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WORKFORCE BRIEF # 4
Prepared by the National Alliance of Business
BASIC WORKPLACE SKILLS:
The Foundation for Productivity Improvement
INTRODUCTION
The competitive pressures of our increasingly global economy
are forcing American firms to change the way they operate in order
to be more productive. These changes in the ways firms do business
frequently require more from workers than was needed in the past.
Today firms need workers who not only are able to read, write,
speak, and understand English, but who also have mathematics,
problem solving, and interpersonal skills.
************************************************************
* "Like many employers, Circuit City has, in fact, *
* eliminated or sharply reduced most of its low-skilled *
* jobs. . . Most of the remaining non-sales personnel *
* are focused on returns, exchanges, and customer *
* satisfaction, all of which require good communications, *
* critical thinking, and interpersonal skills." *
* *
* Alan L. Wurtzel *
* Vice Chairman, Circuit City Stores, Inc. *
* Congressional Testimony, February 1995 *
************************************************************
And, it is not just this array of skills that is important; it
is also their level. Increasingly, workers must be able to
integrate or synthesize information from complex or lengthy texts or
documents, and conceptualize and perform multi-step mathematical
tasks. This expanded set and higher level of skills now constitute
"basic workplace skills" -- skills that are needed as the foundation
for almost all productive work, and the foundation for almost all
productivity improvement efforts.
Most company improvement efforts, however, tend to overlook
basic workplace skills as the foundation for successful change.
This Workplace Brief will show that:
* The level of employees' basic workplace skills has a direct
impact on company productivity and a company's ability to adopt
needed workplace changes. Low skill levels limit productivity
and constrain change, while high skill levels augment
productivity and bolster change efforts.
* Just as low basic workplace skills can have a negative impact on
company productivity, programs to build these skills can have a
positive impact on productivity and a firm's ability t
undertake more comprehensive improvement strategies.
* Most studies indicate that about 20 percent of America's workers
have low basic workplace skills. Improving employees' basic
workplace skills isn't some other company's problem, it's every
company's problem.
* Investing in the development of employees' basic workplace
skills does not have to be difficult. There are many programs
and resources companies can tap into for assistance.
IMPACT OF LOW BASIC SKILLS
Many employers realize the negative impact poor basic workplace
skills can have on a firm's economic performance. When asked the
connection between employee skills and productivity, employers
surveyed for a 1993 W.E. Upjohn Institute study contended that basic
skills were highly linked to productivity.
Among companies participating in a 1982 Center for Public
Resources Survey of Basic Skills in the U.S. Workforce:
* 30 percent reported secretaries having difficulty reading at
the level required by the job;
* 50 percent reported managers and supervisors unable to write
paragraphs free of grammatical errors; and
* 50 percent reported skilled and semi-skilled employees,
including bookkeepers, unable to use decimals and fractions
in math problems.
In the same survey, companies told stories of workers killed
because of their inability to read warning signs, workers making
costly mistakes because they couldn't understand correspondence, and
workers losing time on the job because they had to be "physically"
instructed in how to use machinery due to their inability to read
instruction manuals. While the survey is somewhat dated, if
anything, skill requirements have increased since it appeared.
Not only do poor skills affect a firm's current economic
performance, they also limit a firm's ability to make productivity
improvements. Companies bringing in new, complex technologies need
workers who can read and follow complicated instruction manuals.
Those adopting statistical process control techniques need workers
with a basic understanding of statistics and probability. And
companies shifting to team-based management and production require
employees with good communication skills.
These connections between productivity improvements and basic
workplace skills are recognized by many employers. A 1991 survey
conducted by the National Association of Manufacturers found that 40
percent of the manufacturing executives questioned attributed their
company's inability to upgrade technologically to worker
deficiencies in literacy and basic skills, 37 percent said
inadequate employee skills hampered their efforts to improve
productivity, and 30 percent said they couldn't reorganize their
workplace because their "employees cannot learn new tasks." Basic
workplace skills are not just important in their own right, they are
important as a foundation for a firm's other productivity
improvement efforts.
************************************************************
* Consequences of Low Basic Skills *
* *
* - In a large urban bank, managers discovered that a *
* major reason for low productivity among the *
* secretarial and clerical staff was the fact that *
* 70 percent of dictated correspondence had to be *
* redone at least once because of spelling and *
* grammatical errors. *
* *
* - In a major manufacturing company, one employee who *
* didn't know how to read a ruler mismeasured yards of *
* steel sheet, wasting almost $700 worth of material *
* in one morning. *
* *
* - The same manufacturing company invested heavily in *
* equipment to regulate inventories and production *
* schedules. Unfortunately, the workers were unable to *
* enter numbers accurately, which destroyed inventory *
* records and resulted in production orders for the *
* wrong products. Correcting the errors cost the *
* company millions of dollars and wiped out any savings *
* projected as a result of the new automation. *
* *
* The Bottom Line: Basic Skills in the Workplace *
* U.S. Departments of Labor and Education *
************************************************************
BENEFITS OF BASIC SKILLS PROGRAMS
Although some employers realize the link between employees'
basic skills and their firm's ability to adopt productivity
improvements, many still ignore the importance of basic workplace
skills training in improving competitiveness. When companies search
for ways to improve their bottom lines, they usually focus on
adopting new technologies, reorganizing work, or providing training
in technical or work process skills. They tend to either assume
their employees have needed basic skills or to ignore basic skills
problems because "basic skills training is not a company
responsibility."
