Retraining Workers as Jobs Evolve

Source: Pixabay

The Wall Street Journal published an interesting article today by Austen Hufford titled, "Companies Ramp Up Worker-Retraining Efforts."  Hufford explains that many firms are struggling to find good people given the very tight labor market.  Moreover, many jobs have evolved due to technology innovation.  Thus, companies have invested in new initiatives to retrain workers for their emerging needs.  As an example, Louisiana-based Lamar Advertising is retraining workers accustomed to painting billboards to now repair digital billboards.  These digital displays only account for a tiny fraction of the company's billboards, yet they generate more than 20% of the firm's billboard revenue.  

How should firms think about launching worker-retraining initiaves?  First, I think that companies have to recognize that these investments, while perhaps quite substantial, often pale in comparison to the alternative.  Firms have to weigh the cost of retraining against the extraordinary expenses that they often must incur to recruit and onboard new talent.   In high employee turnover situations, the recruiting and onboarding costs can be astronomical.   Retraining often proves to be a worthwhile investment when judged in this way.   Second, retraining efforts often yield other substantial benefits.   For instance, organizations may find that employee engagement increases when people feel valued and have the opportunity to better themselves through retraining.  Third, investing in internal retraining efforts enables companies to customize their worker training, development, and education to suit their organization's specific needs.   Finding talent from the outside often means that firms rely on training that is quite general and does not meet their particular needs.   Finally, retraining efforts enable dedicated employees to share their newly developed skills with others.  As people master new skills, they can become the trainers for the next group of workers who enter training programs.   Sharing expertise in this manner often has two important benefits.  It reinforces the skills that one has learned, while offering a tremendous sense of satisfaction and pride for workers.   

Alumni & The Recruiting Process

Scholars Jason Greenberg and Roberto Fernandez have conducted an interesting new study about job searches and MBA recruiting. They studied approximately 600 students from a top MBA program over two years.  They conducted the research from a sociological perspective, comparing students who landed jobs through connecting with alumni at various companies (search through social networks) to those students who were hired through formal on-campus recruiting programs (formal search).   They refer to connections with alumni as weak ties (i.e., the students did not necessarily know the alumni prior to the search process; they connected with them through a variety of networking activities).  They found that MBAs are much more likely to accept a job offer landed through alumni networking than through formal on-campus recruiting processes.   That's true, even though the compensation tended to be higher from offers derived through on-campus recruiting programs.   Why is the networking so influential and effective?  Those conversations and connections help the students understand the growth potential associated with a particular job, and that proves to be very important to many talented students... more important than compensation perhaps.   Here's an excerpt from the abstract of the academic paper that the scholars published:   

We find that contrary to conventional wisdom, search through social networks typically results in job offers with lower total compensation (-17 percent for referrals through strong ties and -16 percent for referrals via weak ties vs. formal search). However, our models also show that students are considerably more likely to accept offers derived via weak ties. They do so because they are perceived to have greater growth potential and other non-pecuniary value. On balance, our tests are consistent with Granovetter’s argument that networks provide value by facilitating access to information that is otherwise difficult to obtain, rather than providing greater pecuniary compensation.

What's the implication of this study?   Greenberg puts it this way:  “Based on our findings, recruiters earn a higher ROI when spending time and money on facilitating connections between current employees and potential recruits from their alma mater.   Students look to and trust an alumnus from their school who ‘looks like them in three years’ to provide inside information about growth opportunities within the firm. And that powerful association is a huge influencer when it comes time to accept or reject a job offer.”

Locating Near Talent Pools

The Wall Street Journal writes today that firms are increasingly weighing availability of talent as they make location decisions.  Here's an excerpt:

Fifty years ago, companies opened new locations to be near lumber, copper, or resources needed for their businesses. “Today, people are the natural resources,” said Meredith Amdur, an analytics expert at advisory firm CEB. Facing a tight labor market and a shortage of skilled workers, many large companies say that a city or region’s population of desirable workers is now the top factor in location decisions.

The focus on talent makes a great deal of sense. However, I think firms have to think in terms of identifying areas where hidden gems might exist.  Yes, if you want programmers, you will find a great deal of talent in San Francisco.  However, you will be battling many top firms for that talent, and it will be pricey.  What if another city was home to some terrific universities, but it had a less competitive labor market?  Or, what if some less "prestigious" universities actually were producing great and somewhat underrated talent?  That's what I mean by finding the hidden gems.  

