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Centralized Training May Be Answer to Replace-or-Retrain Dilemma

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One of the toughest challenges facing public companies in this country is figuring out how to satisfy Wall Street without decimating their loyal but costly workforces. I've met no one who has defined this problem more strikingly than Ron Hovsepian, the CEO of Novell.

 

In an interview a couple of years ago, Hovsepian told me that over the course of the preceding year, he replaced a quarter of his workforce in order to acquire the skills he needed:

One thousand of our 4,000 employees are new to Novell. So the change we're going through is pretty significant. Candidly, among all the good revenue stories and the profit improving, people don't realize how much we've really gone in and changed our workforce to get the right skills here.

When I asked him why he didn't put a program in place to retrain and develop his employees rather than replace them in order to fill the skills gap, Hovsepian indicated that he simply didn't have the luxury to retrain on such a sweeping scale:

We're taking some of our youngest, best and brightest talent and investing in them further, around business management and other skills, so they grow. It's done with great thought and care, while balancing it against the financial demands of what we've got to get done. And the cycle time is the biggest issue. The brutality of the pressure the company has to operate under in 90 days is what drives us.

Ah, yes-the 90-day driver. If you don't show the Street the numbers it expects to see during that quarterly earnings call, nothing you've otherwise done to strengthen your company or serve your customers seems to matter all that much. As long as it's dramatically cheaper to replace than it is to retrain, that's the tack that companies will be forced to take to defend themselves against "Street brutality."

 

Hovsepian's answer to the problem warrants consideration. He said we need to take advantage of the economies of scale that would be created by centralizing training under an IT industry organization:

I'd be happy as a company to contribute toward more unification of training of people across the industry, by an industry body, because all of us individually probably don't have the money or the time to get in and do that. But if there was an industry body, I'd be all ears. Other industries do it. Go look at banking, go look at retail. The National Retail Federation does training.

It's not a bad idea. The logical candidate in the IT realm is TechAmerica, the trade association established a year ago with the merger of AeA (formerly the American Electronics Association), the Cyber Security Industry Alliance, the Information Technology Association of America, and the Government Electronics & Information Technology Association. The members include Novell and about 1,500 other companies, including just about every high-tech outfit you can imagine.

 

TechAmerica has dipped its toe in the training water by offering free IT training in California through a partnership with Saisoft, a provider that caters to workers seeking training under federal- and state-funded programs. The organization is in an excellent position to partner with professional associations that represent IT workers who aren't employed by TechAmerica member companies, and to create a viable means of providing the skills U.S. IT workers need not only to keep their jobs, but to advance their careers.

 

If Hovsepian's eagerness to fund training through a centralized body is any indication, TechAmerica's members may well be prepared to pony up the money to expand the organization's training offerings well beyond a government-funded program in one state. There's something kind of sick about an employment landscape where a company is compelled to replace a quarter of its employees for want of needed skills. The remedy suggested by Hovsepian is worth a try.

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