Win! Win! Big Win! Building Pipelines from the Community to the Workplace

Summary

A large manufacturing company developed a cooperation model with community colleges, state workforce development agencies, and local technical high schools to provide initial entry workers with clear “pipelines” from their high schools and employment services agencies directly to full time jobs with the skills required to be successful. The key to success was the company’s willingness to donate their computer based training courseware originally developed to train initial entry employees and management effort to ensure the workforce development staff and the technical schools understood exactly what skills and attitudes industry required. Then the technical schools and workforce development agencies modified their curriculum to teach those exact skills and the community colleges along with workforce development agencies ensured the hiring processes were aligned to ensure the new employees had the right skills and were qualified for the jobs. Since the students are trained on industry provided courseware and are assessed using Work Keys administered by the community college with remediation done at the workforce development center, the company got better prepared applicants, thus reducing initial entry training cost while improving 1st year retention. The local technical school’s receive state-of-the-art learner based curriculum and staff development training. The BIG win is student’s have a clear pipeline from their high schools directly to full time jobs with the skills required to be successful. This program serves as a repeatable model with a compelling business case and positive return on investment.

Background

In the coming years, a combination of increasing demand for products and services in conjunction with retirements associated with an aging workforce and 1st year attrition rates will result in an increase in the number of personnel recruited, hired and trained at the company. The experience the company has gained through its recruiting, hiring and training program during the past two years showed that industrial age recruiting and hiring methods would not be sufficient to accommodate the projected increase demand for skilled employees. The company decided to develop a system to bring new personnel into the company that focused on finding the best candidates; hiring them efficiently; and ensuring that the new employee has the skills necessary to be a productive production worker. The company developed the “Pipelines” program to address these issues. The company leveraged existing organizations with State and Local Government agencies to actively engage their staff’s to support the effort. The company worked with local community colleges to test potential applicants to determine if the applicants had the necessary foundation skills required. Finally, the company worked with local Technical Schools to provide the job skills the company requires on the production line. In all, the company developed a holistic process for recruiting, hiring and training potential employees. The result has been a reduction in hiring cycle time; a better screening process for potential applicants; applicants who are trained in the skills the company needs; and most importantly new employees who have the skills to be successful in the workplace resulting in faster time to competency, improved first year retention, improved productivity, and decreased overhead costs associated with new hires.

Project Purpose. The company has over 18,000 employees predominately located in one location, manufacturing complex products with multi-year production schedules. The practice purpose was to systematically recruit, hire and train personnel. The overall goals were to improve the hourly hiring process; assess recruit aptitude with respect to the skills required in production; provide a realistic job preview during the hiring process; and identify areas where the applicant needs to receive additional training or education to become a productive worker. The company wanted to see positive results in the following areas:

– Improve Support to Production Labor Requirements by decreasing the hiring cycle time.

– Decrease Cost of Hiring

– Decrease Initial Entry Training Overhead Costs

– Increase 1st Year Retention Rates

– Improve EEOC Hiring Compliance

Implementation. The phase program implementation began in January 2003 with an analysis and strategic communications plan to ensure all the key stakeholders were aligned and resources allocated. The program is currently in Phase 5 or the second trial. As the program matured changes were made to take advantage of other programs and support agencies capabilities.

Employees Served by this practice. The company is conducting this program for the 5 basic trades and the Apprentice School which represent over 50% of the total workforce. Future plans include expanding the program to all hourly new hires. To date we have processed 3469 Applicants through the One-Stop. Of these, 3090 have taken the Work Keys. The company has received 3001 applications, interviewed 1285 and hired 922 personnel. Currently we are continuing to collect applicant flow data; measuring the time for each step in the hiring process; developing hiring Cycle Times; and capturing performance data on New Hires. In January of 2005 we will have enough data on attrition to draw conclusions as to the relationship between Work Keys scores, and 1st year attrition in order to refine our hiring process even more. Our goal is to provide interviewees with all the right aptitudes and attitudes focused on 1st year success and measured by job performance and attrition.

Resources committed. During the needs assessment approximately 15 company employees were involved as well as three outside consultants and four representatives from various supporting agencies. During the design phase the company provided Subject Matter Experts as required but most of the work was done by a cadre of 5 company representatives supported by three outside consultants and four representatives from various supporting agencies. During delivery approximately 20 employees were directly involved in some facet of implementations as well as a dedicated Program Management Team with approximately 15 representatives from various supporting agencies. The evaluation is ongoing and involves mostly three outside consultants and two representatives from various supporting agencies. Costs incurred have been mostly cost of the Work Keys tests and Program Management support. Cost of the Work Keys ($12.50 per test) have been $111,500. The cost of other support has been $100,000. Future costs will remain relatively stable with the most expensive aspect of this program being the cost to administer the tests.

