Author: Garry Kranz

Persuading employees to embrace new training is challenging even during times of prosperity. Imagine their reluctance when your company makes deep, painful job cuts.

    Such is the dilemma facing LandAmerica Financial Group Inc., one of the nation’s largest title insurers. The company, based in Richmond, Virginia, provides title insurance and related transaction services to mortgage lenders, real estate developers and brokers, attorneys and homebuyers. Fueled by a sustained homebuilding boom, LandAmerica during the past decade evolved from a regional niche player in the southeastern U.S. to a Fortune 500 company. Revenue has doubled since 2000, from $1.8 billion to more than $4 billion in 2006 (full-year financial results for 2007 were not available at press time).

    At one point, its workforce swelled to 13,500 people. Like many of its financial brethren, however, LandAmerica is feeling the effects of the nation’s ongoing mortgage fiasco. Real estate has gone from robust to bust. Although always cyclical, market conditions seldom have been as devastating as they are now. Languishing home sales are triggering a spate of mortgage-related job cuts across the United States. LandAmerica has slashed about 2,400 jobs during the past year, including 1,100 layoffs announced in August.

    Even as the housing market continues its plunge, LandAmerica hopes to withstand the onslaught by steering employees into well-defined career paths. Heading into 2008, employees will be required to begin mapping out individual career plans, guided by clearly established performance objectives for each job and job family.

    For the first time, LandAmerica is gathering comprehensive data on competencies and skills gaps. It will use the data to design training that lifts employee performance. Training resources delivered through LandAmerica University, the company’s online learning and development center, will connect the dots between learning, career growth and the company’s financial results, according to the company.

    “It is an effort to ensure that our employees know what is expected of them, and how they can progress and develop,” says Susan Sinkiewicz, the company’s vice president of talent and learning resources.

    The approach marks a huge step forward for the company and it is prompted by two factors, both related to the need to better assess the talents and skills of the organization. First, LandAmerica realized about four years ago that a large percentage of employees soon would be eligible to retire. Finding replacements is no easy matter. Second, the company’s workforce is spread across three continents. In addition to the U.S., LandAmerica operates branches in Canada, Mexico, Central America and South America.

    The company’s origins date to October 1991, when Universal Corp. spun off its Lawyers Title Insurance Corp. subsidiary. The new company, named Lawyers Title Corp., went on to acquire two other title insurers: Commonwealth Land Title Insurance Co. and Transnation Title Insurance Co. The combined entities later were renamed LandAmerica Financial Group, which serves as a holding company for a host of subsidiaries.

    Until recently, the different companies retained a fair amount of autonomy, but LandAmerica wants to digest its separate holdings into a unified operating company. The business objective is to get its 900 offices to follow a set of uniform business procedures. LandAmerica needs to provide “superior customer service all the way from Arizona to New York” and beyond to remain competitive, Sinkiewicz says.

    “Four years ago, we made learning and talent development a priority. But we didn’t want to just create a training department; we wanted to embed active learning into our training,” Sinkiewicz says. “To do that, we needed know where our employees stood. That’s data we didn’t have.”

    Part of the problem stems from the highly fragmented nature of the escrow and title business. Much of the work traditionally has been processed by smaller mom-and-pop businesses. As LandAmerica began acquiring other companies, it also inherited their problems. For one thing, performance reviews often were lacking or inconsistent, making it impossible to pinpoint areas of deficiency when planning for succession.

    Even worse, LandAmerica lacked a systematic way to gather and assess data about employee performance. In particular, the company could not determine whether employees were capable of executing the complex tasks associated with real estate transactions.

    “It quickly became apparent that we didn’t have a handle on our talent profile in transaction services,” which are the customer service positions that generate revenue, Sinkiewicz says.

    Rather than customizing a solution on its own, LandAmerica solicited bids from talent management software vendors to analyze jobs by job families, identify critical functions, build a skills inventory and design appropriate training.

    The company eventually settled on human capital management vendor Softscape, based in Wayland, Massachusetts. Softscape is creating a “knowledge warehouse” that would enable LandAmerica’s decision-makers to make a quick inventory of skills and competencies of individual employees.

    “LandAmerica has a lot of cross-fertilization between different lines of business. They’re looking for successors from within—people who can move vertically or horizontally across the organization,” says Christopher Faust, executive vice president of global strategy for Softscape.