Such thinking, however, is shortsighted. Basic workplace
skills programs improve company productivity and support the
successful implementation of other productivity improvement efforts.
The Upjohn Institute estimated that basic skills program
participation may enhance employees' productivity . . . by 10 to 20
percent.
A 1992 Southport Institute for Policy Analysis study found that
programs in basic workplace skills improve both employees' attitudes
and behaviors, and firms' bottom lines. The small and mid-sized
companies it surveyed reported improvements in workers' motivation,
self-esteem, willingness to take responsibility, teamwork, and
communication and problem solving abilities. They also reported
lower turnover rates and improvements in quality and productivity.
In a 1992 study, Mikulecky and Lloyd found that basic workplace
skills training resulted in:
* More instances of employees using reading and writing on
the job;
* Higher employee participation in job meetings;
* Employees asking more questions and making more suggestions
at work;
* Improvements in job attendance and safety; and
* Significant gains in supervisory ratings.
Data also exist to support the contention that programs in
basic workplace skills enhance companies' other workplace
improvement efforts. The Southport Institute study found that firms
that invest in workplace education benefit more from new technology
and reorganization of work than do firms that do not include a basic
education component in their quality programs.
Basic workplace skills programs are a good value. The Upjohn
Institute noted that nearly all of the firms in its study believed
that the benefits of their basic workplace skills programs
compensated for their costs. It is clear: basic workplace skills
training is not just an employee benefit, it is a sound investment
strategy.
EXTENT OF LOW SKILLS
No employer can afford to assume he or she does not have a
basic workplace skills problem. By some estimates, 20 percent of
current workers have low skills, by others, the number is nearly 40
percent.
A 1995 National Employer Survey conducted by the National
Center on the Educational Quality of the Workforce found that, on
average, employers considered only 80 percent of their workers to be
proficient at their jobs. Thirty-two percent of employers thought
that 75 percent or less of their employees were proficient at their
jobs. Only 19 percent of employers thought their percentage of
proficient employees was greater than 95 percent.
Other research confirms that employees with low skills are not
confined to a small percentage of workplaces. Over half of the
small to mid-sized companies surveyed for the Southport Institute
study indicated that they had skills problems that would merit basic
skills programs.
The National Adult Literacy Survey (NALS), a large-scale,
national survey of adult literacy released in 1993, found that 14 to
16 percent of our nation's labor force have very low "prose,"
"document," and "quantitative" skills, and an additional 24 to 28
percent have skills that are only marginally better.
Workers in the lowest skill group range from those having
almost no basic skills at all, to those only able to handle such
simple tasks as totaling an entry on a deposit slip, locating the
time or place of a meeting on a form, and identifying a piece of
specific information in a brief news article. Those workers
categorized as having slightly higher basic skills can handle tasks
like calculating the total cost of a purchase, determining the
difference in price between two items, locating a particular
intersection on a street map, and entering background information on
a simple form.
Neither group has the reading and problem-solving skills
necessary for such complex tasks as integrating information from
relatively long or dense text or documents, and determining the
appropriate arithmetic operation based on information contained in a
directive, and identifying the quantities needed to perform that
operation.
When determining whether employees' skills come up short, it is
important to remember the fact that skill requirements are not
static. Skill needs ten years ago are not skill needs today, and
today's skill needs are likely to be outdated in a few short years
-- or even months. Longshoremen who once manually registered all of
the materials brought in and out of a port are using computers to
track shipments and calculate cargo space needs. An increasingly
sophisticated banking industry is reducing its numbers of tellers
and hiring more customer service representatives who must be
knowledgeable about a wide array of financial instruments.
It is projected that, in the future, the greatest job growth
will be in occupations with basic skill requirements considerably
above the mean for current workers. Employers should think about
preparing for that future now. Workers will need strong basic
workplace skills if they are to operate successfully in companies
adopting high performance work practices or installing new
technologies.
************************************************************
* Basic Skills Program Gains *
* *
* - Otto Engineering Inc. claims a 340 percent increase *
* in productivity since it launched its math and *
* English program in 1988. *
* *
* - Weber Metals reduced scrap from 20 to 2 percent, *
* reduced errors, and improved production reports and *
* communications after it provided classes in English *
* as a second language, math, spelling, computer *
* literacy, and GED preparation. *
* *
* - Wm. Dudek Manufacturing Company improved sales *
* volume, profit, work flow, and on-time deliveries *
* after it provided English as a second language and *
* math classes to its 30 employees. *
* *
* - A basic skills training program at Delta Wire *
* decreased nonconforming material from 6 or 7 percent *
* to 2 percent, increased productivity from 70,000 to *
* 90,000 pounds per week, and led to a "best in class" *
* award from Goodyear, its largest customer. *
* *
* "Training: The Case for Increased Investment" *
* Employment Relations Today *
************************************************************
WHERE TO START
Companies do not have to develop and deliver programs
themselves. There is help available. A variety of organizations are
skilled in developing, customizing, and delivering basic workplace
skills programs. Companies might look for help from:
* Community colleges;
* Adult education centers in school districts;
* Non-profit, community-based organizations;
* For-profit training firms; and
* Volunteer basic skills programs.
