It’s no shock that the marine industry is in desperate need of skilled technical employees in all segments. There are several efforts the industry can and has taken to address the workforce shortage problem, which we will highlight in our April issue.
One way the industry has tackled this problem is through creating and supporting workforce training programs, many of which have appeared to be successful for businesses. But what we may not realize is that we may be measuring the success of these programs the wrong way.
A recent article from Harvard Business Review highlighted how workplace training programs measure their efficacy – cost per student, job placement rates and/or on-the-job retention – but these metrics measure a program’s cost, not value. And in the marine industry, we need our training programs to be valuable to ensure we are retaining a competent workforce for the long haul.
HBR suggests adopting a “total cost of ownership” analysis, which considers both direct and indirect costs over time. Instead of concentrating on inputs, in the form of spending, this approach emphasizes outcomes, in the form of long-term results.
For its own program, HBR created a cost per employed day metric, which measures the social and economic benefits of employment programs. Below is the example HBR provides for how this works:
“Program X serves 1,000 students at a cost of $1,000 each, or $1 million total. Five hundred individuals are placed into work (a 50% “job placement” rate), and they stay employed for an average of 60 days in the first six months. That adds up to 30,000 days on the job, at a cost of $33 per employed day. Program Y, on the other hand, has an up-front cost of $2,000 per student, but a placement rate of 80%, and graduates stay on the job for an average of 120 days. That comes out to 96,000 working days, or $21 per employed day. Clearly, Program Y, which at first blush looks twice as expensive as Program X, provides far more value in terms of helping participants find and keep gainful employment.”
For a program to effectively adopt CPED as a performance measure, HBR suggests programs collect data on cost per student, job placement and retention. There should also be a centralized database where the information can be gathered and easily accessed.
While HBR concedes there is significant work to be done to improve the metric and make it a standard across raining programs, it is a step in the right direction and help better measure whether or not a program is working.
In our industry, we need know if our workforce training programs are succeeding in terms of their value because our industry is in dire need of a younger workforce. And younger generations are in desperate need of solutions that work for finding employment or better, more sustainable careers than the ones they are currently in. We should do everything we can to prove with data that our industry can do just that through our training opportunities.