    Softscape’s platform analyzes other questions too, such as the implications for succession and workforce planning when key contributors are moved from one business unit to another.

    LandAmerica is introducing the performance- and objectives-driven training in small doses. Eventually, Sinkiewicz says all employee groups will be assessed to spot gaps. The initial pilot is geared to 300 top performers, including 75 executive managers and 225 managers who work at its operating facilities.

    Using 360-degree feedback and targeted performance assessments, they are expected to create a development plan that includes a methodical approach to acquiring the knowledge that LandAmerica deems critical to its corporate strategies. LandAmerica has identified 14 competencies that are essential for employees to develop, including behaviors that describe concepts such as integrity and respect for others. Another important behavioral characteristic centers on continuous improvement, which involves encouraging employees to come up with innovative ways of improving business processes and serving clients.

    Sinkiewicz says the greatest benefit will emerge as the company begins to mine its performance data. Someone trained as an escrow assistant, for example, will be able to see the learning requirements for advancing to the position of escrow branch manager. Likewise, employees who work in the residential side of LandAmerica’s business will be able to see what training they would need if they wanted to pursue jobs in commercial divisions.

    “We don’t push training for training’s sake. What we are pushing is the importance of completing a performance review and an individual development plan that identifies gaps,” Sinkiewicz says.

    Companies facing adverse financial conditions frequently resort to cutting back their spending on employee training—a mistake LandAmerica intends to avoid.

    “We’re not necessarily stepping up our training budget, but we’re not pulling back. We are looking for more efficient ways to do things,” Sinkiewicz says.

    Kerry Patterson, a training and management consultant with Vital Smarts in Provo, Utah, says it’s critical for companies like LandAmerica to have ongoing “crucial conversations” with employees, especially when trying to weather a stormy business climate.

    “Be frank, be honest. Tell them: ‘Look, we don’t have control over the entire market. What we do have control over is an ability to make you a better employee by providing you with training,’” Patterson says.

    LandAmerica should be able to trade on a reservoir of good will among its employees. In 2007, even amid news of layoffs, LandAmerica earned a spot on Fortune magazine’s list of the most admired companies in America.

    The company says more than 75 percent of its employees have used the training resources made available through LandAmerica University. All told, about 20,000 online learning sessions and more than 200 classroom sessions have taken place.

    Early returns on skills assessments also are promising. Faust of Softscape says LandAmerica has been able to reduce turnover by about 10 percent. Most important, the company is holding on to more of its promising young managers.

    Along with emphasizing career paths, the company’s Leadership Academy provides in-depth management training to a select group of leaders. The 20 people who attend each year must be nominated for the program, which is run by the University of Richmond’s Robins School of Business. To be considered, managers must score exceptionally well on annual performance and talent assessments.

    Participants spend one week a year, over a two-year period, at an off-site location, where they tackle strategic issues considered essential to LandAmerica’s growth. The training includes material on relationship-centered leadership, communication, negotiation, evaluating joint ventures, honing financial skills and learning the basics of SWOT analysis—how to size up an organization’s “strengths, weaknesses, opportunities and threats.”

    A comprehensive range of activities deepens people’s exposure to critical issues facing the title and mortgage industry, and the learning doesn’t end after the week is up. The group conducts regular monthly meetings, aided by a facilitator, to gauge its progress toward assigned goals during the year.

    Morton Manassaram exemplifies the push to groom new leaders. A 12-year company veteran, Manassaram joined LandAmerica 12 years ago as an accounting manager in its South Florida branch. Later, he advanced to the position of regional controller.

    Last year, shortly after completing training through the Leadership Academy, Manassaram assumed a new role: corporate performance business partner. The fancy-sounding title entails evaluations of business practices that affect financial performance, including helping managers make fact-based decisions.

    “Retaining employees who are considered high performers, and letting them know that they will have opportunity to grow, is something that’s very important. That’s really the success of the Leadership Academy,” Manassaram says, who estimates about half of the 20 people in his group occupy positions of increased responsibilities.

    Manassaram also is sharing his knowledge with others, having recently taught a one-day Leadership Academy course that illustrates how an employee’s individual performance affects business and financial results.

    Sinkiewicz says the leadership initiative is paying off in new ideas and innovative thinking. “They’re taking the learning and immediately applying it, increasing revenue and reducing expenses.”

Sue Morse knows that high turnover goes hand in hand with running customer service call centers. Nevertheless, as senior vice president of human resources for StarTek Inc., Morse—along with her training team—has set out to upset the status quo.