Bottom Line. This practice provides an example of a state-of-the-art program that integrates multiple agencies in support of one goal – placing the right person in the right job. It provides an example of how industry needs to clearly identify requirements and then communicate these requirements to applicants and support agencies. This practice is set apart from other similar practices by the breadth of the process – it begins with the identification of the potential applicant and focuses on finding the production job where they will succeed. It provides a win for the applicant, for the supporting agencies, and for industry.

Needs Identification:
1. The practice began with generation of the labor needs by the production leadership. Because of the growth of the business, the hiring needs continue to grow over the next decade. Given that hiring pattern and increasing frustration with finding and retaining quality hourly employees the project began with a detailed analysis of the current program and the generation of alternatives to systematically build a process to solve the recruiting and retention issues for the long term. Recruiting quality applicants was the first step. The company chose to work with the local Vocational Schools, the State Employment Commission, and the One-Stop facility to assist in recruiting. Applicants were provided two ways of entering the company. For individuals who were in Vocational School programs the Company provided training materials (Computer Based Courseware, welding materials, etc.) to the technical school instructors allowing the students to train to the same standards as initial entry training in the company. This allowed company representatives to observe the students in class, assist in developing their skill set, and identify the candidates for employment with the best job skills. This is the pipeline that was established directly from the Vocational Schools to the Workplace. The second pipeline was established to the local Employment Services offices. This provided the company a means of recruiting using the services of the One-Stop to screen potential applicants prior to involvement of the company. The company developed Realistic Job Previews for each of the Trades and had the One Stop show them to each applicant. The Realistic Job preview provided applicants an overview of the positive and negative aspects of each Trade, allowing the applicant to self-select out. If the applicant decided to continue to pursue employment, the One-Stop assisted in filling out the application and administered Work Keys® to all applicants in these Trades. After a six-month independent analysis was conducted to select the best screening tools, Work Keys® tests was selected as an applicant screening tool. Using these tests ensured that the hiring process was compliant with all relevant legal requirements for hiring new personnel. But more importantly, the use of these tests allowed the company to directly link pre-hire testing to production requirements. The company used Work Keys® in five Trades (Welders, Shipfitters, Electricians, Machinists, and Pipefitters). Prior to introduction of the tests the company had the local Community College conduct a Work Keys® Profile of the five Trades chosen for the study. Each of these profiles established skill levels that aided in targeting the training needs and personal development of employees in these positions. Two separate panels of 8 SME’s each, whose tenure with the company ranged from 2 to 39 years, participated in the sessions. Tasks most critical to the job were determined and on-the-job behaviors associated with skill levels were identified. These veterans reviewed the Work Keys ® skills in order to determine the requirements for the effective performance of their job. The linkage of pre-hire testing to post-hire performance was critical to this practice.

2. Internal to the company, the hiring process was examined and changes were implemented to reduce the time required to bring the employee into the company. Internal training practices were linked with the hiring process and production requirements to develop a system that had connectivity from recruiting through production.

Traditionally hiring into the company has required very little effort. As requirements were created jobs were advertised and qualified applicants appeared on the doorstep. This is no longer the case. The demographics of the applicant pool significantly changed. There is no longer a large pool of potential employees who have experience working with their hands. Getting applicants in the door is no longer easy – there are many other companies competing for applicants with good job skills. In particular, the following statistics indicated there was a potential problem:

· In 2001, the company hired 1,501 new production and maintenance personnel, and in 2002, the company hired an additional 1,344 new hourly employees. Projected hiring profiles for follow on years indicated that this level of hiring would continue through 2007.

· In 2001, the controllable attrition rate for production and maintenance personnel increased to 9.9%, and further increased to 12.4% in 2002. Based on exit interview data, the main cause of the increased attrition rates was turnover with newly hired employees. Attrition among new hires was as high as 40% in some Trades during the first year of employment.

· The experience gained by the company with its 2001 and 2002 recruiting and hiring program indicated it takes approximately 100 applications to obtain 10 meaningful interviews that lead to one actual new hire.

· After two years of intense advertising and recruiting, the company has essentially exhausted the local area labor market. In addition, the unemployment rate for local area remains steady at a relatively low rate of approximately 4%.

Recognizing this situation the company determined that conducting business as usual was no longer going to meet our hiring needs. The company chose to aggressively develop pipelines to school systems and local Employment Services. This response was deemed appropriate due to the fact that we have no option to cut production if we have to reduce the workforce. The company’s products are large government construction projects linked to National timelines. Because of this we must maintain a workforce able to support the work load. This means that changes to the recruiting, hiring, and training processes were required.