The better the quality of a basic workplace skills program, the
greater its benefits. Companies thinking of launching programs
should make sure that the programs:
* Link training objectives to company objectives;
* Teach basic skills in the context of workplace demands
and activities;
* Connect basic skills training to other workplace and
workforce initiatives;
* Encourage the transfer of skills learned in the classroom
back to the workplace;
* Tailor training to employee needs and facilitate employee
participation; and
* Employ highly skilled basic workplace skills providers.
Basic workplace skills programs are not expensive. For many
small and mid-sized companies, there is little expense beyond the
time involved in planning the program and releasing employees from
work to participate in classes. There are many ways that companies
can keep the costs of their basic skills programs low:
* The federal and many state governments offer grants to
subsidize the costs of basic workplace skills programs.
* Some states offer tax credits for basic workplace skills
programs.
* Many community colleges charge only the delivery costs
associated with their basic skills programs, effectively
underwriting all of the development costs.
* Some unions will share the costs of basic skills programs
with employers.
* Some volunteer basic skills programs will charge companies
only for the design and oversight associated with a basic
workplace skills program, and use their volunteers for delivery.
The following National Workforce Assistance Collaborative tools
might serve as a starting point for companies considering a basic
workplace skills program:
* Resource Guide - a listing of national membership organizations
and state program offices supporting workplace and workforce
changes in workplace literacy, employee training,
labor-management relations, and work restructuring;
* Workplace Literacy Publications - an annotated bibliography
of workplace literacy print resources;
* Workplace Literacy Product Checklist - a checklist companies
can use to determine whether particular workplace literacy
products follow best practice (available summer, 1995); and
* Workplace Literacy Interview Guide - an interview guide
companies can use to interview and select appropriate workplace
literacy service providers (available summer, 1995).
************************************************************
* Are You Likely to Have a Basic Workplace Skills Problem? *
* *
* - Individuals employed in the finance, insurance, and *
* real estate industries, and the public administration *
* sector have, on average, the highest levels of basic *
* skills. *
* *
* - Individuals employed in agriculture, construction, *
* manufacturing, and mining have, on average, the *
* lowest levels of skills. *
* *
* - Basic skills proficiencies are highest among *
* professional workers, managers, administrators, *
* and technical workers. *
* *
* - Basic skills are lowest among semi-skilled and *
* unskilled blue collar workers, and among farm, *
* forestry, and fishing workers. *
* *
* - A full 60 percent of front-line workers within the *
* goods producing industries cannot match information *
* in a text to a required task when some inference is *
* involved, cannot integrate information from several *
* documents, and cannot deal with complex tables *
* or graphs. *
* *
* National Adult Literacy Survey, 1993 *
************************************************************
FURTHER INFORMATION ON THE ISSUES PRESENTED IN THIS BRIEF CAN BE
OBTAINED FROM:
Bergman, Terri, "Training: The Case for Increased Investment,"
Employment Relations Today, Winter 1994/95.
Chisman, Forest P., The Missing Link: Workplace Education in Small
Business (Washington, DC: Southport Institute for Policy Analysis,
1992).
Educational Testing Service, Adult Literacy in America: A First
Look at the Results of the National Adult Literacy Survey
(Washington, DC: U.S. Department of Education, 1993).
Hollenbeck, Kevin, Classrooms in the Workplace (Kalamazoo, MI: W.E.
Upjohn Institute for Employment Research, 1993).
National Workforce Assistance Collaborative, Workforce Brief #2 -
Company Training: A Key Strategy for Success (Washington, DC:
National Alliance of Business, 1995)
U.S. Department of Labor and Education, The Bottom Line: Basic
Skills in the Workplace (Washington, DC: U.S. Department of Labor
and Education, 1988).
Terri Bergman 1995
The National Workforce Assistance Collaborative builds the capacity
of the service providers working with small and mid-sized companies
in order to help businesses adopt high-performance work practices,
become more competitive, and ultimately advance the well-being of
their employees. The Collaborative was created with a $650,000
cooperative agreement grant from the Department of Labor to the
National Alliance of Business. Current partners on the project
include the Council for Adult and Experiential Learning, the
Institute for the Study of Adult Literacy at The Pennsylvania State
University, the Maryland Center for Quality and Productivity, and
the National Labor-Management Association. The Collaborative
provides assistance in four areas: employee training, labor-
management relations, work restructuring, and workplace literacy.
For more information on the Collaborative, contact Bernice Jones at
the National Alliance of Business, 202/289-2915.
Bundles of 25 copies of this brief are available for $7.75 (includes
postage and handling) by contacting the National Alliance of
Business, Distribution, P.O. Box 501, Annapolis Junction, MD 20701,
phone: 1-800-787-7788, Fax: 301-206-9789.
.