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A Powerful Partnership: NGNN's Workforce Pipeline Case Study
Robert P. Leber
Director
Education and Workforce Development
Northrop Grumman Newport News
Joseph C. Barto, III
President and CEO
Pipeline Program Manager
Training Modernization Group, Inc
Executive Summary
Northrop Grumman Newport News (NGNN) recognized that conventional hiring methods would be insufficient to support increased production levels over the next decade. Therefore, they developed a program to provide initial entry workers with the skills required to be successful as well as clear “pipelines” from their high schools and employment services agencies directly to full time jobs. To support this program, NGNN created a cooperation model with Thomas Nelson Community College, Old Dominion University, the Virginia Employment Commission, Peninsula Worklink, other state workforce development agencies, and local technical high schools led by the New Horizons Regional Education Center. NGNN also provided a dedicated Program Management Team from Training Modernization Group, Inc. whose role was to ensure this complex program was managed efficiently and effectively to meet all of the stakeholders’ needs, while ensuring goals were accomplished based upon data driven metrics and milestones.
The result was a state-of-the-art program integrating multiple agencies in support of one goal – placing the right person in the right job with the right skills to be successful in the work place. NGNN’s primary purpose with this program was to systematically recruit, hire, and train hourly workers. The key to success was NGNN’s willingness to substantively engage the various agencies to ensure the workforce development staff and the technical schools understood exactly what skills and attitudes industry required and then focused their energies on allowing the partnership to become a fully integrated team. The cornerstone was NGNN’s donation of their computer-based training courseware originally developed to train initial entry employees to the technical schools which detailed exactly the required skill sets for new hires. The technical schools then modified their curriculum to teach those skills. The community colleges, along with workforce development agencies, ensured the hiring processes were aligned to make certain the new employees had the right entry qualifications for the jobs. Since the students were trained on industry provided courseware and were assessed using Work Keys® administered by Thomas Nelson Community College with remediation done at the Peninsula Workforce Development Center, NGNN got better prepared applicants. The result was NGNN reduced cost of hire, reduced initial entry training cost, improved hiring cycle time, and improved first year retention rates. The local technical schools received state-of-the-art learner based curriculum and staff development training. The workforce development agencies were better able to support their local industries.
The BIG win was students and applicants having a clear pipeline directly to full time jobs with the skills required to be successful. This program serves as a repeatable model for any American industry regardless of size with a compelling business case and positive return on investment.
Background
• Northrop Grumman Newport News (NGNN) is the sole builder of nuclear powered aircraft carriers and one of two builders of nuclear powered submarines in the world.
• NGNN has over 18,000 employees predominately located in one manufacturing complex with multi-year production schedules.
• NGNN’s client is the United States Navy with stringent worker qualification requirements to perform nuclear certified construction.
Challenge
• Frustration with old, unsuccessful methods of finding and retaining quality hourly employees built.
• The demographics of the applicant pool had significantly changed – a large pool of potential employees with experience working with their hands no longer existed.
• NGNN determined it took approximately 100 applications to obtain 10 meaningful interviews that lead to one actual new hire.
• Attrition rates among first-year hires were steadily increasing, sometimes as high as 40% in some trades.
• NGNN will experience an increase in the number of personnel recruited, hired, and trained in the coming years due to increasing demand for products and an aging workforce.
• NGNN hiring forecast over the next decade shows a significant increase over current levels of hiring while the skills requirements also are changing due to new product lines.
• Traditional industrial age recruiting and hiring methods will not be sufficient to accommodate the resulting demand for skilled employees.
Goals
• Improve support to production labor requirements by decreasing the cycle time from labor requirement generation to competent employee on the job.
• Decrease cost of hiring
• Decrease initial entry training costs by reducing time to train
• Increase first year retention rates
• Improve EEOC Hiring Compliance
Building the Pipelines
• NGNN developed a new “Pipelines” program to find the best candidates for employment, to hire them efficiently, and to ensure they have the necessary skills to be a productive worker.
• The Pipelines program coordinated state and local government employment agencies to support the effort, local community colleges to test potential candidates’ foundation skills, and technical schools to teach necessary job skills.
• First Pipeline: School to Workplace. NGNN supplied training materials to vocational schools, providing a pipeline directly from the school to the workplace.
- Allowed students to train to the same standards as initial entry training in NGNN
- Allowed company representatives to observe students in class and identify their skills necessary for employment
• Second Pipeline: Local Employment Services offices. Allowed screening of potential applicants prior to involvement of NGNN.
- Realistic Job Previews for each trade given to potential applicants
- Work Keys® test for chosen trade administered to all applicants
• Internal to NGNN, a system was developed that had connectivity from recruiting through production. Follows is a flow chart depicting the synchronization and integration of the Peninsula Workforce Development Center (PWDC) in the NGNN hiring process:
Program Implementation Features
• In December 2002, conducted a Lean event detailing the current hiring process, generated alternatives to improve the process, and created a detailed plan of action with milestones to develop, pilot, test, measure, and continuously improve the process through a series of trials and a rigorous program management plan.