    The best training strategy, she says, is to recruit wisely. Indeed, recruitment tops the list of activities at the Denver-based company, which provides outsourced customer service to wireless telecommunications carriers. Surging consumer demand for wireless products has fueled the opening of three new StarTek call centers in recent years, swelling its roster of service agents to 8,000.

    That growth also presents a challenge: how to find and attract people with an aptitude for a job that can be grueling. Rather than hire people, train them and hope they’ll work out, StarTek is putting more emphasis on assessing people’s abilities during recruiting.

    “Our training starts at the hiring phase. We put people through a screening process that has two parts,” Morse says.

    Step one assesses an individual’s technical competency, particularly computer skills. Yet being a computer whiz means little if a person lacks the desired attributes, such as patience, flexibility and a real desire to help customers. Of greater value, Morse says, is a subsequent personality assessment in which applicants respond to a series of questions designed to elicit their fitness for the job.

    “These are people who are going to be serving people on the phone [and doing so] over and over,” Morse says. “We want to know if they have an attitude that emphasizes service to our clients’ customers.”

Practice, practice
   Unlike some call centers, StarTek goes slowly when preparing new trainees. Before taking a single actual call, agents in training are immersed in a six-week-long simulation of how an actual call center operates. They learn basic skills, such as how to access customer accounts, but also more sophisticated technical information about each wireless carrier’s calling plans, coverage areas, service expectations and equipment. Trainees answer simulated calls and receive immediate feedback from supervisors on how well—or how poorly—they did.

    Those who survive the initial month and a half of training advance to “Academy Bay,” a pre-production environment that has a higher ratio of supervisors to agents.

    “Academy Bay gives supervisors a chance to observe our agents in action and to determine if they are applying what they’ve learned,” Morse says.

    StarTek’s push to improve agents’ skills probably is driven in part by recent business challenges. During the technology boom earlier this decade, StarTek shares traded above $70, but have been tumbling ever since. Earnings growth remains flat.

    Instability in the front office hasn’t helped. The company has had three CEOs since 2001. Amid the shake-up came news that 300 agents were laid off at its Petersburg, Virginia, facility, one of its newer centers. Shareholders were told the layoffs stemmed from one client’s “reduction in volume.”

Managing to motivate
   Call centers represent one of the fastest-growing services industries in the world. More than 125,000 call centers are in operation worldwide, with roughly 75,000 of them based in North America, according to research by Troy, Michigan-based J.D. Power and Associates. Yet turnover among these organizations remains disproportionately high, mostly because of employee job dissatisfaction or burnout, experts say.

    Penny Reynolds, a senior partner with the Call Center School in Lebanon, Tennessee, says call center organizations are desperate for strong managers who can drive employee retention. Higher pay and recognition may be enough to satisfy some employees, while others clamor for more responsibilities in hopes of advancing to higher positions.

    “Getting the right people is the biggest factor for call centers, but it’s up to supervisors to learn the different factors that motivate those individuals,” Reynolds says.

    Some call center organizations are implementing “screening assessment” tools when weighing whether to promote high-performing agents to positions of greater responsibility or leadership, Reynolds says.

    Promoting the right people is an area where StarTek excels, Morse says. All but three of the company’s 19 site directors advanced from other positions within the company. To help them succeed, StarTek provides these supervisors with access to coaching resources to help them build rapport with their employees.

    In addition, company trainers are required to obtain a certification that shows proficiency in adult-learning principals. They also are measured each month on factors such as class attrition, attendance rates and 360 feedback assessments by trainees.

The late Aaron Spelling never made a TV series about employee coaching. But the legendary producer would have enjoyed The Firm, an in-house miniseries created by consulting company PricewaterhouseCoopers.

    Dramatizing real-life workplace issues, The Firm (think of NBC’s The Office, except with a worthwhile purpose) follows the interaction of six fictional employees at the company as they learn valuable lessons about accountability, appropriate business attire, giving and receiving feedback, bridging generational differences and other key behaviors.

    You won’t find The Firm on cable or satellite. The target audience is the 30,000-strong U.S. workforce of PricewaterhouseCoopers. The episodes come complete with a catchy theme song, recurring characters and even a bloopers episode. The inaugural “season” of 10 programs concluded its run recently, and the second season hit the company’s internal airwaves on October 17.

