ESSTP

assists employers in assessing their workers’ training needs, developing customized courses, and

training workers. Often, basic skills instruction is

carried out in conjunction with statistical process

control training or with other workplace changes.

New York’s program typically picks up most

direct instructional costs; however, employers are

expected to provide release time or paid time off to

workers. Since release time can cost 3 to 10 times as

much as the instructional costs, an employer’s

compliance is an important sign of commitment.

Sometimes the release time requirement is eased for

small businesses.

Some States are looking at tax incentives to

encourage private sector involvement in basic skills

programs. Mississippi, in 1989, became the first

State to offer a tax credit to companies providing

workplace basic skills programs that meet State

qualifications.Tl The 25-percent tax credit can be

applied to the wages of instructors (but not trainees),

instructional materials and equipment, and construction and maintenance of training facilities. Several

features of Mississippi’s program aim to assure that

the tax credit is focused on basic skills. The company

must apply for the tax credit, and its chief executive

officer must sign the application. The company must

develop a training plan, a time schedule and a

projected budget. Several State agencies, including

the education department and the tax commission,

are involved in providing technical assistance.

Mississippi has also become a leader among the

States in investigating the potential to use instructional technology in basic skills instruction. The

Governor’s office has been instrumental in funding

a pilot project to test civilian applications for the

U.S. Army’s computer-based Job Skills Education

Program (see discussion in next section and box

6-D).

A few States have called for broad improvements

in the basic skills of their workforce to meet

economic development objectives. Michigan’s strategy for building a competitive workforce, set forth

by the Governor’s office in 1988, includes improving the literacy skills of one million Michigan adults

by 2000 to meet the State’s projected occupational

requirements. “Workforce literacy” and “work

readiness” objectives have become driving forces

behind the numerous State adult education and

training programs. Michigan encourages employers

to assess their workers’ basic skills, and will conduct

job analysis and needs assessments for skills. It

plans to make remedial education available to

currently employed workers.

Michigan’s adult literacy task force has established “core groups” in each region of the State,

comprised of representatives of each organization

and institution involved in adult literacy training.

With help from facilitators, core groups build

cooperation by developing uniform procedures,

forms, referral processes, and outreach techniques.

Core groups also hope to simplify the adult literacy

training system by reviewing the division of responsibilities and funds, encouraging subcontracting

where there is repetition.72

The Michigan strategy includes some innovations, including the Michigan Opportunity Card, a

novel effort to make the Michigan employment and

training system more user friendly. (The Card—

about the size of a credit card-stores enough

information about applicants for State-sponsored

services to allow them to avoid filling out new forms

whenever they seek education or training.)

Adult Education Programs

For many years, States have funded local adult

basic, adult secondary, and English as a Second

Language projects, supported in part through the

Federal Adult Education Act. At least 15 States have

open-ended funding formulas for their adult basic

education programs that can be used to cover

instructional costs of workplace basic skills pro-

~pe~r A. Creticos, Steve DUSC~ and Robert G. Sheets, ‘‘State Fi.MIIcd Custoti=dT*g Programs: A Comparative State Survey,” report

prepared for the Ofi3ce of Technology Assessment under contract L3-381O, March 1990, table 12.

7

1 Senate bill 2925

72 OTA s@f comm~mtion with Judy Hollister, Governor’s Council on Human Resources, June 7, 1990.
174 . Worker Training: Competing in the New International Economy

Box 6-D—Trying To Transfer Military Training Technology: The JSEP Example

The effort to transfer the Army’s Job Skills Education Program (JSEP) to educational institutions and the

private sector reveals both the promises and pitfalls of using trainingmaterials in settings different from those for

which they were originally intended. The Army developed JSEP at a cost of $11 million in the early 1980s. The

attempt to transfer JSEP has been formally underway since 1986 through a joint effort by the departments of

Defense, Education, and Labor, and is still not complete. The full JSEP program includes more than 300 lessons

and 400 hours of basic skills instruction, built on analysis of educational proficiencies needed to perform 94 of the

most common military occupational specialities (MOS). It includes a student management system that keeps track

of performance data, and also gives individualized learning prescriptions based on pretest and other diagnostic

information. JSEP also has learning strategy modules to help students develop time-management skills, test-taking

skills, and problems-solving skills. Soldiers seem to prefer JSEP over conventional instruction, and their test scores

generally improve if given enough time on JSEP.

Why transfer JSEP to civilian use? Many military and civilian occupations are very similar (e.g., health care

aides, electricians, machinists, auto repair people, and computer operators) and require similar levels of basic

educational skills. However, most of the JSEP materials use Army or military examples that seem foreign in a

civilian setting. Hence, JSEP has been partially “degreened” or “civilianized” to facilitate transfer.

Several demonstration projects have been funded, including a Mississippi project involving a community

college and an electronics company. An evaluation of JSEP by the National Alliance of Business (NAB) found that

it can work in civilian settings, at least under pilot or test site conditions. However, NAB found many barriers that

would inhibit immediate and widespread use of JSEP. For example, JSEP’s computer system is either not

compatible with most commercial systems or requires high-cost special equipment to use. Also, complex copyright

issues about control of JSEP courseware exist. Another barrier is the limited technical assistance for civilian users

of JSEP.2

INatioti ~~nce of BUSi.UeSS, tissons Learned: Job Skills Education Program Final Report, prepared by the Natio~ A~m of

Business for the Employment and Training Administration of the U.S. Department of Labor, May 1990.

grams. Where such formulas exist, educational In 1988, the Connecticut legislature made workplace

systems are likely to be more aggressive in serving programs more attractive- to LEAs by allowing

workplace needs—and are better able to approach employers to ‘‘cash match’ for State funds on a

employers with project proposals. (Most other States needs-based formula.

operate from fixed appropriations that limit their

flexibility to act on requests for additional services

that have not been specifically planned in advance.) Instructional Technology and Basic Skills73

Connecticut has been especially aggressive in

offering industry basic skills assistance. It ranks

ninth among the States in matching Federal dollars;

it spends about $5 for every $1 in Federal Adult

Education Act funds it receives. When an employer

contacts the State education agency, the agency

often acts as a broker between the firm and a local

education agency (LEA) to provide the services. The

State is willing when necessary to cross jurisdictional lines to find an appropriate service provider.

When properly used, high-quality technologyassisted training programs can be effective in

delivery of basic education to adults.74 Most, but not

all, evaluations of computer use in adult basic

education have found positive effects. Generally,

these studies conclude that adults in classes where

the computer is used to assist the instructor require

somewhat less instructional time to learn than

students in conventional classes, and may score a bit

higher. 75

73~pter 7 disms~s instructional technology in greater dew.

T4Many s~dies of school-age students have found that that well-designed programs that use instructioti technology cm r~umleag time

compared to the average course taught by traditional means, as well. For a discussion of this researc@ see U.S. Congress OffIce of Technology

Assessment, Power On: New Too/sfor Teaching andl.earning, OTA-SET-379 (Washingto~ DC: U.S. Government Printing Office, September 1988),

pp. 44 et seq.

75sti U.S. congas, offim of TechnoIo~ ~sessmen~ Technology and Structural Unemployment: Reemploying Displaced Adults, O’.B%ITE-25o

(Washington, DC: U.S. Government Printing Office, February 1986) pp. 290-302, for a review of computer-assisted instruction in adult basic education.
Chapter 6-Basic Skills and the Workplace . 175

While the initial costs of acquiring hardware and

courseware can be high, computer-assisted instruction (CAI) can yield cost savings in classroom

settings if students use the computers heavily and

instructors take advantage of the computer to make

more effective use of their time. One review of

computer-based training in the military, for example, found it to cost 30 percent less than traditional

instruction. 76 Other advantages of computers include flexibility in scheduling, individualized learning, privacy, and rapid feedback.77 These features

make computer-based systems attractive to adult

learners, and to business, especially when firms

already own the needed hardware.

Computer-assisted instruction has long been used

in basic education.78 Several large-scale, computermanaged systems exist. Two of these-the basic

skills instruction offered by the Computer Curriculum Corp. (CCC) and PLATO (recently purchased

by the National Education Corporation from Control

Data)-have been used and revised for over two

decades. WICAT, Jostens Learning Corporation’s

adult literacy program, and IBM’s Principles of the

Alphabet Learning Systems (PALS) are more recent.

Although not necessarily computer-based, the Remediation and Training Institute’s Comprehensive

Competency Program (CCP), marketed by U.S.

Basic Skills Corporation, has been used extensively

in Job Training Partnership Act Title II programs for

young adults.

Quite recently, the Federal Government has

sought to transfer some military basic skills programs, including the Army’s Job Skills Education

Program (JSEP), to the private sector and educational institutions. By far the most extensive effort

has involved JSEP, a version of which has been

partially modified for civilian use. (See box 6-D.) A

JSEP pilot project involving a Mississippi community college and a manufacturer of musical instruments has been a collaborative effort among the

Governor’s office, Federal agencies and the National

Alliance of Business (NAB) .79 Interviews with the

first 64 employees participating in JSEP and their

supervisors suggested positive outcomes for job

performance (as reflected in productivity, accuracy,

attitude, and job knowledge). Positive reactions to

JSEP were also expressed by students in a pilot

project involving a White Plains, New York, adult

education center.80

Technology-based delivery of basic education has

the potential to greatly increase opportunities for

adult workers to improve their basic skills. Technologybased basic skills programs are now in relatively

common use in local training projects receiving

funds through the Federal Job Training Partnership

Act-especially projects aimed at economically

disadvantaged adults.81 Several large companies,

sometimes in conjunction with unions, are also

using computer-based delivery of remedial education for their employees. Company demonstration

projects, including the JSEP pilot projects and

several interactive videodisc projects funded by the

U.S. Department of Labor, are raising awareness of

technology-based delivery options.

Even so, barriers to wider use of these technologies exist. While computer-based instruction for

adults can be quite effective, methodological issues

complicate comparison among the different systems

themselves and with conventional instruction.82

Also, there is a lack of reliable information about the

many different products and services now on the

market. While many of these products aim for the

adult basic education market, very few of them were

specifically designed to meet the needs of mature

adult learners. Many adults have difficulty relating

to materials designed for young dropouts or high

school students. There are also very few examples of

computer-based materials that were developed speTGAS cit~ in Power On, op. ci~, footnote 74, P. 78

77Don F. Seaman and Joe Michael McAllister, An Evaluation of Computer-Assisted Instructio~l Systems to Deliver Literacy Services for J.T~A.

Pardcipants at Houston Community College, The Texas Center for Adult Literacy and Learning, College of Bducatio~ Texas A&M University, no date,

p. 22.

78Alan Weisberg, “Five ‘Big’ Systems and One ‘Little’ Optio~” Adult Literacy and Technology Newsletter, VO1.3, No.1, May 1989.

~Jorie W. ~Nippi, Technology Tron,rfer Partnership Project: Meridian Commum”ty Collge-Peavey Electroru”cs Corporation: ~ssow ~arn~

(W@@toQ m: Natioti Allicmce of Business, Jan. 2, 1989).

~ational Alliance of Business, Lessons Learned: Job Skills Education Program Final Report, report prepared for the Employment and Train@

Administration U.S. Department of Labor, May 1990, p. 32.

glFor e~ple, see &iucation TURNKEY Systems, Inc., The Job Training Partnerships Act and Computer-Assisted Instruction (W%sl@@q DC:

National Commission for Employment Policy, August 1988).

8zIbid., p. 5.
176 ● Worker Training: Competing in the New International Economy

cifically for workplace basic skills. Finally, problems in converting technology-based products from

one system to another continue to exist. Many

existing products, including many products developed under contract for Federal agencies, are not

very portable because they were developed using

unique features or systems that are not widely used.

To facilitate transfer of effective programs, strategies and approaches (including technology-based

methods), some State officials have proposed creation of a National Basic Skills Consortium (NBSC).

It would work to develop ways that States and other

service providers could share assessment and testing

tools, curricula, and other products and information.

It would also promote joint development of needed

products and programs. While still being formed,

NBSC might become an effective instrument for

disseminating information about successful approaches.

It currently lacks startup funds and staff.83

IMPLICATIONS FOR POLICY: BASIC

SKILLS, CORPORATE TRAINING,

AND THE EDUCATIONAL

SYSTEM

The workplace basic skills issue has emerged just

as the Nation’s general literacy problems are drawing public attention. The Nation’s Governors, from

among their national education goals, call for every

American to be literate, with the necessary skills and

knowledge to compete in the global economy and

exercise good citizenship, by the year 2000. Similarly, the Secretary of Labor’s Commission on

Workforce Quality and Labor Market Efficiency

called on the Federal Government and the States to

work together to ensure lifetime access to basic

skills education, with the objective of eliminating

illiteracy by 2000.84

Major expansion in Federal support for workplace

literacy (as well as for adult literacy in general) is

under consideration by the 101st Congress. Bills in

the House and Senate would amend the Job Training

Partnership Act (administered by the Department of

Labor) and the Adult Education Act (administered

by the Department of Education). Both would

substantially expand existing Federal support for

workplace literacy. (See box 6-E.) More than likely,

debate will continue on the Federal role in

workplace literacy and its relationship to Federal

support for general purpose literacy programs.

Workplace and General Basic Skills Programs

Where do workplace basic skills programs fit in

developing national policy on adult education and

training? Are these programs so different from

traditional adult basic education projects that they

should continue to be singled out for special

emphasis in Federal and State policy? What is the

relationship between workplace basics and broader

efforts to develop the skills of the workforce? Will

more assistance for employed workers cut into

education and training for unemployed people and

the economically disadvantaged? These and other

questions will become more central in the coming

years as experience with workplace programs grows.

There are good reasons for policymakers to treat

workplace programs as different. Successful workplace programs use tasks and materials similar to

those used at work to enhance retention.85 Few

general-purpose ABE programs can do this, even

though many participants have job-related reasons

for participating.86 Employers are not likely to make

major commitments to improving their workers’

basic skills (such as giving people release time from

their jobs) unless these programs pay off through

better work performance.

In theory, better performance might induce firms

to provide programs at their own expense. However,

there also could be more competition for the limited

M~*New B~i~ S~W Comofim Fom~,’s Worworce &we@xnent Strategies, vol. 2, No. 1, June 1990, P. 8.

84ZnveXting in People: A s~ategy t. Aa!dressA~rica’s Workforce Crisis, Op cit., foomote 48, report of tie Commission P. 21. A simi~ go~~ ~ti

afewmore guidelines forimplementatio~ is contained in Forrest P. Chismaq.lurnp Start: The FederalRole in AdultLiteracy, Final Report of the Project

on Adult Literacy Sponaored by the Southport Institute for Policy Analysis, January 1989.

85A ~iWs~dy, for e~ple,fo~dthat recruits given traditional bmic skills ~ aining tended to lose their skills within 8 weeks. Those given job

related tmining tended to retain their skills. See Thomas G. Sticht, Basic SkZ”//S in Defense (Alexandri~ VA: Human Resources Research Organiz.atio~

1982) p. 27. Reasons why this is so are not well understood, but may relate to the continued opportunities for practice and higher motivation when the

student learns from materials encountered daily on the job. See Mikulecky, “Second Cbance Basic Skills Educatio~” op. cit., foomote 17, p. 250

86~~ony p. ~nev~e, ~fia J+ Gfier, and ~S. Mel@er, Wor@Zace Basics Training Manuaz, AS~ Best ~actices series: Trait@ fOr a

changing Work Force (San Francisco, CA: Jossey-Bass, 1990), p. 3A-6.
Chapter 6-Basic Skills and the Workplace ● 177

Box 6-E—Workplace Literacy and the Adult Education Act

While the Federal Government has supported adult basic education (ABE) and adult secondary education

(ASE) since the mid-1960s, its involvement in workplace literacy programs is recent. Funds from several Federal

programs can be used to support basic skills instruction for employed workers under some circumstances. However,

only a few activities-mostly demonstration projects funded by the U.S. Department of Education and the U.S.

Department of Labor-focus on the workplace per se.

The largest Federal workplace literacy program is a demonstration grant program added to the Adult Education

Act in 1988.1 Under the program, the Secretary of Education can make workplace literacy grants for projects

designed and operated by partnerships among businesses, labor organizations, and education, training, or

community-based organizations. Among eligible services: English as a Second Language; updating basic skills to

meet workplace needs; and improving worker skills in speaking, listening, reading, and problem solving. Child care

and transportation services, as well as educational counseling, also can be provided. Grant recipients provide at least

30 percent of program costs.

In its first round of grants (made in late 1987), the Education Department funded 37 projects, serving about

40,000 workers, at a cost of $9.7 million. Evaluation information from the first round of projects was not available

when this report went to press. A second round of grants-for 43 awards-were made in the spring of 1990.

Congress appropriated a total of $11.7 million for fiscal year 1989, and $19.7 million for fiscal year 1990. As is

discussed in the policy options part of chapter 2, a major expansion of this program was under consideration in the

101st Congress as this report went to press.

The lion’s share of Adult Education Act funds ($137 million in fiscal year 1989) is used not for workplace

literacy but to assist States and localities in providing adult basic education (ABE), English as a Second Language

(ESL), and high school equivalency (GED) projects to educationally disadvantaged adults. About 40 percent of the

people in adult education programs are employed. Another 45 percent are unemployed but looking for work.2

ABE projects have diverse goals, ranging from helping people to function effectively in society to helping them

become more employable. In 1987-88, AEA projects served roughly 3 million people; two-thirds received basic

education or ESL; the remainder were in GED programs.

Federal funding for AEA programs, flat for several years during the 1980s, is now on the increase. Congress

appropriated $193 million for AEA in fiscal year 1990-compared to about $162 million the previous year. The

Bush Administration seeks $239 million for the program in fiscal year 1991, including $19.7 million for a separately

funded workplace literacy program. The Department of Education estimates that the proposed 1991 funding level

would allow services to reach nearly 4 million adults—1 million more than in fiscal year 1989.3

Funding from non-Federal sources for AEA has increased significantly. The States tripled their contributions,

compared to the Federal Government, from about 25 percent in 1969-70 to 76 percent in 1986-87.4 Many States

spend several times more than their Federal grant on adult education, while some other States put in only the

minimum needed to qualify for the Federal grant (a 15 percent cost-share in 1990).

lsmtion 371 of the Adult Education Act.

2~~ony p. ~nev~e, ~ila J. Gainer, and ~ S. Meltzer, Workplace Basics Training Manual, ASTD Best Practices Series:Tfor a Changing Work Force (San Francisco, CA: Jossey-Bass, 1990).

BUS. DW~entof ~ucation, Justifi”cation ofAppropriation Estimates for Committees on Appropriations forFiscal year 1991, m.imeo.,

vol. 1, p. H-54

4u.s. D~art.m@s of Labor, Health and HurrMuI Services, Education and Related Agencies Appropriations for 1990, Hearings, House

Appropriations Committee, Part 6, Department of Education (Washington DC: U.S. Government Printing Office, 1989), p. 692

Federal funds available for basic skills education.87 ranging from training consortia to tax credits to

To minimize competition for funds, complementary training levies, have been proposed to induce emapproaches to encourage firms to become involved ployers to provide more training. Basic skills could

in workplace basic programs might be considered. be singled out for special emphasis, in the event that

As discussed in chapter 2, a variety of mechanisms, Congress adopted one or more of these approaches.

gThde~, workplace programs are popular. The U.S. Department of Education received more than 350 applications requesting nearly $100 million

for workplace literacy projects when it began its workplace demonstration grant program. Ultimately, only 37 projects and $9.7 million in funds were

awarded. At the same time, some urban areas are experiencing waiting lists for general purpose AEA projects.
178 ● Worker Training: Competing in the New International Economy

The Small Business Dilemma

Large or medium-size businesses set up most

company-based workplace literacy programs. Small

businesses seldom have the resources to undertake

their own programs.

While generalizing may be risky, workers in small

firms are often assigned abroad range of responsibilities88 for which strong basic skills are useful.89 Yet,

small firm employees, on average, have less education than workers at large firms. Nearly 23 percent

of employees of very small firms (those with under

25 workers) are not high school graduates, compared

to 18 percent at firms with at least 500 employees.90

Young adult workers with an eighth grade education

or less are more likely to work at small and

medium-size firms (4 percent compared to 1 percent

in large firms).91 It seems likely, therefore, that basic

skills problems may be more prevalent and more

serious in the small business workforce.

Small fins, for the most part, have few resources

to devote to formal job training-let alone basic

skills training. A firm with 50 employees, for

example, will find it very difficult to provide paid

leave or other on-the-job support for basic skills

training, since there are few workers available to fill

in the slack. Very few small businesses are able to

assign personnel to training. Indeed, it is rare to find

a full-time training coordinator at a firm with less

than 250 employees. Many large companies, by

contrast, not only have trainers but also assign staff

to apply for public support for training activities,

including basic skills.

Bringing basic skills programs to small businesses and their employees will be a major challenge

for administrators. Some States have coupled basic

skills training with technical training offered by their

industrial training services. Involving several firms

in the effort can also help. Dry cleaners in South

Carolina are working to develop a program for

entry-level workers that uses job-specific materials.92 In New York City, for example, the Chamber

of Commerce provided basic skills instruction to

employees from several small businesses, with the

Department of Labor providing funds. There is a

clear need for more emphasis on small business in

Federal workplace literacy projects. Only 1 of the

initial 37 workplace literacy projects issued by the

U.S. Department of Education had small business

involvement as its primary objective.

The Role of the States

The States—already active in workplace basic

skills programs— could assume a more prominent

role in the years to come. While the Education

Department’s demonstration program is federally

administered, the program could become part of the

AEA’s regular grants to the States if Federal funding

increases to over $50 million per year. Some States

also are integrating basic skills instruction with other

kinds of industry training assistance-a feature

bound to be attractive to fins. States also receive

and are responsible for grants under several other

Federal programs for basic skills and training—

suggesting at least the possibility of more coordinated delivery of services.

State government policies toward community

colleges and other potential providers of training

also have an impact. Many businesses contract for

training with community colleges, which are more

familiar with business needs than typical ABE

programs. A recent Department of Education survey

identified at least five States that provide all

ABE/GED training through community colleges.

Another 10 States have active programs with community colleges.93 However, some States continue

to prohibit community college involvement in adult

basic education programs 94

SsAnthony P. C!arnev~e and hila J. Gainer, The burning Enterprise (Alexandria, VA: American Society for Train@ and Development 19*9) P.

18.

SgAS suggest~ in workplace Literacy: Targeting the Future, report of the First Natiomd Conference on Small Business and WO@lace Li@mcy,

hosted by the Office of Advocacy of the U.S. Small Business Administratio~ Washington DC, Oct. 3-4, 1988.

~.S. Small Business Administratio~ Sma/lBusiness in the American Economy (Washington, DC: U.S. Government Printing Office, 1988) p. 79.

glrbid., p. 102

-id., pp 8-9.

93 U.S. Dep~ent of ~umtiom Division of Ad~t Educatiom ‘ ‘ABE/GED in Commtity Colleges: A Nation~ Study” June 1988. ‘r’he Stites w~e

Iowa, North Carolina, (lrego~ Washington and Wisconsin. Since only 15 States were surveyed, some other States may also rely exclusively on

community colleges.

~Carnevale et al., Workplace Basics Training Manual op.cit., footnote 86.
Chapter 6-Basic Skills and the Workplace ● 179

The question of how State capacities could best be

tapped to address basic skills issues is part of a

broader debate about improving workforce quality—

and in particular the State and private sector role in

implementing the national education goals adopted

by the Governors’ in 1990. The States are becoming

more active in putting together public-private partnerships to improve the public education system; the

States might well become a primary vehicle for

delivering basic skills services to employees in

partnership with industry. To that end, the National

Governor’s Association (NGA), using foundation

support, set up a State literacy exchange in late

1989. 95 Among other things, the project will annually survey the States, provide technical assistance,

and convene conferences on State literacy activities.

The Governors and NGA are also defining alternative State options for enhancing workplace excellence through partnerships with business, labor, and

education.96

Research and Dissemination Needs

There will be a continuing need for research on

workplace basic skills programs, with dissemination

of best practices to industry and the educational

community. It seems clear that the traditional model

for adult basic education or GED preparation needs

to be refocused when applied to the workplace.97 But

it is also true that workplace programs can become

too narrowly focused on the specific tasks required

at work. There is not yet a consensus about how to

offer a continuum of instruction that builds

workplace specific skills while also developing

more general skills.

Much of what is known about workplace basic

skills comes from federally supported research,

principally aimed at developing effective training

methods for military personnel. While some finddings from the military research are directly relevant

to the private sector, more research needs to be

focused solely on the civilian workforce. Given the

new mix in workforce demography, rapidly changing technology, and new strategies for organizing

work, what is known now about the most effective

approaches needs to be effectively disseminated to

practitioners in industry and government.

The military aside, little research is conducted on

the factors contributing to successor failure in adult

basic skills projects. Only about 1 percent of Federal

Adult Education Act funds went to research in fiscal

year 1990, for example. Moreover, from 1975 to

1988, no AEA funds were available for national

programs, a key source of funds for basic education

research, evaluation, and dissemination.

In 1990, the Department of Education, in conjunction with the Departments of Labor and Health and

Human Services, announced a competition for an

adult literacy center that would go part way toward

accomplishing these needs. However, funding for

the center (about $l0 million over 5 years) is modest.

Far higher levels of funding for basic skills research

and dissemination have been proposed. One recent

study, for example, called for a $30 million center,

with $10 million devoted to research, $10 million for

technical assistance, and $10 million for monitoring

basic skills levels ‘and undertaking analyses useful

for policy formulation.98 The study also recommended an additional $7 million in research funds

by the departments of Labor, Education, and Health

and Human Services (which now administers one of

the largest basic skills programs through the JOBS

program). Another approach might be to target a

portion (say 1 percent) of all Federal funding for

basic skills programs to research and development;

if total Federal funds were $1 billion per year, R&D

would be about $10 million.99

More emphasis might also be given to evaluation

and dissemination of best-practice information on

the use of instructional technology in basic-skills

programs. Several mechanisms for information dissemination, including clearinghouses and shared

efforts such as the previously mentioned National

Basic Skills Consortium either exist or are in

gSNatio~ Governors’ ~soc~tion News Release, Dec. 7, 1989, “Governors to Establish State Literacy fichge.”

MNatio@ Govmnors’ Associatio~ Excellence at Work: The Zssues, Washington D.c., 19%.

n~ some ~tent this is happening on its own. For example, in one Alabama cmn.rmmity, companies are providing jotqecflcrnaterials tit meUSed

in basic skills and GED programs their workers are taking. See Carnevale et al., Workplace Basics Training Manual, op cit., footnote 86, p. C.3.

9sJump Start: The Federal Role in Adult Literacy, Op cit., fOOtnote w, P. W.

=e possibility of setting a 1 percent investment goal for total national spending on education research (including Federal, State, local, and private

sector funds) is discussed in Preliminary Sta#Report on Education Research, Development andDissemination: Reclainu”ng A Vim-on of the FederalRole

forthe1990sandBeyond, Committee Print prepared for the Subcommittee on Select Education of the House Committee on E!ducation and Labor, 1989,

pp. 9-1o.
180 . Worker Training: Competing in the New International Economy

formation. With sufficient support, these mechanisms could work to improve the application of

instructional technology in basic skills projects.

A Concluding Note

Workers with strong basic skills are needed at all

levels within the economy. Yet, today, employers

are finding that an alarming fraction of workers

cannot read, write, compute, or comprehend at a high

school level. In the past, workers without strong

basic skills may have had limited choices in terms of

their own career choices, but few companies had

difficulty in finding enough qualified workers. With

an increasing number of countries possessing highly

educated workforces, basic skills issues must now be

considered in a broader context.

Ultimately, it is the responsibility of the public

education system—not employers or the training

community-to prepare young people with a foundation of skills needed for their worklives. The

foundation of skills young people need includes not

only the traditional Three-Rs, but also an evolving

set of broader competencies (such as the social skills

needed to function within workteams) that employers increasingly use. While the U.S. educational

system is now undergoing substantial reforms, it

will take years for the effects of reform to be

reflected in the workforce. In the meantime, considerable resources must be focused on developing and

enhancing the basic skills of people at work today.
Chapter 7

Training Technology

CONTENTS

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TECHNOLOGIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TRAINING TECHNOLOGY USE IN INDUSTRY TODAY . . . . . . . . . . . . . . . . . . . . . . .

Television . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Video . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Computers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Teleconferencing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Simulators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Job Aids . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ernlmdded Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

THE COST OF TECHNOLOGY-BASED TRAINING . . . . . . . . . . . . . . . . . . . . . . . . . . . .

THE EFFECTIVENESS OF TRAINING TECHNOLOGIES . . . . . . . . . . . . . . . . . . . . . . .

INSTRUCTIONAL DESIGN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Adult I.xxming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Instructional Systems Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Automating Instructional Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FUTURE TRENDS FOR TRAINING TECHNOLOGIES . . . . . . . . . . . . . . . . . . . . . . . . . .

Computer Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Digital Videodisc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Electronic Classrooms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Digital Networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Glass Boxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Virtual Environments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

183

184

189

191

192

196

200

201

203

205

207

209

212

212

213

214

216

217

218

221

222

223

223

224
Boxes

Box Page

7-A. Overview of Training Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185

7-B. Classroom Training at NUMMI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188

7-C. National Technological University . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193

7-D. The Electronic Information Delivery System . . . . . . . . . . . . . . . . . . 195

7-E. Automating Interpersonal Skills Training . . . . . .

. . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197

7-F. Computer-Based Training in Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . +..... 199

7-G. Computer-Based Training in the Insurance Industry . . . . . . . . . 200

7-H. A Boiler Simulator . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . 202

7-I. A Truck Driver Simulator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203

7-J. SIMNET: Networked Simulators in Military Training . . . . . . . . . . . . . . . . . . . . . . . . . 204

,.. .

7-K. The Manpower Services Training System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206

7-L. The Effectiveness of Interactive Videodisc in Training . . . . . . . . . . . . . . . . . . . . ,.,. 212

7-M. A Comparison of IVD Delivery Settings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213

7-N. The Flight Plan Critic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220

Figures

Figure Page

7-1. The Use of Instructional Methods, 1989 ... ... .,. ,.. ... ... ,, , ., , 184

7-2. Instructional Systems Development Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190

7-3. Technology Training Use . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . 191

7-4. Reported Cost-Effectiveness of Training Technology

. . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . 211

7-5. Projected Use of Training Technology, 1990-92 ● . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217

Tables

Table Page

7-1. Characteristics of Training Technologies . . . . . . ...............,...,. , 186

7-2. Potential for Analog Videodisc Frame Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194

7-3. Capacities of CD-ROM, DVI, and CD-I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195

7-4. Computer Use in Training at U.S. Companies With More Than 100 Employees . . 198

7-5. The Allocation of Corporate Training Budgets for Various Size Companies 208

7-6. Technology-Based Training Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

.. *.,

. . . . . . . . . . 209
Chapter 7

Training Technology

SUMMARY

Training technology includes a wide range of

systems for delivering work-related instruction.

Typically, the training system substitutes for real

equipment or situations, or for worker memory. In its

broadest sense, training technology encompasses

both hardware (e.g., television sets, satellite dishes,

computers, overhead projectors) and software (such

as computer programs, television programming,

written materials, and their instructional design), as

well as the setting in which training takes place (for

example, a classroom, the shop floor). The quality of

training depends on the appropriateness and quality

of the hardware and software as well as the ability of

the instructor.

Training technology spans the low- to high-tech

spectrum, from lecture/lab instruction or job aids

such as checklists, to elaborate simulators and

advanced electronic classrooms with interactive

teleconferencing. Technology-based training might

be delivered at a worker’s desk or on the shop floor,

at a training center, in a classroom, or even at an

employee’s home. The training may be undertaken

individually, or in small or large groups. The

courseware might cover all aspects of a job, or

impart only those steps a worker needs to perform a

particular task, or provide an update on technical or

policy changes. The courseware can involve basic

skills (e.g., literacy and arithmetic-see ch. 6);

technical skills, such as equipment operation, maintenance, or repair; or interpersonal skills, such as

sales or job orientation.

The principal findings of this chapter are:

. Technology-based training incorporating sound

instructional design is cost-effective in helping

American workers learn to use new equipment

and production methods and prepare for changing work environments. The training duration,

degree of learning achieved, and employee

satisfaction with instructional technology often

equal or exceed traditional classroom lectures.

Because technology-based training typically is

faster and more convenient to deliver than

classroom instruction, it saves travel expenses

and time off work.

. The costs of technology-based training are

coming down. The hardware and software have

largely matured and are affordable to most

large and medium-sized firms. Indeed, where

workstations already incorporate computers,

using them to deliver training is extremely

cost-effective. Costs are still an issue, however—

especially for smaller firms.

● Innovations that promise to reduce costs further

include: software that substantially reduces

time and labor costs for instructional design

and development, equipment and courseware

leasing options, and learning centers.

. Corporate adoption of technology-based training is accelerating. Large companies such as

IBM, Ford, and Motorola expect that by the late

1990s over half of their corporate training and

education will be delivered outside the traditional classroom using instructional technology.

. Several factors inhibit broader use of technologybased training today. Incorporating technology

in courses requires significant development

and preparation, and often additional capital

investment. Many corporate training personnel

have had little exposure to instructional technology and lack enough hands-on experience to

use it confidently or design courses around it.

Also, early experience with poor courses has

soured many firms on this approach.

. Several developments promise to stimulate

more widespread use of training technology

and enhance its capabilities. These include: the

increasing power and declining cost of personal

computers and other workstations and their

software, including networked systems that

facilitate development of electronic classrooms;

the ability to embed training in production and

other technological systems, bringing it to the

workstation; and advances in broadband digital

networks that will allow information of any

type-text, graphics, audio, video, softwareto be transmitted anywhere affordable.

. To facilitate spread of these developments in

the long term, training professionals (instructors and managers) will need to become more

sophisticated about instructional technology.

Senior management and human resource devel-

–183–
184 . Worker Training: Competing in the New International Economy

opment departments must place a high emphasis on training technology. Corporations and

the Federal Government will have to increase

their research and development funding for

instructional technology design and for adult

learning.

TECHNOLOGIES

Instructional technology is not just hardware. The

supporting courseware and delivery setting also are

part of the technology. Box 7-A gives brief descriptions of the training technologies in use today; table

7-1 summarizes their characteristics, costs, and

potential advantages and disadvantages. The appropriate type of instructional technology to be used is

determined by the training functions and goals

identified during instructional design (see figure

7-1).

Figure 7-l—The Use of Instructional Methods, 1989

Percent of companies with 100+ employees’

Video tape 89.3

Lectures 87.9

One-on-one instructions 70.3

Role playing 58.1

Slides 55.1

Films 47.2

Computers 4 4

Games/simulations 43.9

Case studies 41.6

Sell- testing 40.3

—

Self-study 32.4

– ‘] 11 interactive vide o

Regardless of its form or delivery setting, instructional technology is an increasingly important part

of the work environment. Workers must adapt to

new equipment, new production methods, and changing work environments (e.g, teamwork, just-in-time

production methods, computer-assisted manufacturing, paperless workstations). Training departments

must respond quickly with cost-effective ways for

employees to adjust. Today, many training professionals look to uses for technology-based instruction

in their efforts to reduce training time and increase

achievement in test results or job performance (see

discussion of effectiveness, below). Technologybased training also is available at the worksite and

provides consistent quality and delivery.

Technology has the capacity to provide environments that can promote learning and work simultaneously if designed carefully. Computers, for example, provide an ideal environment for unstructured

learning. They both give and respond to commands

and empower users to monitor and assess their

progress. Good videodisc and computer courseware

increasingly include interactive components (see

box 1-C in ch. 1) that involve several senses and

provide practice, repetition, and feedback-all of

which aid learning. These approaches are now also

being adopted in vocational training through, for

example, workstations with sensors and pneumatic

or mechanized components to teach electronics,

programming , robotics, and computer-aided design.

D10.6 Videoconferencing

Ii3 8.9 Audioconferencing

4.1 computer conferencing

NOTE: This figure is based on data from a survey with a very low response

rate. Hence, care should be taken in interpreting the results.

SOURCE: “Industry Report,” Training, vol. 26, No. 10, October 1969, pp.

31-39.

Instructional technology may help hurdle the

barriers between formal and informal learning.

Successful training often occurs in practical and

collaborative settings, such as apprenticeship, where

the concepts learned are applied to daily tasks.

Taking people away from the setting in which they

are expected to use what they learn and putting them

into classrooms risks teaching classroom practices

only. Learning may have to begin again when

trainees return to the worksite. Job aids and embedded training can contribute to on-the-job informal

training—the kind most American workers receive.

Despite the potential advantages of technologybased training, lecture/lab instruction is still pervasive in the United States (box 7-B). Even training

professionals usually learn about new training technologies in a traditional classroom setting. Yet, in

terms of labor costs (and often travel), classroom

instruction often is the most expensive form of

formal training to deliver. Despite the higher initial

development and hardware costs of technologybased training, it can be cheaper in the long run if
Chapter 7—Training Technology ● 185

Box 7-A-Overview of Training Technologies

Television: The best-known and most widely-used technology-based instruction delivery system. The images,

which are captured electronically, can be transmitted directly or stored on a medium such as videotape or disc.

Telephone hook-ups can provide two-way audio capability for learner-instructor interaction. Transmission can be

from microwave towers, through cable, or via satellite.

Videotape: A means of recording live or broadcast instruction. Video cassette recorders are inexpensive and

highly reliable. Instructors can record programming to supplement their lesson plans; students can record classes,

allowing them to “attend” whenever it is convenient. Students also can replay sections they did not understand the

first time. A wide selection of commercially available programs cover most areas of training.

Analog Videodisc: Lasers store and read information—video, still pictures, text, computer graphics,

audio-on discs. Video flames on a disc are made up from 525 horizontal scan lines with red, green, and blue

components on each line. There are 54,000 frames per disc side. Videodisc currently uses a 12-inch plastic disc,

but is moving toward smaller systems (8-inch dual-sided and compact disc) and digital technology.

Computer-Based Training: Computers can be the subject of instruction, as in courses on computer literacy,

programming, or particular software packages; they can be used as tools for accomplishing other learning tasks, e.g.,

as word processors in writing courses or as design tools in graphics; they can be used to deliver instruction either

prior to application (computer-assisted instruction) or at the time and place of application (embedded training); an d

they can be used to keep track of instruction (computer-managed instruction).

Teleconferencing: Teleconferencing, including audio, video, and computer conferencing, offers an increasing

capacity to provide two-way (or more) communications. Teleconferencing can involve three technologies:

telephones, television, and computers. Audioconferencing involves interaction among a number of participants via

telephone bridges. Videconferencing uses either full-motion or slow-scan television for interaction. Computer

conferencing primarily uses electronic message systems (e.g., voice or electronic mail, bulletin boards) via local

area or wide area networks or modems.

Simuliztors: Devices that duplicate the behavior of real-life machines (like ships or airplanes) or complex

systems (like subways and powerplants). They typically contain a computerized model of the real equipment, and,

depending on their level of sophistication, may duplicate all of the hardware and operating characteristics of the

equipment and its operational environment. The instructor or a computer-managed instruction system presents

operational situations (e.g., negotiating difficult terrain, specific malfunctions) to which the trainee responds.

Job Aids: Devices for helping a person remember or learn how to do a task when that task is to be performed

(e.g., checklists, templates). Job aids (as well as embedded training and performance support systems) are designed

to reduce the reliance on recalled skills and knowledge; they ensure effective performance on jobs in which specific

skills are used infrequently or when a series of tasks must be performed in a particular order.

Performance Support Systems: A computer-based advanced form of job aid. A performance support system

might incorporate any combination of text, graphics, audio, still video, applications software to perform specific

job tasks, databases, expert systems, interactive training programs, assessment systems, and feedback and

monitoring systems.

Embedded Training: Embedded training is instruction that is an integral component of a product or system.

Because microchips are incorporated into so many workplace devices, it is possible to embed training in the devices

themselves. This is a form of computer-assisted instruction, but instead of providing training in anticipation of need,

it is offered at the point of application.

SOURCE: Office of Technology Assessment, 1990.

there is a large enough trainee population over which ing them to bad school experiences or associating

to spread the costs, or if the hardware and/or them with remediation.

software already are in place (e.g., computer-based There are several reasons why so much training

training, embedded training). Moreover, some work- uses little technology.

1 First, print materials and

ers are uncomfortable in classroom situations, relat- overhead transparencies are convenient to use .

IGreg Kearsley, “Instructional Technology and Worker Ixarning Needs,” report prepared for the Ofllce of Technology Assessment under

contract No. L3-5615, February 1990.
Table 7-l-Characteristics of Training Technologies

Extent of Degree of Estimated

Usea Delivery interactivity development Estimated Potential Potential

Medium (percent) settings possibleb

time delivery costcadvantaged disadvantages d

Lecture/lab

Television

Videotape

Videodisc

Computer-based

Videoconferencing

Audioconferencing

88

90

89

21

44

11

9

Group/

classroom

Group/

classroom or

individual

Group/

classroom or

individual

Group/

classroom or

individual

Group/

classroom or

individual

Group/

classroom or

individual

Group/

classroom or

individual

Potentially very high but

depends on skill of

instructor

No branching; Iittle

feedback; little selfdirection

No branching; Iittle

feedback; little selfdirection

Varies; extensive

branching, feedback, selfdirection possible

Varies; extensive

branching, feedback, selfdirection possible

Dependent on group;

little self-direction

Dependent on group;

Iittle self-direction

1-30

hrs/hr

80-240

hrs/hr

80-240

hrs/hr

40-1,000

hrs/hr

8-300

hrs/hr

1-40

hrs/hr

1-40

hrs/hr

Usually very high, including

trainee time off work;

hardware is minimal

Low trainee time off;

hardware is $1,000-$10,000

depending on equipment

and type of programming

Low trainee time off;

hardware is $1,000--$5,000;

coursewareis$100-$1 ,000

Low trainee time off;

hardware is $400-$10,000;

courseware is $70-$12,000

Low trainee time off;

hardware is $1,000-$l0,000;

courseware is $50-$10,000

Low trainee time off;

hardware is $2,000-$10,000

per site

Low trainee time off;

hardware is telephone

system

Familiar; provides social

interaction; adaptable to any

subject

Familiar, available at

numerous sites including home

Familiar; available at

numerous sites including

home; can be viewed at any

time; courseware readily

available

High interactivity;

eventually will be available

at numerous sites including

home and the work station;

excellent transfer to work;

adaptable to most subjects;

wide content variety; can

be used at any time

High interactivity; available

at numerous sites including

home and the work station;

excellent transfer to work;

adaptable to most subjects;

wide content variety;

courseware is easy to

modify; can be used at any

time

Social interaction; provides

feedback

Social interaction; provides

feedback; inexpensive;

available at numerous sites

including home

Scheduling is difficult; often

boring because trainee

interest and involvement

are so dependent on

instructors skill; poor

transfer of training to work

Scheduling is hard without

VCR; often boring; poor

transfer of training to work;

low interactivity; difficult

to customize

Little interactivity; difficult to

customize, often boring

Hardware usually

dedicated to training; high

cost for high level of

interactivity; existing

courseware difficult to

modify

if hardware has to be

dedicated to training then

cost is high; some trainees

are intimidated by

computers

Complex logistics; high rest;

adaptable primarily to soft

skills

Scheduling is difficult; lack

of visual presentation
● ✌

Computer p

conferencing

w

Simulators

Job aids

Embedded

training

4 or individual Varies; extensive 8-300

or team branching, feedback, self- hrs/hr

direction possible

NA or individual All levels Months

or team to yeas

100 At worksite NA usually

little

NA At worksite NA Incorporated

in equipment

development

(weeks to

years)

Low trainee time off;

hardware is $1 ,000-$10,000;

courseware is $50 to $10,000

Low trainee time off;

hardware is $10,000 to

millions

Minimal

Low trainee time off;

hardware is incorporated in

equipment cost; may add

tens to thousands of dollars

to those costs

High interactivity; available

at numerous sites including

home and the work station;

excellent transfer to work;

adaptable to most subjects;

wide content variety;

courseware is easy to

modify; can be used at any

time

High interactivity; excellent

transfer to work; avoids

danger; presents wide

variety of situations; saves

real equipment costs

Provides on-demand

training; easily modified;

excellent transfer to work

Provides on-demand

training; excellent transfer

to work

Low social interaction;

computer intimidation; high

cost for dedicated

hardware

High cost for advanced

hardware; low social

interaction

May not be used by workers

Difficult to design; requires

new approach to product

engineering with significant

advance planning

%ased on survey data from Fortune 500 and private companies with sales of $500 million or more.

bsee ~X I-C for a discussion of the various aspects of interactivity.

