Problem

By Hank O'Roark

If one in five U.S. high school students has trouble reading a diploma, what does that mean for the workforce that awaits? Undoubtedly, it signifies a countrywide need for remedial skills training at all levels. And if measured in terms of financial interest, it means literacy problems cost corporate America about $60 billion a year in lost productivity, according to the National Institute for Literacy.



Check with any illiteracy study or group and the stats come out about the same. The International Adult Literacy Survey conducted recently by the Organization of Economic Cooperation and Development (a worldwide group comprising 30 member countries, including the United States., which provides governments a setting in which to discuss, develop and perfect economic and social policy), reveals that 50 percent of the U.S. population reads below the eighth-grade level, and about 90 million adults are functionally illiterate.



The American Management Association characterizes workplace literacy as the ability to read instructions, write reports, and/or do arithmetic at a level adequate to perform common workplace tasks. "No matter how sophisticated the task, people need to be able to read and write, period," says Ellen Bayer, global human resources practice leader for the ama, New York. "Even in an economic downturn there is a need for quality work on all levels.



So workplace illiteracy is a serious concern. The long-term impact—if we don't address the issue—is that we're going to end up with more and more marginalized people, and companies less and less able to compete because they can't find a qualified workforce."



So what are companies doing to address the issue? Surprisingly, most are doing nothing: Only 13 percent offer remedial training to employees in literacy and math, down from a high of 24 percent in 1993, according to an ama study released last year. But the lowered investment runs counter to what the companies are finding in applicants: The same study found that 38 percent of job applicants lacked the necessary reading, writing and math skills to do the jobs they sought, which is a whopping 15 percent increase in the past two years alone.



For the companies that do address literacy, the approach seems to be a multi-tiered one. Some, after discovering a basic skills gap within their workforce, offer remedial training. Others are willing to hire skills-lacking employees from the get-go, then fill in the gaps through workplace training, an approach that ama's Bayer describes as "good corporate citizenry." And finally, some companies address the issue on a societal level—reaching into communities to help schools and nonprofit organizations better educate skills-lacking students and unemployed adults, all of whom represent, of course, the untapped workforce.



In-House Training



Changes in the organization of manufacturing work have increased the demand for solid literacy skills in recent years. When firearms maker Smith and Wesson, for example, began to reorganize its production operations a few years ago, it realized that a deficiency in the basic skills levels of some employees made job duty juggling even more difficult. So the company took a proactive approach and immediately began to address the problem with new initiatives. This led to a five-year training program that ended just last year with, by all accounts, a satisfied company and an improved workforce.



Springfield, Mass.-based Smith and Wesson had been using the University of Massachusetts since the late 1980s as a source for remedial skills and English as a second language (esl) training. But in 1996, with the company's production work diversifying, it needed to intensify its skills training initiatives.



"We needed something more formal and aggressive," says Bob Pion, director of training for Smith and Wesson. "So we turned to a professional organization dedicated to skills issues." Enter Workplace Education Group, South Hadley, Mass., to advise Smith and Wesson on the range of training needs its workforce required.



"Bob had been beating the literacy drum for years at S and W, and the time was right for them to bring in outside help," says Henry O'Roark, president of the Workplace Education Group. "[The diversified production process meant] the company really needed its people to be more flexible in job duties."



Phase one of the initiative was to assess each job task and its correlating required skill level. As Smith and Wesson's production continued to evolve, some plant employees, for example, suddenly had to interpret process sheets and operate within a team-based tqm environment. In its assessment, the Workplace Group identified three primary needs to make this possible: higher math skills for understanding numerical control equipment; better reading and writing skills; and better oral communication skills for interaction on the factory floor.



A literacy audit showed that employees needed to have at least an eighth-grade reading level to do typical workplace tasks. And, as reflected in national statistics, many of the production floor's 676 non-degreed workers fell below that level.



The next step for Smith and Wesson involved the delicate matter of determining which of those 676 employees actually needed help. To alleviate workers' concerns over privacy and standards, the Workplace Education Group administered tests with a guarantee of confidentiality and with scores sent directly to employees' homes. About 30 percent of the group scored below eighth-grade levels in either reading or math. Employees who fell into that category were assured they would not lose their jobs, but would be expected to take basic skills classes, paid for by the company and provided on company time.



"No one was strong-armed to participate," says Pion, "But some were reluctant or felt picked on and asked not to take part." Most who hesitated were quickly convinced by both a constant dialogue with management, who gave regular presentations on the business benefits, and by peers, many of whom were eager to improve their skills and ability to move up within the organization.



In the first round of classes, 70 percent of class attendees brought their math or reading skills up to the target level. In response to a company survey, the employees listed the positive effects of the training, noting a greater ease in writing and reading charts, graphs and bulletin boards, increased abilities to use fractions and decimals, better overall communication and a significant increase in confidence.



When it saw the numbers on skills improvement, Smith and Wesson continued to budget for year-round basic skills classes until last year. And as for companywide benefits, it knew that an improved workforce meant improved productivity. "Management was very pleased," notes O'Roark. "One manager told me it's the best thing the company has ever done in terms of training."



"Management gave its full support," adds Pion. "HR didn't need to prove or justify the training. The value was so self-evident that we didn't need to quantify productivity numbers or improvements. And it's too hard to isolate out numbers for productivity gains—it's obvious and commonsensical, and either management is committed to it or it's not. We did not have to justify our existence."



Smith and Wesson falls into the small percentage of companies that are willing to retrain current employees on remedial skills. It knows that some of the most pronounced levels of basic skills deficiency, according to the ama's study, are in the manufacturing sector, second only to the wholesale/retail industry, so it knew a call to action was needed.