Design Values

Once the two end points were established the process was broken down to components – screening, hiring, orientation, training, etc. Each of these components was linked back to the production skills required – if there was no production requirement for a particular process it was eliminated. If there was a production requirement the component was examined in detail and modernized. This practice serves the best interest of the potential applicant by providing a consistent, fair, and well mapped hiring process. Company expectations are very well identified and promulgated to all applicants. Applicants are provided the opportunity to test their knowledge and skills using industry-accepted testing tools. If the applicant does not achieve the score they desire they are directed to remediation programs within the same facility as the testing. This provides a single location for the applicant to receive all services.

Alignment:
3. The practice aligns with multiple stakeholder goals; the goals of the applicant is to get a job; State and Local Government agencies is to find employment for applicants; the company is hiring employees with skills required in production jobs.

4. This practice integrates training programs together to form a continuum of learning. It begins with the student in Vocational Training in the local Technical Schools. The schools have adopted the same curriculum that is used in the training programs within the company. The Computer Based Training is exactly the same training as they will see when they arrive at the company for initial training. Their instructors are supported by company instructors and receive training from the company on techniques and procedures required by production. The practice first establishes the reading and math skills necessary to work in each of the Trades. Then these skills are assessed using a nationally accepted testing instrument. This assessment is then compared to the production requirements. If the applicant meets the requirements they continue in the hiring process. If the applicant does not meet the requirement remediation is available in the testing location.

5. Partnerships have formed both within and outside of the company. Within the company the examination of the process has linked many organizations that heretofore have had little connectivity. An example of this is the improved linkage between Human Resources, Training, and Production. Senior management has used this practice as an example of breaking stovepipes and has discussed expansion of certain aspects of the practice to other sectors of the company. The union looks at this program as a way to ensure that employees have the necessary skills to stay employed. The company has worked with the union to ensure that this program is seen as an effort to bring on employees who will be able to be long term contributors to the team. External to the company the relationship with Schools, State and Local Government agencies, and consultants has developed into a network of linked objectives.

Key to the alignment process is the Program Management function. Successful implementation required a dedicated Program Management Team that using the Systems Approach developed a detailed Plan of Action and Milestones with embedded metrics to ensure all the stakeholders value propositions were constantly aligned and reviewed on a regular basis. Key to this alignment was the formation of an Executive Review Board that met monthly to review program progress, identify issues, review alternatives, and allocate resources to ensure program success. A synopsis of the project plan of action and milestones follows:

Phase 1: Analysis and Understanding (April 30 – May 14, 2003). Developed current state hiring model and identified potential improvement projects. Developed ROI predictions for each of the alternative solutions.

Phase 2: Definition, Design, and Development (May 15 – June 14, 2003). Developed and implemented with full documentation the future state model including the Program Plan of Action and Milestones with Resource Requirements

Phase 3: Pilot Testing (June 15). Ran a “Proof of Process” test with Welding Students from a local Vocational School.

Phase 4: Trial #1 (June 16, 2003 – April 9, 2004). Began the first trial with new hires from 3 Key Skills: welders, electricians, and pipefitters. Administered 4 basic Work Keys (Applied Math, Locating Information, Reading for Information, Applied Technology) to each applicant.

Phase 5: Trial #2 (April 12, 2004 – January 31, 2005). Added 2 Trades – shipfitters and outside mechanics. Changed the process to administer two Work Keys (Applied Math, Reading for Information)

Phase 6 – n. (February 1, 2005 – TBD) Continuously improving the system to account for business changes and the workforce. Created and Executive review Board and hold monthly Program Reviews to monitor program progress, identify issues, present resolution alternatives, allocate resources, implement improvements.

Evaluation Strategy
6. Evaluated occurs on many levels. The Data Capture Plan Objectives were as follows:

1. Obtain data on the flow of applicants.

2. Obtain data that shows effect of intervention on NGNN Hiring costs.

3. Obtain data relating the results of the Work Keys Assessment to actual results in the workplace (Time to Competency and 1st Year Retention).

Objective One: Flow Data. The purpose was to monitor applicant flow so each agency can have a common data pool to use in developing reports and identify any choke points or other issues. The following data was collected on a weekly basis

Objective Two: Cycle Time Data. The purpose of Objective two was to capture the processing time for the applications at each stage. Data capture involved touch time as well as step cycle time. There were two methods for collecting this data:

1. For processes which happen frequently and have predictable time durations (e.g. initial applicant in processing) we used a standard time period. These times were observed by the ROI Data Collection person and verified by the Heads of the various sections.

2. For processes which vary in duration (e.g. Applicant interview) actual times were recorded on the routing sheets. Dated start times, and end times were annotated by the person completing the action.

Cycle time looked at how long the process took. Start dates and end dates of the steps of the various processes were analyzed to determine how long it took the Applicant to clear each major step. Cycle time is reported on a monthly basis. Cycle Time to date is depicted below:

Objective Three: Work Keys Assessment. Work Keys is a nationally accepted program and was implemented to replace the old paper based pre-hire test thereby improving EEOC compliance. Also, Objective Three evaluates the effectiveness of the Work Keys in predicting performance in terms of Increase Recruit/Employee Retention.