CHardw~e and ~urseware COS~ usua[~ an be spread over numerous tr~ning sessions; ~SO, in the -Se of w, v“~eotape, and computer-based training, hardware may be USed for other pUfPOSeS.

~hesewill notoccurautomatically but depend on thequaiity of the training program, the appropriateness of the technology to the training function, the skill of the instructor (if any), and other variables.

SOURCE: Office of Technology Assessment, 1990.
188 . Worker Training: Competing in the New International Economy

Box 7-B-Classroom Training at NUMMI

New United Motor Manufacturing International (NUMMI), a joint venture between General Motors and

Toyota in Fremont, California cross-trains maintenance mechanics who are responsible for all plant maintenance

plus special projects such as building robots. Trainees spend 5 years studying five trades (plumbing, pipefitting,

welding, electrical, and machinist). The program includes about 20 percent lecture (theory) and 80 percent lab

(troubleshooting small equipment, making projects), supplemented with on-the-job training. It is much less

intensive in any one trade than registered apprenticeship programs, however. Graduate trainees receive a United

Auto Workers electrical journeyman card and a State of California multi-craft journeyman card, neither of which

would be recognized by other unions.

Before entering the program, candidates take placement tests in both basic skills and their individual crafts.

Basic skills deficiencies are remediated in class contexts (e.g., math skills in blueprint reading). Classes are 2 hours

a day, at the end of each shift; during the most intensive training, classes meet 4 days per week (for this period, a

trainee is in the workplace 48 hours per week). The lab component of each course includes 10-15 projects that the

trainee has to complete satisfactorily. Each project has three basic steps: describe the process, make a materials list,

then return the finished product for review of quality/quantity. The projects range in difficulty from trouble-shooting

small electrical devices to machining parts to welding. Trainees have to pass each class with a score of at least 80

percent or repeat it. Training continues on the shop floor as those mechanics most skilled in one field assist their

co-workers in maintenance tasks.

Training aids in the laboratory include basic electrical units (e.g., volt-ohm-meters, circuits, switches, small

motors), machine tools, welding booths and equipment, and other equipment and tools common to the factory (most

were scrounged rather than purchased).

The maintenance mechanics feel their productivity has improved as a result of cross-training (e.g., on e

cross-trained worker often can complete repairs that previously required two or three specialized maintenance

workers). However, in some crafts-particularly electrical-the mechanics do not feel they have had sufficient

training to tackle complicated repairs without assistance from a union-certified journeyman.

SOURCE: Office of Technology Assessment 1990.

Printed materials are highly reliable, relatively subject-matter experts assigned training responsibilinexpensive to develop and reproduce, and ar e

portable and compact. Almost any kind of subject

can be discussed in print, and a wide range o f

material is available. On the other hand, print gets

unwieldy for large amounts of information, and it is

neither interactive nor dynamic. Overhead transparencies also are handy and have largely replaced the

blackboard in training classes. Transparencies are

easy to prepare, can be used many times, allow color

and graphics, and can be written on the spot. The

projectors are reliable, affordable, standardized, and

require little skill to operate.

Second, many instructors have had little exposure

to instructional technology. Even those who have

had courses about training technology usually have

not had enough hands-on experience with it to use it

confidently or to design courses around it. Moreover, many corporate training personnel have little

formal background in instruction. More often they

are trained in human resource development or are

ities.

Third, incorporating training technology in courses

can require much more development and preparation. Most instructors do not have the time o r

resources to prepare such courseware. Even handwritten lecture notes take less time to prepare than

good overhead transparencies. As courseware moves

into videotape or disc, computer-based material, or

teleconferencing, the amount and cost of development and preparation increase appreciably.2

Fourth, developing good technology-based training material often requires a team approach. Instructional designers provide the learning approach ;

subject-matter experts provide the substance; technical experts do the computer programming o r

produce video materials. Yet teaching traditionally

has been a solitary affair.

Fifth, traditional classroom instruction has a

major social component. It provides an opportunity

to visit with colleagues rarely seen in the normal

?fbid.
Chapter 7—Training Technology .189

workday. Often, break-time conversations are as

informative as the classes.3 Some people also like

the opportunity to travel.

Finally, some topics have not yet meshed well

with technology-based delivery, particularly management skills.4

TRAINING TECHNOLOGY USE IN

INDUSTRY TODAY

Few data are available on the extent to which

instructional technology is used in industry. Most

organizations do not systematically collect data

about their training activities (e.g., number of

students, types of courses). In large corporations,

decisions to use training technology often are made

on a departmental basis with no organization-wide

accountability. Many applications of technology are

considered experimental and are not included in

descriptions of training. Other technologies such as

overhead transparencies and videotapes are so mundane no one bothers to describe them. 5 Also, many

companies do not respond to survey requests for

training data.

Nevertheless, two sets of training technology

survey data are available for 1989. One survey

conducted by Training magazine obtained responses

from around 1,500 companies with 100 or more

employees about the kinds of training delivered,

how, and to whom.

6 The survey had a very low

response rate. However, the data are included in this

report as a rough indicator of the level of use. Figure

7-2 shows the percent of companies using different

instructional methods.

7

A second survey conducted by the American

Society for Training and Development (ASTD)

polled 200 human resources executives in Fortune

500 corporations and privately-held firms with

annual sales over $500 million about their use of

computer-based training (CBT), interactive videodisc (IVD), and teleconferencing.8 The ASTD results show 81 percent of responding companies

using computers in training, 50 percent using IVD,

and 33 percent using teleconferencing (see figure

7-3).

One thing seems clear from the survey data—

large corporations are more likely to use technology

in training. For example, 44 percent of all corporations responding to the Training survey do computerbased training, but use increases to 64 percent for

responding corporations with 10,000 or more employees. The figures were 11 percent and 34 percent

for interactive video training.

Other sources indicate that small businesses are

more likely to rely on informal on-the-job training,

and on demonstrations and printed documentation

provided by equipment vendors. Because persona l

computers (PCs) and viola cassette recorders (VCRs)

are relatively common even in small businesses,

they also use CBT courses for computer-related

topics (e.g., a specific word processor) and videotapes for sales, customer service, or management

skills.9

One way that instructional technology can affect

small businesses is when it is used by their corporate

customers or offered by government or professional

organizations. Thus, a small business that supplies

parts to a corporation practicing total quality management may have to use a specific training a pproach to maintain its supply contract. Also, State

and local agencies may have extension or other

outreach services to aid small business. For example, the Maryland State Department of Education

developed an interactive videodisc called “The

Business Disc’ (TBD) that provides an introduction

to starting and operating a business (e.g., type of

ownership, location, salaries, capital investment,

and cash flow). The videodisc simulates the first

3Beverly Geber, “Goodbye Classrooms (Wdux),” Training, vol. 27, No. 1, Janwuy 1990, pp. 27-35.

4KWSley, op. Cit., footiote 1.

SIbid.

GIn 1989, fiaining magazine mailed two versiom of a mey tO 20,000 org animations culled from a sampling of Dun&Bradstreet’s directory of U.S.

businesses and the magazine’s subscriber list. Both versions included questions about training budgets, topics, and tmineea . Half of the surveys had

unique questions about interactive video and computers in tmining, and the other half bad unique questions about instructional methods. The former

received 1,542 responses, and the latter 1,588 responses. Because of the low response rate, care should be taken in interpreting the data.

7’Tndustry Repor$” Training, vol. 26, No. 10, October 1989, pp. 31-63.

s~e AS~ -ww~ distribut~ to their Human Resource Development Executive Survey P-Lw~ch includes 200 members; responses were

received from 153.

%earsley, op. cit., footnote 1.
190 ● Worker Training: Competing in the New International Economy

A

1- I

//

u

\

\

\

b

al

I

al

T1 \

I

t

,

1 I B ,
Chapter 7—Training Technology .191

Figure 7-3-Technology Training Use

Percent of companies

100 I —

90

80

70

60

50 1 n

40

30

20

10

0

Computer-based Interactive video Teleconferencing

_ Management/supervisory m Sales/marketing

~ Professional/technical = Skills/craft

SOURCE: Bssed on American %eiety for Training and Development

survey of 157 executives from Fortune 500 private firms wfth

$500 million + in sales.

year in business based on decisions that users of the

disc make in the planning stage. Typical business

issues are presented such as rent increases, personnel

policies, late deliveries, theft, and disgruntled customers. TBD has been used at a number of small

business development centers and community colleges. For example, New York State has decided to

install IVD workstations for TBD in 21 small

business centers. At the community college level,

the program is being used in business and marketing

courses to allow students to try out business ideas

they learn in class.l0

Some small businesses are franchises, for which

the parent organization encourages consistent product quality and management, and can afford to

develop and distribute training materials. Chains

such as Domino’s Pizza, FoodMaker, and Southland

Corp. (7-Eleven) use video and are experimenting

with IVD to

worlmite.11

Despite its

train basic employee skills at the

Television

popularity as an entertainment medium, ‘broadcast television is not widely used for

training (except for regular adult education) because

of:

● high production costs and time for program -

ming,

 lack of flexibility in scheduling,

● trainee boredom due to poor programming or

instructors or lack of interaction, and

● regulation of the use of television frequencies .

1 2

Current cable television use for training consists

primarily of continuing education and similar instructional services provided by local community

colleges and other educational institutions. In many

cable franchise areas, these educational commitments plus commercial programming fill existing

capacity. As cable systems expand their channel

capacity, introduce two-way capability, switch to

fiber optics, provide computer networking, and

enroll more households, cable will become an

increasingly attractive medium for instructional

delivery .13

Satellites are making television-based training

much more attractive. Training programs can be

delivered directly to company sites without going

through broadcast television or cable networks.

Satellites also allow teleconferencing (see below)

with two-way video for interactivity. Many large

organizations have satellite uplink/downlink equipment at branches or plants and use television to

IORFrsnce, “ExperimentinginBusiness withIVD: hEvd~tioq’’1mwtionDelive~Sytim, vol. 3, N0.5, September/October 1989, PP. 22-2A.

llK~ley, op. cit., fOOtnOte 1.

l~id.

13Norrnsn D. Kurlsnd and Assoeistes, “The Role of Technology in the Eduestiou Trsining snd Retmining of Adult Workers,” contractor report

prepared for the ~lce of Technology Assessmen4 Oetobe+r 1984.
192 . Worker Training: Competing in the New International Economy

has four satellite networks, and Motorola, Ford,

Hewlett-Packard, and Kodak also use satellite television in training.

The largest user of satellites for training today is

National Technological University (NTU), which

broadcasts hundreds of engineering courses to corporations and Federal agencies (see box 7-C). As

satellite facilities become more common, more

companies will emulate this proprietary network

model. However, few organizations have yet addressed the remaining problems restricting television’s use in training-high costs and low interactivity. Consumer applications of interactive television

are being introduced now (e.g., play-along game

shows, viewer-selected camera angles). In the short

term, however, even with satellite transmission,

television’s use for training remains limited.14

Video

Videotape is a very popular training medium.

Tape is portable and overcomes television’s scheduling problems. Videotape players are inexpensive

and highly reliable. A wide selection of commercially available programs cover most areas of

training. For example, the American Management

Association (AMA) and the American Media Center

for Engineering Education (AMCEE) offer large

libraries of training tapes. Many professional societies (e.g., Institute of Electrical and Electronics

Engineers, American Bar Association) offer videotape self-study courses to meet continuing education

requirements for their members. Most large companies and government agencies produce an extensive

number of instructional tapes for their own use.

Because many American homes have VCRs, videotape also is a viable medium for self-study .15

Despite its wide use, videotape has limitations as

a training medium. It essentially is a linear presentation mode with only limited opportunities for

student interaction. Systems have been developed to

permit random access to tapes, but they are cumbersome compared with videodisc.16 While it has been

used successfully in technical training (e.g., mechanical repair and maintenance) when focused on

narrow tasks, videotape is unsuitable for presenting

a lot of factual information. As with television

14Kemley, op. cit., fOOtnOte 1.

ls~id.

IGKml~d, op. cit., fOO~Ote 13.
Chapter 7—Training Technology ● 193

Box 7-C—Natiional Technological University

The National Technological University (NTU) broadcasts programs originating at universities via satellite to

corporate subscribers. There currently are 29 member universities, 55 corporations, and 15 other sponsoring

organizations, with 242 receiving sites. In 1989, NTU offered around 450 graduate courses, plus numerous

continuing education classes in non-credit Advanced Technology and Management Programs. Of the 3,000

graduate students, 655 are enrolled in degree programs. NTU estimates that around 30,000 people currently are

taking short courses. NTU averages over 250 hours of live broadcasting weekly-more live programming than

ABC, NBC, and CBS combined.

NTU graduate courses focus on engineering and computer science. They are taught by faculty members from

the member universities. Even though the courses originate from universities, NTU grants the degree

(M. S.—accredited-in either Engineering, Management of Technology, and Materials Science and Engineering).

Corporate sponsors pay site fees to receive the programs and provide their own downlinks and classrooms. In

courses requiring lab work the sponsoring organization agrees to maintain lab facilities, either onsite or through

arrangements with nearby colleges or private facilities. The labs are subject to inspection by NTU at any time.

NTU also hosts many teleconferences (one-way video/two-way audio) as special programs for continuing

education. The topics tend to be leading edge subjects in engineering and technology, such as superconductors,

supercomputers, distributed networks, artificial intelligence, and automated manufacturing. These teleconferences

allow engineers and their managers to stay abreast of the latest developments without having to leave their offices.

The teleconferences add an interactive component to the broadcasts by allowing participants to ask questions and

share experiences, making the courses more interesting and relevant. NTU also delivers interactive technical

assistance programs to business entrepreneurs.

In general, students praise the course subjects and the instructors (who often are leading experts in their field).

However, most courses still follow the traditional television and videotape “talking head” format with little or no

interactivity; they can be dull. Also, some university camera and transmitting equipment is substandard, resulting

in poor picture quality. NTU is encouraging the member universities to upgrade their equipment and many have

done so.

Enrollment in NTU courses continues to increase; the number of graduate students admitted to degree

programs doubled in 1989. NTU predicts that by 1993 it will be providing 10 percent of the advanced study

opportunities for part-time graduate engineering students in the United States. Based on the 655 students actually

admitted to degree programs today, within 5 years NTU will be among the top 10 schools in the nation in terms

of number of M.S. Engineering degrees awarded. Although NTU is limited to engineering-related topics, it could

serve as a model for professional education in fields such as law and finance.

SOURCES: Greg Kearsley, “Instructional Technology and Worker Learning Needs,” report prepared for the office of Technology Assessment

under contract L3-5615, February 1990; and NTU annual report for 1989.

programming , videotape requires substantial devel- group or classroom instruction. The overwhelming

opment time and cost and is difficult to customize

for specific situations.17

Less common (and relatively new) is interactive

video training. About 34 percent of the large

corporations responding to the Training survey were

using some form of interactive video training (but

only 11 percent for all responding companies with

100 or more employees). Of the responding interactive video users, 47 percent use a combination of

videotape and personal computer, while 61 percent

use videodisc. About 72 percent use interactive

video for self-paced instruction and 40 percent in

majority (95 percent) use at least one off-the-shelf

program; 29 percent have custom-designed program.

18 In the ASTD survey, interactive video

applications were evenly divided among training for

managers and supervisors, sales and marketing staff,

professionals and technical workers, and skills and

craft employees.

Analog videodisc has been used in training for

several years. Interactive videodisc excites trainers

because it combines the audio-visual power of

television with a high level of interactivity that can

be used in diverse delivery settings. It can present a

17K=ley, OP. cit., fOOtnOte 1.

1

8

’’ Indushy Report, “ op. cit., footnote 7,
194 ● Worker Training: Competing in the New International Economy

lot of text or graphic information as well as still or

motion video and audio-often simultaneously (see

table 7-2).19 Compact discs for computers (CDROM) and digital videodisc (just now being introduced) provide even more storage capability (see

table 7-3 and discussion of future technologies,

below). The contents can be accessed randomly,

information can be layered to give options on the

depth and/or breadth accessed, items can be linked

for browsing or cross-reference, and branching can

be used for interactivity. Its other attractive properties include high information density and durability. 20

Over the last few years, private developers and the

government have produced numerous commercially

available IVD training programs. For example, a

courseware guide published by IBM lists over 500

multimedia programs related to personal computers,

data processing, education, health/medical topics,

industrial technology, management/professional

skills, and other subjects.

The primary obstacle to further IVD use is

cost—it requires more development time and more

expensive equipment than videotape or computerbased training. Even if the price were reduced 50

percent, it would be beyond the resources of many

companies that have a small trainee population over

which to spread the cost. Furthermore, IVD usually

is used for guided self-study, while the bulk of

formal training is still conducted in classroom

format. Therefore, IVD is unlikely to be adopted

widely without a firm corporate commitment.21

The lack of industry-wide standards also is a

continuing deterrent to greater investment in IVD.

Each hardware manufacturer initially used a different operating system, and programs developed for

one system would not play on others. The Interactive

Video Industry Association is developing a standard

set of operating commands, which most hardware

and courseware producers are expected to adopt. The

Association also is working on software that will

translate existing programs to the standard commands. Variations in international television standards also make it difficult to deliver IVD to

Table 7-2—Potential for Analog Videodisc

Frame Use

Motion still Compressed Digital

(minutes) frames audio (hour) data (Mb)a

30

25

20

15

10

5

0

0

0

0

0

1,625

3,250

4,875

6,500

8,250

9,875

54,000

0

0

0.00

13.53

27.08

40.61

54.16

68.75

82.28

0.00

150.00

0.00

0

10

20

30

40

48

58

0

0

221

%b = megabyte.

NOTE: This table shows howthe 54,000 frameson an analog videodisc can

accommodate various combinations of motion and still video, audio,

and data. For example, a disc containing only one medium could

hold 54,000 still pictures, or 30 minutes of motion video, or 150

hours of compressed audio, or221 Mb of digital data. Alternatively,

the media can be combined in various ways; e.g., 10 minutes of

motion video anc16,500 still frames and54 hours of compressed

audio and 40 Mb of data.

SOURCE: U.S. vid90 C(q).

overseas locations. Users must either ship compatible hardware or custom tailor courseware to local

conventions.

But many organizations believe that the training

results are sufficiently improved to just@ the

additional cost and equipment. For example, General Motors Corp. uses IVD extensively throughout

the corporation for technical and sales training. The

United Auto Workers (UAW) and GM have setup

a joint Center for Health and Safety that offers

dozens of self-study courses using IVD. According

to industry figures, GM alone has bought over

10,000 videodisc players for use in training. Ford

and Chrysler also use ND extensively for training.

Finally, the military has made a major commitment

to using IVD in training (see report appendix); the

Army EIDS project ultimately expects to field

50,000 players (see box 7-D).22

Interactive video appears to be especially valuable in several particular training areas. It has been

used extensively in the design of simulations (see

below) for maintenance training. For example,

Federal Express developed an IVD course to teach

its aircraft mechanics how to troubleshoot and repair

lgJo~h V. Hend~~ “~i~and Production of Interactive Multimedia SfidittiOnS, ” tutorial presented at 1 lth Conference on Interactive

Videodisc in Education and Train@, Arliugton, VA August 1989.

Wurland, op. cit., footnote 13.

zlK~ley, op. cit., footnote 1.

%bid.
Chapter 7—Training Technology ● 195

Table 7-3-Capacities of CD-ROM, DVI, and CD-1

Medium CD-ROM DVI CD-1

Text 325,000 pages 650,000 pagesa

300,000 Pagesa

Audio 72 minutes of CD quality 5 hours FM stereo, or 96 hours AM quality

20 hours mid-range monaural, or

40 hours near-AM quality

monaural

Still pictures 500 high resolution 5,000 very high resolution, or 7,000 very high resolution

10,000 high resolution, or

40,000 medium resolution

Motion video with

companion audio 30 seconds 1 hour full screen/full motion, or No full screen/full motion

4 hours, 1/4 screen/full motion, or Can show partial screen/full motion

16 hours 1/8 screen at 1/2 frame Better suited to full screen/full motion

rate animation

Mixed media example Not available 20 minutes full motion video, and Not available

5,000 high resolution stills, and

6 hours audio over stills, and

15,000 pages of text

ABBREVIATIONS: CD. compact disc; CD-ROM = compact disc read-only memory; DVI = digital video interactive; CD-1= compact disc interactive.

aThe amount of text is actually the same for DVI and CD-1, but appears different due to the allotted *arZters per pa9e.

SOURCES: G. David Ridev, “DVI-A Digital Multimedia Technology,” and Karen A. Frenkel, “The Next Generation of Interactive Tschnoloaies.” both in

CornrnurIk&o& of the ACM; vol. 32, No. 7, &Jiy 1939~-

Box 7-D—The Electronic Information Delivery System

In the early 1980s, the U.S. Army began seeking a multimedia training delivery system to replace the slide-tape

unit in use for many years. In 1983, the Army asked several companies to develop interactive videodisc prototypes.

After field testing, a specification for the Army Electronic Information Delivery System (EIDS) was established in

1986. In December of that year, the Army awarded a contract to Matrox Electronics of Canada to supply the

hardware and software. The initial contract called for a total purchase of 48,000 units over 4 years with a value of

$223 million.

The EIDS work station consists of an IBM PC/AT-type computer employing EGA/VGA graphics and a

12-inch optical laserdisc player. The system is capable of overlaying graphics on video displays, playing over 1

minute of sound per still frame, and storing/reading computer programs on the videodisc (Level IV capability). In

its most basic configuration, it has a commercial price of about $6,000 per workstation.

Actual EIDS delivery and courseware development has lagged behind due to procurement difficulties. In 1988,

14 solicitations to develop courses were authorized but none was awarded due to lack of funds. But, by 1989,

approximately 10,000 units had been delivered to Army Training and Doctrine Command (TRADOC) schools and

Army and Navy Reserve sites.

One of the strengths of EIDS is that several authoring systems are available. Computer Sciences Corp.

developed the primary one, ASSIST, for the Army; it is provided to contractors for courseware development. At

least 10 other commercially available authoring systems also can be used with a standard MS-DOS computer and

laser optical videodisc player to create EIDS courseware. Several companies have developed “generic” courseware

that can run on EIDS, and numerous vendors are capable of developing custom courseware for the military or for

civilian clients.

EIDS could be a billion-dollar business opportunity for the IVD industry. How much courseware actually is

developed will depend on EIDS’ acceptance by the military training system and the amount of funding allocated

for courseware. However, without specific technology transfer initiatives or an eager corporate champion, it is

unlikely that EIDS will be applied to civilian training needs. The choice of Matrox Electronics as the primary

contractor has not helped technology transfer because the company is practically unknown in the United States and

has made little attempt to market the system outside of military circles. Furthermore, economies of scale have not

materialized. Indeed, EIDS is more expensive than comparable systems available from other vendors or assembled

from off-the-shelf components.

SOURCE: Greg Kearsley, “Instructional Technology and Worker Ixamn“ gNeeds,” report prepsredfor the (Mice of Technology Assessment

under contract L3-5615, February 1990.
196 . Worker Training: Competing in the New International Economy

electrical problems. The course allows mechanics to

take readings, test components, replace equipment,

and evaluate procedures.23

The visual and motivating characteristics of IVD

also make it valuable in improving basic skills.24 For

example, the Wisconsin Foundation for Vocational

Technical and Adult Education has developed an

IVD course called Interactive ModuMath designed

to improve students’ basic math skills. A wide

variety of students in Wisconsin technical colleges

use the course, and both students and instructors

reportedly like it.25

Another interesting use of IVD is on the factory

floor to support computer-integrated manufacturing

(CIM). Apple Computer and Martin-Marietta both

have high-tech plants that provide employees with

workstations capable of displaying brief video

sequences about different manufacturing processes.

These sequences can provide “just-in-time” training to correspond to the complex nature of a CIM

operation, which involves frequent shifting from one

operation to another. Each station replaces hundreds

of pages of printed material.26 Central monitoring

allows supervisors to pinpoint problems and deliver

needed parts, but it also can provide data on

employee performance and thus contribute to employee stress.

Finally, IVD is becoming valuable in teaching

interpersonal skills, such as sales. Workshops are the

most traditional training approach for such skills,

but workshops are of inconsistent quality, provide

little subsequent reinforcement, and have limited

practice opportunities. Thus, any excitement and

motivation workshops generate may not be transferred to job performance. IVD combined with

role-playing now promises to provide an effective

means of training in interpersonal skills (see box

7-E). 27

Computers

Of all the technologies, computers have excited

the most interest for instructional applications.

Computers’ vast capacity for handling information,

Photo credit: American Association for Community and Junior Colleges

Computer-based training can be delivered at the work

station, or in a classroom or laboratory.

the variety of ways they can be programmed to

respond to user commarids, and their rapidly declining cost and increasing power, make them seem to

be the ideal “teaching machine.” To the extent that

PCs or other terminals already are available in the

workplace, they become a natural and convenient

way of delivering training. If computer equipment

must be bought specifically for computer-based

training (CBT), however, it is a relatively expensive

approach.

Computer-based training can incorporate any

information that can be stored on a floppy or hard

disk-e.g., text, graphics, data. Recent advances in

software design provide windows and branching.

Developments in storage technology (e.g., CDROM and optical drives) add audio and still video

capability. Connection with a videodisc player

allows Ml-motion video. With artificial intelligence

%id.

~~e me of ~~ctio~ t=~olom in b~icatmining is discussed in more detail inch. 6.

‘Ibid.

~Ibid.

awd~ Ives, “sojl Skills in High Tech Computerizing the Development of Interpersonal Skills,” Instruction Delivery Systems, vol. 4, No. 2,

h’fareh/lipri.l 1990, pp. 12-15.
Chapter 7—Training Technology ● 197

Box 7-E—Automating Interpersonal Skills Training

Teaching effective interpersonal skills, such as selling, remains one of the biggest challenges in training today.

In many of the top insurance companies, for example, at least 75 percent of the new sales personnel leave after 3

years, largely because they are unable to develop sufficient sales skills to make an adequate income from their

commissions.

A combination of automated audio/video feedback and interactive videodisc or computer-based training

(CBT) is now being used to teach sales skills (or to aid in early recognition that one is not suited to sales). One IVD

system uses a laserdisc player, touchscreen monitor and a PC coupled with a videotape recorder, camera, and

microphone. The IVD presents full-motion/audio demonstrations of skills such as presenting credentials, then

provides review exercises with proper and improper examples of those skills. Trainees can interrupt the presentation

of a skill when a mistake is made and offer a critique of the action. Feedback is given on the appropriateness of their

critique.

The camera or audio recorder is then used to allow the students to demonstrate proper behavior. Trainees face

anew customer (provided on the IVD) and practice the skill they just saw modeled.1 Their performance is recorded

on videotape along with the customer’s conversation. Students can practice in privacy, then review their

performance based on a set of criteria (from the IVD) and evaluate their own behavior. They can erase and repeat,

practicing as many times as they wish. When they feel they have successfully transferred the training to their

performance, trainees can show the tape to the supervisor, who provides advanced coaching.

In a pilot evaluation program, insurance agents using this training program had a 16 percent increase in calls,

a 24 percent increase in kept appointments, and a 43 percent increase in approach interviews with clients. In addition,

new hire training time was reduced 30 percent over traditional classroom methods, and the subsequent on-the-job

learning curve decreased. For example, one agency that had been using the IVD system for over a year compared

10 agents who used the system with 17 trained by traditional methods. The 10 using the IVD program were at a

level 18 months ahead of the control group after the completion of training. While it is difficult to separate the impact

of the IVD training from other changes in the company, its revenues also have gone up since introduction of the

system, and the agent retention rate has increased.

IBM also experimented with an IVD system coupled with a videotape camera for teaching sales skills. In a

comparison with their traditional person-to-person role playing training, they found that trainees using the IVD

system did much better in structuring their sales calls and developing sales skills.

A second, similar, program uses CD-ROM combined with audio feedback. Full-motion video will be available

on CD-ROM within a couple of years. For some training situations, such as telephone sales, audio feedback is

actually closer to the real job situation, and full-motion video is not needed. CD-ROM also costs approximately

$2,000 less per training station than IVD, has larger storage capacity, and can be used more easily for non-training

applications.

IAltiOUgh the “customer” on the ND cannot respond in all of the unexpected ways a rd person might, this@ c~gewi~ ~v~~

in artificial intelligence.

SOURCES: William Ives, “Soft Sldls in High Tech: Computerizing the Development of Interpersonal Skills,” Instruction Delivery Systems,

March/April 199Q and Beverly Geber, “Goodbye Classrooms (Redux),” Training, vol. 27, No. 1, January 1990.

and hypermedia software, CBT can provide fourth- computer programming in instructional design. Daor fifth-generation interactivity (see box 7-B). tabase management programs make it much easier to

keep track of the elements when developing a

The advances in computer hardware and software complicated CBT or IVD program. Relational dataalso have revolutionized other areas of training. bases provide the underpinnings for performance

Computers control the interactivity in CBT and IVD. support systems.

28 Computer technology also is at

Sophisticated computer graphics and databases are the heart of emerging systems such as electronic

integral parts of simulators. Packages such as classrooms, digital networks, and virtual environauthoring systems have largely obviated the need for ments.

28Re1atio~ d~b~= me -nfly tie most powe~ ~d flexible me~s of inte~ting tie vtiolls cOmpOn~tS Of a @O rmance support system.

In a relational database, the data are represented as tables in which no entry has more than one value. This makes it ea.siex to link data so that complex

queries can be handled rapidly.
198 ● Worker Training: Competing in the New International Economy

Table 74-Computer Use in Training at U.S. Companies With More Than 100 Employeesa (percent)

Use computers Use computers in Use computers in word- Not using but

Number of in training Doing CBT data management processing or graphics will by 1990

employees 1988 1989 1988 1989 1988 1989 1988 1989 1989

100-499 . . . . . . . . . 59.6 64.8 37.9 43.3 49.7 55.2 53.4 62.7 5.8

500-999 . . . . . . . . . 57.4 67.7 31.0 43.6 47.3 61.5 52.7 64.6 8.7

1,000-2,599 . . . . . . 67.1 73.6 45.1 48.0 57.2 64.1 59.0 67.4 9.2

2,500-9,999 . . . . . . 77.6 74.2 56.5 52.1 71.4 64.7 72.0 66.6 4.9

10,000 or more . . . 82.9 82.6 58.3 64.0 76.6 75.2 79.4 76.4 3.8

All sizes . . . . . . . . 60.8 66.2 38.6 44.1 51.1 56.9 54.6 63.4 6.2

aThe data in this table oome from a survey that had a very low response rate. Thus they only provide a rough estimate of the extent of CBT.

bRefersto organizations reporting that they use computers in some way in connection with theirtraining efforts. This might include reeordkeeping orotherdata

management, word processing, or creating graphics for training classes.

SOURCE: “Industry Report, 1989,” Training: Tbe Magazine of Human Resources f7eve/opment, vol. 26, No. 10, October 1989, p. 58.

All of these features combine to create a training

medium with a vast capacity for imparting information in a truly interactive form. Moreover, the

courseware can be edited or updated easily and at a

much lower cost than videotape or videodisc.

Finally, courseware can be sent anywhere in the

world that compatible hardware is available, and can

be used at the learner’s convenience. These advantages can give CBT a substantial edge over television or videotape training.

Provided that courseware can be developed or

purchased for a cost comparable to classroom

instruction or videotape, CBT is likely to displace

those methods of instruction in companies where

terminals are available. The development of instructional design and authoring tools that reduce the cost

and time to develop CBT is thus a key factor in

making this training technology successful on a

wider scale.

According to the Training survey, about twothirds of responding companies with 100 or more

employees were using computers in some aspect of

training (see table 7-4). Most of the companies use

computers for word processing or to create graphics;

many also use them for data management (e.g.,

program evaluation, test scoring, survey processing). Around 44 percent of the companies use CBT.

Of those, 80 percent use it to teach people to operate

computers, 38 percent to deliver training on nontechnical subjects (e.g., management or interpersonal skills), and 37 percent to provide training in

technical skills.29 The ASTD survey indicates that

67 percent of the companies surveyed use CBT most

often to train professionals and technical staff; 37

percent report its use for skills and crafts training.

A barrier to CBT use arises when workers are not

familiar with computers. They often are afraid of the

technology and are intimidated by a keyboard. The

use of touch screens and light pens and the growing

use of computers to provide public information at

sites such as shopping centers and museums is

overcoming this problem. Also many CBT users

have been turned off by poorly designed programs

that only transferred printed material to disk (see

description of first-generation courseware in box

7-B). As with other training media, it is essential that

CBT incorporate good instructional development

principles, and that training managers follow such

principles in developing or purchasing courseware

appropriate to the skills to be imparted.

Today, CBT is used for a wide range of applications in industry, including technical, basic educational, and interpersonal skills (see boxes 7-E and

7-F). Although it was the PC that gave rise to CBT’s

current popularity, one of the largest uses still is on

mainframe computers to teach data processing and

other job-related skills in the insurance and banking

industries (see box 7-G).30

CBT also is used in basic skills training (see ch.

6). Efforts are underway to transfer the U.S. Army’s

Job Skills Education program (JSEP) to adult and

vocational education. McGraw Hill, in conjunction

with Apple Computers, is developing a series of

print and CBT programs to improve basic skills in

six areas (health, automotive, business, construction

trades, electronics, and office). The Adult Literacy

~“Industry Report,” op. cit., footnote 7.

%earsley, op. cit., footnote 1.
Chapter 7—Training Technology ● 199

Box 7-F-Computer-Based Training in Industry

Computer-based training (CBT) can be used to impart technical and other skills. Some examples include:

. Anheuser-Busch in St. Louis, Missouri is using a Micro TICCIT system to teach assembly-line workers to

run beer can packaging machines. The choice of CBT is driven by a desire to improve quality control in

manufacturing and an overall modernization effort in plants. This particular training task was chosen

because it is one of the most critical aspects of beer packaging.

. Burlington Northern uses a MicroTICCIT system to teach train crews the rules of operation for railroads

(e.g., switching signals). This is mandatory knowledge fora all train crew personnel, but classroom instruction

had not proven very effective. CBT both upgrades the quality of training and facilitates its distribution to

the field.

● The Federal Aviation Administration has used PLATO to train flight inspection and maintenance specialists

for almost a decade; recently they began using CBT for air traffic controllers as well. Courses are delivered

to approximately 50 sites around the country. The heavy training load—which is difficult to meet with

classroom instruction-was the primary factor in choosing CBT.

. Bell Atlantic has developed a PC-based financial sales skills course for its telemarketing representatives. The

course includes CBT case studies that simulate the selling process and a Lotus 1-2-3 cash-flow template to

calculate lease versus purchase options. The company reports that the course improves the competence and

confidence of sales representatives.

. The Strategic Management Group (SMG), in conjunction with the Port Authority of New York/New Jersey

has developed a PC-based course entitled “Export to Win” to teach business people about exporting

products to international markets.

● Applied Learning offers hundredss of data processing courses that run under the Phoenix mainframe CBT

system. These courses are used to train staff about mainframe operating systems, applications software, and

telecommunications.

SOURCE: Oreg Kearsley, “Instructional Technology and Worker Learning Needs,” report prepared for the Office of Technology Assessment

under contract L3-5615, Februaxy 1990.

and Technology Project coordinated by People’s CMI can range from simple reports on test

Computer Co. of California involves the use of

commercially available education software in vocational education programs at community colleges

and other training centers. The Technology for

Literacy Center in St. Paul, Minnesota, uses computers in teaching adults and reports improvement in

terms of continued enrollment, student satisfaction,

and increased achievement.31

Computers also can be used to manage training.

Computer-managed instruction (CMI) allows the

instructor and/or trainee to track each trainee’s

progress through the various paths in an instructional sequence and to ensure that the right lesson

and material are assigned and available at the tight

time. With advances in storage technology and

courseware design, CBT or IVD training programs

increasingly have integrated computer management

systems. They also can be used with lecture/lab,

television, or other training methods.

performance to detailed monitoring and analyses of

trainees’ progress on hundreds of learning objectives, including comparing each trainee with the

class, with all the trainees in a program, and with

corporate or national standards. In many systems,

not only can instructors, learners, and administrators

obtain reports organized in any way that is useful to

them, but they also can manipulate the data to get

answers to questions that will help them improve

course design or delivery and instructional program

management. 32

Such management is critical in any large-scale

effort to tailor instruction to individual learners and

to allow them to keep track of their own progress.

With advanced interactive (third-generation and

above) CBT or IVD courseware, learners begin with

pretesting that ensures they start with a lesson that

will neither bore them nor be beyond them. Then

each time they sign on, the system can either start

them where they left off or provide review of

slIbid.

32Kml~d, op. cit., fOOtiOte 13.
200 . Worker Training: Competing in the New International Economy

Box 7-G-Computer-Based Training in the Insurance Industry

The insurance industry has embraced computer-based training (CBT) more whole-heartedly than perhaps any

other economic sector. Several factors explain its success in that industry. First, insurance companies already have

a strong training tradition. When this is combined with the fact that insurance companies are heavily computerized,

with almost every employee having a terminal, CBT becomes natural and cost-effective. Also, both CBT and the

material to be learned-policy information and procedures—are well-suited to tutorial strategies.

CBT in the insurance industry has the same advantages as in other sectors: employee scheduling, tutorials and

practice exercises to aid learning, and time/cost savings relative to classroom instruction. The first is probably the

most important from the employees’ perspective and the last from the firm’s.

A large insurance company in the metropolitan Washington, DC area serves as an example. The company first

got started with CBT in 1981 with an introduction to claims processing course. It failed, however, because the

system was not reliable. A few years later, another course-still in use today-was tried on a more stable system.

Today the system delivers around 20 courses with about 5 new courses being added annually. Thousands of

employees are trained on the system.

While CBT provides effective training for this company, there is an ongoing problem developing and

maintaining quality courses. The company finds it difficult to locate authors/designers who know how to develop

good CBT and can work with the corporate computer system. One segment of the company relies solely on

commercial courses that are then customized. Such purchasing reduces the development costs, but is limited to

“generic” course topics (e.g., data processing, customer service).

The insurance industry has tried to encourage courseware sharing through the Society for Insurance Training

& Education (SITE), which published a courseware catalog in 1987, with a new version in the works. This effort

has not been very successful, however, because of system incompatibilities; confidentiality problems, poor

courseware quality, and lack of customization capability. The industry hopes that vendors will market more generic

courses and provide customization, but those services will not resolve industry concerns about confidentiality.

SOWRCE: Greg Kearsley, “Ins&uctional Technology and Worker Learning Needs,” report prepared for the Office of Technology Assessment

under contract L3-5615, February 1990.

material they may have had difficulty mastering. or hands-on experience can only be achieved for

Thus the system not only allows more options for

instructor management, it also puts the pace of

learning in the hands of the trainee-a factor that is

particularly important for many adult learners.33

Teleconferencing

All forms of teleconferencing have been explored

for training. The Training survey shows 11 percent

of responding firms using videoconferencing, 9

percent audioconferencing, and 4 percent computer

conferencing. In the ASTD survey, 33 percent of the

firms use teleconferencing of some form, primarily

for management and supervisory training.

Audioconferencing is relatively inexpensive, but

is limited by the lack of visual presentations-most

people find it hard to participate actively without

visual cues to indicate who is to speak next.

Moreover, the instructors have no way of telling if

anyone is paying attention. Finally, demonstrations

purely audio skills (e.g., telephone sales).

The Kansas Board of Regents has for years

operated a statewide audioconferencing system,

primarily for part-time adult learners. The courses

focus heavily on continuing education in various

professions. Students may participate either at conference centers located throughout the State or from

their own phones. The primary advantage of the

system is that it enables people to take courses who

would not otherwise be able to do so or could do so

only if the instructors went to numerous off-campus

locations. Studies over the years indicate that

students in the telecourses do as well as on-campus

students.34

As the U.S. Public Switched Telephone Network

(PSTN) becomes more digital with more capabilities, it may become less a telephone network and

more a general purpose broadband network capable

3sIbid.

%id,
Chapter 7—Training Technology .201

of carrying all types of traffic, including audio, data,

and video. Transmitting a live telecourse with full

audio and video interaction may be no more difficult

than making a telephone call is today .35

For training applications, teleconferences involving one-way video (i.e., broadcast television) with

two-way audio (telephone) links are perhaps the best

compromise in terms of cost and quality of information transmitted. This allows full presentation of

visual information and lets participants ask questions or make comments at any time. A fax machine

allows two-way transmission of hard-copy at little

additional cost.36 Compressed two-way video also is

becoming more economically feasible for larger

companies.

Many large corporations, including IBM, Motorola, and AETNA, have satellite-delivered television

networks that are used for training teleconferencing.

AETNA, for example, delivers a business writing

skills course to over 1,000 employees at more than

50 branches via teleconference. In a classroom, the

course takes 2 days; via teleconferencing it reduces

to two 1.5-hour sessions (with some preclass work) .37

Until recently, teleconferencing was used only by

the handful of organizations that could afford the

equipment and could find instructors willing to try

it. With the advent of large-scale digital networks

and satellite links, the use of teleconferencing for

training is likely to become more commonplace.

However, it still will require significant preparation

time and relatively complex logistics, which may

deter many training departments. Nevertheless, increasing pressure to reduce travel time for training is

likely to be a major boon for teleconferencing.38

Computer conferencing also is relatively inexpensive if the hardware is available, and it gets around

the scheduling problems of audio- and videoconferencing. With the increasing prevalence of personal

computers, more organizations are beginning to use

computer conferencing as part of distance learning

activities. For example, the Western Behavioral

Sciences Institute has used computer conferencing

for several years for high-level management seminars. Participants do not have to take time away from

their jobs. Moreover, they can relate what they are

learning in the seminar directly to their jobs because

many of the exercises involve analysis of real

problems in real time.39

The International School of Information Management in Irvine, California has a masters degree

program using computer conferencing to conduct

seminars and provide student/instructor interaction.

Boise State University has a masters degree program

in Instructional Technology that also uses computer

conferencing for remote delivery of courses. This

program is supported by, and designed to meet the

needs of, the U.S. Army and the National Guard.

Because most large corporations already have electronic mail systems in place, the potential exists to

use these systems for training activities.40

Simulators

Until recently, good training simulators were too

costly except for the most dangerous situations (e.g.,

flight training, nuclear reactors). With the advent of

microchips and videodiscs, however, simulators’

costs have come down (although the most sophisticated simulators are still too expensive for all but a

few civilian applications). Moreover, manufacturers

have developed commercial software packages for a

variety of simulations.

The Training survey shows 44 percent of responding companies using simulations or games of some

type. While many of these may not be technologybased, the response rate illustrates the growing

recognition of the value of simulation in training.

Simulators give trainees hands-on experience without the risk of personal harm or damage to an actual

machine or system. Moreover, simulators help

trainees prepare for equipment failure and other

unpredictable events. Simulators can present a wider

variety of malfunctions than is possible on operational equipment or systems. Also, with today’s

35UOS. co~~~, ~lce of T~~ology ~s=sm~~~“~”ng for ~rning: A New COIUW for E&cation, OTA-SET-430” ~_O~ ~: U.S.

Government Printing Oftiee, November 1989). See also U.S. Congress, Office of Teebnology Assessmen4 Critical Connections: Communication for

the Future, OTA-C’IT-407 (Washington DC: U.S. Government Printing Office, January 1990).

3fjKa1ey, op. Cit., foo~ote 10

37~id.

3sIbid.

S%id.

@Ibid.
202 ● Worker Training: Competing in the New International Economy

technology, the time between failures is so long that

maintenance personnel rarely see some types of

breakdowns. Rather than getting training they probably will forget by the time they need it, technicians

instead can go through a simulation of a failure when

it occurs.

In addition, simulators can be used at any time and

can accelerate the rate of learning since more

training opportunities can be provided in a shorter

time than with real equipment. They can be designed

to focus on specific learning objectives, and they

provide consistent and accurate feedback on trainee

performance.

Further, simulators may be less costly to produce

and operate than actual equipment. Flight and driver

simulators save wear-and-tear and fuel; gunnery

simulators save ammunition. Simulators also can

incorporate CMI and automatically maintain trainees’ records, providing more information about their

performance than is possible with actual equipment.