"As with Smith and Wesson, some companies say things like 'Why are we wasting time on teamwork training when many employees can't even read the book?' " explains O'Roark. "Literacy training is a touchy business, but it's the foundation upon which all other training depends."



Ohio Manufactures Training



Similar workforce development initiatives have been going on across the state of Ohio, where a state business group, the Work in Northeast Ohio Council, sponsored a study of remedial skills training in various manufacturing companies. In 1997, the council hired North Coast Education Services, a regional organization that specializes in basic skills training, to evaluate the productivity gains in nine companies over an 18-month period.



When North Coast set out to quantify just how basic skills issues affect a company's bottom line, the local companies' reluctance to take part reflected the general lack of attention paid to such issues. "It took a year to get the nine companies involved just to agree to take part," says Carole Richards, executive director of North Coast, Chagrin Falls, Ohio. "Ironically, companies have to be educated on the remedial skills training process. This takes time, but it's essential."



Once the companies were on board, Richards' group began analyzing the skills of the companies' production workers. Out of 409 individualized, confidential assessments, the group recommended communications training for 208 employees and math training for 256. North Coast then ran company- and job-specific training courses, which included two hours of classroom sessions twice a week at each company, with each session lasting 12 weeks. Classes focused on communications (reading and writing) and math, but were always connected to specific jobs and tasks.



"For each company, we customized what skills were required for the jobs there," explains Richards. Classes in the study included a broad range, from administrative, math, shop and basic accounting to blueprint reading, business writing and esl. Reading and writing skills were grouped into the general communications category so workers would feel comfortable about attending those classes.



"This type of training is a very sensitive issue," notes Richards. "Workers cannot feel threatened or condescended."



The end results? Almost 70 percent of workers reported math and/or reading improvements. They noted improved work accuracy, more confidence, a greater sense of company loyalty and, in the end, a more efficient workday. Supervisors observed a greater openness to change among employees, a general attitude improvement in teamwork, and identified broader options for promotion.



Many of the companies themselves also tracked specific job productivity, and the bottom line impact was apparent. At Zircoa, a manufacturer of nonclay refractories in Solon, Ohio, the company measured the productivity of 10 individual workers and the profits they created as related to their job duties. After remedial skills training, the total profit from these 10 workers jumped from $14,000 to $75,000. Marine Mechanical, a Euclid, Ohio-based supplier of propulsion systems, tracked specific machine-related productivity levels during its training programs. The result: a 60 percent decline in parts deviations.



Although for confidentiality reasons, the study mostly lists these benefits without attributing them to a specific company or worker, it notes that one company reported improved attendance and decreased workers' comp claims. Two others indicated that scrap and waste levels fell after the training. And one reported that its cost of scrap declined from $256,900 to $168,200 after just one year of training.



The North Coast study provides six suggestions for implementing this type of training in the workplace: companywide orientation should be provided to reduce resistance and generate support; supervisors should meet with basic skills instructors; training needs to be flexible and company specific; class content must relate to specific job activities; classes should be organized by ability level; and training is best offered at the beginning or end of work shift, not in the middle.



Though end results help prove the value of remedial skills training, many companies fear the loss of productivity and time associated with classroom sessions. Therefore, according to North Coast's Richards, top management has to support the training. "Leaders have to believe in it, and if they do, they will drive it. The companies that do it can't understand why others don't," she says. "But our real focus at the end of this study is: Can they do their jobs better?" The answer appears to be a resounding "yes."



The Need For Government Initiatives



While individual companies are often forced to address the basic skills gaps, so too are entire states in need of initiatives to address the issue and its resulting effect on economic health. The state of Massachusetts, for example, recently determined that more than one-third of its 3.2 million workers are ill-equipped to meet the demands of a rapidly changing economy. Of that one-third, many have high school diplomas but still lack basic math, reading, writing and analytical skills at the appropriate workplace level, according to a report by nonprofit think-tank, The Massachusetts Institute for a New Commonwealth (massinc).



"The main literacy problem of workers in this state is not that of illiteracy in the traditional sense," as coauthors John Comings and Andrew Sum stated in the report. "Instead, it is a problem of limited skills that restrict workers' ability to take on the complicated duties that are required in varying degrees of all workers in the New Economy."



Released in January, the massinc report uses a new literacy standard, one now adopted by many labor market experts. While the older, narrower definition of literacy merely required an ability to write a signature or read words, the new standard uses the example of a production worker who cannot adjust the controls of an assembly machine by identifying two pieces of data from a simple bar graph—that worker is classified as insufficiently literate. Based on this standard, Massachusetts found that a large portion of its workforce doesn't have the necessary skills level. Compounding this is a pool of 195,000 immigrant workers with extremely limited English language proficiency.



To address the issue, massinc recommends that Massachusetts do what other states in similar circumstances will likely have to do: expand its adult education programs, and encourage strategic alliances between government, business, unions and nonprofits to improve remedial skills education. Despite increases in state funding in recent years, the state has long waiting lists for ged and esl classes, ranging anywhere from 8,000 to 16,000 people annually who, in some cases, wait longer than a year for the classes.



To fund this remedial education initiative, massinc proposes an increase in state funding as well as the establishment of a $22 million Basic Skills Training tax credit that would encourage corporations to enroll employees in local developmental classes. It also promotes a 30 percent tax credit for investment in worker education programs at the company level.



Initiatives such as the statewide massinc study, or smaller-scale ones such as in Northeast Ohio, all point to a growing national acknowledgment of workplace literacy issues. The first step in addressing the issue requires the creation of awareness. And the second step requires commitment, whether from individual companies, regions, or government, which then have to provide the programs and the resources—without these, America's $60 billion problem will only worsen.