• Assessed recruit aptitude using ACT’s Work Keys program administered by the local community colleges. Work Keys® tests were selected as the best applicant screening tool after a six-month independent analysis because they:
- Ensured compliance with relevant legal requirements for hiring new personnel.
- Allowed the company to directly link pre-hire testing to production requirements.
• Work Keys® for five trades (Welders, Shipfitters, Electricians, Machinists, and Pipefitters) were chosen for the study, with the local Community College conducting a profile for each, establishing skill levels and targeting training needs.
• Two separate panels of eight Subject Matter Experts each determined tasks most critical to the job and identified on-the-job behaviors associated with skill levels.
• The experts reviewed Work Keys® skills and determined the requirements for effective job performance by linking pre-hire testing to post-hire performance.
• Integrated Virginia Employment Commission (VEC) and the One Stop Centers into the hiring process to decrease the number of applicants who do not meet the minimum pre-requisites for hiring.
• Developed and implemented a multi-featured realistic job preview including videos, paper based, and face-to-face job information for applicants.
• Identified areas where applicants need additional training or skills development and providing those opportunities through the Workforce Development Center Programs.
• An “end to end” data capture and analytical process to ensure progress was measured and data driven adjustments made to continuously improve performance. Data capture involved collecting applicant flow data, measuring the time for hiring process steps, developing hiring Cycle Times, and capturing new hire performance data.
• As the program matured, changes were made to take advantage of other programs as well as the capabilities of the support agencies.
• A strategic communications plan ensured that key stakeholders were aligned and resources were allocated and integrated into the overall program scheme.
Design Concepts
• A state-of-the-art program integrating multiple agencies in support of one goal – placing the right person in the right job with the right skills to be successful in the first year of employment.
• Shows industry’s need to clearly identify job requirements which are then communicated to applicants and support agencies.
• The breadth and strategic depth of the process sets this program apart.
• The program provides a win for the applicant, a win for the supporting agencies, and a win for industry.
• The ability to successfully move a person from applicant to qualified worker required integrating every agency and entity that touched on this process.
• The process was broken down into components – screening, hiring, orientation, training, etc.
• This program serves the best interest of the potential applicants by providing a consistent, fair, and well-mapped hiring process.
• Company expectations are promulgated to all applicants; applicants can test their skills and knowledge using industry accepted testing tools; remediation programs are provided in the same facility as the testing.
• Applicants may receive all services in a single location.
Alignment
• This program aligns with multiple stakeholder goals:
- The goal of the applicant is to get a job.
- The goal of state and local government agencies is to find employment for applicants.
- The goal of NGNN is to hire employees with the required skills for production jobs.
• The vocational and technical schools offer the same training used in NGNN’s initial training, and the school instructors are supported by and receive training from company instructors.
• Within NGNN, the examination of the hiring process has linked many organizations that heretofore have had little connectivity, including Human Resources, Training, and Production.
• External to NGNN, the relationship among the schools, state and local government agencies, and the consultants has developed into a network of linked objectives.
• The Program Management function, provided by Training Modernization Group, Inc., is key to the alignment process.
• The dedicated Program Management team developed a detailed Plan of Action to ensure constant alignment of all stakeholders’ value propositions.
• An Executive Review Board met monthly to review program process, identify issues, review alternatives, and allocate resources to ensure program success.
Evaluation Strategy
• The evaluation strategy consisted of the following Data Capture Plan Objectives:
1. Obtain data on the flow of applicants.
2. Obtain data that shows effect of intervention on NGNN Hiring costs.
Results
• Objective One: Return on Investment (ROI) on the New Process
- To date, NGNN has hired 922 people. Savings from improvements in the hiring process is approximately $443,638 – a conservative estimate because savings in processing time for personnel hired were not included.
- The costs for this program were $211,500 to pay for the Work Keys® and Program Support, Data Capture, and Analysis.
- Result: A positive return on investment for the pilot project in terms of HR hiring costs.
• Objective Two: ROI on the Reduction in Cycle Time
- The Cycle Time prior to the Lean Event (Current State) was 123 Days. The Lean Event yielded a 60 Day Cycle time (Future State), effectively cutting the previous cycle time in half.
TOTAL AVERAGE CYCLE TIMES (Broken Down by Outcome)
Cycle Time Event
Not Interviewed: 22.96 Days
Interviewed but Not Offered Employment: 33.42 Days
Employment Offered: 40.01 Days
- Analysis shows that the cycle time from initial application to hire has dropped from 123 days (Lean Current State) to 60 days (Lean Future State) and finally to 40 days (One-Stop Supported Model.)