    The specific goal of season one was to entertain employees while educating them about the pivotal role coaching plays in the organization, says Kym Ward Gaffney, the national coaching leader at PricewaterhouseCoopers.

    “We wanted to create coaching messages that were authentic to the PwC experience. We wanted this to be fun, not preachy or pedantic,” Gaffney says.

    Headquartered in midtown Manhattan, PwC provides assurance, advisory and tax services to many large corporations, including the Fortune 500. It is the third-largest private company in the U.S., according to Forbes magazine, with 2007 sales topping $25 billion.

    Each program runs only a few minutes, often using humor to deliver serious points. The overarching theme: Almost every workplace situation presents an opportunity “to coach and be coached.” A narrator (Gaffney) sums up the main idea at the end of each episode.

    Portraying the main characters are actual PwC employees from the New York/New Jersey area, giving the production the desired air of authenticity. About 60 employees auditioned for the roles of the six characters. The ethnically and gender-diverse cast consists of Amy, an associate; Blake, a senior associate; Carl, a senior manager; Bob, a partner, Sally, an executive assistant; and Mukesh, a newly hired employee.

    The series debut introduces the characters, who are viewed mainly through the eyes of Amy, a 20-something with a propensity for twirling strands of her hair as she candidly assesses each of the other characters. She says of Blake, a party animal who occupies the neighboring cubicle: “I guess he gets work done some of the time. But he really doesn’t seem to do much.”

    After a cutaway to a shot of Blake leaving the men’s room, she adds: “Plus, he smells.”

    It is a bit of foreshadowing that pays off, in a serious way, in a subsequent episode. It features Blake and Carl, the senior manager whom everyone likes for his honesty and helpfulness. The episode, “Difficult Conversations,” opens with Blake explaining to the camera why he is shaving in the men’s room. A round of all-night partying prevented him from going home to clean up for work. Carl walks in, easing into a critical coaching moment.

    “We need to have a talk,” Carl tells Blake. He then voices the concerns raised by Amy and others: “You smell like a bar” on arriving at work, he says. He tells him, politely but firmly, to shape up or ship out.

    The message takes hold. Several episodes later, Blake is the first one to arrive at the office. He credits Carl for providing honest and direct feedback to “help me clean up my act.” When Amy arrives, she peeks around her cubicle wall and is surprised to find Blake there ahead of her, hard at work.

    The conversation in the men’s room served as a turning point for Blake. The point was clear: As important as formal evaluations are to help employees grow, it’s often in the unscripted, informal moments that the most meaningful coaching occurs.

    Giving precise feedback is the theme of another episode. It begins innocently enough with Sally telling Bob she’s going for coffee.

    “Can I get you anything?” Sally asks.

    Bob gives her a litany of Starbucks requirements:

    “I’d like a venti, skim latte, no foam, extra hot. Oh, and bring some of that yellow sweetener, not the pink stuff.” Amazed at the specificity of Bob’s order, a dazed Sally is shown in the elevator carrying a tray of coffee cups, and she shares her thoughts.

    “Venti, skim latte, no foam, extra hot; it never fails to amaze me how specific we can be about stuff that doesn’t matter. But when it comes to just talking to each other, we’re experts at being totally vague. Tell me specifically what I need to know to do my job better; [don’t just] say, ‘That’s fine.’ ”

    The concluding narrative reinforces the point, “When you say exactly what you mean, you get exactly what you want: the yellow sweetener, not the pink.”

    Episode nine finally introduces Mukesh, a new employee who has appeared in the opening credits but is largely absent from the previous episodes. That is by design. Most of the other characters don’t even recognize Mukesh’s name, although he’s been with the firm for six months. Ironically, it’s Blake who takes Mukesh under his wing and tries to ease his assimilation into the organization.

    Portraying the characters were Tim Abrahams (Carl), Deirdre Connors (Amy), Don Favre (Bob), Blake Neiman (Blake) and Mukesh Luhano (Mukesh). The woman who played Sally has since left the firm and PwC did not provide her name.

    The final episode features bloopers, closing with a simple message: “We tried to tell the truth. We tried to encourage important conversations. We had fun.”

    Although many companies use online video to aid employee learning, the concept of a TV program is highly unusual, especially for a conservative and serious-minded company like PricewaterhouseCoopers. Internal coaching is well-established at PwC. For example, each employee is assigned a personal coach, but the company sensed a need to reinvigorate its message.