Common examples of simulators are in the

training of:

●

●

●

●

●

●

●

●

air crews for all types of aircraft;

ships’ officers in docking and navigating supertankers, with sophisticated simulators reproducing the conditions of the major world waterways including detailed graphic or video presentations;

operators of nuclear and other energy plants;

technicians in the operation of communications

satellites;

space shuttle crews;

process operators in chemical plants and refineries;

boiler operation and maintenance crews (see

box 7-H); and

driver simulators (box 7-1).41

The fields of computer graphics and animation

now use low-cost simulators to prepare people for

more powerful graphics design machines. Highspeed animation also is useful in creating environments where it is impossible to film at all, e.g., to

create an interactive microscopic world, or to model

the human anatomy. Imaging systems can convert

data into pictures that help people grasp even very

abstract concepts. In medicine, for example, one

Box 7-H—A Boiler Simulator

Lack of training was causing accidents and

unacceptable downtime in organizations that use

recovery boilers.1 The problem was severe enough

that insurance companies were threatening to cut

off insurance for the machines. Yet recovery boilers

are sophisticated pieces of equipment that cost $90

million and are 14 stories high; training operating

and maintenance/repair personnel on a real boiler is

dangerous, and demonstrating malfunctions could

become expensive.

The J.H. Jansen Company of Woodinville, Washington, which makes Kraft recovery boilers for the

paper industry, developed a boiler simulator called

Recovery Boiler Tutor (RBT). The simulator,

which uses an expert system, presents trainees with

scenarios representing boiler inefficiencies, problems, or emergencies. These difficulties can be

resolved in 20 to 30 moves, with the learner

choosing options such as “add oxygen” or “open

flue.” When trainees get off track the system

prompts them with comments such as “Have you

noticed that the trend lines are askew?” or “The

oxygen is much higher than it should be. ”

Learners have three options for interacting with

RBT: they can ask for a scenario that starts with a

particular problem to solve or one that starts with

the boiler operating normally and then develops a

problem that must be diagnosed, or they can adjust

simulated dials and meter readings to create a

problem.

RBT took 18 months to develop, and is now used

in more than 80 plants in the United States, Canada,

and Europe. Within months of its first installations,

several insurance companies offered discounts to

plants that trained with RBT

IRecoveryboilers are used to recycle cb~cals by ~O@

process water and concentrating tbem.

SOURCE: Peter R. Kirrane and Diane E. Kirrane ‘What

Artificial Intelligence is Doing for ‘hiniog;” ~ruining, vol. 26, No. 7, July 1989.

aspect of physician training is learning how to relate

blips on a screen with the organ generating the blips.

Students can see arteries expand and contract under

differing stimuli. These images are not merely

simulations, but computer transformations of data

into pictures. Thus students can achieve understanding of processes and interactions much more directly

than ever possible before.42

411bid.

4Qid.
Chapter 7—Training Technology .203

A new twist in the use of simulators is the

capability to network individual simulators for

teamwork. DoD currently is implementing a concept

called SIMNET, which connects simulators of

armored vehicles as well as tactical aircraft and

artillery and their field commanders to operate

together for real-time combat exercises (see box

7-J). Networked simulators eventually could be

relevant to civilian teamwork situations such as

surgery and major equipment malfunctions (e.g.,

mass transit breakdowns, wide-area electric power

blackouts); in the meantime, the computer graphics

and network aspects are likely to make important

contributions to the technology base.

Job Aids

Job aids are valuable whenever the skill or

knowledge required is used infrequently, so that

even if people were trained, much of what they are

required to do might be forgotten when needed. Job

aids also are used where workers must remember

many detailed steps and do them in proper sequences. At the high-tech end, some forms of job

aids are evolving into embedded training (se e

below).

Virtually every worksite uses job aids of some

type, even if it is only a worker’s handwritten list or

notes. Job aids are more cost-effective than most

Box 7-I—A Truck Driver Simulator

Shell International Petroleum Company Limited, London, has a large truck fleet, and wanted to reduce its

annual accident rate. Shell’s safety experts determined that a lack of defensive driving was the primary problem,

rather than inadequate driver skill. Using interactive videodisc IVD), they developed a truck driver simulator that

teaches defensive driving, including constant alertness and readiness to respond to potential hazards before a

situation becomes dangerous.

The main objective of the simulation is to encourage defensive driving through a series of cause and effect

situations. Shell accomplished this by constructing and videotaping 20 different road hazards based on visual clues

(from a driver’ s-eye view) of potential danger ahead. The hazards include slippery and dark roads, pedestrians and

cyclists, distractions within the cab, and other common causes of accidents.

Because timing is critical to defensive driving, learners must act within a certain time period when they think

a hazard situation is developing. Thus each clue incorporates three time periods: in time, late, and too late. When

the learner reacts, the program stops the action and displays a list of possible responses to the situation (with the

“too late” time period offering no positive choices). The outcomes vary from complete avoidance of danger to

realistic crashes and embarrassing newspaper headlines. The driver rating (defensive, inattentive, dangerous) for

each hazard depends on the combination of timing and action selected.

A replay option explains the clues that led to each hazard, with text and graphic overlays including a timeline

indicating at what point each clue occurred. Other options include a pre-drive vehicle safety check and a practice

drive during which learners are encouraged to experiment with various combinations of timing and action. After

practice, learners may select a test drive, which contains seven hazards in a row. As in real driving, each hazard can

be dealt with only once. The program gives the final score and rating at the end of the test drive. The courseware

also includes a database of facts about the 20 hazards, which the learner can access at any time.

Shell International has not yet undertaken a formal evaluation of Defensive Driving’s effectiveness. Anecdotal

reports from drivers suggest, however, that it is improving the way they think about road hazards The clue sequence,

in particular, appears to help drivers form a mental model of the development of road hazards and sharpen

observation skills.

The U.S. military also uses driver simulators (e.g., the M-1 tank simulator). A truck driver simulator also is

a test program for DVI (see discussion of digital videodisc). Simulators have a potentially wide application in driver

training, where they would be safer for preliminary training, and could save fuel and vehicle wear-and-tear. They

also could be used in driver’s license testing, where they would provide consistency and decrease cost and enhance

safety.

SOURCB: Deborah H. BlanlG “Defensive Driving: Shell’s Interactive Commitment to Safety,” Instruction Delivery Systems, vol. 4, No. 2,

March/April 1990.
204 . Worker Training: Competing in the New International Economy

Box 7-J—SIMNET: Networked Simulators in Military Training

A continuing problem in military training is providing enough hands -on practice in the operation and repair

of equipment, including weapons, support vehicles, telecommunications gear, and logistics hardware. In many

cases, it is too risky or expensive, or physically impossible to use the actual equipment for training. Consequently,

the military has become a big advocate of simulators (see appendix).

Even simulators historically have been unable to provide hands-on training in team skills and group

coordination, however. To be effective on and off the battlefield, soldiers and their commanders must be able to

function as a unit. SIMNET is a research project initiated by the Defense Advanced Projects Research Agency

(DARPA) to connect simulators via local and remote networks. In its current configuration, SIMNET consists of

250 networked simulators at 11 sites (7 in the United States and 4 in Europe). Equipment simulated includes Ml

tanks, M2/3 Bradleys, fighter aircraft, helicopters, command/fire control elements, and a battalion operation center.

Evaluation is of both the combat soldiers and their commanders. Preliminary data indicate that SIMNET

significantly improves unit performance.

While any of these networked sites can “fight’ any other, incompatibility among programming and equipment

(e.g., operating speed) is a continuing problem. The installed base of military simulators uses a wide range of

databases (e.g., for terrain imaging), communications protocols, and levels of hardware sophistication that are

incompatible. Thus a tank that moves behind a building on its simulated terrain may still be in plain view on its

opponents’ screens. Similarly, the amount of data flowing through the satellite network led SIMNET to adopt

relatively simplistic rules for updating screen images. These provide unrealistic positioning of high-speed objects

(e.g., fighter aircraft). Finally, SIMNET accommodates the varying levels of visual fidelity in simulators through

a lowest common denominator, which fails to use the full capability of the more sophisticated (and expensive)

systems. These problems do not make for realistic battle simulations.

The services and their contractors are now developing standards for databases and communication protocols

that will alleviate these problems. Target completion date is May 1991.

SIMNET pushes the state-of-the-art in technologies related to computer animation and 3D graphics as well as

packet-switched networks.1 It also presents new training opportunities, such as replaying the recorded performance

of a unit to analyze mistakes. In addition, it opens up the possibility of “what if” experimentation in combat

situations-something not really possible in field exercises.

SIMNET is having major repercussions for the nature of future military training. It also is likely to influence

civilian training in any application requiring teamwork, especially when multiple sites are involved (e.g., disaster

preparedness). It also could be useful for interpersonal skills training in areas such as management, sale, and

customer service, although teleconferencing is more likely to be used for these applications in the near term.

IPacket-switc~g WaS develop for data communication between computers. Digital information is packaged iIltO small Piwes call~

packets, each containing information about the source and destination of the data and the relationship of that piece to the whole message. The

packets are transmitted separately through the networlq sometimes taking different paths depending on which ones are iiee at the moment. See

U.S. Congress, Of13ce of Technology Assessment, Critical Connections: Cmnmu nicarionfor the Fz4ture, OTA-CIT-407 (Washington DC: U.S.

Government Printing OffIce, January 1990).

SOURCES: Greg Kearsley, ‘‘Instructional Technology and Worker Learning Needs,” report prepared for the Office of Technology Assessment

under contract L3-5615, February IW, and W.A. Demtis, “All lbgether Now,” Military Forum, Novesnber/December 1989.

formal training, often can be developed faster than Many of the most effective job aids do not require

an instructional program, are more timely in that technological devices at all; well-designed print or

they provide the training at the immediate point of graphic materials are often all that is required. For

need, are more easily updated than instruction, and example, on an automobile production line, where

often are more relevant to specific jobs. They also torque requirements vary among components and

can aid in the transfer of training to job perform- models, a table printed in large type showing the

ance.

43 needed torques might hang at the appropriate point

A3Kml~d, op. cit., footnote 13.
Chapter 7—Training Technology ● 205

on the line. A similar table would be used at the

quality control checkpoint. Such job aids do not

differ much from old-fashioned maintenance manuals except in the attention that is given to their design

and access.44 Other examples of job aids include the

checklist that flight crews use before a plane takes

off, and computer keyboard templates that remind

the operator which function keys do what.

Embedded Training

Embedded training is instruction that is an integral component of a product or system. In a

computer, for example, it is easy to provide online

training (help screens, tutorials) as part of the system

(see box 7-K). Most other devices that use microchips now include diagnostic circuitry that speedily

identifies any malfuction; some also describe how

to repair it. Automated manufacturing systems also

now include built-in training and documentation

(e.g., the Martin Marietta and Apple factories

discussed previously). DoD also is interested in

embedded training, which has focused the interests

of military R&D contractors on embedded systems,

and may hasten their transfer to civilian technologies.45

The movement toward embedded training is

being driven by a number of forces in contemporary

technology, including the increasing capacity of

microchips, their incorporation in more and more

equipment, and the speed with which new technology is introduced. Equipment life is getting shorter.

When a machine was expected to last 20 years or

more, traditional training with a high initial cost was

cost-effective. As the life expectancy of equipment

has dropped to 5 years or less, it has become too

costly to train workers in the traditional way every

time a new machine is introduced. Embedded

diagnostics and training reduce both the preservice

training time and the onsite repair/maintenance

time. 46

Embedded training has many advantages over

other forms of instruction. The most important is

availability-training is always available when needed.

Thus, embedded training is useful for applications

where it is either impossible or not cost-effective to

train everyone who uses apiece of technology about

all of its operational characteristics. For example,

office copy machines today often include graphic

displays that show where a problem occurred (e.g.,

a paper jam) and list the steps needed to remedy it.

Second, embedded training is available at the

work station and is focused on the worker’s immediate needs for operation or repair. Third, it makes it

possible to combine the sound instructional design

principles of good formal off-the-job training with

the best features of informal training (e.g., co-worker

interaction, immediate opportunity to apply the

results). Embedded training also simplifies the

logistics of providing training to customers or

employees because it is delivered along with the

product or system.47

With embedding it also becomes possible to shift

costs from employees to customers. One of the most

visible examples is the automated teller machine.

The next step is moving the teller function into the

home via telephone and/or computer-a service now

offered by many financial institutions. Indeed, as the

technology of embedding improves, the skills needed

by the end-user decrease to the point where vendors

are now shifting the responsibility for installation

and maintenance to the user.48

However, embedded training is difficult to design

and many current efforts are not very successful. To

be effective, the information must address the

specific questions or problems that people might

have when using or repairing equipment. A lot of

empirical work with prototypes and typical users is

needed to anticipate the full range of questions or

problems that might arise. User-testing early in the

design cycle is a relatively new concept in system

development, and most engineers have not been

trained in such data collection methods.49 Also, if

the training provided is too restrictive, it can inhibit

‘W.bid.

AsKe~ley, op. cit., fOOtnOte 1.

MK~l~& op. Cit., fOO~O@ 13.

A’lKemley, 0p. cit., foo~ote 1“

@K~l~d, op. cit., footnote 13.

4Qid.
206 . Worker Training: Competing in the New International Economy

Box 7-K—The Manpower Services Training System

In the early 1980s, Manpower, a temporary employment service for offices and factories, saw that with changes

in technology it could no longer expect to find personnel who were able to use the full range of client equipment.

Manpower searched unsuccessfully for an existing training system that would be time- efficient, cost-effective, and

work for many people with widely varying backgrounds at dispersed locations. The company found the training

programs and manuals supplied by equipment manufacturers too hard to understand. Moreover, it felt that most

off-the-shelf training programs taught more than was needed to begin machine use. Overly ambitious programs

might increase learners’ fear of new technology, which were great enough already.

Instead, Manpower developed Skillware, a series of computer-based training programs to teach operators the

hardware and software they will use on assignments. Skillware has modules that differ in difficulty (basic, advanced,

and executive) and in application (special features, graphics, databases). It is personalized and contains humorous

elements intended to help hold trainees’ attention and reduce their fear of the equipment (see figure). Training may

last from a few hours to 2 days depending on the module. Skillware is job-specific, teaching a temp only the skills

that clients request. To achieve this, it uses scenarios; i.e., the trainee works for a fictitious company and has to

complete a task for that company by the end of the course.

At a computer terminal, trainees proceed at their own pace through on- screen tutorials and instruction booklets

(computer/software manuals written in clear language). Each tutorial/exercise segment can fit on a single screen and

focuses on a basic operation (e.g., moving the cursor, printing a computer-edited document). A training

administrator is available to answer questions, but Manpower prefers that trainees work themselves out of jams (as

they might need to on assignment). At the end of training, the trainee is asked to compose a letter about the training

program to Manpower’s president; an acceptable letter is seen as a valid performance test. (Some letters have offered

suggestions to improve training that Manpower has adopted.) After the training, each operator receives a “quick

reference” manual (containing terms, functions, and replicas of tutorial screens) to take to the job.

Recently, Manpower initiated a skills assessment system for job applicants (including applicants for temporary

light-industrial positions). As the company rejects few applicants, the system serves primarily to place people in

appropriate positions. For office placement, Manpower uses a work-sample test to assess editing, proofreading,

clerical, and word-processing skills and to determine applicants’ training needs. The assessment system for

light-industrial applicants includes performance tests to measure sorting and checking, tool-related assembly,

printed circuit board and small-parts assembly, and coordinated rapid movement. Written tests assess aptitude for

tasks such as inspection and logging production. (Manpower does not yet offer training to its light-industrial

temporaries, but recognizes that the trend toward automated manufacturing could require such training soon.)

The company provides Skillware free to all employees, including its light-industrial temps. (A 2-day course

costs Manpower $100 per trainee for equipment, material, and development.) The company feels Skillware is a

powerful recruiting tool-people who know they can get free computer training may be more apt to sign up with

Manpower than with another temporary agency. When not on assignment, office temporaries are encouraged to

come to a Manpower office to learn another software program or familiarizee themselves with new equipment.

The company has begun to train permanent workers at client organizations. For example, IBM hired Manpower

to provide a training program for IBM’s System/36 customers. In return for training those customers, Manpower

gets access to pre-releases of IBM hardware and software so it can anticipate future needs in the temp market.

Manpower continues to invest in training research and development to stay on top of the ever-changing world

of office hardware and software. (Currently the firm spends around $3 million annually, but it spent $15 million

for R&D in the first 2 years of the Skillware project.) Manpower believes the success of its training and R&D efforts

is reflected in its market success; in 1989, sales were $3 billion-double those of the nearest competitor.

workers’ ability to use their intuitive knowledge and are developed after the system or product is comto foster innovation.50 pleted. The inclusion of training specialists as part of

Thus, good embedded training requires that in- the design team often requires organizational changes

structional system design experts work with product and different skills in the training department.

design engineers. Traditionally, training materials Finally, artificial intelligence techniques may be

%titute for Research on Learning, The Advancement of Learning, undated pamphlec John Seely Brown and Paul Dugui4 “Design for

Implernentability,” paper presented at the conference on Technology and the Future of Wor& Palo Alto, CA March 1990.
Chapter 7—Training Technology ● 207

necessary to create embedded training programs that

can pinpoint what the user wants to know.51

In time, the movement toward embedding could

affect many aspects of workplace training. In theory,

far less training would be needed prior to assignment

to a specific task, reducing the cost of training.

Moreover, embedded training occurs at the workstation, improving transfer of learning to work. The

involvement of instructional systems experts in

product design also improves the human factors

aspects of equipment. Finally, fewer workers would

be needed because equipment operators increasingly

can also perform routine repairs and maintenance.

THE COST OF TECHNOLOGYBASED) TRAINING

There are several elements in the cost of technologybased training. The easiest to fix are the purchase

costs of hardware (e.g., PCs, IVD systems, satellite

dishes) and off-the-shelf courseware. Additional

costs may be incurred in adapting the courseware or

retraining instructors. If off-the-shelf courseware is

not available, custom courseware development costs

also must be considered. If frequent updates are

needed, they will add to the longer term costs. Other

costs relate to the delivery setting (e.g., rewiring a

classroom for teleconferencing, adding computer

tables to switch from a lecture to a CBT format).

Finally, the labor cost of delivery (time off work)

must be considered. Table 7-5 shows the training

budgets for various sized companies in 1989. These

data suggest that the smallest companies spend less

than $100 per employee on training while companies with more than 500 employees spend $100 to

several hundred dollars per employee.

Classroom training often has a very low front-end

cost. Most companies have a conference room or

other area that can double as a classroom. Supporting hardware (blackboard, overhead projector,

flipchart) and printed materials are relatively inexpensive and easy to obtain. Lab equipment usually

can be scrounged from operating departments; class

projects are even a way of saving repair and

maintenance costs. The instructor often is a subjectmatter expert from within the company or is hired on

a contract basis. However, classroom training is

consistently shown to be the most expensive in terms

of the labor costs of delivery (time spent away from

the work station) and travel to a central corporate

classroom or a course offered by another organization. Costs rise dramatically for companies or

agencies with offices throughout the Nation or

around the world.

Table 7-6 compares the costs of other common

technology-based training systems. All costs vary

with the level of sophistication of the system and

courseware. The number of participants also can

affect direct costs (e.g., for satellite services). If a

learning site needs to be rewired for satellite,

teleconferencing, cable, or other services, these

modifications will add substantially to the costs.52

Trade-offs between the convenience of off-theshelf courseware versus the cost of programs tailored to specific needs also must be considered.

Many training analysts argue that most good training

has to be situation-specific and cannot be met with

off-the-shelf or generic programs, no matter how

good. Some floppy disks and erasable videodiscs

can be updated or adapted to individual corporate

needs with little effort; other programs cannot be

altered easily or require remastering. Also, there is

little independent evaluation of the claims for

effectiveness of off-the-shelf programs.

Custom courseware development costs vary widely

depending on the medium, program length, and, for

CBT and IVD, level of interactivity and sophistication as well as the development tools used (e.g.,

authoring systems, supporting databases). A CBT

courseware designer at Boeing Aerospace and Electronics estimates that he can design a 20-minute

CBT course in about 4 hours (excluding any video

or graphics work) using a relational subject-matter

database. In contrast, the instructional design department at Stromberg-Carlson estimates that it takes

them 300 hours to produce 1 hour of CBT compared

with 30 hours to produce 1 hour of classroom

instruction. 53 Estimates from consulting companies

range from 50: 1 to 600:1 depending on the complexity of the course and its subject matter. The actual

authoring may only take 15-20 percent of the

51K~ley, op. cit., footnote 1.

SzSeech. 3 ~d app. B of LJ~”ngfor~arning:A New Course~orEducan”on provide detailed assessments Of the cost Componmts of dis~ce lx

systems, OTA-SET-430 (WasbingtorL DC: U.S. Government Printing Clftlce, November 1989).

ss~~r, op. cit., footnote 3.
208 . Worker Training: Competing in the New International Economy

. . . . .

. . . . .

. . . . . I
Chapter 7—Training Technology ● 209

Table 7-6-Technology-Based Training Costs

Medium Equipment Hardware off-the-shelf courseware

Television TV set $250-$3,000 $0-cable or other subscription cost

Satellite dish $800-$10,000 $200-$5,000

Videotape VCR $150-$500 $100-$10,000 purchase

$50-$200 rental

Video camera $700-$2,000

CBT PC $750-$10,000 $50-$10,000

Workstation $10,000-$50,000

Authoring system $100-$5,000

IVD Level la

$400-$1,000 $50-$5,000

Level II $1,000-$2,000 $300-$5,000

Level Ill $5,000-$10,000 $500-12,000

Authoring system $500-$8,000

Digital video DVI $2,000-$21,000 NA

CD-1 $3,000 NA

ABBREVIATIONS: CBT. computer-based training; CD-1 = compact-disc interactive; DVI = digital video interactive; IVD = interactive videodisc; NA. not

available; PC= personal computer; VCR = videocassette recorder.

aln this m~e~, “level” refers to the type and capabilities of the hardware.

SOURCE: Office of Tdnology Assessment, 1990.

development time and initial design and testing

quality assurance the remainder.

IVD course development costs also vary with the

sources for the video/audio/graphic components.

Some IVDs and CD-ROMs available today are

“resource discs” with still frames, audio, or video

for various situations. The purchase price may

include royalty costs. If, however, original film and

sound must be recorded, the production cost will

drive up the price. Total costs for a l-hour course

that uses available resources may be as low as

$4,000, while a 5-hour course that requires filming,

sound recording, and computer programming may

cost several hundred thousand dollars.

Several innovations promise to reduce the cost of

technology-based training. Authoring systems and

other instructional design tools, resource discs, and

relational subject-matter databases substantially reduce the development time and labor costs. Equipment and courseware leasing options reduce the

front-end costs for training that is delivered infrequently. Some professional associations are promoting the concept of ‘shareware” for training materials. Learning centers are being established that

provide services such as satellite links and CBT and

IVD training stations, with accompanying courseware.

THE EFFECTIVENESS OF

TRAINING TECHNOLOGIES

The concept of “good” training has two distinct

lines of thought that are only now beginning to

merge. The first is adult learning theory, which has

engendered a wide range of approaches to training,

many of which have undergone little empirical

evaluation. The second is corporate productivity—

training is effective if it appears to improve job

performance and reduce costs. While little empirical

research has been done in this area, the focus on

productivity gains did promote the use of standard

instructional development principles to ensure that

training was specific and relevant. This section

evaluates the available data comparing technologybased training with conventional methods. The

following section discusses adult learning theory

and instructional systems design.

Few companies have the time or resources to

compare the cost-effectiveness of different training

delivery systems. Many training delivery decisions

are made in an atmosphere of ‘crisis management’

and, while not arbitrary, are more often based on a

combination of the available training funds and the

training manager’s experience with a particular

system than on a measured consideration of shortand long-term benefits. Evaluation of training benefits and costs is usually informal and cursory-often
210 ● Worker Training: Competing in the New International Economy

based on word-of-mouth feedback from participants

and their supervisors.54

Most training managers are not themselves

trained in benefit-cost analysis. Even if they understand the theory, there are practical obstacles to its

application, including the difficulty of quantifying

training benefits, the subjectivity and questionable

nature of the assumptions underlying such analysis,

the inability to separate the influence of training

from other factors that might improve performance,

and the time and financial resources needed for

analysis. Benefit-cost analysis also is not usually a

management priority, either because it is not seen as

valuable or because training itself is not an integral

part of the corporate operating strategy .55

The lack of benefit-cost analysis can mean that

training departments can hide ineffective training—

whether a bad program or course, or training that

simply does not transfer to the workplace. For good

training, however, benefit-cost analysis can elevate

training to a line item that improves productivity and

profits rather than a staff function that spends

money. Thus, benefit-cost analysis might justify a

separate corporate training department and contribute to making training part of a company’s underlying business philosophy.56 Increasingly, companies

are shifting budget responsibility for training to

operating managers to promote cost-effectiveness.

This places greater demands on trainers to keep the

operating managers informed about developments in

instructional technology and available courseware.

Ironically, even when benefit-cost data are available, they may have little influence on decisions to

use technology-based training approaches, which

are often made on entirely different grounds. Sometimes the rationale for using training technology is

for the training manager or corporation to appear to

be on the “leading edge” and thus attract positive

media attention. Another rationale is convenience

(e.g., adopting CBT because the computer terminals

are already in place) .57 On the other side, the

potential long-term effectiveness may be overshadowed by front-end hardware or courseware costs

(e.g., IVD).

When cost-effectiveness evaluations of technologybased training are conducted, they often compare a

subject taught via conventional classroom instruction with the same subject delivered via technology.

This is an oversimplification for three reasons. First,

they may reflect the simplistic view of technology as

hardware, and thus ignore variables such as the

quality of the software or courseware or the skill of

the instructor. Second, technology-based training

usually requires a change in teaching strategy and

media and often involves a shift in course content

and approach as well as the delivery setting. Third,

these comparative studies assume there is a simple

dichotomy between classroom and technologybased instruction. But classrooms often use a range

of technologies, and technology-based instruction

may be delivered in a classroom setting. A typical

training course involves several types of instructional activities, some of which are more suited to

the use of technology and some of which require

lecture or discussion.58

Yet thousands of comparative studies have been

conducted, especially for CBT, IVD, and simulators.

Despite any oversimplifications that may be inherent in the study design, the study conclusions have

been corroborated with years of corporate, military,

and government experience with technology-based

training.

Table 7-1 summarizes some of the potential

benefits from various types of instructional technology. None of these will occur automatically; they

require the right combination of instructional skills

and courseware design with training appropriate for

the task being learned. (Similarly, the potential

disadvantages listed in the table depend on a wide

range of variables.) Figure 7-4 illustrates ASTD’s

survey data on the cost-effectiveness of three

training technologies.

One of the most consistent findings about the

cost-effectiveness of good technology-based instruction is that training duration can be reduced

ficp~ A. ~~=do, ~~Do tie Benefits of Trx JUS@ tie Costs?” Training & Development Journal, VO1. 43, No. 12, D=mkr 1989) PP.

60-64.

SS~id.

~Ibid.

s7’Ke~ley, op. cit., footnote 1.

58~ido
Chapter 7—Training Technology ● 211

Figure 7-4-Reported Cost-Effectiveness of

Training Technology

Percent of companies

100 ——- -—-—- —

[ t 1

90

80

7 0

6 0

Companies that consider

technology-based tralnlng

clearly cost-effect

Company that Consider

technology-based training

Satisfactory

!

5 0

4 0

3 0

2 0

10

0-i J

SOURCE: Based on Arnerioan Society for Training and Development

survey of 157 executives from Fortune 500 private firms with

$500 million + in sales.

30-40 percent relative to traditional classroom

lectures. This reduction appears to occur because of

the design and delivery elements of technologybased training (adaptable to individual learning

styles, self-paced, more private; see boxes 7-L and

7-M). This reduction in training time translates to

large cost savings in less time away from the job and

often lower travel costs. Organizations also can

deliver more training over a given period.59

The best technology-based training also shows

increased achievement in terms of test results,

retention, and/or job performance (although the

latter is difficult to measure). When coupled with

computer-managed instruction, such training can

provide automatic collection of data on student

performance and help identify training problems.

Moreover, many students report that they find

technology-based training more interesting and enjoyable than classroom lectures. Students also have

less fear of giving a wrong answer than in a group

situation. Because the courseware is delivered in the

same way each time, its quality is more consistent

and reliable than classroom instruction. Fluctuations

in the number of trainees and their backgrounds can

be accommodated more readily. In most cases, the

training also is available when and where the

employee needs it without waiting for travel or

course scheduling. This also improves access for the

disabled. Finally, trainees can learn and practice

more types of procedures without downtime or

damage to real equipment, and without safety

concerns on dangerous equipment (see box 7-1).60

The appropriateness of the training technology to

the task being learned is an important element of

effectiveness. Most training professionals agree that

high-tech delivery systems are best suited to technical skills. Teaching someone the series of steps in

processing an insurance claim or assembling equipment is a good application for CBT or IVD. Most

trainers also agree that traditional settings such as

classrooms and workshops are needed for imparting

interpersonal skills, management training, and corporate culture building. Yet high-tech systems are

beginning to make inroads here also (see box7-and

the discussion of performance support systems,

below), and their use probably will increase as

artificial intelligence techniques make video simulations of personal interactions more realistic. The

delivery setting also can influence technology effectiveness (see box 7-N).

Most of the evidence about the cost-effectiveness

of training technology comes from the armed

services. A recent Institute for Defense Analyses

survey examined data from 100 studies on the

cost-effectiveness of CBT, flight simulators, and

maintenance simulators, with most studies showing

that technology-based training saves time and results in higher achievement.61 A survey of 31 studies

of IVD training (15 military, 3 industrial, 13 higher

education) concluded that IVD was more effective

than conventional instruction in almost all cases.

The more interactive features used, the more effective the IVD) training appeared to be (see box 1-C in

ch. 1).62

Stromberg-Carlson, a Florida telecommunications company, devised an IVD simulation of new

telephone switching equipment it produces and

compared the simulation with training on the actual

equipment. The IVD program was faster because

more students could use it at any given time, and the

~id.

-d.

SIJ.~-,‘CTIW lkodutity of lhining,” J. Zeidner (cd.), Humun Producuwy “ “ Enhancement (l%v Y- NY: Praeger, 19S6), VOL L

‘J.D. Fletcher, “Report on the Potential of Interactive Videodisc Technology for Defense-and Education” (Al~ VA: Institute for

Defense Analyses, 1989).
212 ● Worker Training: Competing in the New International Economy

Box 7-L-The Effectiveness of Interactive

Videodisc in Training

Although its use has grown slowly, IVD is

becoming an increasingly common training technology. Evaluations-when conducted-seem to

be uniformly positive. Some examples are:

. Goodyear Tire & Rubber compared a videodisc training program for mechanics on using

an oscilloscope and multimeter with the same

training via videotape or classroom. In actual

job performance tests after training, the IVD

approach produced the best results. Furthermore, trainees indicated a preference for the

IVD course.

● McDonnell Aircraft Company in conjunction

with Digital Equipment Corp. developed a

videodisc training program for computeraided design (CAD). The program cut training

time for this course from 12 hours to less than

8 hours for all trainees, decreased the cost per

student hour, reduced teaching loads, and

resulted in better retention of the material.

. IBM conducted research at its Corporate Management Development Center comparing three

ways of using IVD (instructor-led, small

groups, and self-study) with classroom instruction for an employee relations course.

Learning gains scores and mastery levels in the

IVD approaches were better than classroom

instruction alone.

● GTE of California compared IVD with classroom instruction in training technicians to

troubleshoot a statewide data network. The

IVD training was superior in retention and was

well liked by the employees.

SOUR=: Greg Kearsley, “Instructional Technology and Worker

Mrning Needs,” report prepared for the Office of

Technology Assessment under contract L3-5615,

February 1990.

retention rate was higher because students had more

access time.63 -

INSTRUCTIONAL DESIGN

Worker training’s cost-effectiveness is always an

issue. Some training fails to impart the appropriate

skill for the job, misses some aspects of the skill,

includes irrelevant information, or does not match

the trainees’ backgrounds and learning styles. This

can mean ineffective training for a cost that is higher

than necessary. To help training become relevant,

complete, lean, and suitable, a set of principles and

procedures has been devised to guide instructional

development. First devised in the mid-1950s, these

principles have evolved with changes in adult

learning theory, and now are used widely throughout

industry, government, and the military. In recent

years, these principles and procedures have become

partially automated with computer programs for

designing and authoring instruction.

Adult Learning

In 1973, Malcolm Knowles, then a professor at

Boston University, argued that the traditional pedagogical approach to teaching children is inappropriate for teaching adults in most situations.@ H e

introduced a new approach—termed andragogythat was more flexible, participative, experiencebased, and problem-centered.65 While it has been

challenged on several grounds, andragogy’s most

important contribution probably is that it created a

greater sensitivity to the needs and interests of the

learner.

Today, training developers use needs analysis

(see discussion of instructional development, below)

to determine the best approach to imparting a task.

For some training situations, pedagogical methods

make the most sense-for extremely technical

topics, for example, or for tasks that follow rigid

performance steps, or for subjects entirely new to

learners. 66

At the same time, good training programs increasingly recognize the tremendous diversity among

adults, including the wide range of ages, attitudes,

educational backgrounds, learning styles, and instructional goals and settings. For example, adults

with the most formal schooling are more likely to

63~&r, op. cit., footnote 3.

~M~~lm Knowles, The Adult tiarner:A Neglected Spea”es, (1-hsto% TX: timb. CO., 1973).

65D~eFeUer~dBeverly Gbm, “U’h-oh. . . . Second Thoughts about AdukLearnm“ gTheory,” Trahing,vol.25,No. 12, December 1988, pp. 31-39.

~lbid.
Chapter 7—Training Technology ● 213

Box 7-M—A Comparison of IVD Delivery Settings

Historically, research comparing group and individual learning for lecture/lab has shown that the group settings

are superior in promoting achievement and productivity. Studies that compared CBT using pairs and individuals

found similar results. Only one such study has been performed with IVD. It compared group, paired, and individual

instruction on the same courseware, with the pairs yielding the highest achievement, followed by groups and then

individuals.

The predominant instructional setting with IVD has been individual instruction. Its major advantages include

self-pacing to accommodate individual learning rates, knowledge levels, and training needs; and flexibility in

scheduling and the physical setting. Using IVD in pairs also allows self-pacing (if the trainee pair was chosen

properly), is only slightly less flexible in scheduling, plus it cuts collective learning time in half, facilitates learning

through discussion, and builds rapport among trainees, which can encourage networking between departments and

can resolve multicultural differences. Larger group instructional settings for IVD are gaining popularity. They

provide: an opportunity to tailor generic courseware to a company’s needs, in that the instructor can add to or modify

the IVD to create discussions or skip sections; the dynamics of group interaction and debate; the popularity of group

socialization (e.g., coffee breaks); and, in some cases, more cost-effective training. However, scheduling becomes

less flexible, self-pacing usually is sacrificed, and there is more fear of giving wrong answers.

Each training situation will be different, however. Companies need to conduct trials with different delivery

settings to determine which is best for their training needs. The advantages of paired or group learning may be

insufficient to overcome the costs of multiple training stations or scheduling conflicts.

SOURCES: Richard P. I..oolmtclL “Options for Interactive Video,” Training & Development Journal, December, 1989; J. Vadas, paper

presented at Sixth Conference on Interactive Videodisc in Education and Training.

feel comfortable in structured classes and lectures.67 and effective learning, more research on adult

Many trainees do not want to examine options and

decide for themselves how to perform a task; they

may consider it a waste of time when the instructor

could tell them what to do and they could get back

to work and do it. Similarly, some adults enjoy

andragogical activities such as group role playing,

while others find it silly or are intimidated by the

situation. Finally, some people learn best by listening, some through group discussion, some by

reading, others through visual cues, and still others

through experiencing and practicing.

Adult learning theory has stimulated much debate

over the last 20 years. Yet there is little basic

research or evaluation of different approaches to

applying the research in training. Despite the enormous

sums spent on education and training, and despite

the shortcomings evident in both systems, applied

learning research has never been well supported

except by DoD. Much of the current focus is on how

to fix schooling. Yet the rapid pace of change in

technology and work means what people need to

learn is in constant flux. To promote more flexible

learning and how the results of that research can best

be applied in the workplace is needed.68

There are several different areas that need further

exploration. For example, more research is needed

about the different combinations of learning approaches most likely to help people learn on the job

(e.g., ways to combine formal and informal instruction, the roles of co-worker guidance and repeated

practice). The apprenticeship model, for example,

can promote flexible, powerful reasoning that transfers to other situations. Embedded training systems

can be designed that take advantage of equipment

operators’ intuitive skills while helping them develop a deeper understanding of the processes

involved.69 Performance support systems have the

potential to provide structured on-the-job training in

a wide range of situations.

Instructional Systems Development70

Based on the current understanding of adult

learning, a model or procedure for instructional

systems development (ISD) has evolved that can

67fiid.

a~ti~te for Research on Learning, op. cit., footnOte 50.

@Ibid.

~nlessotherwisenoted, thematerialinthis section isdrawnfromMichael De Bloois, Interactive Training Seminar, Alexand.r@ Vir~ November

1989, and Eagle Technology, Inc., personal communication to OTA.
214 ● Worker Training: Competing in the New International Economy

contribute to more effective training. The five basic

stages of the ISD process are: analysis, design,

development, implementation, and evaluation (see

figure 7-l). This model is now followed in the

military, by many large corporations’ training de -

partments, and by many designers of custom training

programs. Instructional systems development also is

offered as a degree program or included in the

human resource development curriculum at some

universities (the ASTD database shows 2 undergraduate ISD degree programs, 27 masters’ programs, 13

PhD, and 8 cetificates). However, many human

resource development personnel or subject matter

experts assigned training responsibilities have not

been exposed to ISD. Also, ISD principles rarely

enter into training decisions made in a crisis

management atmosphere (as many such decisions

are), or in informal on-the-job training (the kind

most workers receive). Moreover, while ISD can

save money in the long run, the upfront costs can be

considerable.

The first stage of ISD, analysis, helps corporate

trainers (and managers) define training needs more

precisely (or determine whether training is the

appropriate solution to the problem) by describing

the tasks or skills to be imparted and developing a

trainee profile. This analysis contributes to the

overall design of the training project, including the

medium (e.g., lecture, videotape, computer, IVD)

most appropriate for the training. The design decisions are then developed into a combination of

courseware and hardware (or a decision to purchase

off-the-shelf courseware).

In theory, before full-scale implementation, ISD

also includes some field testing-formative evaluation-of the behavior of people using the training

package. Revisions can then be made before the

finished product is produced for the training site.

Ideally, the training program also is evaluated (and

revised as needed) after implementation to determine how well the training transfers to employee

performance, both at the end of training and on the

job. In practice, however, few companies devote

substantial efforts to evaluation.

Depending on the type of training package being

prepared and the resources available, ISD may

involve a team of experts or one or two people. For

an involved IVD simulation, a team might include

instructional designers, subject matter experts, computer programmers or video producers, and writers.

On the other hand, a simple CBT package (e.g., how

to fill out a corporation’s forms) now can b e

produced by training personnel well-versed in ISD

principles working with instructional design tools,

resource discs, and a good authoring system.

There are several issues surrounding the ISD

process. First, many corporate trainers are administrators, not designers. They may fail to determine

whether off-the-shelf courseware was developed

following ISD principles before they purchase it.

Next, development of a good, comprehensive training program can cost hundreds to thousands of

dollars. Task analysis, trainee profiles, and evaluation are especially costly, and companies often

bypass or abbreviate them in order to save money.

Yet these are key steps in the production of good

training materials.

Establishing the medium also is critical for quality

and cost considerations. A well-designed videotape

or lecture (with supporting visuals or other tools)

may be all that is really needed to impart the

information, but translating that information to a

computer program might save trainee time away

from the worksite. On the other hand, the computer

program might cost too much more to develop and

implement. Some companies have chosen CBT or

IVD as the medium because it is the leading edge

without considering whether the medium is appropriate to, or its cost justified by, the task. They

frequently are dissatisfied with the training results.

Automating Instructional Development

Training programs are generally hand-crafted and

relatively labor intensive. Until recently, quality of

the programs was almost entirely dependent on the

developers’ skill and experience. Now, however,

software tools are becoming available to aid in

training design. These include both instructional

design and authoring tools.

These tools can facilitate the development and

implementation of cost-effective training materials.

The tools promise to be a major area of research and

commercial activity within the next 5-10 years.

Authoring systems already are established as an

important category of software tools for training

departments. Work on automated instructional development systems that cover all aspects of analysis,

design, and evaluation is in its nascency. The

application of expert systems to instructional devel-
Chapter 7—Training Technology ● 215

opment also is at an early stage but is likely to catch

on quickly.

The overall effect of these tools will be to make it

easier and faster to develop cost-effective training

programs. Less expertise (either ISD, computer

programmingg, and/or subject-matter) will be needed

to create high quality training materials.

Instructional Design Tools

Instructional design tools are software packages

that help designers in the analysis, design, and early

development stages of ISD-everything up to authoring. The software also may provide project

management capabilities for the ISD process. These

automated instructional development systems are

new (only a few are available commercially) and it

is difficult to generalize about their features. Because many of them were developed for military

projects, they often are linked to military design

specifications and integrated logistics support requirements.71 The key parameters to look for in such

a system include the amount and type of built-in

expertise, whether a system is advisory or operational, the skill needed to use it, the number of tasks

it performs, the types of training technology it

supports, its flexibility, and the hardware platform it

requires. 72

The amount and type of expertise built into the

software ranges from basic online help systems to

elaborate programs using artificial intelligence.

How much expertise is required depends on the type

of training package being developed and on the

designer’s skill. Some software includes a variable

amount of expertise that can be accessed (turned up

or down) as needed. Software maybe targeted either

to ISD experts or subject matter experts. Some

packages are advisory only; they provide checklists,

flowcharts, templates, and other job aids for the

designer. Others actually do the production based on

the data entered (e.g., they perform the task analysis). The number of tasks the software performs also

varies. Some programs do only one step, some do

several. Those that include the entire process are still

in the development stage. The software may be

generic, in that it applies to all types of training

technology, or it may be specific to CBT, IVD or

large machine simulators (ships, planes, tanks).

Finally, they may run on anything from a PC to a

large mainframe.73

Instructional design tools have the potential to

improve the productivity of training developers in

many ways. By automating mechanical tasks such as

sorting information or drawing charts, developers

save considerable time. Easily accessible databases

also speed up the development process. As job aids,

such tools can compensate for a developer’s lack of

either ISD or subject matter expertise and can help

maintain consistency in the quality of training

programs. Combined with project management software and electronic mail, these tools can improve

project tracking.74

To date, however, most of these systems were

designed as part of research projects to investigate

how automated tools could improve the quality or

efficiency of training development. The research

merely demonstrated that working systems can be

built. No studies have been done yet that compare

training packages developed with instructional design tools with those prepared manually, either in

terms of quality or time/cost savings. Moreover,

development of these tools has been on a path

separate from the development of authoring systems, which focus primarily on CBT and IVD. The

front-end results of instructional design tools do not

yet feed directly into scripting and authoring.75

A special category of instructional design tools is

available for expert systems and intelligent tutors.

Indeed, one of the more important applications of

expert systems in training may be to provide

intelligent job aids for instructional system design.

Some programs provide “shells” for the creation of

expert systems or intelligent tutors. These shells are

prewritten programs that help a designer develop an

expert system/tutor without programming skills. As

with other design tools, the system suggests organizational or teaching strategies and/or makes recommendations about design approaches based on the

71K~@, op. cit., footnote 1.

mv~~a Anderson, “An Overview of Software Tools for Instructional Desi~” paper presented at 8tb conference on Interactive Instruction

Delivery, Orlando, FL, February 1990.

Tsrbid.

TA~id, and Kearsley, op.cit., footite 1.

TSKe~ley, op. cit., footnote 1.
216 . Worker Training: Competing in the New International Economy

content information provided. They also may provide advice about evaluation and course administration.76

Expert system/tutor shells also face the general

problem of the current lack of knowledge about how

to design effective training materials. Also, there

have not yet been any comparative evaluation

studies. Conceptually, such shells are easier to

construct than ISD tools because all the designer

needs is several experts who can consistently

perform a task with good results.77 However, translating that knowledge into rules and programming it

may still be difficult and time consuming.

Authoring Tools

Authoring tools use high-level language programming to create interactive computer-based courseware (either CBT or IVD). Authoring languages are

either standard computer languages (e.g., BASIC, C)

or a language designed for creating instructional

material; they require skill in programming. Authoring systems are programs that help people write

other programs. The systems allow an instructional

designer or subject matter expert with no programming background to create computer-based courseware.