Insiders vs. Outsiders: Sweeping Generalizations Don't Make Sense

I read an interesting blog post this week on the HBR site.  The post consists of an interview with Harvard Professor Gautum Mukunda.   Here is an excerpt (video posted below as well):

The finding: The best leaders tend to be outsiders who don’t have a great deal of experience.
 
The research: Gautam Mukunda studied political, business, and military leaders, categorizing them into two groups: “filtered leaders,” insiders whose careers followed a normal progression; and “unfiltered leaders,” who either were outsiders with little experience or got their jobs through fluke circumstances. He then compared the groups’ effectiveness; for instance, with U.S. presidents, he looked at historians’ rankings from the past 60 years. He discovered that the unfiltered leaders were the most effective—and also the least effective—while highly filtered leaders landed in the middle of the pack. 
 
The challenge: Is searching for a leader with a long, impressive résumé a waste of time? Is experience a predictor of mediocre performance? Professor Mukunda, defend your research.
 
Mukunda: I was surprised by how unambiguous the data were, but they confirmed what I suspected: If you choose an insider who you know can do the job well, most of the time that person won’t perform any differently from any other top candidate with lots of experience. Such insiders—I call them “filtered leaders”—might be good, but they probably won’t be brilliant. It’s the unfiltered leaders, the outsiders without lots of experience, who perform the very best.

I'm highly skeptical of such a sweeping generalization.  I don't think we can argue that outsiders are ALWAYS preferable to insiders, that unfiltered folks are always preferable to experienced individuals.    The bottom line is: It depends!  Certain circumstances call for an outsider or a person with fresh perspective, while others lend themselves to an insider or someone with deep experience in an industry or company. Each company needs to assess its situation and make the right choice for that organization, given its strategy and culture, AT THAT POINT IN TIME.  The right solution for Company XYZ in 2012 may not make sense in 2018, as conditions change.   Moreover, the search for that superstar outsider can be a futile one, as I've written about in earlier blog posts.  We sometimes become enamored with the outside "star" hire... and then feel very underwhelmed a few years later.  

The 10,000 Hours Misconception: Practice vs. Talent

Professors David Z. Hambrick and Elizabeth J. Meinz wrote a good article in the New York Times this weekend about the "10,000 hours" concept popularized by Malcolm Gladwell.   Actually, the idea of experts achieving world class status through 10,000 hours of practice comes from the excellent work of Florida State University Professor K. Anders Ericsson and his colleagues.  They have studied how world class violinists, chess players, athletes, and the like engage in deliberate practice to enhance their skills.  Ericsson has found that top people in these fields tend to engage in at least 10,000 hours of deliberate practice during their formative years.

Some people have interpreted this work to mean that talent doesn't matter much, that somehow one can become world class simply through hard work.   Here is how Hambrick and Meinz counter that conventional wisdom:

Research has shown that intellectual ability matters for success in many fields — and not just up to a point.  Exhibit A is a landmark study of intellectually precocious youths directed by the Vanderbilt University researchers David Lubinski and Camilla Benbow. They and their colleagues tracked the educational and occupational accomplishments of more than 2,000 people who as part of a youth talent search scored in the top 1 percent on the SAT by the age of 13. (Scores on the SAT correlate so highly with I.Q. that the psychologist Howard Gardner described it as a “thinly disguised” intelligence test.) The remarkable finding of their study is that, compared with the participants who were “only” in the 99.1 percentile for intellectual ability at age 12, those who were in the 99.9 percentile — the profoundly gifted — were between three and five times more likely to go on to earn a doctorate, secure a patent, publish an article in a scientific journal or publish a literary work. A high level of intellectual ability gives you an enormous real-world advantage. 

Hambrick and Meinz go on to explain that the high achievers that they studied tend to have a very high level of working memory capacity.   That attribute tends to matter, above and beyond how much one practices.  For example, when they studied pianists who had practiced the same amount of hours, they found that those with higher working memory capacity tended to perform better.   The scholars don't dispute that deliberate practice matters.  They simply remind us that talent still matters... a great deal.