    “We’re not producing widgets. We’re sending our people out to work with clients,” so it’s critical they demonstrate the attitudes and behaviors deemed critical for success, Gaffney says.

    A TV-style format was used to deliver the training messages because it is both immediate and universally appealing, according to Gaffney.

    The 10 episodes were filmed during a three-day period. Another three weeks were devoted to voice-overs, editing, mixing and other technical aspects. All told, Gaffney estimates the company spent about $125,000 on the production, which included hiring scriptwriter Bill Heater.

    Employees were notified by company e-mail each time a new episode was released and which installments were available for viewing on PwC’s internal computer networks.

    The first episode attracted 8,500 viewers, and the numbers rose steadily with each successive episode. Attesting to its popularity is a growing overseas audience of PwC employees. Although intended mainly for PwC’s U.S. workforce,The Firm has been seen by PwC employees in Canada, Ireland, Australia and elsewhere.

    Season two of the series focuses on fictional PwC staffers in the Los Angeles office. Again, they’re played by real PwC employees. And while the first season’s episodes addressed the organizational value of coaching, PwC says the second season zeroes in on business issues, such as “the tension of losing a client because we failed to deliver behaviors that lead to high-quality service,” according to Gaffney.

    The employees who participated in season one, meanwhile, have attained the status of in-house celebrities. In real life, Tim Abrahams is a certified fraud examiner in PwC’s computer forensics division. And co-workers he’s never met now seek him out.

    “They’ll stop me in the cafeteria and say, ‘Hey, you’re Carl, the guy from the video,” Abrahams says.

    More important is the fact that the video series has heightened awareness among employees about the important role of coaching, Abrahams says. He actually does coach five PwC employees.

With a portfolio containing 19 million square feet of commercial property, Federal Realty Investment Trust knows the importance of laying solid foundations. The Rockville, Maryland-based company develops and manages retail shopping centers in select U.S. markets, including the Northeast and mid-Atlantic regions, Texas and California. Top managers in the organization are given solid foundations too—in the area of professional growth and development.

Federal Realty is a real estate investment trust, or REIT. These companies have large holdings of commercial real estate and usually are traded on public stock exchanges. (Federal Realty’s New York Stock Exchange ticker symbol is FRT.) Among its 90 shopping centers is Pentagon Row in Arlington, Virginia; Bethesda Row in Maryland; Assembly Square in Somerville, Massachusetts; and, in California, such properties as the Third Street Promenade in Santa Monica and the Fifth Avenue shopping area in San Diego.

Federal Realty, like many real estate trusts, is keen to develop the competencies it needs from within. One reason is the complex nature of its industry, which requires employees to possess a range of skills and knowledge in various industries, including commercial real estate, private equity markets, government regulations, insurance and economic development.

A second and more pressing reason is an acute shortage of capable people.

Earlier this year, Federal Realty launched Foundations of Leadership, a yearlong program intended to help elite performers enhance their skills and put themselves in line for promotions. Eight managers were selected to participate in the inaugural class after being nominated by vice presidents who recognized their leadership potential.

“Vice presidents inherently know which employees are high performers with bright futures. By having them nominate people, we get the cream of the crop,” says Philip Altschuler, Federal Realty’s vice president of human resources.

The Foundations of Leadership program is broken into three modules, each one stretching over four months. During the first segment, participants polish their leadership skills, including communicating with people and learning how to motivate them. Subsequent training sessions are intended to complement the “soft skills” training by deepening managers’ competencies in finance and real estate.

The leadership portion focuses on presentation skills, how to negotiate leasing prices, and performance management.

“People aren’t going to leave this program [ready to be] CPA candidates or HR professionals. But we believe they will come away with a better understanding of how the different functions in our company are interconnected,” Altschuler says.

Managers are excited about the learning opportunities. Baris Ipeker, director-legal counsel for Federal Realty, says he has already adopted some of the lessons he learned in his day-to-day work.

“I am amazed that our company thinks so much of growing its employees that it has dedicated resources to support and ensure professional development from within,” Ipeker says.

The training initiative was developed to plug a hole in Federal Realty’s leadership pipeline. Although its managers possessed excellent technical skills, many were deficient in the skills needed to coach and motivate other employees to higher levels of performance.

Consequently, top brass grew frustrated when trying to fill senior-level positions from its middle-management ranks. “We just didn’t have people ready to step into those roles,” Altschuler says.