78

Authoring systems followed quickly on the heels

of the PC. In 1985, there were around 12 authoring

systems; the number expanded to over 100 and then

shrank to around 80 today.79 Most of them support

interactive video and provide computer-managed

instruction. For some of the more popular systems,

there are also user groups and consultants available

for training or contractual development. Several

firms are now adapting authoring systems for digital

videodisc (see discussion of future technologies).80

Authoring systems vary widely in their sophistication and capabilities. Most present menus that

allow the developer to choose input from a variety of

sources (databases and resource discs of video,

audio, and computer graphics), specify types of

interactivity, select features such as windows and

overlays, and choose presentation styles (such as

video wipes or other transitions). Once these are

specified, the system automatically generates a

program that should be bug-free. Eliminating the

need for programming and debugging can reduce

development time substantially .81 Authoring systems do vary in their flexibility-the extent to which

the user can shape the process. Menu-driven systems

often are easy to use and learn, but they can restrict

flexibility. Others are transparent in the sense that a

programmer can change code.82

Authoring systems have evolved to the point that

programming is no longer a major consideration in

the development of computer-based instructional

materials (other than which system to use). However, knowledge of ISD principles usually is still

necessary. Unless they are trained in the design of

interactive instruction, most training developers do

not have a clue which options to select to make

effective training materials. Eventually, automated

instructional design tools will increase productivity

in this area, but the developer’s skill will still be

critical. Another problem is the lack of hardware

standards for operating systems and for peripherals

such as videodisc players, so that authoring software

would work with all types of devices. Standards for

interfaces (e.g., CD-ROM drives) also are needed.83

FUTURE TRENDS FOR

TRAINING TECHNOLOGIES

The rate of increase in the adoption of technologybased training is accelerating. By 1993, 93 percent

of the executives from large firms polled by ASTD

project ‘some’ or ‘‘substantial’ CBT applications,

with substantial use more than doubling over 3

years, from a current 12 percent to more than 29

percent (see figure 7-5). IVD applications are

projected to increase to 71 percent use, with

substantial use growing from 7 percent in 1989 to 15

76c~ycm, ~~~ptiSwtem: -tDO ~ey Mwnfor Training’?” Training, vol. 26, No. 12, Dec*eI1989, PP. Ala.

77Ke~ley, op. cit., footnote 1.

78 fiid.

7gCErT system, Inc., personal communication tO OTA.

~tCAu~ofig System Now Av~~le for D~ T~~ology,” Zntellnreractivities, VO1. 1, No. 3, winter 1989, p. 1.

slKemley, op. cit., footnote 1.

Sz=cle co~sewfle ~c., personal communication to OTA.

WCEIT systems, he., personaI communication to OTA.
Chapter 7—Training Technology ● 217

Figure 7-5-Projected Use of Training Technology,

1990-92

Percent of companies

100

90

80

70

60

50

40

30

20

10

0

i

I

—. I

Computer-based Interactive video

i —.

Teleconferencing

= Substantial use m Some use m No use

SOURCE: Based on American Sodety for Training and Development

survey of 157 executives from Fortune 500 private firms with

$5(XI million+ in sales.

percent in 1992. The executives project teleconferencing to increase to 54 percent by 1992.

At IBM, technology was used to deliver no more

than 5 percent of the company’s education in the

early 1980s. At the beginning of 1990, training

technology use had increased to 30 percent. Moreover, IBM adopted technological delivery media at

a much faster rate from 1985 to 1990 than during

1980-85. IBM projects that by the end of the 1990s

about 60 percent of the company’s training will be

delivered outside the traditional classroom using

some form of technology. Northern Telecom Inc.

also is moving rapidly toward technology-based

training. Although 90 percent of its training still

takes place in classrooms, as recently as 5 years ago

that figure was 100 percent. The corporate training

director projects that the rate of shift will increase

rapidly, with ultimate plans to move toward the

performan ce support system concept (see below).84

Several factors explain the more rapid shift

toward technology-based training. First is hardware

and software maturi ty and the availability and lower

cost of off-the-shelf programs. An installed base of

training technology platforms (e.g., computer terminals, satellite dishes, VCRs) makes it difficult not to

use technology-based training. The entry of more

computer-literate students into the workplace also

will spur the growth of technology-based training.

Finally, the limitations of most classroom training in

terms of retention and transfer to job performance

will lead managers to be more open to technologybased approaches.85

Many technological advances that are or could be

available in the near future could spur this shift and

greatly affect worker training of all types. Almost all

of the advances use hardware, software, and concepts that exist now but are not yet used for

instructional purposes or that will be used in

radically new ways. Advances in storage, speed, and

peripherals will make computers much more accessible for training. Software improvements will result

in improved courseware. Electronic classrooms and

digital networks will make multimedia training

available anywhere at any time. Longer term advances will radically alter the way people interact

with computers and provide an entirely new environment for simulations.

These changes will allow more learning on

demand-usually at the normal workstation but

increasingly in the field or at home-as well as more

training that is controlled by the learner, more

embedded training, and multimedia training is

responsive to the individual trainee’s learning style

and pace. In the long term, these developments also

could profoundly change the way many people work

(e.g., by eliminating the need for a fixed or regular

worksite in service industries) as well as the way

they learn. Training would become even more

integral to work and not separate from it.

Computer Technology

Advances in computer technology should greatly

increase its utility for training. Options currently

requiring a host of equipment may be incorporated

in one unit. This integration will facilitate embedded

training and performance support systems. Lowcost, easily usable optical character readers will

increase access to information resources, particularly in rapidly developing fields. The storage

capacity of future PCs will be enormous based on

some form of optical disk such as erasable CDROM. Cellular modems will allow users access to

electronic message systems and online databases

without the need for a phone jack. An integral fax

will provide hard copy. Built-in television reception

$%cbcr, op. ck, foo(notc 3.

ss~.
218 ● Worker Training: Competing in the New International Economy

will give access to broadcast services.86 Voice

synthesis will allow access for the disabled and

reading deficient and will enable workers of all types

to receive instructions without taking their eyes

away from their work. Over the longer term, speech

recognition could reduce the time and effort needed

to learn to operate complex machines or software

systems, and enable anyone to generate multimedia

programs without a keyboard, mouse, or touchscreen.

87 Voice recognition systems already are used

in data collection to enable personnel not trained in

computers to work effectively in a computerized

environment. In automobile quality control, for

example, voice recognition has proven faster than

manual data input, and allows the inspector’s hands

to remain free for tactile tasks (e.g., feeling paint

scratches) .88

The evolution of personal computers has a number of implications for training. First, the projected

increase in the use of computers in the workplace

and at home will make it unnecessary to buy them

specifically for training (except for electronic classrooms). The increasing portability of computers will

facilitate embedded training, performance support

systems, and just-in-time training-putting the means

to pull information into the workplace at the time

and in the form it is needed. With the evolution of

multimedia workstations, computer and videodisc

training will accommodate individual learning

styles more easily.

Even though personal workstations will eliminate

many of the current problems associated with CBT

hardware, there will still be compatibility and

quality issues. Various operating systems will have

differing capabilities and will run only particular

types of courseware. Some displays will look better

than others, some machines will access/display

information more quickly, some machines will

sound better than others. This range in performance

characteristics usually will be determined by price,

and access to the most advanced CBT will be limited

by the training budget.

Software

Software developments that axe especially promising for training include hypertext and hypermedia

systems that enable the construction and use of

relational databases, and applications of artificial

intelligence to learning. Automation of instructional

systems design and improved authoring systems

(discussed above) also show

Hypermedia

Hypertext or hypermedia

the term for a new method

databases that allows users

great promise.

(if it’s multimedia) is

for organizing online

to pursue connections

among different items of information, rather than

being confined by a hierarchical structure such as a

menu system. The authors link information (documents, graphics, or audio or video sequences), create

paths through a body of related material, annotate

existing texts, and create notes that point readers to

either bibliographic data or another referenced text.

Users also can make notes and add annotations or

create their own links and paths. Systems that

support multiple users allow researchers, instructors,

and learners to communicate and collaborate within

the context of a database.89

Emerging hypermedia systems will include more

sophisticated navigational tools. These might show

what links a reader followed to get to a document,

which would facilitate incorporation of an intelligent tutor or computer-managed instruction system.

Filtering would allow users to bypass links and

concentrate only on those of particular interest.

Alternatively, hot links would force the user down a

particular path.90

Hypermedia presents a new paradigm for sharing

information in an integrated fashion. Once instructional designers become familiar with its capabilities, hypermedia is likely to have wide-ranging

impacts on courseware. To date, most instructional

uses have been in education, but hypertext and

hypermedia are beginning to be applied to embedded training and performance support systems. They

will be less useful in applications where the task to

86Kemley, op. Cit., foomote 1-

87KW@d, op. cit., fOOtUOte 13.

88Jo~ _~~sw~ up for Q~~,$’ Man@ctinng Engineering, VOL 103, No. 10, October 1989, pp. 67-68.

8~iwle Ytielovich et ~, “Issues in Desi@g a Hyperm~a D~urnent System,” Sueann Ambron and Kristina Hooper (tis.), hteractive

Multimedia (Redmond, WA: Microsoft Press, 1988).

Wbid.
Chapter 7—Training Technology ● 219

be learned is highly structured and needs to be

learned quickly.91

Artificial Intelligence

Research has been conducted for many years on

the application of artificial intelligence (AI) techniques to instructional material design. AI typically

focuses either on intelligent tutors or expert systems.

Intelligent tutors are computer-based instruction

programs with a large amount of background information. They include associative networks, the

capability to draw inferences from programmed

rules, and the ability to build models of students’

behavior based on their interaction with the program

in order to diagnose misconceptions and assess

learning. Intelligent tutors and have the potential in

time to provide much more effective learning

tools. 92

Expert systems are programs that incorporate the

rules, facts, concepts, procedures, calculations, and

rules of thumb used by experts in a field. This

knowledge base is then applied to generate conclusions about the learner’s input (see box 7-N). Expert

systems also can ask questions about an equipment

malfunction and diagnose the problem. In real-time

systems (e.g., in manufacturing or military settings),

data come from sensors rather than answers to

questions. When applied to training, expert systems

can be used to help students understand the factors

involved in making decisions or judgments. Alternatively, expert systems can be used as sophisticated

job aids that reduce or eliminate the need for training

on a specific task.93

Few intelligent tutors have actually been used in

training. Developing tutors takes an enormous

amount of time and expertise in artificial intelligence. Despite the amount of research in this area

(mostly funded by DoD), there are many fundamental issues in adult learning and cognitive theory that

need to be resolved before it is clear how to design

intelligent tutors that really work.94

In contrast, expert systems are much faster to

develop and do not require AI experience to use. The

current generation of authoring tools for building

expert systems is relatively easy to use and inexpensive. Instructors could even have trainees develop

simple expert systems to help them learn a subject

while producing a job aid that will carryover into the

work environment.95

Performance Support Systems

A performance support system is an advanced

type of computerized job aid. It has more information available than CBT, and the user controls access

to the learning or information rather than the

machine.96 Indeed, performance support systems

provide structured on-the-job training that could

substitute for some kinds of formal training.

Performance support systems (PSS) are a new

concept and few exist; thus generalizations are

difficult. Examples are provided below to illustrate

some of the features and uses to date. A PSS might

incorporate any combination of text, graphics, audio,

still video, applications software to perform specific

job tasks, databases, expert systems, interactive

training programs, assessment systems, and feedback and monitoring systems. With the development

of digital technology, full-motion video also will be

possible.97

Two major recent developments have promoted

performance support systems. First, storage technology for PCs and portables has advanced. Second,

innovations such as hypermedia gave rise to the

crucial underpinning of a PSS—the relational database which ties all of the above elements together.98

Today, a PSS often is not initiated by the training

department. It might begin in customer service, with

a need for a relational database that makes large

amounts of information easily accessible to telephone customer service representatives. The same

information is then found valuable in sales, and

91Ke~@, op. cit., footnote 1.

~Ibid.

gxfiid.

%bid.

g5~id.

%~~r, op. cit., footnote 3.

~Ibid.

~lbid.

%bid.

31-463 - 90 - 8 : QL 3
220 . Worker Training: Competing in the New International Economy

Box 7N-The Flight Plan Critic

The Flight Plan Critic is an instructional expert system developed jointly by WICAT Systems, the University

of North Dakota, and Northwest Airlines to help aviation students learn how to plan a cross-country flight. The

Flight Plan Critic was developed using the WISE authoring system linked to OPS5—an expert system development

language-and runs on a WICAT work station. It represents one of the first instructional expert systems to be used

in a real training setting with a commercially available CBT system.

The student begins by developing a flight plan using a variety of information about the aircraft and its load,

maps, and weather conditions. All the students’ steps used in calculations and decisions are recorded. When the

student completes the flight plan and ‘files’ it, the plan is analyzed by an expert system for correctness. If mistakes

are found, the expert system diagnoses the source of the error and provides feedback to the student including

prescriptions for improving performance.

Development of The Flight Plan Critic presented several CBT design challenges. Extracting enough

information from student responses to diagnose problems was difficult and required the adoption of a “mixed

initiative” approach in which the expert system would present its advice but let the student decide what to do with

it. Determiningg when to give feedback and what kind also presented design problems. These stem from the

inadequacies in our current understanding of how learning occurs.

The Flight Plan Critic is now being tested with aviation students and fine-tuned based on the test data It

demonstrates that existing authoring tools can be extended to accommodate expert system and intelligent tutor

capabilities. It also illustrates that development of new forms of interactive instruction will require substantial

research about learning and teaching.

SOURCE: Andrew S. Gibbons, “TheExpertFlight Plan Critic,” paper presented at 1 lth Confmnce on Interactive Videodisc in Education and

‘g> Arlinstom VA August 1989.

adapted for use there. Later, more elements, includ- than 300 million pieces of data about them. It

ing training modules, maybe added to the system.99

A PSS (called “The Source”) was developed for

Prime Computer to put all the information needed by

field personnel in one accessible place. The field

personnel had entire bookcases full of data about the

company’s products, its customers and how they use

the products (e.g., for computer-aided design), and

its competitors’ products. In addition, Prime had the

usual training retention problems among their field

personnel. Its PSS now provides most of this

information on a portable computer that is networked to a mainframe for access to spreadsheets

(allowing comparison of alternatives), the most

recent cost data, and new product information. The

PSS also includes job aids such as tables comparing

Prime products with their competitors’.100

Ford Motor Co. is introducing a PSS called the

Worldwide Engineering Release System. The mainframe CBT system, which cost $77 million to

develop and implement and was translated into five

languages, lists 400,000 automotive parts and more

contains information useful to engineers about every

part used in Ford products worldwide, including a

part’s engineering history, how long it has been

used, its metallurgical makeup, and any current

information about the part. For example, if a part

isn’t fitting into a bracket, the engineer can tap into

the system to find out if any other plants have had

similar problems and how they might have solved

them. The system includes 25,000 training screens

about parts, 1,600 simulations, and 1,500 assessment exercises. It also includes training on how to

use the system.101

Another PSS was developed to assist insurance

underwriters analyze risk. Risk analysis can take one

of a number of approaches, and each underwriter is

different. Thus, the sponsoring company felt that

underwriters would resist an expert system that used

one approach and made a decision. The company

also felt that such a system would inhibit learning.

Finally, a learner-controlled system was needed to

address different experience levels and learning

%id.

1~~ J, Mybould, “BuiMing a ‘tiormauce Support System: Comparing Alternate Development Platforms, ” paper presented at 8th cmfertmce

on Interactive Instruction Delive~, Orlando, FL, February 1990.

lol~~, op. cit., footnote 3.
Chapter 7—Training Technology .221

styles-to incorporate text, graphics, pictures, and

sound. The relational database structure of a PSS

filled these requirements.102

A final example is a PSS developed for Codex

Corp. as a prerequisite for technical training. In

essence, the PSS provides new hires with an

introduction to their work environment by simulating a communications management job. It simulates

the floor plan (complete with furniture and equipment) as well as the co-workers (animated computer

graphics with audio). Databases provide information

about the workplace (e.g., co-workers’ backgrounds).

Moving among rooms and selecting objects provide

entry and exit points to the subject matter databases.

Familiar office imagery (e.g., to-do lists, calendars,

telephones) helps new hires get started. Opportunities to interact with colleagues and to get feedback

from a mentor help trainees respond to increasingly

complex challenges posed by the boss.103

Although technological developments made performance support systems feasible, technology alone

will not promote their use, as it did with CBT. A PSS

is difficult and costly to develop. Because the PSS is

a new concept, decisions related to hardware and

software are still experimental. An organization has

to have a strong need to try something so different

from normal training methods. One factor promoting PSS use (along with embedded training) is the

frequent inability of conventional training to transfer

to the job. In addition, a PSS can accommodate

reams of information that can be updated easily and

quickly. These systems also can adapt readily to

different learning and working styles.

Digital Videodisc

Digital videodisc gets around the space limitations of analog systems. In general, the higher the

quality of the audio or video reproduction, the more

space it takes on a disc. A normal CD-ROM, for

example, can store about 325,000 pages of text, or 72

minutes of CD-quality audio, or fewer than 500

high-resolution still images, or 30 seconds of full

motion video.104 Moreover, it would normally take

over an hour for a PC to play back the 30 seconds of

motion video from a CD-ROM. Compressing and

digitizing the audio and video greatly expand

CD-ROM storage and speed up the PC interaction.

Digital encoding allows simpler delivery systems

(with a single monitor handling digital text, graphics, images, video, and audio all played back from a

single optical disk). Digital encoding also offers fine

control of the contents and of each frame.105

Two forms of digital videodisc are being introduced-digital video interactive (DVI) and compact

disc-interactive (CD-I). DVI uses an IBM PC/AT

type platform with three custom boards and accompanying driver software, audio amplifier and speakers, and standard CD-ROM drive.106 DVI eventually

will compete directly with analog videodisc in

training and education applications. IBM and Intel

are collaborating to develop and market DVI for

IBM’s PS/2 line of PCs based on its micro-channel

architecture. Both are sponsoring the development

of several authoring systems. Moreover, they are

establishing a joint technology center in Princeton,

New Jersey to facilitate DVI acceptance, solicit

customer requirements, disseminate technology information, and support application development.107

CD-I also will use CDs that store video images,

audio, text, graphics, and data plus the software to 108 However, CD-I is being support interactive use.

developed primarily for the consumer market. It is a

packaged system, with its own unique hardware

(player) that is hooked up to TV monitors and stereo

systems, and has a UNIX-like operating system.

Digital videodisc provides all of the same potential advantages of analog in training applications,

plus greater storage capacity. Because of its ability

to integrate media, digital video has great potential

in simulations. For example, split-screen capabililo2~F~ley, “T’hehjividual Ptionnauc e Accelerator: A Demonstration” paper presented at 8th conferenc eon hmxactive Instruction Delivery,

Orlando, FL, February 1990.

los~deleine Bud=, ~~~ ~fienti~ Model fOr_Us@ ~~~ctive Mul=~” pq~ pre~ntti at 1 lth COnferlXICe On bttXllCtiVe

Videodisc in Education and Training, ArlingtorL VA August, 1989.

104G. David Ripley, “Dvr—A Di@al Multimdk TcchoIo~,” CO mmunications of the ACM, vol. 32, No. 7, July 1989, pp. 811-822.

los~wmd A. FoA “me COmmg Revolution in Interactive Digital Video,” Communications of the AC~, vol. 32, No. 7, July 1989, pp. 794-801.

106~velopmentof D~~gn~ 1983 atRCA>~ David S~offR~emchC~ter in~ceto~ NJ. ~ 1988, rntel a~tithetihnolo~ from General

Electric, RCA’s parent company.

lov~n A. Fretie~ “The Next Generation of Interactive Technologies,” CO~ications of the ACM, vol. 32, No. 7, July 1989, pp. 872-881.

108~-Iwm~vm~~~e~d- tol~e-198@~ou@acoll~o~on~owN.V.~ps(aNe~m~dscomp~y), Sony Corp., and MicrowareCorp.
222 ● Worker Training: Competing in the New International Economy

ties allow users to compare images selectively,

either still or in motion. High-quality graphics can

be combined with video for a trainee to display, for

example, a cut-away schematic of a piece of

machinery on one part of the screen, examine and

manipulate a model of the machinery on another

part, while hearing an explanation of the machinery’s operation or repair. The trainee can also access

other windows to get textual information on parts

availability, different model numbers, and costs.

High-speed animation can be used to simulate

environments where it is impossible to film.109

Several of the test applications of DVI are in

training. Applied Optical Media and duPont are

developing a truck driver safety simulator. It is

installed in a full-size truck cab (the whole unit can

be moved with a forklift) in which all driver

functions are simulated, with a DVI display providing views of 12 safety scenarios for the front

windshield and both rear view mirrors. First a larger

wide-angle view is decompressed, the portion of the

view corresponding to the truck’s current lane

position is selected, and then the view is skewed to

keep the distant horizon relatively fixed. This last

step results in smooth, real-time lane changes, and is

an example of the flexibility of digital video.

Bethlehem Steel and Lehigh University are developing a casting simulator, Arthur Andersen is using

DVI for manufacturing process analysis, and Carnegie Mellon has a workplace simulation for entrylevel trainees.110

Because military training makes extensive use of

simulation, digital videodisc may find a potentially

large market there. One company is developing a

DVI application for submarine maintenance training; another firm is developing an air defense

program in which the operator identifies and tracks

targets through actual terrain; a third is working on

weapon maintenance training. (See report appendix

for further discussion of simulation in the military..) 111

However, digital videodisc still faces difficult

technical problems. The cost of compression is high,

special hardware and software are required, and

efficient tools and environments for authoring and

editing are still nascent.

112 Thus, digital videodisc

probably will not supplant analog for at least 5 years

and probably longer.113

Electronic Classrooms

While the availability of personal workstations

and the extensive use of networks will make

self-study and distance learning very common, a lot

of training still will be classroom based for social

interaction. Many future classrooms will have video

projection capability, large monitors for PC projection, sound-activated cameras for remote interaction, and transponders to record learner responses.

Instructors will show multimedia materials, access

online databases, participate in teleconferences and

videoconferences, and display real-time learning

results.

Such electronic classrooms and meeting rooms

already are being installed at some corporate learning centers and universities. IBM’s Management

Development Center at Armonk, New York, has 10

advanced technology classrooms in which the instructor uses a PC to control all audio and visual

devices in the room including videotape, videodisc,

slides, computer display, and lights. Each student

has a keypad to respond to questions. The instructor

and class can immediately see a display of the

tabulated results of the class responses.114 IBM

found that students retain 83 percent of the information presented in the electronic classroom compared

with 68 percent retention in traditional classroom

training. 115

In another concept, every learning station would

have networked multimedia PCs, with the instructor

controlling the displays. Introductory material could

be presented to the entire class, and then students

could proceed at their own pace. Feedback on

student progress, aided by intelligent tutoring sys109Rjpley, op. cit., fOOblOte I“.

ll~i~ ~fiO Sandra Morns, “Digital Video Interactive Technology Application Sample,” paper presented at llth Conference on Interactive

Videodisc in Education and Training, Arlingtop VA August 1989.

lllfiid.

IITOX, op. cit., fOOtnOte 105.

llqFre~el, op. cit., footnote 107.

llAKemsley, op. cit, footnote 1.

llSGe~r, op. Cit., footnote 3.
Chapter 7—Training Technology .223

terns, would enable the instructor to identify individual learning problems and display remedial materials. 116

The more widespread use of PCs by instructors

reinforces the trend toward electronic classrooms. If

instructors become accustomed to preparing training

materials on the PC (e.g., presentation slides, other

graphics, multimedia programs), they will want to

have a computer in the classroom to make use of the

software. Similarly, computers in the classroom will

promote their use in class preparation.117

Electronic classrooms are more expensive to

build than conventional ones, however, and are

beyond the reach of all but the largest corporate

training budgets. Learning centers are one option for

increasing access. Furthermore, because computer

and media technology are evolving so quickly, the

equipment installed in these classrooms becomes

obsolete rapidly.118

Digital Networks

As noted in the discussion of teleconferencing, the

U.S. Public Switched Telephone Network (PSTN) is

moving toward a digital system with more capabilities. Eventually, the Integrated Services Digital

Network (ISDN) will allow users to send audio, data,

and video signals over the same line simultaneously,

thus allowing transmission of electronic messages

and other signals associated with CBT, teleconferences, and hypermedia. Although not all the relevant

standards have been worked out, manufacturers are

already making narrow band ISDN equipment

(which does not allow full-motion video transmission), and there are more than 60 trials underway

(none involving distance learning). Wideband applications of ISDN including video are not expected to

appear until 1995 or be widely available until 2000.

The services probably will include videoconferencing, high-speed data and fax, and HDTV.119

These networks will make the transmission of

multimedia as inexpensive as voice. With technical

and financial obstacles to tele- and videoconferencing reduced, network use should increase substantially. In conjunction with other developments

in computer hardware and software, digital networks

will greatly facilitate embedded training and distance learning. In many cases, training will become

more informal and self-directed.

Glass Boxes

Smart job aids, such as computer help screens and

automotive diagnostic tools, replace mechanical

processes with information processing and radically

change the way people use tools. Although they have

reduced the need for retraining by transferring the

burden of keeping pace with innovation from the

worker to the systems designer, such aids also can

stifle workers’ use of intuitive skills. Good specialized auto mechanics, for example, are renowned for

their intuitive grasp of how cars work and what to do

when they stop. But opaque electronics have now

replaced many of a car’s mechanical systems-to

the point that some modern cars are computationally

more powerful than the average PC. Repair shops

also have widely adopted electronic diagnostic

systems that issue instructions without necessarily

making either the diagnosis or the prognosis explicit. Both the car’s electronics and the diagnostic

system are ‘‘black boxes’ to mechanics, who must

blindly follow instructions, and who are no longer

able to monitor, reflect on, and correct their own

working procedures. Nor do mechanics have much

opportunity for useful conversation about their

work—which traditionally has contributed to shared

workplace knowledge. Mechanics are particularly

helpless in the face of misdiagnosis or failure of the

diagnostic system.120

A smart job aid that is under development to

overcome these problems is a ‘‘glass box’ ‘—a

transparent system that will help workers develop a

deeper understanding of the process in which they

are involved. Glass box tools are, like the journeyman or office expert, both a tutor and a fully

operational component of the workplace. Glass

boxes would break a task down into constituent parts

that a trainee can understand and master separately.

116~clM=Wm of the fifieAd&es~s Smdent’s Needs,” ISTR~ieW, s ummer 1989, pp. 2-3.

117Kemsley, op. cit., fOOtnOte 1.

l18~id.

l]gofice of T=~olo= As~s~en~ ~“~ing for ~arning, OTA-SET430, op. Cit., fOOtnOte 35.

l~ti~tc for Rese~h on _, op. cit., footnote 50.

lzl~id.
224 ● Worker Training: Competing in the New International Economy

They also would provide a means for collaborative

learning and for discussion of the task.121

In sophisticated machinery, however, the representation of working procedures is an extremely

complex task requiring detailed research on the

interaction between machines and workers. Much

more work is needed in this area before good user

interfaces can be designed that, with the help of

multimedia devices, will provide workers with an

adequate understanding of tasks while still allowing

them to develop and use intuitive knowledge, thus

fostering worker flexibility and innovation.122

Virtual Environments

Researchers also are working on systems that will

allow people to interact with computers in profoundly new ways. In prototype systems, people

wearing a special helmet and gloves feel immersed

in three-dimensional computer-generated worlds

and can control the computer by using their hands in

a natural manner. Such advanced simulation systems

are called artificial realities or virtual environments.

The helmet contains two small television screens

(one for each eye) that provide three-dimensional

images and a sensor that keeps track of the position

and orientation of the wearer’s head. As the head

turns, the computer-generated scene shifts accordingly. The glove has optical fiber sensors that detect

how the hand is bending. A separate sensor determines the hand’s position in space. A computerdrawn image of the hand appears in the display,

allowing the user to guide the hand to objects in the

simulation. 123

Virtual environments are still in the basic research

stage (a complete system may cost $100,000 to

$200,000 and an enormous amount of computer

capacity is needed to generate the images), but

commercial and military interest is beginning to

develop. Virtual environments could substantially

reduce the size requirements for flight simulators,

for example (see appendix). They also would be

useful for manipulating remote objects (e.g., robot

arms) and for work in space. The glove alone already

is being used in computer-aided design in lieu of a

keyboard or mouse (and in advanced video games).

Companies also are researching full body suits that

would allow types of body movement to control a

simulation, and allow incorporation of two or more

people in a virtual environment (e.g., a pilot and

copilot, a virtual meeting). The participants would

not need to be in the same location, but could be

linked on digital networks.124

121~i&

122~id.

~23~&ew POWC~ “what IS MIcial Reality? Wear A Computer and See,” The New York Times, Apr. 10, 1989, p. A-1.

l~Ibid.
Chapter 8

Training and Workers' Careers
CONTENTS

SUMMARY

Page

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ................,..,,*+*+, 227

ACCESS TO TRAINING AT WORK .. .. .. .. .. .. .. .. .., .., .,+...+. .

. . . . . . . . . . . . 227

Lack of Training for Older Workers . . . . . . . . . . . . . . . . . . . . . . . . 229

EMPLOYMENT SECURITY AND TRAINING . . . . . . . . . . . . . . .

...*... . . . . . . . . . .,

. . . . . . . .....*., *,. 231

Barriers Further Education .. .+..,,.,.,+,.. . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . 231

EDUCATION AND TRAINING FOR NONCOLLEGE YOUTH .. .................232

Vocational Education . . . . . . . . . . . . . . . . . . **.... . . . . . . . . . . . . . . . . ...,*.* . . . . . . . . 233

Apprenticeship: The Past As Prologue? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 236

JOINT’ UNION-MANAGEMENT TRAINING PROGRAMS . . . . . . . . . . . . . . . . . . . . . . . 242

. . . . . . . .*.

Relationship of Joint Programs to Company Training . .....,.,,...,........,.,+ . 244

Mixed Quality of Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247

Tuition Assistance . . . . . . . . . . . . . .

● .. Q * + . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247

Future Outlook . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248

RETAINING THE SKILLS OF OLDER WORKERS ..,,,..,, . . . . . . . . . . ..,,..,... 249

Practices That Compensate for Age-Related Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250

Training To Update Skills ... .....,............+....,...........,,.+,,+ 25 . . . . . . . 1

Experience With Training Older Workers . . . . . . . . +. ..+ . . . . . . . . . . . . . . 252

Retirement and Public Policies . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . 253

Boxes

Box Page

8-A. ADEA: Two Cases . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . 230

8-B. CWA-Pacific Northwest Bell . . . . . . .

. . . . . . . . . .

● . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245

8-C. SEIU-Cape Cod Hospital . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . 246

8-D. Older Workers and Computers

. . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254

Figures

Figure Page

8-1. Upgrade Training by Occupation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229

8-2. New Enrollments in Joint Union-Management Tuition Assistance Plans . . . . . . . . . 232

Table

Table Page

8-1. Joint Union-Management Training Corporations

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244
Chapter 8

Training and Workers’ Careers

SUMMARY

Transferable training, useful in more than one job

or company, is hard to get at any age. High school

vocational courses poorly track the changing needs

of the workplace, and noncollege youth receive

meager help in finding gainful employment. Once

employed, younger workers receive little company

training because of their high turnover. Even when

their careers stabilize, shopfloor workers get little

attention, because companies tend to save training

dollars for white-collar managers, professionals, and

technicians. Finally, older workers are often undertrained because of age-related stereotypes.

Nonsupervisory workers who are trained at work

may find that their narrow, job-specific skills do not

transfer easily to a new job or a new employer.

Further education outside of work often provides

transferable skills and better earnings; however,

barriers such as cost, family responsibilities, and fear

of failure in a school setting prevent many adults

from attending outside courses.

Only a small fraction of nonsupervisory workers

receives transferable training. This includes those

who participate in formal apprenticeship programs,

joint union-management training, and innovative

programs to tap the skills of older workers.

Apprenticeship has declined in the United States,

where only 0.16 percent of the workforce is enrolled

in governmentally registered apprenticeship programs. Nevertheless, the quality of apprenticeship

training as measured both by workers’ wages and

productivity remains high. Major expansion of

apprenticeship, both in its traditional stronghold of

manufacturing and to the service sector, could

potentially aid U.S. competitiveness as well as

enhance workers’ careers.

Some of the largest U.S. unions and companies

have created joint training programs through contract negotiations. During 1989, these joint programs controlled about $324 million and made

training accessible to about 709,000 workers. Other,

smaller, joint union-management programs have

also provided training that has benefited both firms

and workers. With only 16 percent of the American

workforce represented by unions, these programs

have a limited direct impact. However, large nonunion employers may well develop similar programs, to maintain competitive rank or, ironically, to

block unionization drives.

Workers with transferable skills are more likely to

be employed and to continue working longer than

others. Whether employers will support development of such skills remains in question. It is possible

that the shrinking pool of younger workers may

encourage more employers to adopt apprenticeship

and other forms of enhanced training for that age

group while also increasing their training of older

workers to keep them on board.

ACCESS TO TRAINING AT WORK

Training is a major route to career advancement,

especially within companies: several studies show

that workers who are trained at work earn 10 to 30

percent more than their untrained counterparts and

are less likely to lose their jobs.1 The earnings

advantage of the trained workers can last as long as

13 years following training. Training has been

shown to benefit a broad spectrum of workers—

while managers enjoy the greatest increase in

earnings, the wage advantage of trained semiskilled

workers lasts the longest.

However, access to training is limited. Workers

under age 25 and workers over age 44, as well as

most nonsupervisory workers and minorities receive

a disproportionately small share of companyprovided training.2 For example, in a 1983 Bureau of

Labor Statistics (BLS) survey asking about all types

of post-school, job-related training, white males

made up 52 percent of those who said they had

received upgrade training once employed (they

made up 50 percent of the employed labor force at

that time). By contrast, black males made up only 7

IStephen L. ~“Evidence on Private Sector Training,’ investing in People (Washington DC: U.S. Department of Labor, Commis sion on

Workforce Quality and Labor Market Efficiency, 1989), p. 354.

%Iong W. Tam “Private Sector Training in the United States: Who Gets It and Why,” discussion paper prepared for the National Assessment of

Vocational Education (WashingtorL DC: National Assessment of Vocational Educatiom February 1989), p. 5.

–227–
228 . Worker Training: Competing in the New International Economy

percent of those who had received upgrade training,

even though they made up 9 percent of the labor

force. 3 Hispanics and other nonwhite minorities,

who made up 3 percent of the workforce, accounted

for only 2 percent of upgrade training.

Younger workers, who most often need training,

are least likely to get it. In the 1983 BLS survey,

when 55 percent of all workers reported that they had

needed some type of training to qualify for their

current jobs, only 25 percent of workers aged 16 to

19 and 47 percent of workers aged 20 to 24 said

likewise. Once employed, only 14 percent of the

younger workers between 16 and 24 years of age

reported receiving any upgrade training, yet this

group made up 19 percent of the U.S. labor force.4

Nonsupervisory workers of all ages, especially

those in lower level jobs, are unlikely to receive or

take training. While the overall average of workers

reporting they needed qualifying training in the BLS

survey was 55 percent, only 37 percent of machine

operators, 36 percent of transportation workers, and

16 percent of laborers said they needed such

training. In contrast, 93 percent of professionals and

71 percent of executives and managers needed

training to obtain their jobs.5 Those individuals with

limited formal schooling also face limited training

opportunities in the workplace and hence lower

future productivity, income growth, and employment stability as well.6 Formal training is most often

delivered to managers and more highly educated

employees; entry-level workers and minorities are

less likely to receive training on company time.7

The 1983 BLS survey showed that on average

only about’ 35 percent of workers had received any

type of upgrade training once employed. This small

amount of training was delivered unevenly across

occupations. Figure 8-1 shows that workers in some

occupations received far more than the average

amount of training while those in other occupations

received less. For example, three-fifths of professionals, more than half of technicians, and nearly

half of managers reported receiving upgrade training. By contrast, shopfloor workers, such as machine

operators and laborers were much less likely to

receive training (22 percent and 14 percent respectively, received upgrade training).8 When companies

install new equipment, they frequently hire the

equipment vendor to train the workers, but this

training is often provided only to plant engineers

and/or managers, rather than to the nonsupervisory

workers who will use the new technology on a daily

basis.

Workers who receive company-specific training

can find that their skills are not marketable elsewhere. For example, during a 1986 layoff, American

Telephone and Telegraph, Inc. (AT&T) set up a

telephone hotline so that other companies could

recruit the laid-off workers. While the potential

employers wanted clerical workers with excellent

typing and word processing skills, many of the

AT&T workers only knew how to use one specialized data or word processing package.9

Employer-supported training leading to formal

credentials is more transferable than informal on-thejob training. One recent study found that workers

who had completed apprenticeships or school-based

training earned higher wages with their current

employers than those in the same company who had

not. However, on-the-job training with a previous

employer did not appear to lead to higher wages with

a current employer.10

S-L. Cwey and Alan mlq HOW Worbrs Get Their Training (Washingto~ DC: U.S. Department of Labor, Burwu of hbor SkltistiCS, 1985),

p. 42. As discussed inch. 5, the accuracy of such surveys depends on individuals’ memories and their understanding of what constitutes tmining.

4

1bid., p. 20.

%id., p. 21.

~~ op. cit., footnote 2, pp. 18-19.

we A. Lillard and Hong W. ‘Ihq Private Sector Training: Who Gets Zt and What Are Zts Effects? (Santa Monica, CA: Rand Corp. for U.S.

Department of Labor), p. vii.

Warey and Eclq op. cit., footnote 3, pp. 18-19.

%iscussion based on information received by Margaret Hiltoq OTA, when employed by the Communications Workers of America in 1986.

l~i~ M. Lynch “~vate Smtor Training and Its Impact on the Earnings of Young Workers” (Cambridge, MA: M.I.Z, SIO~ School of

Management November 1988).
Chapter 8-Training and Workers’ Careers ● 229

Figure 8-l—Upgrade Training by Occupation

(percent of workers reporting upgrade training)

Professional

specialtie s

Technicians &

related support

Executive/

managerial

Precision production,

craft & repair

Administrative

support

Sales

Machine operators,

assemblers & inspectors

Transportation &

material moving

Handlers, equipment

cleaners, helpers &

labor s

m’”

14%

I I I I I I I I

o% 10% 20% 30% 40% 50% 60% 70% 80% 90% 1 00%

aNOTE: On average, 35 percent of all workers receiv~ skill improvement training for their current job.

SOURCE: Max Carey and Alan Eck, How Workers Get Their Training (Washington, DC: U.S. Department of Labor,

Bureau of Labor Statistics, 1985), p. 18-19.

Lack of Training for Older Workers11 groups constituted 31 and 51 percent of the

workforce respectively,

16 indicating that older workOlder workers, those age 45 or older, are unlikely ers are underrepresented in adult education courses.

to get adequate training at work.12 Surveys of

workers, such as the one conducted by BLS, show Employers invest less in training older workers

that older employees receive a smaller share of both because they believe the company cannot recapture

on-the-job training and outside courses than younger all of its investment during the employee’s remainworkers,13 and that training declines with age within ing worklife.17 The fact is that older workers change

the older worker population.14 Some older workers jobs less frequently than younger workers (see ch.

compensate by taking outside courses, but most do 3). The Age Discrimination in Employment Act

not. Among the 14 percent of adults who took adult (ADEA) prohibits denying access to training on the

education courses in 1984, only one-fourth were 45 basis of age (see box 8-A). However, budgetary

and older, compared with 60 percent who were constraints inhibit enforcement of ADEA provibetween 25 and 44 years of age.15 In 1983, these two sions.

llme ~tefi on Older worlcers in this chapter is based on F. R. Rotbste@ with D. J. R@te, “Training and Older Workers: Implications for U.S.

Competitiveness,” report prepared for the Office of Technology Assessment under contract N3-1630, March 1990.

lz~e “oldm” worker is variously defined. The Federal Age Dis crimination in Employment Act includes workers as young as 40 among those

covered. Some Federal assistance programs for older workers limit assistance to those 55 and over. In this repofi O’E4 uses 45 as the beginning point

as did the National Commission for Employment Policy in OZder Workers.’ Prospects, Problems, undPo/icies, report No, 17 (Washingto% DC: National

Commission for Employment Policy, 1985).

lqcarey and 13ck OP. cit., footnote 3, p. 42.

141bid., p. 20.

lsSusanT. ~,Trends in AduJtEducation 1969-19&# ~mhingto~DC: Department of Educatiow Centa for ~ucation SWkt.iCS, 1987), p. 23 (table

8-B).

IGCarey and Eck op. cit., footnote 3, p. 42.

17 R. J. Vaughan and S. E. BerrymML Employer-Sponsored Training: Current Status, Future Possibilities (New York NY: Institute on Education

and the Economy, 1989), p. 5.
230 . Worker Training: Competing in the New International Economy

Box 8-A—ADEA: Two Casesl

The Age Discrumination in Employment Act

(ADEA) of 1967 specifically prohibits companies

from denying training to workers on the basis of

age. Older workers have successfully sued because

they were denied training given to younger workers

and suffered adverse consequences as a result.

Case 1. CBS Inc. switched from film canisters to

videotape and trained their newer, younger workers

in the new technology. The older workers sued

when they were disproportionately affected by a

subsequent layoff because they had not received the

training.

Case 2. In a 1989 case, an office machines

serviceman in Kansas City, Missouri, successfully

sued his employer, Monroe Systems for Business,

Inc. The employee was the oldest of six servicemen

in the Kansas City office. He had been discharged

as part of a layoff because he lacked photocopier

training, although he had repeatedly requested it.

Younger men who received the training that he

lacked were not discharged.

There have been similar cases, against Westinghouse Electric Corp. and NCR Corp., when agebased denial of training resulted in subsequent job

loss. The faster technology changes and the more

sophisticated the senior lobby becomes, the more

likely are suits of this kind.

IF.R. I@t.hSk@ with D.J. Ratte, “Tmini.ng and Older

Workers: Implications for U.S. Competitiveness,” report prepared for the OffIce of Technology Assessment under contract

N3-1630, March 1990, pp. 56-57.

Another factor in employers’ reluctance to train

older workers is the negative attitude of managers

and executives.18 Surveys show that older workers

are generally seen as loyal, with good work habits

(e.g., attendance, punctuality), a commitment to

quality, and a strong work ethic, but managers often

rate them lower on flexibility, adaptability, and

aggressiveness. 19 In 1985, for example, employers

in industrial settings were found reluctant to hire and

Photo credit: American Association for Community

and Junior Colleges

Demographic changes and increasing sensitivity to age

discrimination may increase interest in tapping the experience of older workers.

train new employees over 40 or to retrain those

already on the payroll-despite evidence that those

workers are healthy, dependable, and productive,

with low accident rates.20

Despite management attitudes, many older workers want to stay employed and to pursue further

training. Three out of four adults would prefer to

work part-time instead of retiring completely .21 A

recent survey found that workers between 40 and 49

were especially interested in training for a new

position whereas workers between 50 and 62 were

most interested in training to update their current job

skills. Even workers over 62 expressed a high level

of interest in training. 22

Reflecting these views, organized labor, which

traditionally has sought pension and early retirement

benefits for older workers, is beginning to press

1%. H. Rhine, Managing Older Workers: Company Policies and Attitudes (New York NY: The Conference Board, 1984), pp. 16-17; B. Rosen~d

T. H. Jerdee, “Investingin the Oldex Worker,” PersonnelAdministrator, April 1989, No. 34, p. 71; The Yankelovich Group, Business and Okfer Workers

(w-on, DC: American Association Of Retir~ persons, 1989), P. 20.

I?Helen Dennis, Fourteen Steps in Managing an Aging Work Force @cingtonj MA: Lexington BOOkS, 1980, P. 145.

-eyL. Sterns and Dennis Doverspike, “TrainingandDeveloping the Older Worker: Implications forHuman Resource Management,” in Dennis,

op. cit., footnote 19, p. 98.

zl~erimn Ass~iation of Retired Persons, Workers 45+ Today and TOmOrrOW (was~o~ DC: 1986), P. 19.