Tracking began once an Applicant was hired and placed in initial training for his/her Trade. The student was tracked by SSN and personnel number. Washouts, terminations, and resignations were monitored on a weekly basis. Student time to train data in the company training programs was used to measure performance. This time to train data was compared to historic norms to determine if the Applicant/Employee was in the Fast, Average, or Slow range. The projects overall data schema is represented in the following diagram and shows the comprehensive, “end to end” nature of the program scope and the multiple stakeholders need for performance data.

7. Impact

Objective One: ROI on the new Process. Using the numbers captured in the flow monitoring process, a model was developed to determine the total cost to hire. A baseline was developed using the Lean event Current State model and the hiring numbers during 2002 giving a cost to hire each employee of $1230. To date the company has hired 922 people. Savings from improvements in the hiring process of these people alone is approximately $441,638. This is a conservative estimate in that it includes the costs of only those people who were hired – the savings in processing time for personnel hired were not included. The costs for this program were $111,500 to pay for the Work Keys and $100,000 cost for Program Support, Data Capture, and Analysis – net of $211,500 in costs. This gives us 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

The results of the analysis is 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). This increased the speed that new hires could be provided to the Trades and thus Improved Support to Trades Labor Requirements, the first goal of the hypothesis.

Objective Three: Work Keys.

As stated above, the analysis of employee performance is not yet complete as of the date of this report. However, we are collecting data and analyzing results. A database was created that captures Work Keys data on new hires. The data was collected from June 2003 to August 2004. The database is updated monthly using information provided by Human Resources. Also in the database is the following demographic data:

· Trade codes that indicate the jobs of the employees

· Hire/Training start dates

· On-the-job start dates

· Training achievement data only where available.

· Turnover indications (no turnover--still employed; voluntary turnover; involuntary turnover)

Path Forward. For this report there are no conclusions to be drawn on the justification and recommendations answering the question: “Is the Work Keys Assessment System a valid assessment tool for hourly hiring?” By Jun 2005 we will have a comprehensive database with analysis to determine those relationships. The key issue we will be addressing in the coming months is linking On-the-Job performance to Work Keys to see if there is a correlation.

Technical School Graduate Performance. We also tracked the performance of the graduates of the Technical School program during their initial training in the Welding School. We had conducted a comprehensive study of time-to-train on each individual training task during initial training and we used this as a baseline to compare the performance of the graduates of the Modernized Technical School Program with the performance of average welding students. The results showed a 25% reduction in time-to-train as depicted in the following chart:

The top line represents the results from the sample group, personnel who were brought into the company with no pre-training. The lower line shows the results of the personnel who were trained using the company’s training materials prior to hiring.

8. Impact of the practice on the organization. The practice improved the ability of the One-Stop to respond to the needs of other companies in the area. By forging a path our company has provided an example that others can emulate. The practice improved the responsiveness of the corporate Human Resource process to Production requirements. We have been able to reduce costs to hire, reduce time to hire, and obtain a clearer picture of the capabilities of the applicant to hiring foremen. We have improved the hiring experience for the applicant. There is a clear path with defined milestones for the applicant to follow. The applicant receives an assessment that they can use to create a personal development plan to correct any shortcomings in training and education. The applicant is also exposed to a Realistic Job Preview early in the process allowing them to make an informed decision as to whether they want to apply for the job. The Training organizations have been positively impacted. Spin-offs of the process changes have improved evaluation techniques and reduced time-to-train. Production has been positively impacted. Foremen are receiving personnel from the Training base who have the skills necessary to be productive workers. Anecdotally this was illustrated by the comments of one foreman when asked how the new personnel were doing. He replied that he would rather receive a new hire from the training base than a transfer from another area of the company. The new person had all the right skills and none of the bad habits.

All these impacts are long term. This project has been operating for over one year. There have been continuous improvements throughout the program and we anticipate these positive changes will continue. This is no longer a program that is being “done to” people. Personnel in the One-Stop, HR, Training, and Production have recognized the value of this practice and are continuing on their own to improve it.

Shared Learning
9. Specific lessons learned from designing and implementing this practice for the purposes of continuous improvement.

a. 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.

b. Program success is a “team sport”. It requires a dedicated program management team and support from each of the key leaders involved.

c. 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.”

d. It is industries responsibility to clearly articulate its needs to school and workforce development programs not schools and workforce development programs guessing on what they need.

e. 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.

f. 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.

g. This process will be transferred and replicated internally within the company. 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.

h. The program is repeatable by other businesses in the community. We do not see other’s 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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