Talent shortages are endemic to the industry, experts say. In fact, REITs present a classic example of the “buy versus grow” conundrum of acquiring talent. Consolidation and shrinking capital markets have intensified the battle for top-flight candidates, with companies trying to find talent in an increasingly shallow labor pool, says Anatole Pevnev, an analyst and editor of REITCafe.com, a research firm in Cleveland.

“More and more REITs are discovering that they have to train their own people. They’re coming up with methods to internally mentor those who can lead them forward,” Pevnev says.

The problem of finding leaders isn’t confined to U.S.-based REITs. Canadian Hotel Income Properties Real Estate Investment Trust, or CHIP REIT, runs a “GM School” each year that provides targeted skills training to the general managers who run its 32 luxury hotels.

In addition, the Vancouver, British Columbia-based organization conducts a leadership boot camp to prepare potential GMs who have been nominated by regional vice presidents.

“Training needs to begin with our leaders,” because they set the tone for other employees at their hotels, says Sharon Mackay, CHIP REIT’s senior vice president of culture.

Learn by doing
   Managers at Federal Realty attend four-hour classes every other week. Company trainers deliver the content alongside consultants including business professors from the Robert H. Smith School of Business at the University of Maryland.

Another important aspect is the makeup of the team, which consists of professionals with different backgrounds and expertise. That enables people from different disciplines to share their experiences, thus becoming “students as well as teachers” for one another, Altschuler says.

Between class sessions, managers from different professional areas team up to complete the project assignments, which are intended to reinforce classroom instruction. Altschuler likens the regimen to a “customized MBA for federal employees,” albeit with a more promising return on investment.

“I know we’re getting a good ROI because I know what we’re teaching. We’re assigning [teams of] managers to real projects, so they’re getting work done at the same time they learn,” Altschuler says.

The work is challenging. As part of a session on negotiation, managers were required to read two books and complete various business projects—and that was before classes began.

After completing the leadership track this fall, participants will spend the balance of this year honing their financial literacy skills. The program concludes with real estate training in spring 2008.

Getting feedback
   Mackay says pervasive talent shortages have prompted her company to accelerate the promotion of high-caliber employees, perhaps before they were completely prepared for the advanced responsibilities. To boost their chances of success, CHIP REIT is providing them with extra coaching and leadership training.

The company created an in-house 360 survey tool, called LEAD, for managers to evaluate their progress. The acronym stands for Liveliness, Engagement, Anticipation of customer needs, and Delivery.

The survey “asks managers to evaluate their own competencies on 49 behaviors to see how well they’re doing,” Mackay says.

Those self-assessments serve as a basis for benchmarking. It helps HR develop just-in-time training curricula to address shortcomings, she says.

At Federal Realty, those enrolled in the Foundations of Leadership program could advance to an even more exclusive leadership initiative. Also known as LEAD, here standing for Leadership Education and Development, the four-year-old initiative is designed to prepare promising managers for senior-level executive positions. Only two managers are currently enrolled in LEAD.

In addition, the company is developing a mentoring program to pair newly hired employees with seasoned company veterans. The object is to help newcomers assimilate more quickly into Federal Realty’s business culture, Altschuler says.

H eather Hatfield is looking forward to EMD Serono Inc.’s inaugural “Week of Learning.” As director of corporate and scientific communications, her job entails taking complex information about the biotech company, such as its various therapeutic products and specialized research, and making it easy to understand.

    The challenge is also to make it engaging and informative, without oversimplifying the material, when talking to colleagues, investors, journalists and members of the business community. So Hatfield jumped at the chance to take a special class, titled “Persuasive Conversation Skills,” during the July 23-27 training event.

    Coupled with an earlier course on how to present complex information, which is offered through EMD Serono’s in-house training university, Hatfield expects to gain new knowledge that will help her improve her job performance.

    “This training is extremely useful by helping me communicate more effectively and to get buy-in from employees. In fact, I can’t think of a situation in my job where it won’t come in handy,” says Hatfield, who is one of more than 200 employees scheduled to participate.

    Despite the name, the Week of Learning isn’t intended as a weeklong cram session. Instead, the goal is to underscore the company’s year-round commitment to growth and development, says Mike Laffin, EMD Serono’s director of learning and organizational development.

    “It’s important for our employees to have training (opportunities) that meet the demands of their jobs,” Laffin says.