22~enWn Ass~i~tion of Re~~ persons, ~Or~ and Retire~nt: Employees fier 40 ad ~&ir views ~ashbgto~ x: 1986), pp. 11-12.
Chapter 8-Training and Workers’ Careers ● 231

management for retraining and job redesign to keep

its more senior members at work.23

Educating managers on age issues can be effective

in changing their perspectives and decisions vis-avis training older workers, and in challenging their

concerns about the return on investment in older

worker training.24

EMPLOYMENT SECURITY

AND TRAINING

Workers’ careers are affected by many factors,

including layoffs, voluntary quits, and the creation

and destruction of firms (see ch. 3). Increased

international competition and the globalization of

production are rapidly changing the structure of the

U.S. economy, and hence, job opportunities. About

two million workers are displaced each year due to

layoffs or business closures, fewer jobs are available

in large fins, and most new jobs are in the service

sector, paying relatively low wages.25 In the midst of

this shakeout, few U.S. firms have been willing or

able to make company-wide commitments to maintain full employment, retraining and redeploying a

stable workforce in response to changing product

and skill requirements. As a result, most American

workers must be prepared for unwanted as well as

desired job changes.

Barriers to Further Education

Diplomas have clear benefits for workers. Among

males, in 1987, college graduates earned 41 percent

more than high school graduates, and high school

graduates earned 21 percent more than high school

dropouts. 26 While the real earnings of female college

graduates rose 16 percent between 1979 and 1987,

earnings of females with only a high school diploma

rose only 2 percent, and females without diplomas

saw their earnings drop by 4 percent. 27 More highly

educated workers of both sexes are also less likely to

experience unemployment than those with fewer

years of schooling (see box 6-D).

Many employers provide tuition assistance to

help workers further their education. One study

estimates that nearly three-fourths of U.S. firms

sometimes pay in part or in full for outside courses

taken by their employees. This study further estimates that employers spend about 0.2 percent of

payroll, or $1.8 billion per year, on such benefits.~

On average 3 to 5 percent of those eligible in any

given year29 take advantage of employer-provided

educational assistance.

Barriers such as poor basic skills, lack of information about educational opportunities, lack of money,

family responsibilities, and fear of failure in school

settings often prevent nonsupervisory workers from

extending their formal education outside of working

hours. Even when employers provide tuition assistance, some workers cannot afford to pay tuition up

front and wait for reimbursement following successful course completion. In addition, some employers

use these programs quite selectively for a few chosen

managers, while other firms fail to publicize their

programs because they feel that in-house courses are

more beneficial than outside education.30

Unions have negotiated improvements in tuition

assistance programs that help to overcome many of

these barriers. These improvements include eliminating requirements that courses be strictly jobrelated, moving courses to the workplace, greatly

increasing educational and career counseling, providing tuition in advance instead of after course

completion, reimbursing workers for child care and

transportation expenses, and providing basic skills

classes in a comfortable environment so that workers

are better prepared for outside courses. As shown in

2Judith Wineu, “Age Issues in the Work Place: A Labor Perspective, “ in Dennis, op. cit., foomote 19, pp. 180-182.

~Dennis, op. cit., fOOmOte 19, pp. 1%-151.

fipeter B. Doeringer, Zlubuzence in the American Workplace (New York, NY: Oxford uIiVtXS@ hSS, foficoming).

~John Bishop, “Incentives for Lxuming: Why American High School Students Compare So Poorly to Their Counterparts,” Znvesting in People

(Washington, DC: U.S. Department of Labor Commission on Workforce Quality and Labor Market Efficiency, 1989), p. 11.

27Co~ssiononthe Skills of the Americm Workforce, America~s Choice: High s~’zzs or~wwage~~ (Rochester, NY: Natio@ Center on Education

and the Economy, 1990), n.p.

m~s es~te mmt~ approached Mm caution because it is based on a 1988 survey with a response mte of O@ 11.3 per~nt. me SrouP s~eY~

was selected to represent a cross-section of U.S. business by industry, firm size (including f- with less than 100 employees), and geographic

r@on-U.S. Chamber of Commerce, Research Center, Employee Benefits: Survey Data From Benejit Year 1988 (Wahingto~ DC: 1989), pp. 22, 33.

zg~rad G. Gold, Emp~oy~nt.Based fiition Assistance: DecisiOns und checklists for Employers, Educators, and u?liO?lS (w&lhl@OIl, DC:

National Institute for Work and kwnin g, 1985), p. 9.

Wbid.
232 ● Worker Training: Competing in the New International Economy

16

14

12

10

8

6

4

2

0

Figure 8-2-New Enrollments in Joint UnionManagement Tuition Assistance Plans

(as a percent of eligible workforce)

rl

1966 1987 1988 1989

= UAW-Ford m CWA-US West ~ UAW-Chrysler

SOURCE: Based on information supplied by the joint programs to the

~ce of Technology Assessment, 1990.

figure 8-2, the proportion of workers who use tuition

assistance in the joint programs has increased.

As discussed in chapter 2, Federal income tax

policy also affects workers’ choices. Most tuition

assistance benefits, including those for courses taken

to prepare for new careers as well as those related to

workers’ current jobs, are exempt from an employee’s income tax.31 However, the exemption will

expire on September 30, 1990 unless extended by

Congress. In part of 1989, when Congress allowed

the exemption to expire temporarily and employers

began withholding income taxes on the value of

tuition benefits paid, there was a marked dropoff in

participation in some tuition assistance plans (see

figure 8-2). Continuing uncertainties about taxation

of tuition benefits could have a dampening effect on

workers’ participation in off-hours education.

Workers’ increased awareness of the links between education and employment security, together

with active recruitment by educational institutions

and employer-provided tuition benefits, have led

more adults to further their educations. About 10

percent of adults participated in adult education in

1969, while, by 1984, 14 percent were involved.32

However, those who do take outside courses are

generally those who are more educated to begin

with. 33 Like training at work, further education

outside of work usually misses nonsupervisory

workers.

EDUCATION AND TRAINING

FOR NONCOLLEGE YOUTH

More and more employers are requiring postsecondary education for jobs formerly held by high school

graduates. Workers holding only a high school

diploma face increasing difficulty in the job market:

their real earnings dropped by 28 percent from 1973

to 1986, and the gap between their earnings and

college graduates’ widened.34 Some employers who

formerly hired high school graduates and “trained

them up” to higher level positions, now look for

young people with specific skills obtained from

technical school, the military, or college. Internal job

ladders have been weakened (see ch. 3).35

Young people who do not go on to college are

often unprepared for work. A General Accounting

Office report recently concluded that “insufficient

attention is devoted to preparing U.S. noncollege

youth for employment.”36 Several major industrial

nations-including Japan, West Germany, and Sweden—invest proportionately more money and effort

in education and training of their noncollege youth

than does the United States. Young people in these

other countries receive not only stronger basic

education in school, but also much more assistance

in preparing for the world of work and in finding

jobs.

Once employed, younger American workers with

only high school diplomas typically get little training.37 This is partly because of the kinds of jobs they

find-companies most likely to provide good jobs

Slpublic IAW 95.600. fior to this act IRS regulations limited the tax exemption only to those educational b~tits ptid fOr COUrS@ bdy mktti

to the worker’s current job.

3= op. ~t, foo~~ 15, p. 5. The last such survey was conducted in 1984.

331vanCharnerand Bryna Shore Fraser, “Di.fTerent Strokes for Different Folks: Access and Barriers to Adult Education andlhining” (Waahin@onj

DC: National Institute for Work and Ixwning, 1986), p. 49.

~~umtio~Tes~ Service, Policy Information Cent% “From School to Work” (Princetoq NJ: ETS, 1990), p. 27.’

SSThieW J. Noye~e, B~o&l~~”alDualism (Boulder, CO: W=tview pr~s, 1987), P. 15.

36U.S. ~n~ ~om~ ace, rrai~”ng s~ategies: Prepan”ng NO~Ollege Youth for Employment in the US. and Foreign Count??”es,

GAo/HRD-!w88 (wawngtoq DC: May 1990), p. 2.

s~~d and ~ op. cit., footnote 7, p. vii.
Chapter 8-Training and Workers’ Careers .233

with career ladders are less likely to hire young

workers (those aged 16 to 20) than other companies

offering low-skill, low-paid jobs with little chance of

career advancement.38

Apprenticeship is one source of transferable

training, but it serves much less than 1 percent of the

workforce and is rarely available to young people

just finishing high school. Other forms of companyprovided training are often narrow and job-specific,

limiting young workers’ marketability to other

employers. The net effect of poor basic education

and a lack of broad, structured training at work is that

many young people flounder through a series of

low-wage jobs.

Vocational Education

Advances in technology and work organization

are altering the skills needed for jobs typically filled

by noncollege youth (see chs. 3,4, and 6). There will

continue to be many jobs for which advanced

education will be unnecessary. However, the best

among these jobs-those that offer better wages and

career advancement-will go to job applicants

whom employers believe can learn new skills and

can adjust to new work circumstances.

These changes will require the American school

system to radically improve the quality of education

so that more young people can function successfully

in the workforce. Most importantly, high school

graduates will need a stronger foundation in basic

skills-reading, writing, and arithmetic. They will

also increasingly need a broader set of competencies: social skills to interact with co-workers,

problem solving abilities, and good communication

skills to interact with customers. Those young

people who are comfortable with computer-based

technology, recognizing that it will continue to

change during their worklives, will fare better than

those who are not.

Public high school vocational education can make

an important contribution to workforce preparation.

The vocational system was initially developed for

youths entering technical trades. Today, nearly all

high school students (97 percent) enroll in at least

one vocational course.39 40 However, only about 30

percent of high school students concentrate on

vocational courses in preparation for a specific

occupation. 41

The evidence is mixed about how well high

school vocational education prepares young people

for today’s job market. Compared to college-bound

students and those in a general education curriculum, vocational concentrators are more likely to be

employed and working more hours per week in the

year following graduation.

42 Although this is not

surprising, considering the fact that graduates from

the other two groups were more likely to be full-time

postsecondary students, it is also interesting to note

that, among those from all three groups who were

working, vocational graduates had the lowest unemployment rates.

At the same time, however, most students graduating from vocational programs do not take jobs in

their fields of concentration,43 and those who do find

skilled work rarely use their occupational courses.44

Since other variables, such as the characteristics of

the local labor market, affect students’ employment

prospects, low placement rates alone are not sufficient to judge the performance of vocational education.45 Moreover, there are exceptions to the generally low placement rates, most notably in secretarial

fields. 46

Ssstephen F, Hamilto~ Apprenticeship for Adulthood: Preparing Youth for the Future (New York m: Macmill% 1990), P. 3.

W.S. Dep~ent of Education, National Assessment of Vocational Educatioq First Interim Report (WmhingtO% DC: JmWUY 1988), PP. 1-5.

~.S. Congress, Office of Technology Assessment Performance Stanahrds for Secona%ry School Vocational EducatioMET Sta# Paper

(Washington, DC: OTA, April 1989), p. 12.

41u.s. Gener~ Accounting ~lce, op. cit., footnote 36, P. 28.

42Sue E. Berrymq “Vocational Education and the Work Establishment of Youth: Equity and Effectiveness Issues” (Santa Monica, CA: The Rand

Corp., 1980), p. 21.

43The WiMm T. Gmnt Fow~tionCo@ssion on work F~y~dciti~mhip, The Forgotten Half: Non-college Youth in Amen”ca ~@@O~

DC: January 1988), p. 50.

@uaS. Dq~entof ~ucatioq Nationa[A~~e~~mentof vocatiomlE&cation, Final Report, volu~ ] :su~q ofFi~ingsadRecome&fi”ons

(Washington, DC: 1989), p. xiii.

4SU.S. Congress, Ofllce of Technology Assessment, op. cit., footiote 40, P. 5.

46Sen~ A. ~=u Refor~”ng Education for work: A cognitive science perspective @erkeley, CA: Natio~ Center for Rese~h in VO~tiO13d

Educatio@ December 1989), p. 29.
234 . Worker Training: Competing in the New International Economy

Although vocational graduates seldom use their

specific technical knowledge on the job, the best

vocational courses help students develop good work

attitudes (such as self-confidence and reliability)

and general skills that can be used in a wide range of

occupations. For example, students in agricultural

education courses often learn about management,

finance, and marketing by setting up incomegenerating business projects or experiments. A

researcher visiting a class of 18 vocational agriculture students in West Virginia in 1986 found that

only 1 student planned to become a farmer-the

others were attracted to the blend of business skills

and adaptability taught in the course, which they

found superior to the traditional business program

also offered at their high school.47

Given the changes now occurring in the workplace, both academic and vocational courses might

benefit from a greater blend of theory and practice.

Recent research suggests that people of all ages

often learn both practical and theoretical skills most

easily when working together as a team to accomplish a concrete task.48 For example, a group of New

Hampshire high school students designed and constructed a solar-powered car during the 1989-90

school year as part of an applied science class. The

students made all decisions as a team, requiring them

to learn decision-making, leadership, and management skills. As they consulted their peers in metalworking, drafting, and electricity classes, they began

to assume responsibility for their own learning. The

project leader, along with half of those on the team,

were college-bound, but were attracted to a chance

to get away from ‘‘book-centered learning. ”49 At a

forum on this project, which was sponsored by the

National Council on Vocational Education, one

corporate training official stated that the skills these

students learned matched those his company is

seeking in new hires.

While incorporating practical tasks, an improved

vocational curriculum would not limit learning to

job-specific knowledge that rarely transfers to new

Photo credit: American Association for Community

and Junior Colleges

The best vocational programs combine both academic and

occupational skills.

contexts. 50 Instead, the goal would be to help

students develop the flexibility and adaptability

needed to adjust to changes in their lives and jobs.

This can be accomplished by incorporating academic skills into vocational courses and by offering

both academic and vocational courses at the same

high schools (as many schools do now), rather than

creating separate facilities for vocational concentrators. Students can learn mathematics quite effectively within the context of vocational courses such

as business math and vocational math.51 Academic

coursework might help vocational graduates advance beyond entry-level jobs and pursue postsecondary education later in their careers.

The largest effort currently underway to better

integrate vocational with academic education is a

project of the 13-State Vocational Education Consortium of the Southern Regional Education Board.52

47SM A. Rose&ld, “vocatio~ Agriculture: A Model for Education Reform, ” Education Week, Sept. 26, 1984, p. 24.

4$~men B. Resnic~ “l-earning in School and Ou~” Educational Researcher, December 1987, p. 18.

dg~e MytyCh.Ddponte, “N.H. High Schoolers Learn Techniczd Work Skills by Building Solar Car,” Employment and Training Reporter, July

7, 1990, p. 971.

~Sue E. Be-m Bre~ing out of the circle: Rethinking Our Assumptions About Education and the Economy (New YOr~ NY: COhUIlbk

University, Teachers College, National Center on Education and Employment June 21, 1987), p. 5.

51wza, op. cit., foomote 46, P. 29.

5ZEdumtioti Testing Service, op. cit., footnote 34, p. *O.
Chapter &Training and Workers’ Careers ● 235

The group has begun to design, implement, and

evaluate a high school program combining both

elements. When completed, this project could provide valuable models for educators throughout the

United States.

Vocational programs also can help familiarize

students with the kinds of technology they are likely

to use in the workplace. Several “technology

literacy” programs have been developed in recent

years. Some use mobile training centers equipped

with small replicas of advanced manufacturing

technology and with industrial simulators; one

example, the Advanced Center for Technology

Training , is discussed in chapter 7. Computer-based

learning can also help familiarize students with

rapidly changing technology. For example, several

companies, vocational schools, and other service

providers in the Cincinnati area have developed an

interactive video disk training program in machine

tool and fabrication skills.53

Some public schools are beginning to offer

technology familiarization courses to younger students. With funding from the Michigan Department

of Education and the Federal Job Training Partnership Act, the Jackson, Michigan school district is

orienting at-risk youth in middle school to manufacturing technology. Short summer courses on technology applications give students and teachers a

‘‘taste’ of what skills and knowledge are required to

work in the growing number of advanced manufacturing plants located in the Jackson area. 541n the past

2 years, about 100 14-year-olds, 50 teachers, 5

guidance counselors, and 12 principals have attended these courses.

Vocational education might have greater impact if

students knew more about what jobs were available

in their local labor markets. Now, students graduate

with little job placement help from the school.

As a practical matter, greater job search assistance

as well as the other reforms outlined above would

require more extensive employer involvement in the

schools. For example, cooperative education, which

includes periods of classroom instruction and paid or

unpaid work, could be used much more extensively

and effectively. Currently, less than 3 percent of all

high school students participate in cooperative

education. 55

Critics contend that time spent in cooperative

education jobs is often wasted, as students lose

valuable school time only to learn narrow, jobspecific skills. This problem can be eased by placing

the students in a series of jobs, rather than a single

position. But the real key is a commitment by both

the employer and the teacher to make sure that the

student learns the broader principles behind particular tasks while working.

Another avenue for greater collaboration between

employers and high schools, paid or unpaid internship, is available only in a few locations. One

successful experiment in New York City paired

selected students with business executives in a

semester-long, full-time work experience taking the

place of coursework. Like other successful internship programs, this program bridged the gap between work and school by employing teacher/

coordinators, who supervised work placements and

organized seminars and projects that related students’ work experiences to academic subjects.56

Yet another approach is being tried by the

Chamber of Commerce and the local school district

in Fort Worth, Texas. In the project’s initial phase,

local employers, supervisors, and workers were

surveyed about the skills needed in their positions

(e.g., reading, computer literacy, math, communications, problem solving) and the required proficiency

level (from “rudimentary” to “adept”). They were

also asked to predict what those skills and proficiencies would be 5 years from now and a decade from

now.

57 This information is currently being inteS3h ~rgatitiom the &eater CtiCiIIMti ~dus~ Training Corp., was set up to develop and market this curriculum. Part of the startup funds for

the courseware was provided by the U.S. Department of Labor.

~Bob ~lton and -e~%e, Jackson co~ty Community Coflege, Jackson, ~,perso~ comXrlUIdatiOQ June 26, 1990.

55wil~ T. ~ant FO~&tiO@ Commission on work, F~y and ci~enship, op. Cit., foornote 43, p. 42.

‘Ibid., p. 43.

s’l~=en~tionof Stefsenptio&fore the Sarew’s Cohssion on ~hievingNe~ssq SICWS (SCANS), May 18, IW. SCANS, established by

Labor Secretary Elizabeth Dole in the Spring of 1990, has a similar mission at the mtional level as the Fort Worth project has locally. It is charged with

developing national competency guidelines that reflect work readiness to aid in the development of curricula for schools and training programs at the

State and local levels.
236 . Worker Training: Competing in the New International Economy

grated into a new school curriculum, which will be

tested in the fall of 1990.58

Finally, Jobs for America’s Graduates, a private

initiative, has brought the business community and

schools together to provide realistic employment

counseling, job placement, and follow-up support

groups. The program, based on a similar effort in

Delaware, is aimed at all seniors not bound for

college and was operating in 16 States in 1990.

Although placement rates among the 292 participating schools vary from 48 to 89 percent, depending on

local labor market conditions, the programs are

finding other “positive outcomes,” such as postsecondary education and military service, for high

school graduates.59

The 101st Congress is considering legislation to

initiate some of the reforms outlined above through

the reauthorization of the Carl D. Perkins Vocational

Education Act,60 the major Federal program supporting State and local vocational education. As this

report went to press, a House-Senate conference

committee had just completed action to resolve

differences between House and Senate passed bills.61

The bill reported by the conference committee, the

proposed Carl D. Perkins Vocational and Applied

Technical Education Act Amendments of 1990,

emphasizes support for curricula that integrate

vocational and academic methodologies, and that

provide a coherent course sequence through which

academic and occupational skills could be measured. Among many other provisions, the bill also

would authorize support for tech-prep education

programs that encompass the 2 years of secondary

school preceding graduation with 2-year postsecondary or apprenticeship programs. It also would

authorize, as discussed in chapter 2, business-laboreducation partnerships for training.

Although this bill, if enacted, should help bring

vocational education closer to emerging workplace

needs, it cannot accomplish all of the changes

needed. First, Federal funding accounts for less than

10 percent of all support for vocational education;

thus the actions of the States and local school

disticts are crucial. Second, Federal funds are

targeted mostly for schools, not employers. The

links between vocational education and the world of

work can become stronger only with active, ongoing

employer commitment. The new bill encourages, but

cannot guarantee, more active involvement.

Apprenticeship: The Past As Prologue?

Although the U.S. apprenticeship system has

declined over the past two decades, there is growing

interest in revitalizing and expanding it. As recent

research into learning theory suggests, the apprenticeship model, combining theoretical classroom

instruction with hands-on practice and skillbuilding, is a very effective method of developing

the ability to think and learn as jobs and technology

change. 62

Proponents of apprenticeship note that it could

help address some of the challenges raised by the

Hudson Institute’s Workforce 2000 report:

1. rising skill requirements in many occupations;

2. a shrinkin g supply of younger workers;

3. increased training needs in the service sector,

where job growth will predominate and productivity lags; and

4. the need for more systematic training in smaller

fins, where most of the employment growth in

the service sector will occur.63

Nevertheless, attempts to expand apprenticeship

face big barriers. Currently, apprenticeship plays a

very small role in training of U.S. workers. Between

1970 and 1987, apprentices in federally registered

programs fell from the already small proportion of

0.3 percent of the U.S. civilian workforce to only

0.16 percent.64 Formal apprenticeship does little for

S8’CM0 WofiB~inesses, Schools Join to Develop Work-Readiness CurriCtdu.m,” Employment and Training Reporter, June 20, 1990, p. 939.

5Wuwtio~ Tes@ Service, op. cit., foo~otc 32, p. 25.

‘%ills included H.R. 7, as passed by the House, and S. 1109 as passed by the Senate.

61 The ~o~erenm ~epfi on H.R. 7 WS publish~ in the Congressional Record, Aug. 2, 1990, PP. H633~H63*2.

6ZR=~c~ op. cit., footnote A*, P. 16.

63u.s. De~~ent of ~bor,E~plopent & T~~g AWs~tio~ “Apprenti~ship 2~ Issue pa~r ~d Initiative; Notice ~d Request fOr

Comments,” Federal Register, Dec. 2, 1987, p. 45905.

~u.S. Dep~ent of Labor, Work.Based~arning: Training America’s Workers (W~hingto@ DC: U.S. Government Printig OffIce, 1989), p. 8.
Chapter 8-Training and Workers’ Careers ● 237

the average high school graduate-the median age

of U.S. apprentices is 25.65 By contrast, apprentices

make up 6 percent of the labor force in West

Germany (see ch. 3), where apprenticeship is the

major vehicle for helping young people aged 16 to

19 move from school to work.66

To be registered with either the Federal Bureau of

Apprenticeship and Training (BAT) or a State

Apprenticeship Council (SAC), apprenticeship programs may be sponsored unilaterally by a single

employer or by a group of employers (with no union

involvement), or jointly by a single employer with a

union or by a group of employers with a union.67 In

addition to registered programs, some employers

and professional associations operate formal apprenticeships that are not registered. It is estimated that,

in addition to the 300,000 apprentices now enrolled

in federally registered programs, there are about

100,000 more in nonregistered programs.68

Although 85 percent of the more than 40,000

federally registered apprenticeship programs are

operated unilaterally by employers, most of these are

quite small, offering only one or two training slots.

By contrast, over half of all U.S. apprentices work in

the unionized construction industry and another 20

percent are employed in unionized manufacturing.69

The recent decline in apprenticeship parallels the

falling rates of unionization in construction and

manufacturing. Although there is no legal barrier to

the creation of nonunion apprenticeship programs,

there is a practical one-financing. Apprentices in

the United States typically attend evening classes

two or three times per week, receive on-the-job

instruction, and take tests at regular intervals over a

3-year period.70 To support these costs, the firm or

industry must, in effect, tax itself. In unionized

companies, collective bargaining provides a mechanism for collecting the fee. Without unions, industry

associations must solicit voluntary contributions

from member firms; a single firm acting alone may

be unable to support such extensive training.71

Sustaining apprenticeship programs is particularly difficult in the manufacturing sector. Although

manufacturing and construction workers are equally

unionized (unions represent about 22 percent of

workers in both industries)72, industry associations

in manufacturing are weaker and less likely to

support training.

73 With neither union pressure nor

broader support from a trade association, many

nonunion manufacturers, including Cincinnati Milicron and Bell & Howell dropped their formal

apprenticeship programs as part of broader costcutting efforts in the recessionary late 1970s and

early 1980s.74 75 Although unionized companies

such as the “Big 3“ U.S. auto manufacturers did

maintain their programs during this difficult period,

they greatly reduced the number of trainees. Today,

U.S. automakers have shortages of skilled craft

workers.

fiStephenM.IMS andBeatrice G. Reubens, “YouthEmployment inthe United States,‘‘ in Beatrice G. Reubens (cd.) Youth at Work: An International

Survey (Totowa, NJ: Rowan and Allenheld, 1983), p. 273.

66Nick Kolb, B~au of Apprenticeship and Training, personal Communicatiorl NOV. 15, 1988.

GTRobert W. Glover, “Apprenticeship: A Route to the High-Paying Skilled Trades for Women?” Sharon L. Harlan and Ronnie J. Steinberg (eds.)

Job Training For Women: The Prondse andh”m”ts of Public Policies (Philadelphia, PA: Temple Univemity Press, 1989), p. 272.

6sRolxrt Glover, Senior Research Associate, Center for the Study of H~Resources, the University of Texas at Austin, personal communication

July 1990.

@Glover, 1989, op. cit., footnote 67, p. 272.

7~e aver%ecostforone appratice toattende~eningc~sses in~e sh~tme~industry~ees~t~ to kabout$2,500 peryear-DavidHarrh@ow

Sheet Metal and Air Conditioning Industry, National Training Funq personal communication June 27, 1990. One rough estimate of employers’ and

unions’ total annual investment in apprenticeship, including wages, is $8 billion to $10 billio*Roberts T. Jones, Assistant Secmtaryof Labor, testimony

in Hearings before the Committee on Appropriations, U.S. House of Representatives, Thursday, Mar. 9, 1989 (Washington DC: U.S. Government

Printing OftIce, 1989), p. 559.

7

1 Robert W. Glover, “Expanding the Use of Apprenticeship,” report submitted to the Bureau of Apprenticeship and Training, U.S. Department of

Labor, September 1988, p. 26.

Tz’’UnionMembers~p Down to 16.4 Percent of Workers in ‘89,” Daily Lubor Report, No. 27 (Washington DC: Bureau of National Affairs, Inc.,

Feb. 8, 1990), p. 1.

TsGlover, 1988, op. cit., fOOtllOte 71, p. 21.

74J~w Winy, Corporate Director, Pmsonnel Development/Compensation/Bends, CiLIChUMti M.ilicron, Wrso@ communicatio~ WY 4! 1989”

TsDon Frey, fomer ~ef~wutive offiCW, Bell & Howell, perSOIld communicatio~ Apr. 12> 1989”
238 . Worker Training: Competing in the New International Economy

Joint Apprenticeship Programs

In construction, apprentices are usually new hires

(often with some work experience and/or college),

while in manufacturing, apprenticeships are allocated to employed workers on the basis of seniority

and aptitude tests. In both cases, demand for

apprenticeship slots exceeds supply, and, in some

trades, there are commonly four applicants to every

one apprentice accepted.76 Currently, about 20

percent of all apprentices are minorities, while 7

percent are female.77 Unless the limited number of

apprentice positions expands, it is unlikely that

apprenticeship will become an important vehicle for

moving women and minorities into high-paying jobs

in the near future.

Apprenticeship training trust funds originated in

local contracts covering the mechanical and electrical trades within the construction industry following

World War 11.78 These local funds are overseen by

Joint Apprenticeship Training Committees (JATCs).

As a condition of receiving training from unionnegotiated funds, apprentices must agree that they

will not work for a nonunion contractor for a certain

period of years. Administrators of JATCs have

successfully sued journeyman who have taken such

action, winning back the training costs.

In the mid-1950’s, unions and employer associations began establishing national training trust

funds, overseen by national joint committees, to

support their local apprenticeship programs. These

national funds work in concert with local JATCs,

which actually deliver the training. The national

committees focus on making training more portable

throughout the Nation by certifying journeymen as

training instructors, purchasing training equipment

at bulk rates, and developing standard curricula for

the industry, while the local JATCs oversee local

programs and select the apprentices.79 For example,

the National Training Fund (NTF) of the Sheet

Metal and Air Conditioning Industry develops

courses on video disk, providing them free to the

Photo credit: National Training Fund,

Sheet Metal and Air Condoning Industry

Apprenticeship training provides long-term career benefits

for young people. Here, an apprentice sheet metal worker

learns on the job by working with a master craftsman.

local JATC’s, and also uses mobile trailers to teach

welding techniques near major construction sites.

Among the largest national finds, the NTF, had a

1987 annual budget of $5.2 million. These funds

were contributed by employers; the national union

(Sheet Metal Workers International Association)

requires each local contract to include a clause

requiring a contribution to the NTF of $0.07 per hour

worked by each journeyman.80 The National Ironworkers and Employers Apprenticeship Training

and Journeyman Upgrading Fund is less wellfunded; Local contracts may, but are not required to,

include contributions to the fund of $0.02 per hour

worked.81

Today, joint apprenticeship trust funds in the

construction industry control about $500 million

annually. These funds are used not only to train some

200,000 apprentices, but also to upgrade the skills of

journeymen and to train apprentice instructors. For

example, the United Association of Plumbers and

TsGlover, 1989, op. cit., footnote 67, p. 286.

~c~c~tionfrom data supplied by the Bureau of Apprenticeship and Training (AMS Report 001, ~.30, 1989).

TgGlover, 1988, op. cit., footnote 71, p. 22.

T~en IMwmds, rntemtio~Brotherh~ of Electrical Workers (IBEW), phone interview, Feb. 23, 1989.

~NatioMl Training Fu~AnnualRepo~ 1988 (Ale~n&@ VA: Natio~Tr~g Fund,Sh@ Mew and Air Conditioning bdus~); ~dp~Olld

ccmununieation with Gerald Olejnicza.lq Assistant Administrator, NT’F.

81~y Ro~@oW ~temtio~ Association Of Bridge, s~~~~~d-en~~nworkers, prsoti communication, hbr. 15, 1989.
Chapter 8-Training and Workers’ Careers ● 239

Pipefitters, which has about 24,000 apprentices in

full-time training, provided short upgrade courses to

about 80,000 journeyman in 1987.82

Journeyman upgrading is increasingly important

as construction technology changes: The joint program in the electrical industry provides fiber optics

training to journeymen, while the sheet metal

industry’s NTF has provided courses in such diverse

skills as solar energy installation and architectural

sheet metal skills for historic renovation.83 The

Laborers-Associated General Contractors of America (AGC) Education and Training Fund, which

celebrated its 20th anniversary in 1989, provides

journeyman upgrade training in leadership skills,

hazardous waste clean-up, and asbestos abatement,

with financial support from the Environmental

Protection Agency.84

Legal Framework

The legal framework for apprenticeship in the

U.S. has remained largely unchanged since 1937,

when the National Apprenticeship Act chartered the

creation of BAT within the Labor Department. BAT

was given four missions:

1. to formulate labor standards to safeguard the

welfare of apprentices;

2. to extend application of these standards in

apprentice contracts;

3. to bring together employers and labor with the

goal of developing apprenticeship programs;

and

4. to cooperate with State agencies engaged in

developing standards for apprenticeship.85

Within this framework, a patchwork system

involving BAT and some States has developed. At

the national level, BAT promotes apprenticeship,

formalizes national training standards developed by

industry associations and unions, registers and

services approved apprenticeship programs, and

certifies graduate journeymen. Twenty seven States,

the District of Columbia, Puerto Rico and the Virgin

Islands have State Apprenticeship Councils (SACS)

established by State laws and formally recognized

by BAT SACS perform many of the same functions

as BAT, which has offices and staff in all States.

Most SAC and BAT personnel agree that promotion

should be left to BAT, while the SAC concentrates

on registering programs and both entities develop

and service programs. However, this division of

responsibilities is rarely spelled out in a formal

agreement, causing confusion and sometimes conflict between the agencies.86

On successful completion of a registered apprenticeship program, the graduate journeyman may

receive a certificate of completion from BAT or the

SAC. As discussed above, manufacturers typically

operate individual programs, rather than working

through industry associations to establish uniform

national training curricula approved by BAT This

decreases the portability of the journeyman certificate, because a certificate granted by one State may

not be accepted by employers in another State.87

As part of a broader effort to enhance traditional

apprenticeship, BAT is reviewing and revising its

policies related to Federal and State roles in apprenticeship. However, any attempt to increase Federal

control will be limited by the fact that the 27 SAC

States contribute far more in support of apprenticeship than does the Federal Government. During the

1986-87 fiscal year, SACS spent $15.25 million on

apprenticeship administration, while BAT spent

only $7.75 million in support of State programs in

both BAT and SAC States.88 (The remainder of

BAT’s $13 million budget for that year was spent on

national and regional operations.) Perhaps because

they are willing to financially support greater

S@lover, 1988, op. cit., footnote 71, P. 1*.

sqNell P. Eurich, &arning to work: Resources for Adult Learning (The Carnegie Foundation for the Advancement of Teac@, dr~t m~uscriPt

forthcoming in 1990), p. 180.

~Training up~te,n. 10 ~We~er 1989) (Pomfret Center, CT: Laborers-AGC Education ~dTrtig F~d, 19*9), PP. 3,5.

85wTil~G. wThi~er,Apprenticeship Training i~A~ri~a;the “Fitzgera ldAct” (1937-]987) (Congressioti Rese~ch Service Report 87-902 E,

1987), p. CRS-4.

86Keme~ wro Tolo, Robefl wr. Glover ~d Jo~ A. ~onou~~ (eds.), Coordimtion of state and Federal Apprenticeship Adndnistration, A report by

the Apprenticeship Projecb LyndonB. Johnson School of Public Affairs, The University of Texas at Austin (Aust@ TX: Board of Regents, the University

of Texas, 1980), p. xiii.

87u,s. Dw~ent of Labor, Employment and Training Administration, “Apprenticeship 2000: Focus Paper on Support Activities and Linkages,”

Federal Register, Jan. 25, 1989, p. 3758.

‘

sMeridian Corp., “Apprenticeship2000: Project 3C: Analysis of State Roles and Responsibilities,” reported submitted to U.S. Department of Labor,

Sept. 30, 1988, p. 2.
240 . Worker Training: Competing in the New International Economy

outreach efforts, the SAC States have about twice as

much apprenticeship activity, (with an average

1,100 registered programs and 6,200 apprentices per

State) as the BAT States, which have an average of

500 registered programs and 3,300 apprentices per

State. 89

Quality of Apprenticeship

Despite the patchwork legal framework, the

quality of current, legally registered apprenticeship

programs appears quite high, especially from the

worker’s perspective. Workers who have completed

apprenticeship are generally well satisfied with their

training, usually continue working at their crafts,

and often move into supervisory positions.90

One recent study compared matched samples of

1972 high school graduates who either entered

apprenticeships, received other formal on-the-job

training from their employer, or received no training.

Those who had completed apprenticeships earned

significantly more ($4,700 annually, for males) than

those who received no formal training, while those

who had received other types of formal on-the-job

training from their employer earned more, but not as

much more ($3,900 annually, for males) .91 As noted

above, another recent study found that apprenticeship training was more likely to result in increased

earnings with a subsequent employer than other

forms of employer-provided training. 92 This is

because apprenticeship, especially in the construction trades, leads to a widely recognized, portable

journeyman’s certificate. Like formal education,

apprenticeship offers a key benefit to workers—a

recognized credential.

Of course, not all workers successfully complete

their apprenticeships. A problem that has affected

U.S. apprenticeship programs since the 1940s is a

high dropout rate, currently estimated to be over 50

percent. 93 Although high, these dropout rates are

moderate compared with those from school-based

vocational education: Only 19 percent of high

Photo credit: National Training Fund,

Sheet Metal and Air Conditioning Industry

As technology advances, journeyman upgrading courses

have become an important component of joint unionmanagement apprenticeship training programs.

school graduates who enter community colleges

complete a certificate or degree within 4 years of

their high school graduation.94

Although hard evidence is lacking, some trends

point toward improved quality in apprenticeship

training. For example, a growing number of joint

apprenticeship programs, including those in sheet

metal, masonry, and iron work, are collaborating

with colleges and universities to provide in-depth

technical and pedagogical instruction to apprenticeship instructors.95 In recent years, joint programs in

carpentry, bricklaying, insulation, and painting have

updated their curricula and developed new national

standards for apprenticeship training. And, as discussed above, journeyman upgrade training to keep

workers abreast of new technology is increasing.

‘%’bid., p. 1.

90Glover, 1988, op. cit., fOOtuOte 71, PO 12.

91WestaL Inc., “Analysis of Apprenticeship TrainingfromtheNational Longitudinal Study of the High School Class of 1972” (Roekville, MD: March

1989), p. 4-1.

92Lwch, op. Cit., f~tiOte 1O.

gsGlover, 1988, op. cit., footnote 71, p. 17.

~UoS. Dep~ent of Education, Natio@ Assessment of v~atio~ ~ucatio~ op. cit., f~fnote 44, 1989, p. XVi.i.

95Glover, 1988, op. cit., foo~ote 71, p. 17.
Chapter 8-Training and Workers’ Careers ● 241

Potential for Expansion

In 1987, the U.S. Department of Labor launched

a two-pronged effort, “Apprenticeship 2000” which

is aimed at both strengthening traditional apprenticeship and expanding the apprenticeship concept

(formal and on-the-job training leading to a credential) beyond its present concentration in the construction trades. While BAT found considerable

support for expansion among business, labor, academia, and State and local officials, initial discussions

revealed several barriers. These include:

cost, especially for small employers;

perception of union control;

fear of “pirating” of apprentices;

lack of support structure (i.e., a joint apprenticeship committee) for nonunion employers,

especially small employers.96

To overcome these barriers, the agency is studying a number of alternatives for strengthening

traditional apprenticeship, including expanded promotion of and technical assistance for apprenticeship by BAT and the States; use of competency

testing or other devices to make apprenticeship

certificates more portable across States; approaches

for replicating the joint apprenticeship committee

model in nonunion settings; loans to employers;

subsidizing the costs of related instruction (this is

currently done by the States); improving linkages

between apprenticeship programs and educational

institutions, JTPA, the Job Corps, and the Employment Service; and improving consistency in State

implementation of apprenticeship.97

BAT has too few resources to implement these

alternatives. The agency for some time has not been

able to service all employers who have or wish to

have apprenticeship programs. For example, in the

mid-1970’s, in Utah, BAT serviced the larger joint

union-management apprenticeship programs while

the SAC serviced smaller, nonunion programs.

Neither agency had the resources to develop apprenticeship programs in the rural, northern part of the

State. 98

This situation has worsened. Despite inflation,

Congressional appropriations for BAT have remained almost constant, growing only from $13.86

million in fiscal year 1978 to $14.02 million in fiscal

year 1990. BAT’s real spending ability in constant

(1982) dollars has fallen by more than one half since

its high point in 1978. This is reflected in the

agency’s staffing, which has fallen from its 1978

level of 495 people to only 247 people.99 With fewer

staff and almost no travel budget, BAT has made

fewer visits to potential sponsors of apprenticeship

programs and fewer onsite reviews of existing

programs.

100 These reductions in outreach could

feed the widespread perception that BAT services

only union apprenticeship programs, thus discouraging more nonunion employers from participating.

Despite the cuts in funding for its traditional

mission of strengthening and expanding traditional

apprenticeship, BAT has received a share of JTPA

research and development funding in addition to its

basic budget. These funds are earmarked for the

second part of the Apprenticeship 2000 Initiative

developing new approaches to apprentice training.

In mid-1989, the agency granted $1.8 million of

these funds to three organizations, the 70,001

Training and Employment Institute, the National

Alliance of Business, and the AFL-CIO’s Human

Resource Development Institute, to research and

develop innovative apprenticeship programs.101 The

first organization is working with small businesses

in Indiana to adapt the apprenticeship concept to

training of child care workers; the second is developing structured on-the-job training for bank tellers in

conjunction with the American Banking Association, and the third is developing upgrade training for

aircraft manufacturing and health care workers in the

State of Washington.

In early 1990, BAT was made part of the new

Office of Work Based Learning (OWBL) within the

Department of Labor. OWBL also has program

responsibility for retraining displaced workers and

trade adjustment assistance. The new office is

evaluating proposals for demonstration programs

%u.S. Department of Labor, *plOyrnent & T-g AdministratiorL “Apprenticeship 2000: Focus Paper on Support Activities and Linkages,”

Federal Register, Jan. 25, 1989, pp. 3757-3758.

~rbid.

WGary B. Hansen and Mark H. Skidmore, “Closing the Rural Employment and Training Gap: A Utah Experiment” Thrust, April 1985, p. 52.

~ormation supplied by the U.S. Department of Labor, Jan. 6, 1990.

looRoIRrrs T. Jones, testimony, op. cit., footnote 70.

lol~nwwer Momtion,IUC., Employment and Training Reporter, VO1. 20, No. 46, p. 1239.
242 ● Worker Training: Competing in the New International Economy

enhancing school-to-work transitions for young

people. A total of about $3.5 million will be given

out during 1990 to support these research and

demonstration programs.102

If successful, these new demonstration projects,

as well as those described above, could help spread

concepts of apprenticeship. In the American context,

these concepts may have more potential than traditional, legally-registered apprenticeship. An effort to

expand legally registered apprenticeship programs,

the National Industry Promotion Program, launched

in 1976, had only limited impact. All of the industry

associations ceased their national apprenticeship

activities when the flow of Federal funds was

stopped in 1979. At the local level, a few programs

involving unions such as the fire fighting apprenticeship, continued, but those in nonunion industries

floundered. For example, in the auto repair industry,

the lack of industry association support meant that

there were never a substantial number of apprentice

auto mechanics.103 Without strong trade associations or another avenue of collaboration, few firms

continued comprehensive, structured, work-based

learning.

By contrast, General Motors has developed a

highly successful training program modelled on the

apprenticeship concept. (The program is not registered.) Each student entering the program is sponsored by a GM dealership and is paid a competitive

training wage during the on-the-job training portion

of the 2-year program. Launched in 1980, this

program provides classroom training through local

community colleges. Approximately 2,400 GM

repair technicians have completed this program

since its inception. Although graduates have a

guaranteed job with the sponsoring GM dealership,

an increasing number are going to work for other

auto repair shops as the quality of the training

becomes known.104 As discussed in chapter 5, other

auto manufacturers are now developing automotive

technician training programs similar to GM’s.

Whether legally registered or not, most U.S.

apprenticeships are filled by young adults, rather

than teenagers. This is primarily due to the limited

scope of apprenticeship-with demand for training

slots exceeding supply, apprenticeship sponsors can

choose carefully, looking for prior work experience

as evidence that a young adult will succeed in

apprenticeship. 105 Nevertheless, successful School-toApprenticeship programs, linking high school vocational students with formal apprenticeships, do exist

in a few locations. Expanding such programs would

make an important contribution to improving the

amount and quality of training for younger workers.

In addition, school-based internships and nontraditional apprenticeships, such as those discussed in the

vocational education section above, would greatly

help young people make the transition from school

to work.l06

JOINT UNION-MANAGEMENT

TRAINING PROGRAMS

Many unionized workers receive transferable

training and career counseling through contracts

negotiated with their employers. Although unions

represent a small and declining share of the labor

force (from a peak of 35 percent of the workforce in

1954 to 16.4 percent in 1989),107 their influence on

workplace training has been disproportionately large.

Some features of union-negotiated retraining programs for laid-off workers, such as income support

while in training, advance notice of layoff, and

remediation of basic skills, have been adopted into

Federal programs 108 for workers laid off by nonunion as well as union firms. But unions also

influence training programs for employed workers.

Iozfiene L~~ce of Work-Based Learning, U.S. Department Of bbOr, ptiSOIlrd cOmmunimtiOQ August 1990.

IOSGlova, 1988, op. cit., footnote 71, p. 28.

l~Jim cho~oc~, General Motors, personal COInmUniCatiOIL June 1990.

IOsF~au&Associata, ~ ~L-~eSan@VWatio~ ~ucationSystemwithApprenticeship,’ paper submitted totheBure~ ofApprenticeship

and Training, U.S. Department of Labor, Oct. 17, 1988, p. 29.

106For ~ ~omprehen5ive di5cu55ion of school.b~ed app~entices~pmode~, see Stephen Fo =to~ Apprentice~~ipfOrA&/t~OOd mew YOr~ ~:

Macmillan, hlC., 1990), pp. 158-185.

IOT’’u~on Membership DOW to 16.4 percent of Workers in 89,” Daily Labor Report, op. cit., footnote 72, p. 1.