- The increase in the speed that new hires could be provided to the trades and thus improve support to trades’ labor requirements, the first goal of the hypothesis at reduced cost of hiring, is shown in the following chart:
Path Forward
Path One: Relate Work Keys® scores to first year performance data to provide better guidance for hiring foreman.
• Data is continuing to be collected and the database is continuing to be populated.
• By Summer 2005, there will be enough longitudinal data to draw correlations between Work Keys® scores and job performance (time to competency, first-year retention) of new hires.
• Known correlations will allow for better informed hiring decisions.
• More data will result in the best-suited placement of new hires in trades, along with easier hire/no hire decisions.
• For example, an applicant scores a 3 on Applied Mathematics and gains employment as a welder. If this employee leaves the company after a short period of time or shows low first year job performance, it may be evident that those who score a 3 for Applied Math should not be hired as welders, or should be directed to other trades suitable for their score, such as pipefitting.
• The following graph depicts the gaps between the overall skills of the initial entry employment population and the incumbent employees:
• Consequently, the ability now exists to take a systems view of linking our educational systems with our workforce development systems by having a data driven evaluation of the applicant pool so workforce development agencies can make better resource allocation decisions to improve the overall skill set of the local workforce. The following chart shows the linkage between the Career Training Paths and traditional education paths.
Path 2: Relate ACT Work Habits Assessment results to NGNN first year attrition rates
• NGNN agreed to participate in the ACT Work Habits Assessment Validation pilot in an attempt to reduce first year attrition, which is primarily due to bad attitudes towards employment in terms of attendance and acceptable workplace behavior.
• ACT developed a Work Habits test designed to provide insights into these specific issues.
• Test will assess new employees’ attitudes towards attendance, acceptable workplace behavior, etc.
• Better methods of assessing new employees’ attitudes should result in lower rates of first year attrition.
• Currently working with ACT to validate the test by Summer 2005 for implementation later that year.
Path 3: Expand Technical School Program
• Based upon the following results of the first year of technical school graduates, we will continue to expand this program to other schools and in other skill areas as training curriculum becomes available.
• Also tracked was the performance of the graduates of the Technical School Program during their initial training in the Welding School.
• A comprehensive study of time-to-train was used as a baseline to compare the performance of the graduates of the Modernized Technical School Program with the performance of average welding students.
• Results showed a 25% reduction in time-to-train, as well as a reduction in first-year attrition for the Technical School graduates.
• These results can be replicated with a larger applicant population.
• The following chart depicts the 25% reduction in time-to-train:
The top line represents the results from the sample group, personnel who were brought into NGNN with no pre-training. The lower line shows the results of the personnel who were trained using NGNN’s training materials prior to hiring.
First Year Attrition
• 11.7% reduction in first year attrition for Technical School graduates
• 36.7% attrition in the yard population and 25% attrition in the Tech School population
• NGNN’s goal is to approach the attrition numbers of the tech school graduates.
Summary
• By forging a path, our company has provided an example that others can emulate.
• The program has reduced costs to hire, reduced time to hire, and obtained a clearer picture of the capabilities of the applicant for the hiring foremen.
• The applicant has a clear path to follow, exposing them to realistic job previews, and allowing them to correct any shortcomings.
• Applicants and hiring managers are able to make better informed decisions.
• Foremen are receiving personnel from the training base who have the skills necessary to be productive workers/
• Time-to-train and first year attrition rates have been reduced.
• Production has been positively impacted.
• Anecdotally, one foreman noted that he would rather receive a new hire from the training base than a transfer from another area of NGNN – the new person had all the right skills and none of the bad habits.
• Impacts from this program are long-term, and positive changes are expected to continue.
Lessons Learned
• Success depends upon seeing the process through the eyes of the new applicant and ensuring the process is supportive of their needs and not a deterrent in and of itself.
• Program success is a “team sport.” It requires a dedicated program management team and support from each of the key leaders involved.
• Human Capital Programs must be about building systems to provide applicants with the right skills to be successful in the workplace, not ways to “thin the heard.”
• It is industry’s responsibility to clearly articulate its needs to school and workforce development programs, not schools and workforce development programs guessing what they need.
• Program success requires executive leadership who view the process from an “end-to-end” perspective and apply “Big Picture Thinking” to ensure long term solutions take precedence over short term gains.
• There is no one “silver bullet” that will solve all problems. Dealing with people creates many different permutations of each process to accommodate each individual. Building a process that links complementary systems is easier and more responsive than developing new processes.
• This process will be transferred and replicated internally within NGNN. We started this process off in the Trades areas – the place where the majority of our hourly workers are. The success of this program allows us to move into the salaried worker area.
• The program is repeatable by other businesses in the community. We do not see others building like programs as a threat to our company’s applicant pool. We think that by applying increased industry focus on the skilled trades we can move community resources to focus directly on developing the skills of the workforce to meet all of our needs and improving the quality of the regional workforce therefore attracting more and better businesses to our area.
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