Who Should Lead and Fund Retraining, Government or Business?

During the Obama administration, the federal government put a lot of money into retraining and education for workers who had lost their jobs due to the 2008 recession. And while I think it was a good idea for the government to help fix the economy in this way, I wondered if government was really the best provider of retraining and education, or knowing what it is that workers needed.

In my mind, worker retraining should be a business-led effort. The companies know what they need, and they can often offer on-the-job training or even provide students and instructors to the local community and technical colleges.

Worker retraining can help unskilled workers learn to use more complex machines like this CNC router.And the government should provide tax credits for companies that offer or pay for retraining. In other words, imagine a business that could set up an apprentice program and train their new employees. The skill set comes from the manufacturers themselves, which means they have the instructors already on hand. However, funding for this training usually ends up being philanthropic in nature. That is, businesses do it more or less to help the employees who have been loyal to them and the goal is to get a return out of it. But the government could get even more businesses to offer retraining by offering tax credits for it.

There are already some businesses that have been doing this proactively, including some I know of in my sphere of experience. For example, large electrical contractors actually offer in-house training and apprenticeship programs that they and their business partners fund. The labor unions often offer this kind of training, but so do these large contractors.

Grants and tax credits could help smaller companies provide the retraining, possibly even in conjunction with the trade associations. This could be done under the business’ umbrella, and they could get more participation from the employees who are already there.

Another problem this could help solve is in creating more employee loyalty. Right now, the biggest issue manufacturers face is finding new employees. Rather than scouring the area for employees and either going without, or paying higher-than-expected salaries just to land these rare birds, they could instead provide the retraining to existing employees and start filling their needs immediately, and often for less money.

The employees learn your new system and you can keep them from developing bad habits that new employees have to unlearn. Best of all, your employees are more likely to stay with you for longer and will feel a sense of ownership of the new systems. All because you gave them a lifeline when no one else could or would.

I’ve been a manufacturing executive, as well as a sales and marketing professional, for a few decades. Now I help companies turn around their own business. If you would like more information, please visit my website and connect with me on Twitter, Facebook, or LinkedIn.

Photo credit: Marcin Wichary (Wikimedia Commons, Creative Commons 2.0)



Author: David Marshall
I’ve been a manufacturing executive, as well as a sales and marketing professional, for a few decades. Now I help companies turn around their own business. If you would like more information, please visit my website and connect with me on Twitter or LinkedIn.