Outsource, But Train Those Who Remain

CEOs NEED EDUCATIONAL PROGRAMS THAT WORK.

November 1 2004 by Chief Executive


 

The burgeoning trend of outsourcing is often described in terms of how much companies save in labor costs. Less talked about, but equally vital, is how offshoring affects employees who remain at home.

In many cases€¦quot;particularly for engineers, scientists and managers€¦quot;the movement of some functions offshore adds to, rather than lightens, their workloads. Suddenly, they’re faced with the challenges of managing dispersed teams of people and assuming new responsibilities that did not move offshore. This often demands additional education in areas such as risk and decision management, finance, knowledge management and strategic planning.

As a result, professional education is no longer an end-goal achievement but rather an ongoing process. “Not only must our engineers stay at the top of their specialty, we’re looking for them to widen their vision, think more boldly and lead,” says Joan Woodard, executive vice president of Sandia National Laboratories, the government nuclear security contractor managed by Lockheed Martin. “This can only happen through continually investing in education for our employees.”

Companies can use a variety of incentives to encourage their employees to take continuing ed classes. For example, United Technologies awards $10,000 in company stock to any employee who completes either an undergraduate or a graduate degree (see Q&A, page 38). Lockheed Martin hosts classes on-site and offers flex time, allowing employees to arrange work schedules around classes and special course-related projects. General Motors’ technical education program gives a “value-added award” to employees who successfully apply course knowledge to improve GM products or processes.

CEOs must investigate all learning providers and ask very specific questions: What is the shelf life of the courses offered? Are they taught by university faculty who are accessible to students? Is the knowledge transferable?

In terms of content and delivery, CEOs need programs that offer flexible time and locations; practical as well as theoretical courses that reflect the latest trends, research and case studies; and access to premier faculty. The potential return on investment must be weighed in terms of long-term benefits, not to mention convenience and initial costs.

By collaborating with educational institutions, companies can develop courses with direct industry application, as well as new or improved strategic initiatives that offset the cost of the education. An outlay of several thousand dollars for a team to pursue a one-year creative program can provide hands-on training that would take years of real world experience. It also can improve a company’s bottom line. GM Mexico, for example, is saving millions of dollars through work-related class projects completed by employees in Stanford’s “Design for Manufacturability” course series last year. There’s also online education€¦quot;perhaps the most promising option for working professionals. CEOs can work with faculty or education experts to develop online certificate programs.

LandAmerica Financial Group, a $3 billion provider of real estate transaction services, is exploring this approach. “One challenge is that we have 800 offices, many with only 25 employees,” says CEO Charles H. Foster Jr. “We are looking for universities that can address this as well as offer a relevant, high-quality curriculum.” In fact, universities are eager to enter such partnerships.

Ultimately, the educational institutions that offer the best return on investment will be those that collaborate with industry, understand and respect corporate concerns as much as their own or their faculty’s€¦quot;and be able to balance the two.

So the question is not whether to support individual career-long learning, but how to do it in the most organizationally effective and strategically beneficial way. As today’s global marketplace continues to produce major work-force shifts, providing successful continuing education is not just an option for healthy companies but an imperative.

Andy DiPaolo is senior associate dean at Stanford University’s School of Engineering and executive director of the Stanford Center for Professional Development.