108~bfic ~wl~37g,tie Wofiw Ad@tment and RexNo~lcation Act reqfies ~ employers of 1(M) or more worker tO @Ve advance notice

of layoffs and Public Law 100-418, the Omnibus Trade and Competitiveness Act of 1988 provides funds for income support and mediation of basic

skills during retraining of workers served by the Federal JTFA Title III displaced worker program.
Chapter 8-Training and Workers’ Careers ● 243

For a variety of reasons, large nonunion employers frequently match or better the wages, benefits

(including training programs) and working conditions negotiated in unionized companies.l@ Perhaps

the most notable recent example was the United

Auto Workers’ (UAW attempt to organize Nissan’s

Smyrna, Tennessee auto plant in 1989. According to

one observer, the extensive cross-training and expanded job responsibilities given to workers at the

plant was the key factor in the union’s defeat.110 In

addition, Nissan had maintained full employment

during a sales slump; employment security is a key

UAW goal, but union-negotiated protections with

the ‘big three” U.S. automakers allow layoffs when

sales fall. Like Nissan, a growing number of

nonunion employers may begin to provide training

packages similar to, or even better than, those

offered through the large joint union-management

programs discussed below.

Since 1982, contract negotiations in the auto and

telecommunications industries have led to the establishment of five large, joint, union-management

training corporations. They are: 1) The United Auto

Workers (UAW)-Ford National Educational Development and Training Center; 2) The UAW-GM

Human Resource Center; 3) The Communications

Workers of America (CWA)-U.S. WEST Communications Training Partnerships, Inc.; 4) The Alliance

for Employee Growth and Development (a joint

venture of AT&T, CWA, and the International

Brotherhood of Electrical Workers); and 5) The

UAW-Chrysler National Training Center. In early

1989, the United Steel Workers of America (USWA)

ratified contracts with several major steel companies

which will create similar corporations.

As shown in table 8-1, in 1989, these five entities

offered training to a total of 709,000 workers and

had annual budgets totaling about $324 million. On

average, $460 is available per worker per year.

However, most workers do not take advantage of the

training, and much more than the average is available in some of the companies.

Three of the joint training programs (UAW-Ford,

UAW-GM, and the Alliance) were born in times of

crisis in response to mass layoffs.111 This initial

Photo credit: The UAW-Chrysler National Training Center

Joint union-management training programs offer technical

preparation courses in auto plants after hours.

focus on retraining laid off workers led all of the

joint training programs to emphasize broad, transferable skills and career counseling. Over the past few

years, most of the five corporations have targeted the

majority of their funds at upgrading the skills of

employed workers; however, the focus on transferable skills has not changed. Courses are typically

offered outside of regular working hours at the plant

site. They include basic skills, computer literacy,

career and educational counseling, financial management, and preretirement planning.

Although the new joint union-management corporations have captured the public eye, some unions

and their employers have developed successful joint

training efforts without creating separate training

entities. Two examples are the joint training programs developed by the Communications Workers

of America (CWA) and Pacific Northwest Bell,

which have enhanced both workers’ employment

security and company revenues, and the joint

“Career Ladders” program developed by Hospital

Workers, Local 767 of the Service Employees

International Union and Cape Cod hospital (see

boxes 8-B and 8-C). There are many other examples

of local unions and employers throughout the United

States developing a variety of training programs

l~ed K. Foties, “Large NonunionizedEmployms,” Jack Stieber et al. (eds.), U.S. Industrial Relations 1950-1980: A Critical Assessment

(Madisou WI: Industrial Relations ResxtrchAssociatio% 1981), p. 156.

llO”TX Kept UAW Out of Nissan,” American Machinist, October 1989, p. 37.

1ll’rhe=pm~s me ~s~s~ ingr~~rdeti in Margaret Hilto~ “The Role of Labor Unions kT- of Employed Workers,” Working Paper

W OTA Worker Training Projecg May 28, 1989.
244 . Worker Training: Competing in the New International Economy

Table 8-l-Joint Union-Management Training Corporations

Amount potentially

Name 1989 budget Number of

(year created)

available per

(in millions) workers covered worker in 1989

U/W-Ford National Education, Development and

Training Corporation (1982) . . . . . . . . . . . . . . . . . . . . . . . . . $63” 105,000 $600

UAW-GM Human Resource Center (1982) . . . . . . . . . . . . . . . $200b 360,000 $556

PATHWAYS’ (1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5 40,000 $125

UAW-Chrysler National Training Center (1985) . . . . . . . . . . . $45 79,000 $570

Alliance for Employee Development, Inc.d (1986) . . . . . . . . . $11.3 125,000 $90

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $324.3 709,000 $457.40

NOTE: Contract negotiations during 1989 led to creation of three new joint union-management training programs: 1) The United Steel Workers of America’s

Career Development Institute, with Bethlehem, Armeo, Inland, and LTV Steel companies, has an annual budget of $10 million to serve about 50,000

steelworkers, or$200 per worker per year; 2) The CWA-BellSouth Corp.’s Employment Security PARTNERSHIP program is funded at $130 per worker

peryear, statting in January, 1990;3) The Aeorospace Machinists Industrial bdge 751 -Boeing Company’s Quality Through Training program is funded

at about $12 million per year for 42,000 workers, or about $286 per worker per year.

afidudes local funds, which go directly to joint local Committees.

bvew ~ntraliz~. Total includes $5o million which is allocated directly to local joint training COmmitteW.

CJOint venture of @mmunimtion9 Wokers of Ame~a (cWA), lnternation~ Brotherhood of El@~lwo~ers [[BE~, ~d U.S. WEST Communications.

dJoint venture of CWA, IBEW, ~d ATaT. . .

SOURCE: Office of Tmhnology Assessment, 1990.

dealing with basic skills, health and safety, productivity, quality, and other common concerns.

Joint union-management training programs have

the potential to broaden workers’ access to training.

For example, due to continuing layoffs of less senior

employees, many union members are now middleaged or older. In 1988, when workers between aged

45 and over made up 26 percent of the total labor

force, they comprised 35 percent of workers represented by unions.112 Although company-provided

training might bypass these workers, the joint

programs use techniques such as peer counseling,

context-based basic skills courses, and onsite classes

to encourage older workers’ participation.

Relationship of Joint Programs to

Company Training

Most of the new joint training corporations are

designed to supplement, not supplant, the parent

corporation’s regular, job-related training. Only at

General Motors is the joint program viewed as a

primary delivery mechanism for training of hourly

workers, including job-related, on-hours training as

well as more generic courses after hours.113 (See ch.

4.)

In reality, however, all of the joint programs do

have links with the corporate training system. For

example, at Ford’s Van Dyke plant, 14 UAWrepresented workers sit on the 16-member technical

training committee, which identifies on-hours training needs for the hourly workforce.114

As at Ford, joint training committees in Chrysler

plants work closely with corporate trainers. The

committee at Detroit Axle-a plant that had been

threatened with closure-helped the company successfully install new technology. As part of a larger

program to maintain competitiveness, Chrysler decided in 1987 to add truck front-drive axle production to the plant, which had previously produced rear

axles only. The local joint training committee

designed an 8-week training program in operation of

newly purchased Okuma CNC machine tools, including four weeks in class with four weeks of

hands-on experience operating the machines using

dummy parts. In total, 37 new jobs involving

computerized machining of axle parts were created.

Although obviously aimed at job-specific skills, this

training was financed with joint funds and conducted on company time.115

1

1

2

’ ’Union Membership Falls to 16.8 Percent in 1988,” DaiZy Lubor Report, op. cit., footnote 72 (table 1), p. B-14.

113Pa~ Delker, “worker Tr-: A Study of Nine Companies,” report submitted to OTA under contract ##H3-6785, September 1988, p. 110.

114Beverly Geber, “The Resurrection of Ford,” Training, vol. 26, No. 4, April 1989, p. 26.

115’’Tr&Kxx Fifl 37 New Jobs,” NTC Newsline, vol. 1, No. 1, 1987, p. 4.
Chapter 8-Training and Workers’ Careers ● 245

Box 8-B-CWA-Pacific Northwest Bell

Pacific Northwest Bell (PNB) was one of three Bell Operating Companies that were combined to form U.S.

WEST Corp. when AT&T was split up in 1984. Until 1987, when it was merged into U.S. WEST Communications,

the company operated somewhat independently. Headquartered in Seattle, PNB provided local and long-distance

telephone service in the States of Washington and Oregon. In 1987, the company employed 14,500 workers,

including about 10,000 represented by the Communications Workers of America (CWA) and the International

Brotherhood of Electrical Workers (IBEW).

According to PNB’s Director of Employee Relations, ‘‘the company and the unions are constantly looking for

common ground and common issues that will give us an umbrella under which joint activities can take place." 1 This

approach to labor relations evolved slowly, beginning in 1980, when CWA proposed a joint union-management

Quality of Worklife (QWL) process during national contract negotiations with AT&T Based on that contract

language, which applied to the whole Bell System, the company and union agreed to jointly train labor and

management facilitators who would lead shop-floor committees in addressing issues of concern to the union,

management, or both.

In 1984, PNB and the union expanded the QWL process by appointing three organizational change consultants

(OCCs), reporting to management, CWA, and IBEW respectively. In 1985, this team merged with the company’s

Organizational Development Group and received a $50,000 grant from the Federal Mediation & Conciliation

Service (FMCS) to develop and promote innovative approaches to labor-management cooperation.

The OCC’s were soon called in after management had tried and failed four times to teach Installation and

Maintenance (I&M) technicians, how much they could charge for work on equipment and wiring not owned by

PNB. The company, seeing little revenue generated by the labor hours spent, had stopped marketing the technicians’

services, and layoffs appeared likely. The company’s concern was money; the union’s concern jobs. A jointly

developed training course, delivered by specially trained technicians to their peers throughout Washington and

Oregon, helped meet both needs. One year after the training was delivered, a total of $1.4 million had been billed

for the technicians’ work, and demand for their services had increased so much that surplus workers from other job

titles were able to move into these jobs.2

As the OCC group worked with various union-management committees, other training programs were

developed. For example, a survey showed that Systems Technicians, who work on computer-telephone hookups

and other special systems, were unhappy with the quality of their training. A joint union-management team spent

4 months in 1985 developing a basic electronics course, which was subsequently delivered on company time to

about 400 technicians and their supervisors at a Vocational Technical School outside Seattle. The total cost of the

3-week course, was about $1.2 million. Another example: onsite classes offered by community colleges at worksites

in Seattle, and Portland, beginning in 1986. Local union and management committees identified the need for courses

in basic arithmetic, writing, computer programming, and electronics and arranged the logistics.3

Although the 1986 contract between PNB and CWA provided no money specifically for training, the

commitment to Jointness has resulted in expenditures of large sums of money in addition to those described above.

For example, a joint task force created in 1985 to deal with future surpluses of Central Office Technicians due to

digitalization of central switching offices identified a broad need for career counseling and retraining of all workers

to minimize future layoffs. To deal with this need, the joint task force helped local managers and CWA officers

develop pilot education fairs in Yakima, Washington and Eugene, Oregon in early 1987. Representatives of local

colleges as well as internal company and union training programs setup booths at the l-day fairs. Attendance was

so high and response so enthusiastic that the joint task force ultimately helped local joint committees in 25 cities

create similar ‘‘Opportunity Expositions. ” The total cost to PNB was about $50,000, in addition to lost wages for

those workers who attended on company time. The successful creation and delivery of a wide range of training

programs at PNB demonstrates that joint training can be one of many offshoots of a strong, cooperative,

labor-management relationship.4

l~~A Conversation ~th Arnold -e@”f.ubor ReZatio~ To&y (U.S. Department of Labor, Bureau Of htbor-~nagement Relations

and Cooperative Programs), May-June 1987, vol. 2, No. 3.

2WgMet ~ton and Ronnie StraW, ‘‘Cooperative Training in Telecommunications: Case Studies,” Monthly LaborReview, May 1987,

p. 35.

31bid.

4~e ~,CM, ClfTA-PNB Training Advisory Board, personal communication March 1988.
246 . Worker Training: Competing in the New International Economy

Box 8-C—SEIU-Cape Cod Hospital

The Service Employees International Union (SEIU) represents about 875,000 service workers, the majority

of whom work in public or private health care.1 In 1979, the union received a $300,000 grant from the U.S.

Department of Labor’s Bureau of Apprenticeship and Training (BAT) to determine the feasibility of applying

apprenticeship to the health care industry. Later, with the assistance of two more BAT contracts, SEIU’s national

office developed a modified apprenticeship model, termed LEAD, or Lifelong Education and Development.

By 1984, the LEAD program included staff at both SEIU international headquarters in Washington, DC and

in 11 regions of the country. Although staff were laid off when Federal funds were cut off the following ye@,

several successful LEAD programs continue to operate at the local level. One such example is found at Cape Cod

Hospital.

During 1981 contract negotiations, SEIU’s national LEAD director helped Hospital Workers Local 767 win

the broad outlines of a comprehensive upgrading program for its members. Local 767 represents all nonmanagement

workers except Registered Nurses (RNs), or about 650 of the hospital’s 1,100 employees. As called for in the

contract, a Joint Career Development Committee was created. The group met weekly for over a year to negotiate

on the qualifications required for every represented job, ranging from the lowest paid Housekeepers and Pot

Washers to the highest paid Pharmacists.3

The result was a comprehensive joint training program, dubbed “Career Ladders,’ which has been continued

and expanded during subsequent contract negotiations. A key element in the program is a Career Ladders booklet

describing requirements for about 100 jobs and listing 6 in-house training programs and 12 traineeships available

to meet those requirements. Normal attrition and turnover combined with continuous introduction of new

technology creates a continuing demand for skilled workers at Cape Cod and other hospitals.

Under the Career Ladders program, workers know exactly what they must do in order to be promoted.4 For

example, an entry-level housekeeper knows that, to become a Unit Clerk s/he must complete training in Medical

Terminology (offered at the hospital) and be able to type 35 words per minute. At least one worker has made this

transition, involving an increase of three levels in pay grade, within 6 months.

Union and management agree that the Phlebotomy traineeship has been quite successful. The Phlebotomists,

who draw blood, are in great demand, especially in the summer months, when tourists swell the population of Cape

Cod and its hospital. In 1984, about 30 workers successfully completed training and were promoted to the

Phlebotomist position. In early 1989, the Joint Career Development Committee agreed to offer new traineeships

in Phlebotomy and the higher level job of Histology Technician.

In comparison with many other joint union-management training programs, the Cape Cod Hospital program

is much more explicitly aimed at equal opportunity for minorities and women. From the vantage point of the Local

President, the key benefit to the union members is that opportunities for training and promotions are now based on

seniority, rather than being left to the discretion of management.

The hospital’s Director of Labor Relations describes the program as “an employee benefit with significant

benefit to the employer.” The hospital does not provide its own formal training; all training of nonmanagement

employees is done through Career Ladders.

The overall approach to training appears to benefit both union and management, but is difficult to transfer to

new locations without the support of the national union and Federal funds.

IJem Ross, SEIU, Wrsond comrnticationj November 1988.

2The fiacontract was one of several “New Initiatives” contracts to labor unions and other organizations interested in developing

apprenticeship programs. These funds were appropriated to the Department Of Labor as discretionary funds under the Comprehensive

Employment and Training Act (CETA), and charmeled through BAT. In 1977, BAT disseminated about $15 million of these funds for researc@

development and demonstration projects related to apprenticeship. However, funds were cut back in 1978, and after 1980, there were almost

no “New Initiatives” contracts and grants. SEIU was one of few organizations to receive more fands during the 1980s.

3Fr~ Bodensie~ $~ufioq Hospi~ Are Enthused With Success of ~dderProwam,“ Cape Cod Register, June 23, 1983.

4~e follo~g discussion is bm~ on Febw1989 ~taiews ~thWdw pm~icbpresident Hospi~ WOrkerS/SEII.J ~id 767;

Theresa Belmont, Director of Labor Relations, Cape Cod Hospital; and Jeame Savoy, SEIU Representative to Career Ladders Committee.
Chapter 8-Training and Workers’ Careers .247

During 1987 and 1988, two divisions of AT&T

(operator services and long-distance services) designated the Alliance as the “official response for

career development needs. " 116 In other words, these

divisions of the company will not develop a separate

package of career counseling for employees, but will

rely on the Alliance to provide these services. It

appears, then, that joint training programs are

increasingly linked to the companies’ strategic

goals.

Mixed Quality of Training

Joint union-management training programs are

often quite decentralized. Typically, a corporatelevel joint committee often supported by a staff, sets

overall policies and funds development and delivery

of some training courses, while more detailed

funding and training decisions are made by joint

training committees at the local level. In addition,

many training decisions are made by the workers

themselves who use employer-paid tuition assistance to take courses. A variety of public and private

training consultants, as well as in-house trainers, are

used within this decentralized structure.

One result is a wide range in the quality of training

supported by joint union-management programs. As

discussed in chapter 5, one unscrupulous training

company attracted UAW members to its classes by

offering free computer components, but providing

little training. This happened early in the history of

the UAW-GM joint Human Resources Center, a

highly decentralized entity that sends about onefourth of its $200 million annual revenue stream

directly to joint training committees in the plants.117

To improve quality, the joint training programs

have tried to increase the expertise of local committees and at the same time provide career and

educational counseling to help workers in their

selection of educational providers. Today, each local

joint UAW-GM joint training committee is staffed

by full-time local joint training coordinators, who

are trained by the Human Resource Center in

development, design and evaluation of training.118

UAW-Ford and UAW-Chrysler have hired full-time

career counselors to assist local joint committees

with design of training and selection of training

providers as well as to counsel individual workers.

However, within the UAW programs, career and

educational counseling remains strictly voluntary,

and workers may sign up for courses without prior

counseling.

The two joint training corporations negotiated by

the Communications Workers of America (CWA)

require career counseling. Workers must meet with

a counselor and develop a career plan in order to be

eligible for prepaid tuition. Courses must be related

to the career plan in order to be eligible for

assistance. Other rules apply as well. For example,

CWA-U.S. WEST Communications will not pay for

flying lessons as a hobby but will pay for ground

school and instruction if it leads to a commercial

pilot’s license.119

Tuition Assistance

Most of the joint programs offer workers tuition

assistance to take courses on their own time. Such

courses may be job-related, for personal development, or to prepare for new careers.120 As shown in

figure 8-2, use of tuition assistance grew as the

programs have paid tuition assistance directly to

schools, removed penalties for noncompletion of

courses, and provided career and educational counseling. More recently, perhaps due to tax changes

(see below) participation in some of the programs

has dropped off. Nevertheless, a large fraction of

each workforce has benefited, when cumulative

enrollments over time are considered: At UAWFord, 27 percent of the workforce has taken accredited courses atone time or another since the program

was instituted in 1984. At UAW-Chrysler, the

comparable figure is 36 percent, including personal

development courses. PATHWAYS enrolled 30

percent of its workforce in its first 3 years of

providing tuition assistance. These programs are

very beneficial to workers, because many enroll in

courses leading to 2- and 4-year degrees-the

formal, widely recognized credentials that are most

likely to enhance their careers and earnings. AlllGThe Alliance: Annual Reporz (Somerset NJ: The Alliance for Employee Growth& Development tic., 1989), P. 8.

ll~on Davis and Rich McMiw~ Co-Directors, UAW-GM Human Resource Center, personal communication Apr. 27, 1989.

l18~id.

ll~e~ Hackenburg, “Pathways’ Presentation: It Sells Itself,” MB Times, vol. 7, No. 15, July 29, 1987.

l-e~mcepmc~es most ~~g for ~ups of workers, ~~~ -relying on individ~ use of tuition assistice @on Treine@ The -n=,

personal communicatio~ Aug. 30, 1989).
248 . Worker Training: Competing in the New International Economy

though tuition assistance programs are expensive,

they are much less costly than on-hours training,

because the employer can avoid paying workers’

salaries while in training.

As the joint programs were gathering momentum,

tuition assistance benefits paid to workers for all

types of courses—those related to their current jobs

and those taken to prepare for new careers-were

not taxed as income. As discussed above, this

changed temporarily when Congress made tuition

benefits for non-job-related courses taxable between

December 21, 1988 and November 1989.121 Although Congress restored the tax-exempt status of

all tuition benefits retroactively to January 1, 1989,

participation in the joint union-management programs fell during the long period of uncertainty (see

figure 8-2). As discussed in chapter 2, making the tax

exemption permanent would remove any tax impediments to worker participation in qualified tuition

assistance programs, whether sponsored unilaterally

by employers or jointly with unions.

Future Outlook

The future prospects for joint union-management

training appear bright. At General Motors and Ford,

union and management have reaffirmed their commitment to the joint corporations through three

rounds of collective bargaining, Chrysler and UAW

renewed their commitment to joint training in 1988,

and the CWA and AT&T agreed to continue the

Alliance even before opening formal contract negotiations in 1989. Participation in voluntary training

programs offered by the five corporations has

dramatically increased since their inception, and

each corporation has had to add staff to accommodate this growing demand. Cumulative enrollments

in all types of training programs offered by each

corporation range from 16 to over 50 percent of the

eligible workforce.

There are three factors which could threaten joint

union-management training:

1. lack of evaluation to demonstrate the quality of

training provided;

2. deterioration of the current cooperation between the unions and managements; and

3. further decline in the unionization of U.S.

workers.

Photo credit: The Alliance for Employee Growth

and Development, Inc.

Joint union-management training has spread from the auto

industry to telecommunications. Here, a unionrepresented AT&T employee receives one-on-one

coaching from her instructor.

First, most joint union-management training programs are not evaluated. This is not surprising: As

discussed above, very few company training programs receive rigorous evaluation because of the

time and expense required. Evaluation of joint

programs is particularly difficult because they are

designed to achieve a variety of goals. Nevertheless,

it is possible to assess the quality of individual

courses and programs. The CWA-U.S. WEST Communications program has conducted several studies

of specific programs and services, and all three of the

UAW joint programs have begun to evaluate their

major programs. The results of these studies could

be useful to the broader training community as well

as to the joint programs themselves.

The second threat-a decline in union-management cooperation, which forms the basis of the joint

training corporations-is real, but is unlikely to

affect joint training in the near future. Although a

vocal minority within the UAW has raised awareness of some of the flaws of ‘‘jointness, ’ the

top-level leadership remains firmly Committed to

cooperation when it is in both the unions’ and

management’s interests. Training is seen as such as

area. The CWA has strongly supported joint training

even while reducing its commitment to joint ‘QualIzlwldichw 1oo-647, approvdNov. 10, 1988, retroactively extended Seetion 127 horn Jan. 1, 1988 (it had expired onlke. 31, 1987) tiu@D~.

31, 1988. This law also disqualified formerly eligible graduate level courses.
Chapter 8-Training and Workers’ Careers ● 249

ity of Worklife" programs aimed at other areas of

labor-management cooperation.

However, as the unionized percentage of the

workforce shrinks, the possibilities for joint unionmanagement efforts, not only in the area of training

but also in other productivity and quality issues, are

diminished. Since 1960, the percentage of private

sector workers covered by union contracts has

plummeted, while the percentage of government

employees represented by labor unions has increased. In 1989, union members made up 37

percent of employment in government, compared

with only 12 percent in the private sector.122 The

decline in private sector unionization in the United

States is in sharp contrast to the situation in Canada,

where labor law makes union organization much

simpler and allows less scope for management

opposition.

RETAINING THE SKILLS OF

OLDER WORKERS

The U.S. population is aging. The proportion of

the population age 45 and older will increase

steadily from 1991 to about 2010 when the last of the

baby boomers enters this age group. At the same

time, a decrease in the youngest age group from

which workers are drawn, those 16 to 24, is

projected. 123 One way that companies can compensate for projected workforce shortages is to retain

older workers in greater numbers and/or for more

years. However, an increasing proportion of older

workers in the labor force means that it will be

important to know how advancing age affects the

various skills that contribute to job performance, and

if there are negative effects, how to reduce or

compensate for them. If age-based physiological

changes do not have a significant effect on performance, there is still the question of whether older

workers receive adequate training to match their

skills with changing technology. This chapter defines older workers as those 45 years old and older

(see footnote 12). Hence the discussion covers not

only those at the young end of the older worker

group, but also those who are now typically retired

(65 yearn old and older), because there may be more

job opportunities for such people in the years ahead.

Laboratory studies show gradual declines in

sensation and perception, motor control, learning,

and memory with age, but how these changes affect

job performance has not been well-researched.124

Laboratory tasks may be poor surrogates for

workplace tasks. In addition, people become more

heterogeneous with age. Accordingly, chronological

age is a poor predictor of significant reductions in

the productivity or trainability of any particular

worker. Better information on the relationship between laboratory test results and job performance

would facilitate development of more accurate

predictors of productivity and trainability than

chronological age.l25

Despite age-related physiological changes, agerelated declines in performing traditional tasks in

most occupations seem to be gradual and slight, and

it appears that the ability to produce and learn is

unaffected in healthy workers beyond the age of

65.

126 The explanation for the apparent lack of

performance declines may be that judgment and

experience of older workers compensate for some

age-related physiological declines or because people

with significant age-related deficits remove themselves from the workforce, or both.

Sometimes the decision to leave the workforce is

not due to diminished capacity to accomplish job

tasks per se, but due to other deficits that indirectly

affect performance and/or enjoyment of work. The

hard-of-hearing person is often mistakenly perceived to be inattentive, slow-thinking, or aloof,

when instead the person has simply not heard a

question or instruction or has heard it incorrectly.

Such misconceptions may cause workers with agerelated deficits or disabilities to leave the workforce

prematurely. 127

lzz’’u~on Member~p Down to 16.4 Percent of WOrkerS, ” Daily Lubor Review, op. cit., footnote 72, p. B-8.

lzs~e ti~ for those aged 16 to 24 is from Howard N. Fullertou “New Labor Force Projections Spanning 1988 to 2000,” MOnthZy Labor Rew”ew,

vol. 112, No. 11, November 1989, p. 8.

l~F.R. Ro~tefi with D.J.I@te, op. cit., footnote 11, pp. 1-30. Much of the discussion in this section is drawn from mreport.

l~lbid.

126D. Baugher, “Is the Older Worker Inherently Incompetent?” Aging and Work, fall 1978, p. 248.

127F. R. Ro~te@ ‘~Reducing~e~pactof Age-Re~ted H~g~ss,” ~ub~hedconceptpaperfor ~Natio~Co~il onthe Aging, November

1982, p. 2.
250 ● Worker Training: Competing in the New International Economy

Even without adequate data on age-related physiological changes and job performance, common

sense leads to several conclusions. First, most jobs

do not demand performance at maximum physical

capacity; jobs requiring physical strength and a rapid

work pace would be most affected by advancing age.

Conversely, work that depends on experience or on

building a clientele puts the older worker at an

advantage. 128 Second, declines in heavy manufacturing and increases in service jobs will likely reduce

the impact of age on job performance. Finally, the

great variability among workers in the same age

range means that policy with respect to the older

worker should be flexible and individualized rather

than uniform.129

Practices That Compensate for Age-Related

Changes

Efforts to compensate for age-related deficits

focus either on the worker or on the job. When the

focus is on the worker, one approach is to try to

reduce the deficit. Company-based health promotion

programs have the potential to improve the health

and thereby the overall job performance of middleaged and older workers.130 Another approach is

training. While research is limited, some evidence

suggests that training can overcome some agerelated deficits. Hearing loss, which accounts for the

largest number of all sensory loss disorders with

age,

131 is an example. A promising training approach

tested in a nursing home and yet to be tried in an

employment setting involves training both older

persons and those with whom they interact in new

communication techniques.

132 The training is not Sign

language but teaching heightened sensitivity to the

possibility of misunderstanding or partial understanding. Such techniques are likely to be applicable

to the workplace.

When the focus is on the job, the number of hours

worked can be reduced and/or the characteristics of

the job can be modified to facilitate retention of

older workers. Part-time work can meet business

needs for peak-time coverage and for workforce

flexibility. On the other hand, employers may use

part-time work as a way to avoid offering benefits.

Nonetheless, part-time work is an attractive option

for some older people.133

Part-time work arrangements include job-sharing,

phased retirement, and, increasingly, reemployment

of retirees on a part-time or contingent basis

(postretirement employment). Travelers Insurance

Co. uses 16 retirees as job sharers in four positions

staffing a consumer hot-line.134 As an example of

phased retirement, Polaroid offers workers a ‘tryout retirement’ option, in which they can reduce or

even terminate their work schedules with the option

of returning to full-time responsibilities if they

change their minds.135 Postretirement employment

comes in a variety of forms. Depending on pension

provisions, retirees can return to their previous

employer as part-time employees, as contract workers, through an outside temporary agency, or as part

of a job bank or internal temporary work pool.136

Job modifications include job transfer, job redesign, and job accommodation. Stouffer Foods Corp.

allows older workers to transfer from the fasterpaced retail assembly lines to the slower-paced

institutional lines if their work slows down or

compromises safety.137 In job redesign, the work is

changed to reduce lifting, climbing, or prolonged

standing. Job redesign is often informal and individIZ6P.K. Robinso~ “Age, Heal@ and Job PeIfO_nce, ” J.E. Birren, P.K. Robinso~ and J. E. Livingston (eds.), Age, Health, and Employment

(l@lewood Cliffs, NJ: Prentice Hall, 1986), pp. 70-71.

lz?Rothste~ with Ratte, op. cit., footnote 11, p. 33.

130Rob&o% op. cit., footnote 128, P. 71-72.

131somehem1055 t. Pme tone5 cm ~~eawedfi nmly evqone titer the middle 305. ~p~entsin speech compmhemion under adverse

conditions begin as early as the 40s. Rothstein, with Ratte, op. cit., footnote 11, pp. 8-9.

lszDeveloWd by the Regional Council on Aging (RCOA) in Rochester, New Yor& “El*ting the Sound Barrier,“ improved communication

between hard-of-hearing older people and professionals who worked with them.

lss~eric~Association of Retir~ Persons, Workers 45+: Totiy and Tomorrow (wMhiI.lgtOq DC: 19*6) P. 19.

1~F.R. Rothstein, “older Worker Employment Opportunities in the private SectOr,” R. Morns, and S.A. Bass (eds.), Retirement Reconsidered:

Economic and Social Roles for Older People (New York NY: Springer Publishing Co., 1988), p. 154.

135L.S0 Rmt ~dL.H. ~ch,~~ Persomel fiactims for an Aging W70rkforce: ~vat~sector fi~ples,” paper prep~~ for tie U.S. SeIlilte s~id

Committee on Aging, February 1985, pp. 40-42.

13GH. kel, Job Ba~sfor Retirees (New York NY: The Conference Botid, 1989, PP. 6-7.

ls7Root md Za,rIU~ op. cit., footnote 135, p. 47.
Chapter 8-Training and Workers’ Careers ● 251

ualized and can involve mechanization to reduce

physical effort, changing job content through task

redistribution, or minimizing distractions.138 139

A recent survey of human resource professionals

suggests that companies are not enthusiastic about

job transfer and job redesign, and these adjustments

are used infrequently. Older workers who cannot

keep up with new technology and procedures often

stay in their current jobs, at the same pay, but many

of their duties are reassigned to more capable staff

members, resulting in attitude and morale problems. 140

Job accommodations are sometimes made to

retain a long-term employee whose capacities are

diminished after a heart attack, stroke, or other

disabling incident. A simple example of job accommodation is found in McDonald’s Corp.: older

workers who assemble salads sit on stools rather

than standing up. The Job Accommodations Network, a hotline for employers to exchange information about the modifications they have made to

retain employees with various impairments, estimates that most employee accommodations cost less

than $1,000.141

Training To Update Skills

For most older workers, the need is not methods

to compensate for age-related physiological declines

but training to upgrade skills that have become

outdated by new technology. Federal support for

older worker training programs has been limited and

corporate training departments and private for-profit

training vendors have shown little interest in developing training packages tailored to older workers.

142 143

Demographic changes make continuing education programs an increasing source of retraining. In

the last two decades, as the baby boom has moved

out of the traditional college and postgraduate years,

universities have begun seeking older students. Still,

targeted marketing and tailored teaching methods

will be necessary to attract more older students and

to mitigate fears they may have of competing in the

classroom after many years away from formal

teaching.

The main question with university-based retraining is who pays. While recent legislation (the Higher

Education Act of 1986) has opened up financial aid

opportunities for part-time students,l44 full-time retraining is out of reach financially for most employees.

145

Vocational schools have long been instrumental

in training and retraining people for work. Older

workers have not been a major component of their

student populations. However, former American

Vocational Association president Gene Lehrmann

predicts that the role of vocational education in

retraining older people for second careers in high

demand occupations will grow.l46

Apprenticeship is another source of training.

Formerly limited to people under 45, apprenticeships are now available regardless of age, and older

people are beginning to take advantage of the

opportunity. Many older apprentices come into the

program as dislocated workers. There are no differences in the training or work processes for older

apprentices. However, a new practice that helps

some of the older dislocated workers is that as

incoming apprentices they get credit for prior

experience, which allows them to come in at higher

levels. In February 1990,4 percent of apprentices in

138Rob@ow op. cit., footnote 128, PP. 72-73.

ISX.I’). mer, Retraining the American Wor&orce (Reading, MA: Addison-Wesley, 1989), P. 130.

l~~ericm Society of Personnel Administration/Commerce cltighouse, “Managing the Aging Workfome: The 1988 ASPA/CCH Survey,”

Human Resources Management, June 28, 1988, p. 3.

141K.J. Marion, Human Factors Consultant, Job Accommodation Network personal communication, 1990.

142~e.icn SWie~ of Persomel A*~tio4Commmcecl-house, op. cit., footnote 140, p. 6.

ldsJ.C~ery, senior Research Analyst Training magazine, personal COmmUniGltiOU J~WUY IWO.

144L.B0 Shw, c’spmtifioblms of Older Women Workers,’ Ml. Borus etal. (eds.), The OZder Worker (Madison, WI: Industrial Relations Research

Association, 1988), p. 66.

14SG. Kearsley, “Introducing New Technology Into the Workplace: Retraining Issues and Strategies,” Investing in People: A Strategy to AaVress

America’s Workjorce Crisis, Background Papers, vol. 1 (Washington DC: Commis sion on Workforce Quality and Labor Market F!ftlciency, U.S.

Department of Labor, September 1989), p. 478.

146KOM. Ro~.@ ‘~Re~aent is a New Be-,“ Vocational Education Journal, January/February 1950, p. 25.
252 . Worker Training: Competing in the New International Economy

the Bureau of Apprenticeship Training’s database

were 45 or older.147

Companies could find it to their advantage to help

finance if not to provide, training of older employees

as fewer younger workers enter the labor market. In

theory, the Age Discrimination in Employment Act

(ADEA) encourages such activities. One purpose of

ADEA is “to help employers and workers find ways

of meeting problems arising from the impact of age

on employment. ” Although virtually nothing has

been done toward accomplishing this purpose,

ADEA clearly opens a door for Federal involvement

on a “carrot” rather than a “stick” basis.

Experience With Training Older Workers

Two-thirds of the human resource managers who

participated in a 1987 survey acknowledged that

special training techniques may enhance efforts to

update skills among older employees. Self-paced

learning , experiential training, on-the-job coaching,

pragmatic or application-oriented training, and training that senior employees help design were among

the techniques cited.

However, according to the survey, efforts to train

older workers are hampered by several factors.

Fifty-nine percent of the managers reported moderate to great resistance to training among older

employees, and 52 percent reported that older

employees have trouble mastering new concepts,

ideas, and approaches. Despite high awareness that

older workers have distinct training needs, only 38

percent of the companies represented conduct an

annual assessment to identify training needs, and

only 29 percent offer training and development for

older employees.148

Experience with older workers and computers

shows that older workers can be effectively trained

in new technologies and that they benefit from

training methods tailored to them. The attitudes of

management are the greatest hurdle older workers

face (see box 8-D).

Training managers on age issues can change their

perspectives and decisions vis-a-vis training older

workers. An evaluation involving 100 organizations

using a course that emphasizes the benefits of

effective use of older workers showed that, 3 months

later, the training continued to have a positive effect

on managers and their feelings about their own

aging, their commitment to involving older persons

in their human resource planning and their decisions

on performance reviews, retraining, and retention of

older workers.149

There is general agreement on some of the

characteristics of training that benefit older workers.

Because stress has a greater negative effect on older

trainees than on their younger counterparts, methods

that minimize stress are particularly important for

the older trainee. Programmed teaching minimizes

stress, and thus may be more successful with older

workers than traditional teaching methods. Even

with programmed teaching, however, there is evidence that older people require more time to

complete a learning program; 67- to 84-year-olds

needed 103 minutes to complete a learning program

that 16- to 32-year olds finished in 45 minutes.150

Testing is a cause of stress, and some experts

suggest that testing of older trainees be minimized.

When testing is necessary, frequent feedback on

results can help accustom the older trainee to

testing. 151

Reducing the need for memory by job aids and

embedded training (or improving memory by mnemonics) and minimizing distractions can increase

successful learning by older workers.152

Programs for reentry women and dislocated

workers find it effective to provide motivational and

confidence-building sessions prior to skills training

to combat the self-fulfilling prophecy of those who

147M. ~ler, Acting Director, Bureau of Apprenticeship Training, U.S. Department of Labor, PCrSO@ ~-ti~tio%1990.

l~~e~cm SWie~ of perso~l Administrators/Commerce Clearing House, op. cit., footnote 140, p. 6.

ld~e~, op. cit., foo~ote 19, pp. 149-151. The course was “Age Issues in Managernmt” available from* Conference Boti.

150~ ~~g,s. R. Rhodes, ~d M. Schuster, T~Aging Wor&:Res~rch a~Reco=~tiom (Beverly~, CA: SaGE Pllbli@io~, 1983),

p. 113.

lsl~er, op. cit., footnote 139, p. 138.

IS~id., pp. 129-130.
Chapter 8-Training and Workers’ Careers ● 253

expect to do poorly in training and then proceed to

do so.153

Such techniques could help in skills training of the

older worker, particularly when computers are

involved. 154

Malcolm Knowles has probably had the greatest

influence on development of adult learning principles. Knowles pioneered andragogy, the art and

science of helping adults learn, based on the learner

as an active participant in designing and delivering

the learning program.155

Knowles’ principles as applied to older workers

can be summarized as follows. First, the physical

environment and psychological climate of the training setting need to accommodate the declines in

physiological functioning that affect older people to

varying degrees. Second, traditional classroom methods such as lectures are less effective than group

discussions and problem-solving, in part because the

latter techniques more closely emulate real-life work

processes and in part because they mitigate the

anxiety many older adults feel about returning to the

classroom after decades away from it. Third, the

extensive job and life experiences of the older

worker can enrich the training experience and must

be integrated into the learning program. And fourth,

the motivation of older workers in work-related

learning is directly related to whatever career and

life changes they are undergoing.156

Retirement and Public Policies

Improvements in retirement income packages

have been a major factor affecting retirement decisions. 157 These improvements, which have enabled

more workers to retire earlier, have also reduced

pressure on the government and corporations to

develop programs and policies to expand older

worker training and employment opportunities.158

Congress recently began requiring employers to

recognize earnings tier age 65 for pension contribution and benefit purposes. This pension policy

removed a disincentive toward continued work past

65, but pension plans may still limit the ability of

retirees to work part-time for their former employer

because pension payments are jeopardized.

Amendments to the Age Discrimination in Employment Act first moved the mandatory retirement

age from 65 up to 70, and in 1988 the age limit was

outlawed altogether for most jobs. However, enforcement by the Equal Opportunity Commission is

minimal because of severe budget constraints.159

The Social Security system affects continued

employment in several ways. For instance, the

earnings test restricts the amount that Social Security beneficiaries between 62 and 69 may earn

without jeopardizing their benefit levels. However,

low income workers do not generally earn enough to

affect their benefits. The earnings limit will be

relaxed somewhat beginning in 1990. Moreover,

few people understand that the earnings test does not

apply to those who are 70 or older; that is, that the

benefit levels of such workers are not affected by

earned income.

On the other hand, the 1983 Social Security

amendments included several incentives for continued work. The gradual rise in age eligibility for full

benefits from 65 to 67, which will begin in the year

2000, could encourage baby boomers to stay longer

in the labor force. Gradual increases in the delayed

retirement credit for employees who continue working beyond age 65 should have a similar effect.l60

153F. L. ~e~~d A. ~~d- sewing ol&~In&~~l~under the Job Training partnership Act: State Initiatives and practices (%%hhl@O@

DC: National Governors’ Association and National Association of State Units on Aging, June 1988), p. 13.

lw~e.icm SWie~ of Pemmel flti~tio~co~~e clearing House, Op. cit., footnote 140) P. 14.

15%L S. Knowles and Associates, Andragogy in Action (San Francisco, CA: Jossey-Baas, 1984), PP. 14-1*.

156H. L. stem and D. Doverapike, ‘Trainin gandDeveloping the OlderWorkm: Implications forHumanResou.me Management’ inDennis, op. cit.,

footnote 19, p. 99.

ISYR. V. B~~~~andJ. F. Q- “Labor Force Participation of Older Workers,”Znvesting in People:A Strategy to AaVressA-”ca’s WorkJorce

Crisis, background papera, vol. I (Washington DC: Commis sion on Worldorce Quality and Labor Market Et33ciency, U.S. Department of Labor,

September 1989), pp. 1084, 1099-1100.

158s. E.~,Dir~torof Res_& Women’ sR~~h~d Education ~ti~~, ~s~ony atajoint hx~fore~e Seleet Committee On A@g ~d

the Subcommittee unemployment opportunities of the Committee on Education and Labor, U.S. House of Representatives, on “The State of the Older

Worker: Current and Future Needs,” 1989, Serial Number 90-614, p. 58.

159J. K. L. Mor~, At~ey, Offl= of tie ~ne~ Comel, ~~~ployrnent oppo~ty cotissio~ PtXWlld COIXllXldCatiOU 1990.

l~~e~ Op. cit., footnote 136, p. 9.
254 . Worker Training: Competing in the New International Economy

Box 8-D-Older Workers and Computers

Rapid technological change and pervasive use of computers and computer-assisted tools are common in the

workplace today. Yet, there is little documentation about whether there is a differential effect on older workers when

computers are introduced into the workplace. Of the few age-specific studies that have looked at adult performance

in computer training, most relate to the older worker’s ability to learn to use computers for word processing:

. A recent study examining older women’s computer trainability and attitudes toward computers found that

women 55 to 70 years old performed as well as young (25 to 39) and middle-aged (40 to 54) women. 1

. A study comparing younger adults (20 to 39) with older adults (50 to 84) found that the older adults took

twice as long to learn but achieved nearly equal performance levels. The older adults requested help two to

three times as frequently. Performance in training and attitude toward computers were directly related.2

. When older adults (65 to 75) and younger adults (18 to 30) without prior computer experience participated

in two training sessions a week over several weeks, the older adults proved able to learn computer word

processing skills and to use that expertise to solve problems. Information recall about the word processing

program was similar in both groups, and both carried out computer operations equally correctly and

efficiently. However, the older adults needed more time to select and carry out procedures and more

assistance during editing tasks.3

Gist, Rosen, and Schwoerer compared older and younger people in computer familiarization and spreadsheet

training using two different training techniques. Both age groups showed learning gains, but the younger trainees

performed better than those over 45 with both training techniques.4

The above studies suggest that older workers can adjust well to computerized word processing. However, older

workers tend to take longer to learn and need more assistance while learning to use computerized word processing.

A growing body of anecdotal information indicates that older workers are more likely to accept computers if

introduced to them in ways deliberately designed to reduce their anxiety: older instructors, smaller classes, and

abundant time to practice.5

Despite evidence that older workers can become both comfortable and accomplished with computer

technology, many managers believe otherwise. A recent survey showed that only 22 percent of human resource

executives felt that older workers were comfortable with new technologies such as computers. Three-quarters of

the respondents agreed that “our younger employees represent the future of the industry and we should focus our

training and development efforts on them.” G

INatiO~ Council on the Aging, “Research Findings: Older Persons Can Excel on Computers,” The Aging WM#orce, vol. 3, No. 1,

March-April 1989, p. 5; S. J. Czaj~ unpublished research on older adults and computer training for Advanced Automation Concepts, Inc.,

Buffalo, NY.

2E. ~dri and N. Charness, “Training Older and Younger Adults to Use Software,” Educational Gerontology, vol. 15, 1989, pp.

623-625.

3A. A. ~ey and J. T Hartley, ‘The Older Adult as Computer User,” P. K. Robinsoq J. Livingsto~ and J. E. Birren (eds.), Aging and

Technological Advances (New Yo~ NY: Plenum Press, 1984) p. 348.

AM. Gis4 B. Rose~ and C. Schwoerer, “The Influence of Training Method and Trainee Age on the Acquisition of Computer Skills,”

Personnel Psychology, vol. 41, 1988, pp. 261-262.

