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Published Articles by David Balovich

Title: Employees Must Provide Value Added Skills
Published in: Creditworthy News
Date: 1/13/09

It cannot be argued that we will encounter significant change going forward into the New Year. If our organization has not already experienced a reduction in its work force chances are very good that the company will reduce the size of its work force either through attrition or outright layoffs. 

We may be asked to participate in or make the difficult decision of reducing staff if we are fortunate not to be a victim of downsizing. The difficult decision will be in deciding whom to let go. We have had previous experience in this area and consider it one of the most unpleasant functions of management. 

Todays’ world is not the same as it was prior to 1980 when 60 percent of jobs could be filled with unskilled workers. Today, 80 percent of high-growth, high-demand jobs requires some form of education beyond high school. Unfortunately, research has shown American students are unprepared for skills needed in today’s workplace. 

Many states have recognized the importance of a skilled workforce and have adopted programs to provide such skilled workers to the workplace. Those states that have adopted these programs have seen business either relocate their operations to and/or expand their businesses in their state. However, all too often these same employers are informing these same states that the job applicants do not possess the basic skills necessary in a modern economy. These employers are not alone in their opinions. According to a survey conducted by Hart Research Associates and Public Opinion Strategies, college instructors report that 42 percent of entering freshmen are unprepared for college work, and employers estimate that 45 percent of recent high school graduates lack the basic necessary skills; reading, writing, arithmetic and comprehension. These opinions are also shared by the high school graduates themselves: 35 percent of college students say they graduated from high school with very few classes devoted to basic academic skills, and 39 percent of high school graduates entering the workforce report they are not prepared for basic entry level positions, especially those jobs that require mathematics along with verbal and written communication skills.

There is an objective basis for these concerns. Let’s look at Texas for example. Texas is a state that boasts a skilled workforce and has benefited over the past decade with not only a substantial increase of new business but also a large expansion of its existing business work force. Due, in part to this business growth, Texas has yet to experience, fully, the economic downturn being felt in other regions of the country today. However, a study of Texas high school graduates taking the required exit examination for graduation in 2004 found only 18 percent of the graduates possessed the fundamental skills for both college and the workplace. In addition to learning the basics, employers report that such applied skills as critical thinking, teamwork, and effective communication are essential to the preparation for today’s workplace. For some occupations, these applied skills are even more important than basic or specific technical skills that can be gained on the job.

While one can make the argument that Texas and like states are doing a reasonably good job of producing the quantity of four-year degrees through its’ colleges and universities, there exists a huge mismatch between the areas of study and the jobs being created.

Tom Luce of the U.S. Department of Education commented during a recent interview that “America now graduates more sports exercise majors than engineers,” adding that “there were twice as many physics graduates in 1956 as in 2004.” 

Regardless of the efforts of our elected officials and educational systems, the reality is that we, as employers, are being asked to hire an inferior workforce who is demanding higher wages and benefits for positions they are not qualified to hold. It is not only critical that our employees know how to learn on their own and how to analyze issues, identify solutions, and develop recommendations for solving problems, but that we provide the necessary resources so that they are qualified to hold the positions we hire them to fill and, at the same time, demand that the employee utilize those resources and prove to us that they have become the qualified employee we expected them to be upon finishing their formal education whether it be academic or technical. 

Having said all of the above that brings us back to the dilemma of whom we inform in our organization that they are no longer a member of our team. The decision is one that must be made objectively because it will not only have an effect on our business but on remaining staff as well. In fact it is important that, in any type of reduction in force, remaining staff be made aware of what is expected of them so that they can take the action necessary to ensure they do not suffer a similar fate as a result of their failure to meet company expectations. 

Many states today have “at will” statutes where employment is concerned. What that means in simple terms is that employers and employees are not bound by any restrictions concerning termination of their employment. An employee may leave their employment without giving any notice and an employer may terminate an employee without any specific reason as long as it is non-discriminatory.

Thus, the majority of employees who are not covered by some type of employment agreement are subject to termination especially in times when cost reduction is a mandate. 

So how does the employee ensure they are not the primary or secondary candidate considered for termination and how does the manager objectively identify those employees who should not be considered for termination when faced with a directive to reduce staff?

 The answer is added value. This is a term that is most often used in conjunction with product or service, adding value to the product or service, so the customer will choose one organization over a competitor, especially where there is no significant difference in quality or price. The majority of employees fail to improve themselves once they have been hired for a position unless they are provided the opportunity by the employer to do so on company time and any expense involved in their improvement is borne by the organization.

For the past several years, the majority of companies have not provided any type of advanced training because they believe, falsely we might add, that providing the employee time off to participate in training has a negative impact on productivity. The companies who do provide training will most likely eliminate the training budget during the initial round of cost cutting. 

Managers should be looking at those employees who take the initiative to not only improve their existing skills but are also learning new skills, on their own, to make them a more valuable resource to the organization. Employees, at the same time, should recognize that employers are going to retain those employees who have provided “added value” to their positions regardless if the employer has provided either the time or resources to assist in their achievement. 

Additional training does not necessarily have to be costly or take time away from the employee’s work or family. Training can be a thorough understanding of the inner workings of the organization and its’ various departments, subsidiaries, etc. It can be reading, understanding and implementing company policy and following company procedures. It is the knowledge of our customer and why they choose to purchase from our organization instead of a competitor. It is the knowledge contained in the resources available to us that make us an added value employee. Many of these resources can be found within our organization in the form of manuals and the experiences and knowledge of older employees.

Never should the mistake be made of confusing knowledge with accreditation. These programs, although very good, can be costly and require many hours of study. However, accreditation does not necessarily make for a better employee, regardless of the hype associated with it. For example, there are many credit professionals who have a three letter certification behind their name who cannot read a balance sheet, cannot explain the difference between a subsidiary and a division, do not know the purpose of a bonded warehouse, or know that a secured creditor has a lien on their product even when it has not been paid for. Robert Crandall began his storied career as a credit analyst for Eastman-Kodak and later climbed through the ranks of American Airlines to become the Chairman of AMR, the parent of American Airlines. The only three letters that ever appeared behind his name was CEO. 

A value added employee is one who is hired into the organization and immediately identifies the knowledge and skills they need to improve their performance and through observation, study, and inquisition make themselves an asset to the organization. This is the employee managers do not want to lose when having to make the unpleasant decision of whom to let go and will fight to the end to retain.   

I wish you well

The information provided above is for educational purposes only and not provided as legal advice. Legal advice should be obtained from a licensed attorney in good standing with the Bar Association and preferably Board Certified in either Creditor Rights or Bankruptcy.  

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