5F.R. ROthStein With D.Je Ratte, “Training and Older Workers: Implications for U.S. Competitivenewss,” report prepared for the Office

of Technology Assessment under contract N3-1360, March 1990, pp. 83-84.

meYankelovich Group, Business and Older Workers (WSShingtom DC: American Association of Retired Persons, 1989), p. 13.

The employment section of the Americans with —this interpretation has been called the Act’s

Disabilities Act requires any private company with ‘‘sleeping giant’. ’ 161

15 or more employees to provide “reasonable

accommodation’ to employees with disabilities Specific Federal commitment to training older

unless such provision causes the business “undue workers involves only two programs-the Job

hardship.” The Act may offer legal remedies to Training Partnership Act (JTPA) and the Senior

older workers affected by age-related disabilities Community Service Employment Program, also

ICIB. Free, &~tive Director, Natio~ Senior Citizens hw Center, speech at National Association of State Uf.dtS on Aging Conferen% Jm 1%

1990.
Chapter &Training and Workers’ Careers .255

known as the Title V program of the Older Americans Act. Title V and the older worker provisions in

JTPA are limited to assisting low income individuals 55 and over and neither has the resources to meet

the needs of this population.l62 Neither program

emphasizes training for older workers. The JTPA’s

targeted older worker services have emphasized

assistance in job search rather than skills enhancement. l63 The one nonmeans-tested JTPA program,

which is designed to serve dislocated workers

regardless of income, has disproportionately underserved older victims of economic dislocation.l64 The

Title V program places low-income seniors in

part-time jobs with community service agencies, and

they are generally paid the minimum wage. While

some training occurs, most Title V programs have

income maintenance as their primary goal.l65

Lack of Data on Access, Costs and Effectiveness

of Older Worker Training

Inadequate information on access, costs, and

effectiveness makes it difficult to formulate policy

about training older workers. While the Bureau of

Labor Statistics conducts regular labor force surveys, these surveys do not seek information on

worker training. 166 The one comprehensive household survey conducted by BLS and the Census

Bureau in 1983 has not been updated.

Most companies could probably produce age data

on their trainees by examining personnel files.

However, a study prepared for OTA167 found no

companies that do so as a matter of course.

Furthermore, if companies do compile such information they might hesitate to make it public for fear of

violating ADEA provisions. Not all human resource

development specialists interviewed for this report168 realized that collection of age data on training

participants is not prohibited under ADEA.

Nor does access to training by older workers

appear to be on the research agenda of national trade

associations. The National Association of Manufacturers, which represents many of the companies at

the center of the restructuring and retooling activities of the past decade, has not focused on age as a

factor important to the human resource development

needs and practices of its members.

Just as data on access are limited, so also are data

on the costs and effectiveness of methods of training

older workers. Only 11 percent of companies in one

survey reported that they analyze the costs and

benefits of training employees over the age of 50.169

Little useful information has been compiled from

experience with publicly funded training.170 Federal

budget constraints, combined with a shift of the

Administration on Aging away from research on

employment, have resulted in sharp cuts in grant

support for such research. Nonetheless, the aging of

the American workforce means that better information on access, costs, and effective methods for

training older workers will be increasingly important.

16~o&sk~ Mm mm, op. cit., footnote 11, P. 47.

1S3F. R. Rotb.stc@ Contiwing to work JTPA and the Older Worker (%%shingtoq DC: National Association of COl@.kS, 1989), P. 19.

MU.S. CoWess, ~eral ACCOW@ Wlce, Dislocated Workers: Local Programs and Outcomes under the Job Traina”ng Pmmership ~t

(W_Ou w: G=md Accounting ~ce, 1987), pp. 39-40,46.

16%. Sandeu, Older Workers: Prospects, Problems andPolicies, 9thtiudR~rt(Wdingto~ ~:N~o@Cofnmi ssionforEmployment Policy,

1985), p. 27.

166HPL. Ronqfionomis~Bureau of Labor Statistics, persontd COmmticatioq Fe-lm.

lSYRothste@ with Ratte, op. cit., footnote 11, p. 72.

16sIbid., p. 73.

l@B. Ro~n and T. H. Jerdee, op. cit., footnote 18, p. 72.

ITwor emple, Job Training Partnership Act: Z@orntation on Set-Aside Futi”ng for Assistance to Older Workers (WSsb.@tOw w: ~~~

Accounting OMce, 1990), a January W90reportflornthe General Accounting Office, probably offers the most complete cost information on the set-aside

program to date. Yet it examines only expenditure rates and numbers of participants temuinating from the progranq with no atttmtion to the

cost-effectiveness of various types of tmining, i.e., the relationship between types of intervention and outcomes.
Appendix
Appendix A

Training in the U.S. Military

The U.S. military recruits and trains large numbers of

young people. Parts of the military training model

resemble apprenticeship, except that the “related instruction” (which takes place alongside on-the-job training in

private sector apprenticeship) is front-loaded in the

military. That is, new recruits receive intensive instruction at the beginning of their tour, followed by on-the-job

training coupled with written and practical skills tests.1

Aside from the very different missions, there are

several basic differences between military and conventional private sector training. One is the scale and scope

of training. Private firms often give little training to young

entry level workers because they expect them to move on

within a year. The military recruits for 3- to 4-year tours

of duty, and trains all recruits. Some remain in the military

for a 20-to 30-year career. Further, the military model is

up or out; if recruits do not pass training and move up,

they may be discharged. Military training also is aimed

more at specific performance standards, based on job

analysis, than most private sector training. Also, military

training is evaluated and improved constantly, with the

trainees’ commanders providing feedback. Instructors are

rotated, conducting training for 3 or 4 years at a time and

then returning to the field. Thus they maintain and

upgrade their duty skills.

Instructional technology also is more prevalent in

military training than the civilian sector. The military has

a keen interest in training technology for several reasons.

The portability and consistency of instructional technology make it very atttactive for the military’s large

worldwide trainee population and high turnover. The

military also frequently introduces new equipment with

sophisticated and complex capabilities that are particularly well suited to technology-based training. Finally, the

Department of Defense (DoD) can afford the startup costs

associated with hardware and software development.

Because DoD’s training budget is so large (DoD spends

approximately $3,500/person annually on training compared with perhaps $100 to several hundred dollars per

employee in the private sector), the military’s investments

in training research have the potential to yield large cost

savings if they produce more effective or efficient training

methods.

The military services have a multibillion dollar inventory of training material. For example, in 1986, the Naval

Training Systems Center processed more than $1.0 billion

for research, testing, and development of training systems, and provided logistics support for over $3 billion

worth of training material and systems in use throughout

the world. Because of its increasing emphasis on training

technology, the military training market is one of the few

U.S. defense markets that is growing.2

Scope of Training3

The Department of Defense had almost 5 million

personnel in 1989 (see table A-l). The 3.8 million

uniformed personnel received the equivalent of 250,000

years of training, with 81 percent going to active forces

and the rest to Guard/Reserve personnel (see table A-2).

The figures in table A-2 only cover what DoD calls

“individual training and education,” or training of

individual uniform members in formal courses conducted

by organizations whose major mission is training. Training by units —roughly equivalent to on-the-job training—

is not reported in the DoD Military Manpower Training

Report.

DoD divides individual training programs into six

categories:

1.

2.

3.

Recruit Training: given to enlisted personnel with

no previous service by the Branch they join. Recruit

training is more akin to socialization than to skills

building. An individual coming from duty in

another Branch may need modified Recruit Training.

One-Station Unit Training (OSUT): initial training

given only by Army Combat Arms (e.g., Infantry,

Armor, Artillery). OSUT combines Army Recruit

Training with advanced individual training.

Officer Acquisition Training: now includes six

general programs (Service Academies, Recruit Officers Training Corps, Officer Candidate Schools, OffIU~ws othe~semfemnce~ themte~in this appendix is from Douglas Copeland, personal communications to OTA, October 1989-JanW 19W;

and Greg Kearsley, ‘‘Instructional Technology and Worker Learning Needs,’report prepared for the OffIce of Technology Assessment contract No.

L3-5615, February 1990.

Zsteve Hull, “Hot Markets,” Military Forum, vol. 6, No. 3, November/December 1989, p. 5.

3~~omtionpre~en~dblow is d~v~ from the 1989 Defense AIwMc, the Dep~ent Of Defe~e ~ilifu~ Murlpowt?r Training Report

(MMTR) for fiscal year 1990, and the Department of Defense, OffIce of the Assistant Secretary of Defense Manpower, InstallatiorL and Imgistic,

Occupational Conversion Manual. Ln some cases, these data will address requirements for f~cal year 1991. This fiscal year 1991 information is part

of the MMTRandis required by the U.S. Congress in accordance with 10 U.S.C. 138(d)(2). The MMTR for 1990 was prepared in March 1989. It should

be noted that this reflects neither the Presidential Budget presented to the Congress in January of 1990, nor any increased demands due to the 1990 Iraqi

invasion of Kuwait (e.g., call up of resewe forces).

–259–
260 ● Worker Training: Competing in the New International Economy

Table A-l—Department of Defense Personnel

(as of March 1989)

Active duty personnel:

Army . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Navy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Marine Corps. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Air Force . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Guard and Reserve:

Army . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Navy.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Marine Corps... . . . . . . . . . . . . . . . . . . . . . . . . . . .

Air Force . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Civi/Service:

Army . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Navy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Air Force . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total DoD . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SOURCE: Departmentof Defense, DefenseA/manac, 1989.

4.

5.

764,259

581,050

194,860

575,604

2,115,773

1,063,437

241,448

83,233

268,254

1,656,372

430,480

354,491

263,437

96,679

1,145,087

4,917,232

Campus Commissioning, Enlisted Commissioning,

and Health Professions Acquisition). There are

sub-elements to some of these programs, as well as

special programs unique to each service.

Specialized Skill Training; prepares personnel for

specific jobs in each service. Initial Specialized

Skill Training includes most formal training that

follows Recruit Training.The training is for specific

jobs listed for: I) Military Occupational Specialty

(MOS) for the Army4 or Marine Corp,2) Navy

Enlisted Classification (NEC), or 3) Air Force

Specialty Code(AFSC). Following initial training,

personnel usually are assigned field duties. Those

showing particular aptitude may get Advanced

Enlisted Technical/Skill training—usually after they

have gained on-the-job experience in their specialty.

The advanced training also may qualify trainees for

a new occupation code. Personnel may go to several

advanced courses during the military career,either

for advanced technical areas or management or

supervisory positions.

Flight Training: provides basic flight operation

skills and knowledge for those seeking to be pilots

(aviators} Naval Flight Officers (NFOs), and/or

navigators. Often called Undergraduate Pilot Training (UPT), its graduates are awarded their wings and

designations and assigned to specific aircraft training squadrons for qualification. For example, a

newly designated Air Force pilot who is jetqualified may be assigned to an F-15 training

squadron prior to assignment to an F-15 operational

squadron.

Table A-2—Department of Defense Requested

Training Loads for Fiscal Years 1990 and 1991a

FY 1990 FY 1991

Active militaryb

Army . . . . . . . . . . . . . . . . . . . . 79,667 74,760

Navy . . . . . . . . . . . . . . . . . . . . 67,224 66,517

Marine Corps . . . . . . . . . . . . . 21,656 22,235

Air Force. . . . . . . . . . . . . . . . . 39,575 37,757

Subtotal . . . . . . . . . . . . . . . 208,122 201,269

Guard and Reservec

Army National Guard . . . . . . . 19,168 18,667

Army Reserve . . . . . . . . . . . . . 15,377 15,963

Naval Reserve . . . . . . . . . . . . 3,237 3,259

Marine Corps Reserve. . . . . . 4,179 4,178

Air National Guard . . . . . . . . . 2,941 2,939

Air Force Reserve . . . . . . . . . 1,752 1,774

Subtotal . . . . . . . . . . . . . . . 46,654 46,780

Total . . . . . . . . . . . . . . . . 254,776 248,049

aDoD defines “Training kd” as the average number of students ~d

trainees participating in formal individual training and education courses

during the fiscal year. Forafull fiscal year, training loads are the equivalent

to the total number of years of training taken by students/trainess.

bEa~ service’s training load is the amount of training needed by members

of that service. However, some training will be done by other serviees, in

DoD sehmls, or by outside institutions. The figures above are consistent

with the President’s Sudget for fiseal years 1990-91, submitted in January

1989.

cln~udes formal school training provided by active military training

establishments.

SOURCE: Department of Defense, Military Manpower Training Report,

fiscal year 1990.

6. Professional Development Education: provides

education and training to career personnel in

preparation for complex duties. It encompasses a

range of goals and subjects (e.g., military science,

engineering, instructional technology, management,

and medical areas). While most professional development is for the officer corps, some programs are for

senior enlisted personnel. Some service school

programs range from 22 weeks (Armed Forces Staff

College) to 4244 weeks (Army, Navy, Marine

Corps and Air Command and Staff Colleges).

Load and course data for initial and advanced skill

training and pilot training are presented in table A-3. The

number of initial entry-skill training courses shown is

large; it also is relatively insensitive to reductions in

personnel. DoD would still have to instruct in the entry

level skills, but to fewer trainees. Personnel reductions (or

increases) would have an impact on course load and thus

costs.

In contrast, advanced skill training courses are given to

fewer personnel. Much of the advanced training is in

support of specific weapons systems (e.g., F-15 aircraft,

M1A1 tank) or weapons platforms (for example, SSBN

4Army OSUT sati~les the concept of ‘specialized skill~tig’ because it combines the skill training with recruit training in a single program or

course (an MOS may be awarded).
Appendix & Training in the U.S. Military ● 261

Table A-3-Skill, Flight, and Professional Development Training Loadsa (fiscal year 1990)

Initial Initial Advanced flight Professional

skill courses skill load skill load training load development load

Military branch (number) (man-years) (man-years) (man-years) (man-years)

Army. . . . . . . . . . . . . . . . . . . . . . .

Active . . . . . . . . . . . . . . . . . . . . . .

Reserve . . . . . . . . . . . . . . . . . . . .

Guard . . . . . . . . . . . . . . . . . . . . . .

Navy . . . . . . . . . . . . . . . . . . . . . . .

Active . . . . . . . . . . . . . . . . . . . . . .

Reserve . . . . . . . . . . . . . . . . . . . .

Marine Corps . . . . . . . . . . . . . . .

Active . . . . . . . . . . . . . . . . . . . . . .

Reserve . . . . . . . . . . . . . . . . . . . .

Air Force . . . . . . . . . . . . . . . . . . .

Active . . . . . . . . . . . . . . . . . . . . . .

Reserve . . . . . . . . . . . . . . . . . . . .

Guard . . . . . . . . . . . . . . . . . . . . . .

Total active . . . . . . . . . . . . . . . .

Total Reserve/Guard . . . . . . .

Total DoD . . . . . . . . . . . . . . . .

319

21,854

5,855

7,032

172

23,269

1,285

342

5,899

1,221

597

13,651

980

1,446

64,673

17,819

1.430 82.492

9,503

656

952

12,563

318

2,276

93

5,563

134

408

29,905

2,561

32.466

1,131

114

246

2,084

583

2,788

73

203

6,586

636

7.222

3,641

79

86

2,376

123

966

47

3,632

49

40

10,615

424

11,039

~histabledoes notinelude advanee individuaheamt eehnieal training conducted bythe Services. ltdoes include some prior-servieetrainees andsome

eross-traineesfrom other skill areas.

SOURCE: Departmentof Defense, Mi/ifaryManpowerTrainingReport, fisealyear1990.

Ohio class ballistic missile submarine, DD-963 Spruance

class destroyer). This advanced skill training includes the

equipment associated with the various systems. As an

example, some of the equipment on the new U.S.S.

Arleigh Burke (DDG-51) destroyer that requires unique

advanced technical training includes: harpoon missile

system, Mk-41 Tomahawk launcher system for the

Tomahawk antiship cruise missile, SQS-53C hullmounted SONAR system, SQQ-9 ASW system, 5“/54

gun system, Phalanx CIWS, and SQR-19 tactical towedarray SONAR system.

Any modification to weapons systems or other equipment will require additional training in operation and/or

maintenance. This will in turn affect both the number of

courses and student load. Because these might be

conducted under contract as factory training or new

equipment training (see discussion of providers, below),

it is difficult to determine the actual number of these

programs or their costs.

Training Delivery Costs

Table A-4 shows funding for individual military

education and training for fiscal year 1990 by type of

training. The estimates include military pay and allowances for both trainees and the military and civilian

workforce used in the support of initial entry and skill

training.

DoD has established the Interservice Training Review

Organization (ITRO) to review its training programs. Part

of the ITRO mission is to reduce training costs and the

duplication of training programs and courses among the

services; the mission of the services is central to the

evaluation. This program is headed by the commanders of

the major training commands.5

Training Providers

The DoD and the services use military and civil service

personnel as well as civilian contractors to conduct their

education and training programs at the military training

bases. Each branch conducts its own recruit training

program to meet its specific needs and mission. Each

service also designs its flight training program to meet the

needs of the mission and operational equipment. For

example, Navy and Marine trainees designated for the

fighter/attack jet training pipeline may be required to

complete aircraft carrier take-off and landing qualifications. Some training is provided by other services in

DoD Schools, or in some cases by institutions outside

DoD. As an example, all explosive ordinance disposal

(EOD) personnel are trained in Navy schools. There also

is some interservice flight training (the Navy UPT

program provides training to the Marine Corps and Coast

Guard).

5These are: 1) Army Training and Doctrine Command, 2) Chief of Naval Education and Training, 3) Marine Corps Combat Development Command

(Marine Air-Ground Education and Training Center), and 4) Air Training Comman d. ITRO is divided into committees and subcommittees addressing

the many areas of military education and training. These include Initial Skill Training, Advanced Technical Training, Flight Training, Tmining

Technology, Contract Training, Tr~g SUppOrt, and other areas.
262 . Worker Training: Competing in the New International Economy

Table A-4-Funding of Individual Training by Service and Typea (millions of dollars)

Type Army Navy Marines Air Force DoD

Recruit . . . . . . . . . . . . . . . . . . . . . . . . $ 383.0 $ 531.1 $ 256.4 $ 185.1 $1,355.0

Officer acquisition . . . . . . . . . . . . . . . 128.4 198.4 21.2 152.8 500.8

Special skills . . . . . . . . . . . . . . . . . . . 1,532.2 1,784.7 584.9 802.2 4,704.0

Flight . . . . . . . . . . . . . . . . . . . . . . . . . . 334.6 1,208.7 45.8 902.7 2,501.8

Professional development

education . . . . . . . . . . . . . . . . . . . . 191.8 203.4 53.9 216.7 665.8

Army OSUT . . . . . . . . . . . . . . . . . . . . 378.3 378.3

Medical . . . . . . . . . . . . . . . . . . . . . . . . 354.9 172.3 222.1 749.3

BOS/direct support . . . . . . . . . . . . . . 2,191.0 1,039.3 221.6 1,045.2 4,497.1

Management HQs . . . . . . . . . . . . . . . 61.5 27.1 0.4 57.0 146.0

PCS . . . . . . . . . . . . . . . . . . . . . . . . . . 165.5 142.9 46.4 108.6 463.4

THY . . . . . . . . . . . . . . . . . . . . . . . . . . . 852.8 39.7 17.7 409.4 1,319.6

Reserve/Guard pay . . . . . . . . . . . . . . 793.1 56.1 66.1 146.8 1,062.1

Total costs . . . . . . . . . . . . . . . . . . $7,377.2 $5,403.7 $1,314.2 $4,248.6 $18,343.7

alnd~esmflitarypayand akwaneesfortraineesand formilitary orcivilian trainers andsupport staff, funding fortraining base operation anctmaintenance,

seleeted overhead eosts, and other administrative costs.

ABBREVIATIONS: B08-base operating support; H@-headquarters; OSUT-one-station unit training; PCS.permanent change of station ;TDY-temporary

duty.

SOURCE: Department of Defense, Mi/itaryManpower Training Report, fiscal year 1990.

Professional development programs for both officers

and enlisted personnel are conducted at military and

civilian institutions. Each service maintains Intermediate

and Senior Service Schools and Colleges for their

officers. In addition, DoD runs joint institutions to prepare

military and civilian personnel for special assignments in

program and project management, or for very high

positions. 6

Each service also has an office responsible for developing, procuring, and maintaining training systems. The

Naval Training Systems Center (NTSC), in Orlando,

Florida, for example, defines Navy training requirements,

writes contracts, and manages delivery. Most of its

development work is contracted out. A similar function is

performed by the Army’s Project Manager Training

Devices (PM TRADE-located in the same building in

Orlando). The Marine Corps and Air Force have liaison

offices in Orlando. These groups try to coordinate efforts

by sharing knowledge and avoiding duplication of efforts.

They may work together to develop training systems, or

provide them to other branches. For example, about 30

percent of NTSC’s procurement budget comes through

development and production of Army training devices.7

State and local educational agencies sometimes contribute to defense training efforts. For example, recruits at

the Naval Training Center (NTC) in Orlando, Florida who

need remedial reading or math before taking individual

skills training are assigned to the Job Oriented Basic

Skills (JOBS) Program, taught by instructors from the

Orange County Public Schools System. (The JOBS

curriculum was developed and written by Naval personnel.) Orange County does not charge the Navy for this

service in recognition of the Navy’s large contribution to

Orlando’s economy. This saved the Navy over $150,000

in instructor salaries between 1984 and 1989.8

Individual skills training is sometimes contracted out.

A few years ago, for example, a Navy sponsored study

concluded that it would be more cost-effective to contract

out initial electrical/electronics skills training. A l-year

contract (since renewed for 5 years) was awarded to San

Diego Community Colleges to provide this service for the

Orlando Naval Training Center. An onsite San Diego

Dean (retired from the Navy) and an assistant oversee

administration and hire instructors, many of whom are

also Navy retirees in the Orlando area.9

DoD also uses civilian contract instructors for new

operational systems coming into the military inventory.

This is referred to as Factory Training or New Equipment

GS~or DoD and se~i~ Collega me tie Natio~ Defense University (NIX&including the National War College and the kdustrial college of

the Armed Forces), Army War College, Navy War College, Air War College, Defense Intelligence College, Defense System Management College, and

the Uniformed Services University of Health Sciences. Intermediate DoD and Service Schools include the hed Forces Staff College (incmporated

into the NDU in 1981), the Army Command and General Staff College, Air Command and Staff College, the College of Navrd Command and Staff,

the Marine Corps Command and Staff College (the Marine Corps University at Quantico, VA, consolidates Marine professional development programs

under one command.) A separate system serves noncommissioned offkers.

~aval Training Systems Center, “Poised for the Future,” undated pamphlet.

8L.D. ~=tcr~, Nav~ Training Center, Orlando, Flori@ personal communication to OTA October 1989.

%Iaval Training Center, Orlando, Flori@ personal communication to OTA, October 1989.
Appendix A-Training in the U.S. Military .263

Training. Inmost cases this contractor-conducted training

is used only until the service is ready to take over the

program. There are times, however, when the contractor

will conduct the training for the life cycle of the

equipment. Contract instructors are expected to follow

military training standards.

Defense contractors who develop training programs are

required to use the same development documentation and

guidelines as the uniformed services. This is based on the

“Interservice Procedures For Instructional Systems Development’ or ISD. The Marine Corps uses the same

system but calls it “System Approach to Training” or

SAT ISD/SAT follow the same principles of instructional

systems development discussed in chapter 7. This system

was implemented service-wide in 1972 and continues to

go through modifications.

Basic changes are occurring in the military’s training

procurement process. Historically, training packages for

new military technologies were budgeted, contracted, and

managed separately from the equipment itself, and often

delivered later. In the case of the B1-B bomber, for

example, Boeing delivered the first weapon system trainer

2 years after Rockwell delivered the last aircraft, and

aircrews chalked up as many as 600 hours in the plane

before getting access to the trainer.10

Now, the same program manager is more likely to

handle both the military system and the training system,

with the training an integral part of the program budget

and provided by the military system prime contractor. For

example, a Navy contract for a new program for initial jet

training includes the T-45 training aircraft, the flight

simulators, other training devices, instructors, logistics

support, and the training sites. The theory is that the prime

contractor will be better able to ensure concurrency with

the training system. The change is affecting the military

training industry by forcing contractors into joint ventures

or requiring systems experts to suddenly also become

training experts.ll

Basic Skills Training

The more technical the requirements of the service

mission, the more likely many high school graduates will

need remedial training. Each service has programs to

remedy educational deficiencies.

Recruits are given the Armed Services Vocational

Aptitude Battery test for entry into initial skills training.

Those who fail are assigned to remedial training in verbal

and math skills (e.g., the Navy JOBS program, the Air

Force JORP program, and the Army’s JSEP program

described inbox 6-E of ch. 6). The curriculum is designed

to teach basic skills in the context of the recruit’s assigned

technical skill. Thus, remedial math instruction for the

Navy’s quartermaster (navigation) A School might teach

the math skills needed to determine the distance, range,

and bearing of another vessel based on its radar position.

Trainees who do not pass the remedial training may still

go to the first level of initial skills training. If they again

fail, they either are discharged or assigned low skill

duties. Those in the latter group who perform their duties

well and are motivated may be able to reenter initial skills

training.

The various services have ongoing research programs

to remedy deficiencies in basic education. The Navy

Personnel Research and Development Center, the Naval

Training Systems Center, the Office of Naval Research,

and the Chief of Naval Education and Training have

projects to address these problems. The services often

contract with civilian organizations or universities to do

much of the research and development. For example, the

development of JSEP, which was initiated by the Army’s

continuing education system and monitored by the Army

Research Institute, was undertaken by Florida State

University and the Hazeltine Corp., now part of Ford

Aerospace.

Both DoD and the services also have training programs

for newly enlisted personnel in English as a Second

Language. The DoD runs such a program at the Defense

Language Institute at Lackland Air Force Base. Another

program is conducted by the Puerto Rico Army National

Guard. This remedial training, including English as a

Second Language, is conducted prior to the newly

enlisted going to basic training at Fort Jackson.

Training Technology

Current applications of instructional technology in

military training are diverse and involve all of the

technologies discussed in chapter 7. DoD also has

numerous instructional technology research projects;

only some of these will move into an operational status.

Military training is an enormous enterprise with no

centralized coordination. As a result, it is very difficult to

provide a comprehensive description of DoD’s use of

instructional technology. Thus, this section will try to

provide snapshots of the kind of activities being conducted.

Two military basic skills projects involve instructional

technology: JSEP (see box 6-E in ch. 6) and the Spatial

Data Management System (SDMS) project. SDMS was

an attempt to demonstrate the use of interactive videodisc

(IVD) through basic skills instruction in the context of

map reading and navigation. This project was conducted

by the Human Resources Research Organization for the

l~mnce C. Gossmam ‘Prime Tfi% “ Military Forum, vol. 6, No. 3, November/December 1989.

ll~id.
264 ● Worker Training: Competing in the New International Economy

Army Research Institute in the early 1980s. It did not

continue into an operational phase, although it served to

demonstrate the potential of IVD for basic skills training.

For initial skills training, the basic model is still

lecture/lab, but with numerous training aids in the

classroom and laboratory. For example, classroom aids

used in torpedo maintenance and repair training at

NTC-Orlando include drawings and working cut-away

models of torpedoes (full and partial scale), and all the

component parts of torpedo propulsion, fueling, and

targeting systems. Laboratories range from troubleshooting benches for propulsion, fueling, and targeting

(with actual torpedoes with inert warheads) to a full-scale

submarine torpedo loading facility (with all currently

used equipment and torpedoes). For firing exercises, a

computer-managed system provides post-mission review. 12

Quartermaster school at NTC-Orlando begins with

classroom theory of navigation-learning to read charts,

use nautical almanacs (e.g., tide and current tables, light

lists), set courses, use dead reckoning, and plot positions.

Trainees then move to a classroom with chart tables

similar to those aboard ships with radar screens alongside.

Videotape provides radar patterns corresponding to the

navigation aids on charts plus the associated shorelines

and possible other ship traffic.13

The Navy also has used teleconferencing for training.

In 1989, for example, it initiated an “electronic schoolhouse” project at its fleet combat training center in Dan

Neck, VA. The project links the training center with

classrooms at navy bases in Norfolk, VA, Charleston, SC,

and Mayport, FL, using two-way compressed video

delivered via satellite. Each classroom has two cameras,

large monitors, microphones, and an audio speaker, and

accommodates 30-50 students. Ten courses were taught

focusing on soft skills and basic concepts. The preliminary results showed a net savings of $50,000 (a total of

294 students, average 23 per session, a savings of

$155,000 in travel and per diem over 5 months, and a cost

of $105,000 for the teleconferencing). The students’

grades were as good or better as when they traveled to the

course, and they were able to train more students per

session.

The Army logistics Management College also uses

Satellite teleconferencing (one-way video, two-way audio)

to teach logistics at over 30 sites. The televised courses

have been taken by over 13,000 students.

Computer-based training and interactive video can be

used in most military environment-n ships, for

example. The Chief of Naval Education and Training

(CNET) is monitoring some initiatives for reducing the

costs of shore-based training, including mobile pierside

trainers, onboard CBT packages, and teletraining. CNET

has analyzed a number of existing onboard packages on

computer literacy, ship maneuvering, and the Rules of the

Road (part of navigation), as well as basic skills (functional and applied). It is examining physical characteristics of hardware and software (i.e., suitability of hardware

for onboard spaces), and user characteristics. It found that

some sailors were bored by and did not use many training

packages. However, the packages did accustom people to

computers. This is seen as a major need as more

operational systems on ships become computerized.14

Military training technology increasingly involves

simulators. Simulation is as old as organized warfare. The

combat and technical training requirements of World War

II, however, marked the beginning of what would become

the contemporary simulation and training technology

industry.

Simulators are crucial in military training because

some tasks are too complex, costly, or dangerous to

rehearse or to practice using real equipment. Simulators

range from individual weapons simulators (see box A-l),

to computer- or videodisc-based simulations of combat

situations, to full-scale motion-based simulators, to networked versions of all of these.

The CNET analysis discussed above found that mobile

pierside trainers are used more frequently than other CBT

packages and contribute to computer literacy. An example

is a computer-based simulator-the 20B5 pierside combat system team trainer-that the Navy uses for tactical

gaming. It is housed in a trailer equipped with fiberoptic

cables for radar and SONAR simulations and communications. The simulation capability arises from the computer programming and auxiliary equipment. For example, a digital general purpose radar indicator driven by the

computer simulates combat radar signals. The Navy’s

current thrust is to introduce the tactical gaming packages

dockside and to then move them onboard.15

Simulation, usually involving CBT and more recently,

interactive videodisc, is also under development for

maintenance. For example, in 1987, the Air Force

Communications Command fielded 92 interactive video

systems for electronics maintenance training on the

AN/GRN radar and test equipment. The IVD system

delivered on-the-job training for skills that had previously

12Nav~ ‘rr~g cater, or~ndo, FIori&I, personal emmmmication to OTA, october 1989.

131bid.

ldNav~Tr- System Center, personal COITIIUti@iOn to o~, October 1989.

ls~id.
Appendix A-Training in the U.S. Military .265

Box A-l—The Marksmanship Expert Trainer

The Marksmanship Expert Trainer (MET) is a

nonfiring M-16 automatic weapon (actual size and

weight) that evaluates the trainee’s aim and firing

behavior. It simulates recoil and firing noise. When

the trainee pulls the trigger, a light pen (instead of

bullets) hits a target screen (either 72-inch projection screen or a computer monitor). A breath sensor

tells whether the trainee is holding his breath, a

trigger sensor determines squeeze/jerk, and an

overall sensor evaluates stance. Initial targets are

single and fixed; a computer management system

shows where each shot went, how many hit the

target, how far off the misses were, and the sensor

results. More advanced targets pop on and off the

screen at random; for each target the management

system shows the path the trainee took to aim, how

long it took to aim, and how many shots it took to

hit the target. The expert systems reduce instructor

requirements and sense things a live instructor

cannot. The MET also does not require ammunition

or a special target range area and thus is less

expensive than training on real weapons. It is also

safer than real bullets, has low maintenance, eliminates weather delays, and trains more quickly and

more accurately.

SOURCE: Naval Training Systems Center, Marksmanship Expert Trainer, undated pamphlet.

been learned only through apprenticeship. The project

involved a detailed followup on 160 trainees; however, no

comparative evaluation of the IVD system versus apprenticeship only was conducted. The followup study indicated that the system was effective when used but difficult

to integrate into the workplace.

Other examples of simulation using CBT or IVD

training include:

The Computer Assisted Medical Interactive Video

System (CAMIS), Medical Heath Sciences Education &

Training Command, Naval Medical Command: over 25

interactive videodisc courses in basic medical skills and

medical knowledge areas have been fielded and many

more are in development.

GUARD FIST II, Army National Guard: a simulator

employing IVD and computer-generated imagery will be

used to provide tactical training in simulated battlefield

scenarios. The simulator includes all equipment normally

used by the Forward Observer MOS.

Piloting and Navigation Team Trainers, U.S. Navy:

a set of simulators are used to train naval officers on ship

navigation and piloting skills. These simulators provide

realistic presentations of shipboard equipment and use a

variety of hydrographic databases.

OBT-89 ASW Trainer, U.S. Navy: a simulator that

provides embedded training for the AN/SQQ-89 sonar

systems installed on surface ships for Anti-Submarine

Warfare (ASW). The OBT-89 allows an instructor to

program the AN/SQQ-89 for training exereises.

Networking also is increasingly important in military

training (see box 7-J, ch. 7). Networking permits many

groups to participate in the same training exercises. In

addition to equipment, it requires databases for environmental simulation and expert systems for evaluation.

In most Navy ports, networks connect ships in the

harbor to signal generators for training exercises. Some

ports have master scenario generator/controller systems

for battle simulation. Participants use personal computers

(PCs) linked by a local area network (LAN) and

telecommunications to other groups of participants at

other PCs. The defense data network can be used for

enhanced naval warfare gaming. An anti-submarine

warfare tactical team trainer, with 300 students networked

in one building, also is used. Networks involving 22

computers are used in Navy flight trainers to coordinate

flight training domes. Simulation exercises can be global

in reach: for example, scenarios generated by the Lamps

helicopter weapon trainer system can be satellite broadcast to ships at sea and at foreign bases.16

As simulation databases have proliferated, the lack of

standardization has complicated networking efforts. The

B-52 training system, for example, has a database that

cannot be used for the B-1 or the C-130. Integration can

be a problem even within a single weapons system trainer

if different contractors provide individual elements (e.g.,

the visual image generator and the radar simulator). The

services are now working on a standard database that will

be interoperable among all simulators, due to be completed in May 1991.17

Research on military training technology currently

focuses on improved sensor (e.g., radar) simulation,

low-cost graphics and image generation, embedded

training, part-task training, and team training. In visual

scene technology, the cost trade-offs are in the display and

the image generator. Display costs for achieving the

resolution required for certain training applications have

come down significantly. For example, a passive sonar

(LOFAR) trainer cost at least $35,000 when a minicomputer had to be used to achieve the high resolution, colors

and shading needed for this application. The cost today

l%id.

ITw.A. Demers, “All Together NOW, “ Milita~ Forum, vol. 6, No. 3, November/December 1989.
266 . Worker Training: Competing in the New International Economy

can be as little as $5,000 when a 386 PC and video

graphics array (VGA) monitor are used. Advances in high

definition television (HDTV) will bring further cost

reductions for high-resolution simulators. A second

consideration is how much of an image a particular

simulation actually needs. An F18 operational flight

trainer for take-offs and landings uses three computer

monitors; air combat maneuvers require a full dome, and

battle simulators typically have a five-dome network. The

alternative to the domes could be helmet-mounted displays and other features of virtual environments.18

Embedded training is attractive to the military for

several reasons. First, complex military systems have

proliferated to the point that conventional training simply

is not adequate-there is too much to learn and remember,

especially when duty assignments between training

episodes frequently span a year or more. Second, most

military training occurs at training centers while military

systems are in the field; embedded training puts both in

one place. Third, embedded training takes much less

space than a classroom or even dedicated training

equipment-an especially attractive feature on ships, or in

facilities where space is limited. Fourth, embedded

training is consistent with efforts to make training

technology part of the prime system contractor’s responsibility. 19 For all these reasons, current Army policy is

that embedded training is to be considered the preferred

training alternative for new systems.20 Still, little is

known yet about the design of effective embedded

training (see ch. 7).

Performance support systems (PSS) are also getting

DoD’s attention. A PSS has been developed to help new

Army Corps of Engineers employees figure out the

complex details of the Army’s military construction

program. The PSS contains a database, which can be

updated, covering each of the hundreds of projects

underway throughout the world. An employee assigned to

a project could use the PSS to get a list of project tasks,

the steps needed to complete each task, and help in

accomplishing it. For example, based on situations

commonly arising in construction projects, the PSS might

point out the need for a high priority letter, display model

letters from the database, provide a word processor for

editing a model, and print and send the approved letter. It

also updates project status, suggests ways to level the

workload to avoid crunches, and in other ways helps the

employee stay on top of the job.21

Part-task trainers address the problem of how to train

more people with fewer instructors for less cost. Using

portable (often desktop) systems, they are aimed at

teaching specific skills that combine in the performance

of more complex tasks. Once the specific skills have been

mastered in isolation, they can be combined effectively in

complex and higher cost group or team simulations.

NTSC is incorporating expert systems and interactive

videodisc in part-task trainers.

Present military team training often is based on

“practice devices” for individual skills used in a team

situation. They have few embedded educational features,

or evaluation and debriefing capabilities. The goal of

current research is to produce effective teams that monitor

their own performance, are self-correcting, get task and

motivational reinforcement, adapt to unpredictability, and

use closed-loop communications. Research on networking also will aid this effort.22

Technology Transfer

Because military training is a multibillion dollar

enterprise that is increasingly technology-based, technology transfer to the civilian sector has become a major

issue. Yet there are few visible examples beyond the use

of flight simulators in commercial airlines and the

National Aeronautics and Space Administration. Some

trainers argue that military training is too specific to

military missions (combat and weapons systems) to be

applicable in the civilian sector (the so-called “green

problem,” which refers to the appearance of specific

uniforms in training materials). A more basic problem is

that the developers of military training technology are

simply unaware of potential civilian applications, and

potential civilian users are unaware of the military

technology. For example, the developer of a military

training R&D effort on bulldozer terrain imaging saw its

obvious application to civilian earthmoving in construction projects, but failed to imagine its usefulness for

open-pit and surface mining. Bridging this awareness gap

is going to be extremely difficult.

A third problem is budget-related. If a research project

does not have immediate military applications, it is not

funded for development or demonstration. Technology

transfer does not have a high priority in DoD’s budget in

general, and training technology is just one of many

candidate technologies for transfer. Still transfer efforts

are growing. For example, NTSC recently began adapting

18Nav~ Tr aining Systems Center, personal communication to OTA, October 1989.

l%id.

m“Study Plan to Focus Embedded Training Research” Training Systems and Devices, vol. 1, No. 4, Fall 1989, p. 6.

zlH~oldH~ter, “~efiowledgeWorker Perform~ce Support System, ” paper presented at Eighth Conference On hteractive~truction Delivery,

Feb. 21-23, 1990, Orlando, FL.

zzNav~ Tr~g Systems Center, personal communication to OTA, October 1989.
Appendix A-Training in the U.S. Military ● 267

educational software for public schools. It also is exploring medical applications for hand-held sonar trainers.23

Often, it is not the training technology per se that

transfers, but its concept. Simulators are an example of a

military training concept that is now finding a wide range

of civilian applications. Thus, tank-driver simulators laid

the groundwork for current truck- and auto-driver education units. It was the increasing capacity of PCs and their

linkage to IVD that made simulator technology costeffective for civilian applications that do not have so large

a trainee population over which to spread the costs.

Similarly, the nuclear submarine simulator led to simulators for nuclear powerplants and eventually for all types

of powerplants. Exposure of the general population to

motion-based simulators in amusement parks is likely to

speed awareness of their potential for civilian training

uses.

Yet in these examples, the connection between military

and civilian uses was obvious. In most other Federal

agencies that are successful at transferring training

technology, either a connection is obvious (e.g., firefighting training conducted by several agencies), or the

research is targeted directly toward transfer (e.g., the

National Institutes of Health, the U.S. Bureau of Mines).

For training technology transfer to become more

widespread, DoD would first have give it priority. This is

especially important for R&D funding. Second, developers of military training materials would need to make an

extra effort to identify potential civilian applications and

civilian trainers would need to become more aware of

military training systems. Third, both groups would have

to hurdle the ‘green problem’ and realize that adaptation

is cheaper than ground-up development.

Skills Transfer

Personnel trained by the military frequently are highly

valued in the private sector, either for specific technical

skills or for more basic interpersonal and self-discipline

skills. The military apprenticeship model can lead to

Bureau of Apprenticeship Training (BAT) certification as

a journeyman. Even without certification, the military’s

own recognition of journeyman status is widely accepted

by the civilian sector. Moreover, military trainees learn

how to test, maintain, and repair the primary equipment

and the testing, maintenance, and repair equipment.

Over the past several decades DoD and the Department

of Labor have maintained separate compilations of

occupational specialties in the workforce. There are cross

data in the identification of these occupational skills that

identify DoD officers, enlisted, Civil Service (General

Service-GS, and Wage Board), and in the case of the

Labor Department, civilian positions. Each occupational

area is assigned an identification number based on careful

analysis of the job to be performed. In most cases duties,

tasks, and job functions are grouped together by service.

These specific positions may not be identical, however,

due to the equipment, mission, and personnel structure of

the individual service.

In most service occupational fields, there are career

paths for both officers and enlisted personnel. As an

example, the Marine Corp Occupational Field 35, Motor

Transport, includes the operations and maintenance

functions within the tactical and commercial motor

vehicle services. A Marine in this field will participate in

a number of formal schools and can progress from Private

(E-1) as, for example, a Body Repair Mechanic (MOS

3513), to a Motor Transport Operations Chief with the

rank of Master Gunnery Sergeant (E-9). That Marine also

may have the opportunity to participate in a formal

apprenticeship program that leads to BAT certification.

This field requires skills and knowledge widely needed

in the civilian economy. The MOSS include: 3500-Basic

Motor Transport Marine, 3513-Body Repair Mechanic,

3521-Organizational Automotive Mechanic, 3522-

Intermediate Automotive Mechanic, 3523-Vehicle Recovery Mechanic, 3524-Fuel and Electrical Systems

Mechanic, 3525-Crash/Fire/Rescue Vehicle Mechanic,

3529-Motor Transport Maintenance Chief, 3531-Motor

Vehicle Operator, 3533 -Tractor/Trailer Operator, 3534-

Semitrailer Refueler Operator, 3537-Motor Transport

Chief, and 3538-Licensing Examiner.

Other military occupations such as pilot, aircraft

maintenance, air traffic controller, powerplant operator,

firefighter, cook, medical assistant, or marine navigator

also have direct civilian counterparts. While the equipment may not be identical, the skills are readily transferable with little or no additional training. Other skills

training such as electrical/electronics provides valuable

background for a wide range of civilian occupations.

Finally, some DoD professional development and

education concepts may have application to the leadership

and management of American industry. Likewise some

Government training programs, such as Total Quality

Management (TQM—now being used in the military as

well), have proven useful in civilian industry.
Index
Index

Adult education, 10, 19,92-93,232

basic skills, 57,158,167,153-180

continuing education, 58-60, 191

Federal role, 25,30,31,52,53,56-60, 66,67,68,153, 158,

172, 175, 176-177, 179

Japan, 19,93

research, 66,67,68, 155,212-214

State role, 173-176

theory, 209,212-214,236,249-250, 253

West Germany, 93

see also Remedial education; Retraining

Adult Education Act, 31,53,57, 158, 171, 173-174, 176, 177,

178, 179

Adult learning, 66,67, 155,212-214

Aetna, 134, 169-170,201

Age Discrimination in Employment Act, 229, 230,252,253

Age factors, 11-12,37,73,229,230, 252,253

apprenticeships, 52

see also Older persons; Young adults

Allen-Bradley, 138

Amatrol, 139

American Banking Association, 142, 169

American Institute of Banking, 142, 169

American Management Association, 136, 167

American Society for Training and Development, 48,63, 136,

157, 159, 189, 193, 198,214,216

Americans with Disabilities Act, 254

Antitrust law, 45, 149

Apple Computers, 198

“Apprenticeship 2000,” 54,55,241

Apprenticeships, 18,19,26,30,41,52-55, 73,87,110,227,232,

236-242

automobile industry, 237,242

demonstration projects, 48,55,241-242

Department of Labor, 19,30,53,54-55, 241; see also Bureau

of Apprenticeship and Training

Federal role, general, 30,53-54,237,238,239-240, 241-242

historical perspective, 236-237,238,240,241

multifirm, 45

older persons, 251-252

small firms, 55, 130, 241

State role, 237,239-240

unions and, 54, 55,87, 237,238-239, 241

West Germany, 19,21,37,52,83,87-89, 237

Arithmetic and mathematics, 155, 159-160

Army Research Institute, 68

Artificial intelligence, 206-207,215-216,219

expert systems, 24,26, 215-216, 220-221,222-224,265

Asia, 134

see also specific countries

Associated Builders and Contractors, 142

Associate degree programs, 38,85

Associations

professional, 136,139,141,142,166, 167,169,239, 255; see

also Trade associations

training, 48,63,136, 157,159,189,165, 168,193, 198,214,

216

see Industry associations; Trade associations; specific

associations

AT&T, 245,248

Attitudes

on apprenticeships, nonunion shops, 54

on college diplomas, 90

managers, 41,60,96, 101, 114, 121, 127, 131, 134, 165,

230-231,252

trade association members, 141-142

young workers, 73,234

see also Morale and motivation

Authoring tools, 216

Automation, 4-5,8, 104, 107, 114, 138

computer-integrated manufacturing, 111, 119-123, 136, 143,

196,204,205

deskilling, 153, 155-156, 157

State assistance, 71

statistical process control, 7,9, 102, 103, 107, 111, 112, 113,

136, 155, 170-171

textile industry, 84, 155-156

see also Computers; Technology

Automobile industry, 8,3,102,113,114,116, 118,122-123,134,

136, 140, 147, 165

apprenticeships, 237, 242

hours of training, 16

Japan, 5,7,9, 15,37,83, 103,104-105, 145,149, 188

job classification, 7,9, 103, 114

labor costs, 104, 116

parts supply, 81, 105, 106

union-management programs, 20, 114, 140-141, 142, 154,

170-171, 194,232,243,244,247-249

see also specific companies

Banking and finance, 75,96,113,116,117,118, 142,165, 169

Basic skills. 7.10-11,39,41,76,95, 101,107,112,118,153-180

adult education for. 57, 158, 167, 173-180

arithmetic and mathematics, 155, 159-160

corporate programs, 10-11, 30,45,53,57-58, 116, 117, 154,

159, 164-166, 167-172

cost of deficiencies, 166-167

defined, 153

demonstration projects, 53,57,58,171-172,175, 178,

179-180

Department of Education, 11,57, 154, 178, 179

Department of Labor, 11, 154, 175, 176, 179

Federal role, general, 11,30,39,53,56-58,65, 153,154,172,

176-177

foreign countries, general, 4, 153, 160, 164

Japan, 153, 156, 164

manufacturing, 156, 158, 166

military training, 263

minorities, 3, 73

research, 11, 53, 155

service industries, 116-118, 119

small firms, 57,58, 167, 168, 178

State role, 10,65, 171-176, 178-179

testing for, 75, 116

textiles, 82,85

–271–
272 . Worker Training: Competing in the New International Economy

training technology, 174-176, 179-180

young adults, 41, 154, 159-160, 161, 162, 178

see also Literacy; Problem-solving skills; Reading skills;

Social skills

Best practice approaches, 65,66, 179

Black Americans, 74,78,79,80, 163, 164,227-228

Blue-collar workers, 4,9,73,90

Bureau of Apprenticeship and Training, 19,30,53,54-55,237,

239-240,241-242

Bureau of Labor Statistics, 67,69,70,78, 156-157,228,255

Bush Administration, 37,39,55

Business Council for Effective Literacy, 167

Business Roundtable, 142

California, 144

Canada, 19,86,93,166-167

Capital investments, 7,27, 101

automation equipment financing, 121

foreign governments, 27

human, 127, 130-131; see also Human resources

Career issues, 18-20,227-255

job ladders, 6,75, 115

older workers, 250-251

see also Apprenticeships; Retraining; Transfer of training

Carl D. Perkins Vocational and Applied Technology Education

Act Amendments (proposed), 56,236

Carl D. Perkins Vocational Education Act, 44,53,55-56

Caterpillar, 88, 109-110

CD-ROM, 196, 197,209,217,221

Census Bureau, 33,67,69, 121

Certification, see Credentials

Chrysler Corp., 170,232,243,247-248

Churning (labor market), 76,77,95-96, 131

Classroom instruction, 22,45,87,236

apprenticeships, 237

corporate programs, 127

v. new training technologies, 183, 184-185, 186, 188-189,

207,210-211,212-213, 222-223

State efforts, 150

transfer of training, 132, 133

Clerical workers, 75

Codex Corp., 221

Cognitive skills, 153

see also Problem-solving skills

Colleges, see Community colleges; Universities and colleges

Commis sion on Achieving Necessary Skills, 39

Commis sion on the Skills of the American Workforce, 38, 61

Commis sion on Workforce Quality and Labor Market

Efficiency, 38,48, 176

Communication skills, see Social skills

Communications Workers of America, 154, 170-171,232,245,

247,248-249

Community colleges, 45,61,85, 142-143, 144, 146-148, 166,

175, 178, 199

associate degree programs, 38, 85

Computer-aided design (CAD), 7,24, 120, 121-123, 136, 138,

143, 149, 184,215-216

Computer Curriculum Corp., 175

Computer numerical control (CNC), 123,136,138, 149,244

Computers, 7,8, 101, 103, 117, 138

databases, 7,9,24,214,215,218-219, 223,265

decentralization, 101

financial industries, 75,96

inventory control, 5, 7, 8

older workers and, 252

personal, 23,119,121,183,189,195, 198,216,217,218,219,

221,222-223,267

simulators, 186, 187, 201-203, 204, 210, 222, 224, 264,265

as training technology, 11,17,18,22-25,26,33, 64,65-67,68,

75, 138-139, 154,173, 174-176,183-190,194-224, 235,

264-266

see also Artificial intelligence, Automation; CD-ROMs,

Computer-integrated manufacturing, Expert systems,.

specific computer companies

Connecticut, 174

Consortia for training, see Corporate programs

Consortium for Manufacturing Competitiveness, 21, 143

Construction equipment, 109-110

Consultants, 61, 121,136-137, 138-139,262-263

Contingent workers, see Part-time and temporary employment

Continuing education

Federal role, 58-60

by television, 191

see also Adult education; On-the-job training; Retraining

Control Data Corp, 138, 175

Copyrights, 66-67

Corporate programs, 14-18,74, 127-150,227-231

apprenticeships, 237,242

barriers to, 29-30,40-41,43,44-52, 130-131

basic skills, 10-11,30,45,53,57-58, 116,117,154, 159,

164-166, 167-172

consortia for training, 21, 25,29-30,4547,48,65, 143

costs of, 127, 128-131, 132-133

employer institute for work-based learning, 63-64

evaluation, 44, 127, 132-134, 171, 172

Federal role, 4, 11, 12, 14,25-26,28,29-30,39, 47-48,56,

57-58, 175

Japan, 22,86, 113, 114, 168, 188

large firms, general, 3,169,183, 189; see also specific sectors,

industries, and firms

local cooperation, 235-236

State role, 20-21, 127-128, 140-141,144-150,171-176

surveys of, methodology, 128, 167

training technology, 22, 183-224

union-management programs, 20, 114, 140-141, 142, 154,

170-171, 194,227,232,242-249

see also Small and medium-sized firms

costs

apprenticeships, 237

basic skill deficiencies, 166-167

consortia, corporate, 21,25,29-30,45-47,48

corporate programs, 127, 128-131, 132-133

estimates, 14, 15

information development and dissemination, 67,69

labor, 104, 116

military training, 261

production reorganization, 82-83

quality and, 4-5

small firms, training, 40,41,61,208

State efforts, 144-145

training, 13, 14, 15, 16,64,81-83, 103

training technology, 24,64,183,184-185,191, 193,207-209,

210-212,265-266
Index ● 273

vendor training, 138

Court cases, see Litigation

Credentials, 18,38,74,75,81,231,223, 247

associate degree programs, 38,85

foreign countries, 90-91

minorities, 73,80

national standards, 31,38,40,56, 87,91, 158

see also Apprenticeships

Cultural influences

Japan, 7,22,89-90,96, 104

multicultural training, 134

Databases, 7,9,24,214,215,218-219, 223,265

Decentralization, 6, 101

Defense Advanced Research Projects Agency, 68

Demography, 3-4,56-57,78-81

Bureau of Labor Statistics, 67,69,70,78, 156-157,228,255

Census Bureau, 33,67,69, 121

immigrants, 12,73,78,79, 157, 158

labor force participation, 78,79

men, 163, 240

mobility and, 34, 8-9, 11-13, 27, 37,40,73, 76,77, 95-96

poverty, 4,38,41,44,74,96

projections, 3, 11,12,37,79,96-97,249

skill pool, 74-81,96-97

urban areas, 163, 166

women, 77,78,79, 116, 163,252

workforce, general, 78-81,96-97

see also Age factors; Educational attainment; Minorities;

Regional factors; Statistical programs and activities

Demonstration projects, 31,39,44,48,56,60

apprenticeships, 48,55,241-242

basic skills, 53,57,58, 171-172, 175, 178, 179-180

best practice approaches, 65,66, 179

field tests, tax incentives, 48-49

regional training, 56

Department of Commerce, 31,32

Census Bureau, 33,67,69, 121

linking training and technology, 61,62

National Institute of Standards and Technology, 32,62,65,

143

National Technical Information Service, 62,67

Department of Defense, 32,65-66,68,203,205, 259-267

see also Military training

Department of Education

adult learning, 69; see also Adult Education Act

automation, 143

basic skills, 11,57, 154,178, 179

information services, 33

instructional technology, 66-67

linking training and technology, 62

literacy, 31, 158, 178

loan defaults, 140

standards, 56

technology transfer, 32

see also Adult Education Act; Carl D. Perkins Vocational

Education Act; Office of Educational Research and

Improvement; Office of Training Technology Transfer

Department of Energy, 66

Department of Health and Human Services, 69, 179

Department of Labor, 25,31,37,38,39

apprenticeships, 19, 30,53, 54-55, 241

basic skills, 11,154,175,176, 179

career development, 18

company consortia, 29-30,48, 65

information services, 33

linking training and technology, 62,65

research, 69

standards, 56

technical assistance, 30,46,4748

unemployed, literacy, 160

see also Bureau of Apprenticeship and Training; Bureau of

Labor Statistics; Job Training Partnership Act; Office of

Work-Based Learning

Depression and recession, see Economic cycles

Design, see Product design; Systems engineering

Deskilling, 153, 155-156, 157

Developing countries, 22,37

see also South Korea

Diamond-Star Motors, 116

Diplomas, see Credentials

Disabled persons, 254

Dis crimination, 229, 230, 252, 253

DNS, 146

Dole, Elizabeth, 39,48

Dropouts, 38,79-80, 163, 175,231

Dun and Bradstreet, 165

Economically disadvantaged, see Poverty

Economic cycles, 116

small firms and, 77

training during downturns, 14,73,77, 116

Economic factors, see Capital investments; Costs; Financial

arrangements; Taxes

Economic Policy Institute, 156

Education, 4

foreign countries, 4,92-93

see also Adult education; Basic skills; Universities and

colleges; Vocational education

Education assistance, see Student aid; Tuition assistance

Educational attainment, 12-13,52,74,80,81-82, 92,116,135,

155-160, 163, 178

dropouts, 38,79-80,163, 175,231

foreign countries, 89-91,92,160,164

as hiring criteria, 156

minorities, 79, 163

see also Credentials

Educational technology, see training technology

Educational Testing service, 160

Education Summit, 37, 39

Efficiency and effectiveness, 64-70,81

course design, 132-133

decentralization, 6, 101, 114, 133

Federal role, 32-33,38,48

kaizen, 7,89-90, 104, 107, 110, 111, 113

older workers, 252

State-subsidized programs, 145-146

technology-based training, 209-212

see also Work organization

Elderly, see Older persons

Electronic Information Delivery System, 195

Electronics industry, 5,75, 109, 113, 132, 134, 156

see also Computers; Telecommunications; Video technology

Embedded training, 185, 187,205-207,266
274 . Worker Training: Competing in the New International Economy

Employee issues, see Adult education; Age factors;

Apprenticeships; Career issues; Credentials;

Demography; Educational attainment; Employment;

Minorities; Morale and motivation; Older persons; Parttime and temporary employment; Retraining; Tuition

assistance; Unemployment and unemployed; Unions;

Vocational education; Young adults

Employer-provided tuition assistance, see Tuition

assistance, Taxes

Employment, 77,96-97

churning , 76,77,95-96, 131

labor force participation, 78,79

mobility and, 3-4,8-9,11-13,27,37, 40,73,76,77,95-96,131

part-time and temporary employment, 11,38,52,78-79,

118-119,250

self-employment, 79

skill pool, 74-81,96-97

see also Unemployment and unemployed

Engineers, 111, 131, 164

Entry-level workers, 73,76,81, 164, 165,259,260

Equipment

construction, 109-110

maintenance and repair, 85, 123, 139

vendors of equipment as trainers, 17,60,61, 85, 127, 136,

137-139, 189,228

see also Machine tool industry

Evaluation

corporate programs, 44, 127, 132-134, 171, 172

Federal efforts, 32-33,41,62, 154, 159-160

State efforts, 32,41,63, 128, 145-146

technology-based training, 209-212

see also Quality control; Tests and testing

Executives, 164-166

Expert systems, 24,26,215-216,220-221, 222-224,265

Federal Express, 194, 196

Federal Government, 37-70

adult education, 25,30,31,52,53,56-60, 66,67,68,153,158,

172, 175, 176-177, 179

apprenticeships, 30, 53-54,237, 238, 239-240, 241-242

basic skills education, 11,30,39,53,56-58,65, 153,154,172,

176-177

Bush Administration, 37,39,55

continuing education, 58-60

contractors, 121

corporate programs, role in, 4,11,12,14,25-26,28,29-30, 39,

47-48,56,57-58, 175

educational institutions, 143

efficiency, 32-33, 38,48

evaluation, 32-33,41,62, 154, 159-160

extension services, 149

human resources, 172, 176-177, 178, 179

information dissemination, 30,31,33,38,39,41,60, 62,65,

66,67-70

literacy, 57, 172, 176-177, 178, 179

Medicare and Medicaid, 40

national commissions, 38, 39,48,61, 63, 176

older workers, 20

policy options, general, 12, 15,25-33,38,39-44,93-95

poverty programs, 4,38,41,44

quality control, 4,26,28,32-33,38,43,48

Reagan Administration, 39

retraining, 25,28, 30-31,43,56

small businesses, 61, 178

standards, training, 31,38,40,56,87,91, 158

States, relation to, 28,31-32,43,46,56,57, 60,61-63,65

statistical programs, general, 33, 67,255

tax incentives, 30,37,38,46-47,48-49, 51,53,58-59,232,

248

technical assistance, 30,31-32,38,43,44,46, 47-48,55,

60-64

technology-based training, 26, 136, 175, 184

technology transfer, 31,32,61,62,65-69,266-267

textile industry, 85

trade associations, 30,47-48,55,56, 142

unemployment, 4,42

vocational education, 13,25,44,53,55-56,59-60, 236

see also Department of Education; Department of Labor;

Laws, specific Federal; Military training; other

departments and agencies

Field tests, tax incentives, 48-49

Financial arrangements

apprenticeships, 237

automation equipment purchases, 121

corporate programs, 130-131

employee financing, 54

Federal cost-sharing, 63

student aid, 31, 58, 93, 135, 140, 231-232, 247-248

see also Costs; Capital investments; Taxes

Financial industries, see Banking and finance

Florida, 148

Ford, Henry, 83, 114

Ford Motor Co., 134, 140, 170, 192,220,232,244,248

Forecasts, see Projections

Foreign countries, 37

apprenticeship programs, general, 53

basic skills, 4, 153, 160, 164

competition, general, 4-6, 14-22, 73,74,81-95

cooperation with, 74

credentials, 90-91

government policies, 15,21,22,27,27,83,93-95

international companies, 4, 5, 9, 103-104, 134, 146, 188

payroll-based national training levy, 30,49,50,51,94,95

small firms, 9

standards of training, general, 3

vocational education, general, 15,21-22, 86, 90-92

see also specific countries

France, 51,94,95

Franchise businesses, 77, 191

Fraud, 140

General Accounting Office, 232

General Electric, 116

General Motors, 83,101,114,122-123,140-141, 147,171,188,

194,242,243,244,247, 248

Glass boxes, 223-224

Globalization, see International companies

Goodyear Tire & Rubber, 212

Government role

foreign countries, 15, 21,22,27,83, 87,93-95

West Germany, 14, 15,61,62,87,93
Index ● 275

see also Federal Government; Policy issues; State-level

actions

GTE, 212

Handicapped persons, see Disabled persons

Health service sector, 80

High-skill professionals, 157,260-261

engineers, 111, 131, 164

scientists, 131, 164

High-technology industries, 74

Hiring practices, 6, 13-14,82, 115, 117, 118-119, 154, 156

Hispanics, 78,79,80, 163, 164, 166,228

Historical perspectives

apprenticeships, 236-237, 238,240, 241

computerization, 138

educational attainment of workforce, 163, 164

electronics industry, foreign, 5, 138

immigration, 158

Japan, 90

literacy, 158

organizational, 105, 107, 113-116

skill requirements, 156

State role, 144

textile industry, 82,84-85

trade associations, 142

West Germany, 87-88

Hours of training

automobile workers, 16

Japan, 90

Household workers, 80

Human capital theory, 127, 130-131

Human resources, 13-14,60,73-97

Federal role, 37,38,60

financial arrangements, 128-130, 132

hiring practices, 6, 13-14,82, 115, 117, 118-119, 154, 156

job ladders, 6,75, 115

management, linkage with, 133

military, 63-64

organizational strategies, 6

safety, 3, 16, 25

Skill pool, 74-81, 96-97

small businesses, 13,60,73

see also Management and managers

Hypermedia, 218-219,223

IBM, 103, 132, 133, 135, 147, 194, 197,201,212,217,222

Illinois, 142, 150, 172

Illiteracy, see Literacy

Immigrants, 12,73,78,79, 157, 158

Income

retraining and, 52

taxes, 13

see also Poverty; Wages and salaries

Individual workers, see Adult education; Age factors; Apprenticeships; Career issues; Credentials; Demography; Educational attainment; Employment; Minorities; Morale

and motivation; Older persons; Part-time and temporary

employment; Retraining; Tuition assistance; Unemployment and unemployed; Unions; Vocational education;

Young adults

Industry associations

apprenticeship programs, 19, 55

training technology, 24-25,68

work-based learning, 6 3

see also specific associations

Informal training, 127, 128, 130

Information and information services, 27,69-70

databases, 7,9,24,214,215,218-219, 223,265

Federal role, 30,31,33,38,39,41,60, 62,65,66,67-70

job classification, 7,8, 103, 108, 114,132

see also Statistical programs and activities; Technology

transfer

Institute for Auto Service Excellence, 141

Instructional design tools, 132-133,215-216

Instructional methods, see Classroom instruction; On-the-job

training; Training technology

Instructional Systems Association, 139

Instructional technology, see Training technology

Integrated Services Digitial Network, 223

Interactive video, 194-196, 197-198,203,207,209, 210,

211-212,213,214,215, 216,221,222,264-265, 267

see also Simulators

International companies, 4,5,9, 103-104, 134, 146, 188

International perspective, see Foreign countries; specific

countries

Interpersoal skills, see Social skills

Inventory systems, 1 0 4

computerized, 5, 7, 8

just-in-time, 4-5,9, 102, 104, 105,106, 107, 110,111,

112-113

Japan, 14, 15,21-22,73,83,86,87, 89-90,96

adult education, 19,93

automobile industry, 5,7, 9, 15, 83, 103, 104-105, 145, 149,

188

basic skills, 153, 156, 164

construction equipment, 109

corporate programs, general, 22, 86, 113, 114, 168, 188

credentials, 90, 91

cultural influences, general, 7, 22,89-90,96, 104

design of products, 83

government role, 14, 15,22,61,62,90,93

job classification systems, 7,8, 103

kaizen, 7,89-90, 104, 107, 110,111, 113

management style, 89, 90

older workers, 94, 95

on-the-job training, 21-22,37,89,90,95

production systems, 102, 104-105, 114, 116

quality control, 83

U.S. emulation, 5

Job aids, 185, 187,203-205,219-221, 223-224,252,266

Job classification, 7,8, 103, 108, 114, 132

Job creation, 77-78,95,96-97

Job ladders, 6,75, 115

Job Opportunities and Basic Skills program, 153, 171

Job performance, 132, 136,211

Jobs for America’s Graduates, 236

Job skills, see Skills

Job Skills Education Program, 68, 173, 175, 198

Job Training Partnership Act, 12,41,44, 153, 171, 175, 176,

241,254,255

Just-in-time inventories, 4-5,9, 102, 104, 105, 106, 107, 110,

111, 112-113
276 ● Worker Training: Competing in the New International Economy

Kaizen, 7,89-90, 104, 107, 110, 111, 113

Kaset, Inc., 139

Knowles, Malcolm, 212,253

Labor associations, see Trade associations; Unions

Laborers-Associated General Contractors of America Education

and Training Fund, 239

Labor force participation, 78,79

Language skills, 157, 158, 166, 173

multicultural training, 134

see also Literacy; Reading skills

Laws, specific Federal

Adult Education Act, 31,53,57,158,171,173-174, 176,177,

178, 179

Age Discrumination in Employment Act, 229,230,252,253

Americans with Disabilities Act, 254

Carl D. Perkins Vocational and Applied Technology Education Act Amendments (proposed), 56,236

Carl D. Perkins Vocational Education Act, 44,53,55-56

consortia for corporate training (proposed), 45,48,65, 176

Internal Revenue Code, 31,58-59,232,248

Job Training Partnership Act, 12,41,44,94, 153, 171, 175,

176,241,254,255

National Apprenticeship Act, 239

National Cooperative Research and Development Act, 45

National Literacy Act (proposed), 57

National Training Incentive Act (proposed), 48

Older Americans Act, 12,94,254-255

Revenue Act of 1978,58

Tax Reform Act, 59

trade act, 32,61,66,67

Learning International, 137

Legal issues

antitrust, 45, 149

apprenticeships, 239-240,242

copyrights and patents, 66-67

fraud, 140

litigation, 230

see also Laws, specific Federal

Literacy, 31,39,57-58,68,82,84-85, 116,154, 155, 158,159,

161,162,165,166-167, 169-173 (passim), 176,177,179,

199

Department of Education, 31, 158, 178

Federal role, general, 57, 172, 176-177, 178, 179

projections, 39, 176

Litigation, 230

Local factors

barriers to firm-based training, 44

basic skills, 170

community colleges, 38,45,61, 85, 142-143, 144, 146-148,

166, 175, 178,199

corporations, cooperative programs, 235-236

educational institutions, other, 142-143, 170

information sharing, 65

job qualification mismatches, 13

trade associations, 141-142

Machine tool industry, 119, 142,237

computer numerical control (CNC), 123, 136, 138, 149, 244

West Germany, 89

Maintenance and repair, 85, 123, 139

Making Things Better: Competing in Manufacturing, 32,61

Management and managers, 87, 108, 110,111, 115, 119, 136,

157, 167,228

attitudes, 41,60,96, 101, 114, 121, 127, 131, 134, 165,

230-231,252

computer-aided, 199-200

credentials, 75

executives, 164-166

France, 95

Japan, 89,90

military training, 259-260,267

older workers and, 20

production, 5,6,9, 110,111, 131

retraining, 52, 228, 252

self-management, 108

skills, 157, 158

small firms, 17,60, 128, 130

State assistance, 61

technology-based training of, 189, 191

training plans by, 16, 133-134

union-management programs, 20, 114, 140-141, 142, 154,

170-171, 194,227,232,242-249

Manufacturing industries, 21,32,61, 116, 119

apprenticeships, 237

basic skills, 156, 158, 166

computer-integrated, 111, 119-123, 136, 143, 196, 204, 205

construction equipment, 109-110

first-line supervisors, 75

machine tooling, 89, 119

original equipment manufacturers, 106-107

wages, 116

see also Automobile industry; Electronics industry; Machine

tool industry; Process control; Textile industry

Market forces, 76-81,96-97

Massachusetts, 128, 149, 171-172

Mathematics and arithmetic, see Arithmetic and mathematics

Mazda Corp., 145, 149

McDonnell Aircraft Co., 212

McGraw-Hill, 198

McLaughlin, Ann, 39

Medicare and Medicaid, 40

Men, 163,240

Michigan, 128, 136, 140-141, 145, 149, 173

Michigan Modernization Service, 61, 148-149

Military training, 33,63-64,65-66,68,173, 174,175,179,194,

195, 198,203,204,205,222, 259-267

Minorities, 3,9,18,30,52,73,74,78, 79-81,140,163,227-228

Age Discrumination in Employment Act, 229, 230, 252,253

Black Americans, 74,78,79,80, 163, 164,227-228

disabled persons, 254

discrimination, 229, 230, 252, 253

Hispanics, 78,79,80, 163, 164, 166,228

immigrants, 12,78,79, 157, 158

youth, 79,81

see also Older persons; Young adults

Mississippi, 173, 175

Mobility

demography and, 3-4,8-9, 11-13,27,37,40,76,77, 95-96

textile industry, 85

young workers, 73

Models, see Demonstration projects

Morale and motivation, 5, 16,41, 101, 108, 119, 171

kaizen, 7,89-90, 104, 107, 110, 111, 113
Index .277

multiskill training and, 8

older workers, 252-253

West German workers, 88

young workers, 73,234

Motorola, 109, 113,132,134,166, 192,201

Multinational companies, see International companies

Multiskill training, 8, 107

National Advisory Board on Workplace Training, 39

National Apprenticeship Act, 239

National Assessment of Educational Progress, 154, 159-160,

162

National Association of Manufacturers, 166,255

National Basic Skills Consortium, 65, 176, 179-180

National Center for Education and the Economy, 48

National Center for Education Statistics, 69

National Commission for Employment Policy, 63

National Cooperative Research and Development Act, 45

National Council for Early Childhood Education, 141

National Education Corp., 140, 173

National Governors’ Association, 63, 171, 176, 179

National Industry Promotion Program, 242

National Institute of Standards and Technology, 32,62,65,143

National institute on workplace learning (proposed), 32

National Literacy Act (proposed), 57

National Science Foundation, 67,69

National Society for Performance in Instruction, 136

National Technical Information Service, 62,67

National Technological University, 192, 193

National Tooling and Machining Association, 142

National Training Fund, 238,239

National Training Incentive Act (proposed), 48

New England Telephone, 134-135

New Initiatives in Apprenticeship, 55

New York State, 173, 191

Nissan, 243

Nonprofit organizations, 63

North Carolina, 144, 146, 148

Northern Telecom Inc., 217

NUMMI, 113,114,168

Nursing homes, 40

Occupational health and safety, see Safety

Office of Educational Research and Improvement, 66-67,69

Office of Personnel Management, 66

Office of Training Technology Transfer, 62,66,67

Office of Work-Based Learning, 47-48

Oklahoma, 144

Older Americans Act, 12,94,254-255

Older persons, 12,20,30,44,76,78,94-95, 227,229-231,

249-255

Japan, 94,95

research on, 69

retirement, 253-255

retraining, 12,227, 230-231,251-252

small firms, 17

women, 78

On-the-job training, 16, 18,75, 117, 135, 138,228

apprentices and, 237,240

embedded training, 185, 187,205-207,266

expenditures, 127, 128

informal, 127, 128,130

Japan, 21-22,37,89,90,95

older persons, 252

research, 69

small fins, 189-190

textile industry, 85

West Germany, 88

see also Apprenticeships

Organizational issues, 4,6,7-9,40,75, 101-102

centralization, of training industry, 139-140

consortia, corporate, 21, 25, 29-30,45-47,48, 65, 143

consortia, educational institutions, 21, 143, 144

coordination of services, 60-64

decentralization, 6, 101, 114, 133

franchise businesses, 77, 191

just-in-time inventories, 4-5, 102, 104, 105, 106, 107, 110,

111, 112-113

production reorganization, 82-83, 101-123

small businesses, 4

statistical process control, 7,9, 102, 103, 107, 111, 112, 113,

136, 155, 170-171

textiles, 84

training in, 107

U.S. industry, 6

work-based learning institute, 63-64

see also Work organization

Original equipment manufacturers, 106-107

Pacific Northwest Bell; 245

Part-time and temporary employment, 11,38,52,78-79,

118-119,250

Patents, 66-67

Payroll-based training levies, see training levies

People’s Computer Co., 199

Performance support systems, 219-221,266

Personal computors, 23,119,121,183,189,195, 198,216,217,

218,219,221,222-223, 267

Petersen, Donald, E., 134

Planters Life Savers Co., 159

Plumley Companies, 112

Pneumatic Scale Corp., 149

Polaroid, 169

Policy issues, 37-70

Federal role, general, 12, 15,25-33,38,39-44,93-95

foreign governments, 15,21,22,27,93-95

small firms, 73

unemployed, 73

Poverty, 74, 96

Federal programs, 4,38,41,44

Private sector, see also Corporate programs

Private Sector Training: Who Gets It and What Are Its Effects,

52

Problem-solving skills, 3,6,7,10,18,75,76,101, 104,113,133,

134, 155

Process control, 7,8, 111, 116, 119

computer-integrated manufacturing, 111, 119-123, 136, 143,

195,204,205

statistical, 7,9, 102, 103, 107, 111, 112, 113

Product design

computer-aided (CAD), 7, 24, 119-120, 136, 138, 143, 149,

184,215-216

flexibility, 83, 113, 114, 117

instructional design tools, 132-133, 215-216

Japanese, 5
.

278 . Worker Training: Competing in the New International Economy

quality, 82

Production and productivity, 3,60,74,209,227

basic skills and, 153, 166

decentralization and, 6, 101, 114

Japan, 102, 104-105, 114, 116

management, managers and, 5, 6, 9, 101, 131

multinational companies, 5

organizational factors, 82-83, 101-123

United Kingdom, 21,88

West Germany, 21,88

see also Efficiency

Projections, 7-9

corporate training, 22, 183, 248-249

demography, 3, 11, 12,37,79,96-97,249

literacy, 39, 176

skill requirements, 156-157

Social Security, 253-254

technology-based training, 26, 183,216-224

Public Switched Telephone Network, 200,223

Quality control, 26,60,64-70,82,83,95, 133-134

apprenticeship programs, 19, 240

basic skills and, 166, 179

consultant trainers, 139, 140

cost and, 4-5

Federal role, 4,26,28,32-33,38,43,48

Japan, 22

kaizen, 7,89-90, 104, 107, 110, 111, 113

national training levies, 44-45

production reorganization, 83

secondary education, 92

small businesses, 4,41

union-management programs, 20, 247

vendor training, 137-138

vocational education, 15, 86

West Germany, 21

workforce, general, 74

see also Credentials; Evaluation; Standards

Racial groups, see Black Americans; Minorities;

White Americans; see also Hispanics

Reading skills, 10, 153, 155, 166

see also Literacy

Reagan Administration, 39

Recession and depression, see Economic cycles

Regional factors, 13,81, 166

community colleges extension, 144

educational attainment, 80, 163

immigrants, 158

literacy, 57

model programs, 56

recruitment of industry, 145

small firms, 21

textile industry, 85

Remedial education, 68, 153, 163, 166, 167-168

Repair and maintenance, see Maintenance and repair

Research, 27,32,39,41,45, 140, 179-180

adult learning, 66,67,68, 155,212-214

apprenticeship, 241

basic skills training, 11,53, 155

information dissemination, 66

instructional technology, 65-67

military training, 65-66,68, 179,265-266

older persons, 69

tax incentives, 48-49

technology-based training, 26,62,65,68-69, 184

university-based, 64

see also Demonstration projects; Technology transfer

Retail businesses, 77, 113, 116, 117, 118

Retirement, 253-255

Retraining, 13-14,17,37,116,135, 155,157,163,165-166, 170,

228

career advancement, 52-60

costs, 116

Federal role, 25,28,30-31,43,56

Japan, 93

managers, 52, 228, 252

older persons, 12,227, 230-231,251-252

union role, 20

Revenue Act of 1978,58

Safety, 3

corporate training, 16

Federal role, 25

Salaries, see Wages and salaries

Satellites, 191-192, 193,201,264

Scientists, 131, 164

Self-employment, 79

Semiconductors, see Electronics industry

Semiskilled workers, 75, 110, 157

Senior Community Employment Program, 254-255

Service Employees International Union, 246

Service industries, 95,96-97, 116, 117, 118, 157,246

banking and finance, 75,96,113,116,117,118, 142,165,169

consultants, 61, 121, 136-137, 138-139,262-263

household workers, 80

maintenance and repair, 85, 123, 139

nursing homes, 40

retail businesses, 77, 113, 116, 117, 118

Sex differences, see Men; Women

Shell International Petroleum Company Limited, 203

Simulators, 186, 187,201-203,204,210, 222,224,264,265

Skills, 8-9,38,39,61,68, 135-136

automated manufacturing, 143

cognitive skills, 153

deskilling, 153, 155-156, 157

educational levels and, 155-158

high-skill professionals, 157, 260-261; see also Engineers;

Scientists

lifecycle, 138

military training, specialized, 260

multiskill training and, 8, 107

pool, 74-81,96-97

problem-solving skills, 3,6,7,10,18,75,76,101, 104,113,

133, 134, 155

semiskilled workers, 75, 110, 157

transfer of training, 17-18,23,29-30,37,40, 42, 131, 132,

133,227-255,267

unskilled workers, 75,84-85,96,103,105, 107,110,146,155,

157

upskilling, 157, 158

wages and, 75

see also Basic skills; Literacy; Retraining; Social skills; Tests

and testing
Index ● 279

Sloan, Alfred, 83

Small and medium-sized firms, 12,16, 17,73,76,77-78,87,

107, 130, 165-166

apprenticeships, 55, 130,241

automated manufacturing, 143

basic skills education, 57,58, 167, 168, 178

community colleges and, 148

consortia, corporate, 21,25,29-30,45-47

cost of training, 40,41,61,208

efficiency, 81

Federal role, 61, 178

foreign countries, general, 93

franchises, 77, 191

human resources, 13,60,73

institutional structures and, 4

instructional technologies, 64

Japan, 90

job creation, 77-78,95

management practices, 17, 60, 128, 130

on-the-job training, 189-190

quality control, 4,41

regional efforts, 21

State role, 21,61,128, 148-149,191

supply firms, 81, 107, 116

technology-based education, 189, 191

young workers, 17,73,77, 178

Small Business Administration, 62

Social Security, 253-254

Social skills, 18,75,76, 103, 116, 134, 157-158, 159, 197

foreign cultures, 134

older workers, 250

Society for Applied Learning Technology, 136

Society for Human Resource Management, 165,168

Southbridge Sheet Metal Corp., 149

South Carolina, 144, 148, 172, 178

Southern Growth Policies Board, 156

Southern Manufacturing Center, 144

Southern Regional Education Board, 234-235

Southern Technology Council, 21,143

South Korea, 22, 15,86,91-92,93-94,95, 164

Standard of living, 3,4,27,37,38,40,41,74, 81, 153

standards

apprenticeships, 239

credentials, national, 31, 38,40,56, 87,91, 158

interactive video, 194,216

international, 3, 194

textile industry, 84

young workers, 38

Stanford University, 159

State-level actions, 20-21,37,41,61-63

adult education, 173-176

apprenticeships, 237,239-240

automation, 71

basic skills education, 10,65, 171-176, 178-179

classroom instruction, 150

community colleges, 38,45, 61, 85, 142-143, 144, 146-148$

166, 175, 178, 199

Consortium for Manufacturing Competitiveness, 21, 143

corporate programs and, 20-21, 127-128, 140-141, 144-150,

171-176

educational institutions, 143

efficiency and effectiveness, 145-146

evaluation efforts, 32,41,63, 128, 145-146

extension programs, 32,44,61, 149

Federal role, 28,31-32,43,46,56,57, 60,61-63,65

information sharing, 65

National Governor’s Association, 63, 171, 176,179

payroll-based training levies, 49,51

small enterprises, 21,61, 128, 148-149, 191

tax incentives, 145, 173

technical assistance, non-extension, 21,61-63,63

technology transfer, 21,61, 148-149, 176

textile industry, 85

trade associations, 141-142

vocational institutions, 147-148

see also specific States

Statistical process control, 7,9,102,103, 107,111, 112,113,

136, 155, 170-171

Statistical programs and activities

adult education, 67

Bureau of Labor Statistics, 67,69,70,78,156-157, 228,255

Census Bureau, 33,67,69, 121

corporate surveys, methodology, 128, 167

Federal, general, 33,67,255

National Center for Education Statistics, 69

older persons, 255

on training activities, 69-70, 167, 189,255

training costs, 14, 15, 16,69

see also Demography

Student aid, 31,58,93,135, 140,231-232,247-248

see also Tuition assistance

Supervisors, see Management and managers

Supplier firms, 60,110, 115, 118

automobile industry, 81, 105, 106

Japan, 90, 105

and original equipment manufacturers, 106-107

small, 81, 107, 116

statistical process control, 112

see also Inventory systems

Survey of Income and Program Participation, 77

Sweden, 92

Systems engineering, 6

Tax credits, 28,30,38,43,46,4849

see also Taxes

Taxes, 40

incentives, Federal, 30, 37, 38,4647,48-49, 51,53,58-59,

232,248

incentives, State, 145, 173

income, 31, 52

see also training levies, tuition assistance

Tax Reform Act, 59

Taylor, Frederick, 105

Technical assistance

Federal role, 30,31-32,38,43,44,46, 47-48,55,60-64

linking with training, 60-64

small firms, 58

State extension programs, 32,44,61

State role, other, 21,61-63,63

sees also Demonstration projects

Technology, 22-25,26

educational attainment and adaptation to change, 12-13

engineers, 111, 131, 164

Federal role, 31-32
280 . Worker Training: Competing in the New International Economy

older persons, 250-251

satellites, 191-192, 193,201,264

scientists, 131, 164

small and medium-sized firms, 60, 189, 191

training for innovation, general, 7-9,27,42,60, 101-123,

135-136

vendors of equipment as trainers, 17, 60,61, 85, 127, 136,

137-139

see also Automation; Computers; Training technology

Technology transfer, 198,266-267

Federal role, 31,32,61,62,65-69,266-267

State role, 21,61, 148-149,176

see also Demonstration projects; Training technology, transfer

Telecommunications, 134-135,248

satellites, 191-192, 193,201, 264

training technology, 56,64,217-218

union-management programs, 20, 154, 170-171,232, 243,

245,247

Teleconferencing, 185, 186,189,191-192, 193,200-201,223,

264

Television, 185, 186,191-192, 193

Temporary employment, see Part-time and temporary employment

Tests and testing

apprenticeships, 87

basic skills, 75,116

National Assessment of Educational Progress, 154, 159-160,

162

older workers, 252

program evaluation, 134

Texas Instruments, 156

Textile industry, 75,82,84-85, 117, 144, 145, 155-156

Times Mirror Co., 139

Towers Perrin-Hudson Institute, 167, 168

Toyota, 113, 188

Trade Act, 32,61,66,67

Trade associations, 139, 141-142,237,238-239

basic skills training, 169

credentials, standards, 38

Federal assistance, 30,47-48,55,56, 142

foreign countries, general, 93-94

West Germany, 21,87

work-based learning, 63

see also Unions

Training, 189, 193,198,200,201

Training levies, 22,28,29,30,37,38,42, 44-45,47,49-52,

51-52,60,64,

foreign experience, 22,94-95

State levies, 51

Training personnel, 136, 138,261-263

Training technology, 3, 188-224

artificial intelligence, 206-207,215-216,219

authoring tools, 216

basic skills, 174-176, 179-180,

best practice approaches, 65,66, 179

computer-assisted, general, 11, 17, 18, 22-25,26, 33, 64,

65-67,68,75, 138-139, 154, 173, 174-176, 183-190

(passim), 194-224 (passim), 235,264-266

databases, 7,9,24,214,215,218-219, 223,265

embedded training, 185, 187,205-207,266

expert systems, 24,26, 215-216, 220-221,222-224,265

hypermedia, 218-219,223

informal training, 127, 128, 130

instructional design tools, 132-133,215-216

job aids, 185, 187,203-205,219-221, 223-224,252,266

performance support systems, 219-221,266

small firms, 189, 191

self-study, 93

simulators, 186, 187,201-203,204,210, 222,224,264,265

telecommunications, 56, 64

transfer, 32-33,43, 62,64, 65-68

video, general, 184, 185, 186, 189, 191, 192-196

video, interactive, 194-196, 197-198,203, 207,209, 210,

211-212,213,214,215, 216,221,222,264-265, 267

see also Adult learning; Classroom instruction; On-the-job

training; Transfer of training

Transfer of training, 17-18,23,29-30,37,40,42, 131,132,133,

227-255,267 see also Training technology, transfer

Tuition assistance, 31,53,58-59,232,247-248

see also Student aid

Unemployment and unemployed, 27,40,52,73,76,78,96, 231,

252

churning , 76,77,95-96, 131

Federal programs, 4,42

literacy, 160

minorities, 80

State programs, 51

Unions, 19-20,56,95, 140, 141, 142

apprenticeships, 54, 55, 87, 237,238-239, 241

management-union programs, 20, 114, 140-141, 142, 154,

170-171, 194,227,232,242-249

older workers, 230-231

see also Trade associations

United Auto Workers, 114, 140-141, 154, 170-171, 194,232,

243,244,247-248

United Kingdom, 21,88,89

Universities and colleges, 147,214

attainment by workers, 74

attitudes toward, 90

Consortium for Manufacturing Competitiveness, 21, 143

costs, 128

research, 64, 159

training by, 127, 136, 142-143, 192, 193

West Germany, 83-84,87-88

see also Community colleges

Unskilled workers, 75,96, 103, 105, 107, 110, 146, 155, 157

textile industry, 84-85

Upgrade training, see Retraining

Urban areas, 163, 166

Vendors, equipment, as trainers, 17,60,61,85, 127, 136,

137-139, 189,228

Video technology, 184, 185, 186, 189, 191, 192-196,221-222

interactive, 194-196, 197-198, 203, 207, 209, 210, 211-212,

213,214,215,216,221, 222,264-265,267

simulators, 186, 187, 201-203, 204, 210, 222, 224, 264, 265

Virtual environments, 224

Vocational education, 13, 15, 18-19, 127, 140-141, 146-148,

233-236

career planning, 227

computer-based, 198-199

earnings and, 52

Federal role, 13,25,53,55-56,59-60
Index ● 281

foreign countries, 15,21-22,86,90-92

older persons, 251

State role, 21

West Germany, 83,85,87-88,90-91

see also Apprenticeships

Wages and salaries, 5,7,27,79,82, 129,227,228,243,247

apprenticeship training and, 240

automobile industry, 104, 116,243

and foreign relocation of industry, 146

manufacturing, 116

minorities, 80

payroll-basedtraining levies, 29,30,37,46-47,49-52, 51-52,

60,94,95

raises, 18

retraining and, 52

skills and, 75

during training, 130, 131

women, 78

West Germany, 14,21,22,73,83,85,87, 94,95,96, 146

adult education, 93

apprenticeships, 19,21,37,52,83,87-89, 237

basic skills, 153

credentials, 90-91

government role, 14, 15,61,62,87,93

vocational education, 83, 85, 87-88, 90-91

White Americans, 79,81, 163

Wisconsin, 138

Women, 77,78,79, 116, 163,252

Workforce Quality Clearinghouse, 39

Workforce 2000, 156,236

Work organization, 82-83, 114-115, 184,233

basic skills and, 159

continuous-flow, 135

hiring practices, 6, 13-14,82, 115, 117, 118-119, 154, 156

historical trends, 105,107, 113-116

multiskill, 8, 107

statistical process control, 7,9, 102, 103, 107, 111, 112, 113,

136, 155, 170-171

see also Automation; Management and managers

Xerox, 82-83, 132, 137, 139

Young adults, 11, 12,38,44,73,78,81, 116, 140,227,228,

232-233,249

attitudes, 73,234

basic skills, 41, 154, 159-160, 161, 162, 178

dropouts, 38,79-80

minority, 79, 81

school-to-work transition, 15,37, 39,52, 56,86,242-243

small firms, 17,73, 77, 178

see also Apprenticeships; Vocational education

Zenger-Miller, 139
282 ● Worker Training: Competing in the New International Economy

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