    More than 20 specialized training opportunities will be delivered in a variety of formats, including classroom work, virtual classes and e-learning modules. Taking the courses will be researchers, clinical scientists, financial professionals and support staff at the company’s Rockland, Massachusetts, headquarters, near Boston. The company is a subsidiary of pharmaceutical and chemicals giant Merck, which is based in Darmstadt, Germany.

    EMD Serono has hired training vendors to facilitate the classes and publicized the event to employees for about six months through e-mails and meetings. Most of the training is interactive and gives participants a chance to do hands-on activities. Its employees are not required to sign up for training, although participation is strongly encouraged by senior management. Laffin estimates about 60 percent of employees will take at least one course during the week.

    To set an example for their employees, managers also are being requested to participate in course offerings during the week.

    In addition to attending training, employees will be able to participate in various forums, meet individually with program facilitators and gain exposure to the company’s array of training resources. The company expects that the Week of Learning will be an annual event.

    “This proactive employee development and learning focus [should be] a strong marketing approach for EMD Serono in attracting and retaining top talent,” says David Hagerty, regional vice president for BlessingWhite in Skillman, New Jersey, one of several training providers hired for the event.

    Although EMD Serono always has provided training programs, the past few years have brought about a stronger organizational commitment to learning. Biotech companies are in an intense scrimmage for the scarce talent available in the Boston area. Amid the stepped-up competition, top management recognized the tremendous role a highly competent workforce plays in achieving business goals, Laffin says.

    “Our training has always been skewed in favor of results competencies. Now we’re paying equal attention to employee development and competency objectives,” which contribute directly to business results, Laffin says.

    The company has solidified its performance management process as well. Employees are expected to consult with their supervisors to identify development goals and training plans for achieving them. Each individual goal is mapped to the organization’s larger business objectives, which in turn shapes the types of training provided by the company’s in-house university, known as Lead Academy.

    For employees like Hatfield, the weeklong learning event illustrates a more comprehensive effort to prepare employees for greater responsibilities.

    “It shows that our company sees professional development as a priority,” she says.

When Bubba Gump Shrimp Co. goes trawling, tiny sea creatures aren’t the only catch. The San Clemente, California-based company is also trying to haul in the best workforce possible—one that’s competent, highly motivated and fiercely loyal.

    Themed after the 1994 Tom Hanks film “Forrest Gump,” the restaurant franchise is reshaping perceptions of the restaurant industry, which for decades paid little attention to high turnover and even less to career development. From a single restaurant on Cannery Row in Monterey, California, in 1996, Bubba Gump Shrimp has grown into a chain of 25 restaurants globally, including 18 in the United States. Many are in tourist hot spots, including Honolulu; Breckenridge, Colorado; Daytona Beach and Orlando, Florida; Gatlinburg, Tennessee; and midtown Manhattan.

Since formally establishing its training and development department in 2001, turnover in the managerial ranks has been reduced by half, from 16 percent down to 8 percent. In addition, most of its approximately 200 store managers have been promoted from within.

Retention of managers shows up in hard dollars. Having well-trained managers who stick around saves a Bubba Gump restaurant about $600,000 in recruiting costs, or about 10 percent of its estimated annual sales of $6 million, says Steve Moreau, who launched the initiatives when he was director of training and development. Moreau took over as the company’s communications director in 2006.

In addition, Moreau says year-over-year increases in same-store sales, as well as a higher concentration of sales per square foot—two key metrics used by restaurants and other retailers—are the direct result of more intensified training efforts.

In an industry that has a tough time luring new recruits—much less persuading them to pursue food service as a career—Bubba Gump Shrimp is setting standards for innovative training. It was one of five food service chains in 2005 to win a Spirit Award from the National Restaurant Association Educational Foundation, given to restaurants that demonstrate industry-leading practices in hiring, training and retaining employees.

“People are our greatest asset simply because they are the [main] point of contact with our guests. Failure to invest the training and development of those people would be a failure to grow our business,” Moreau says.

Trawling for talent
   Employee training at Bubba Gump Shrimp is closely integrated with such functions as recruitment and hiring. Candidates are assessed during behavioral-based interviews that focus on personality and aptitude. Emphasis on related job experience often is secondary to a person’s attitude, Moreau says, which makes it easier to train someone after they are hired.

“Rarely do we ask about an individual’s experience level. We are most interested in who are they in terms of their attitudes and behaviors,” Moreau says.

He adds: “We can train people to be effective servers, cooks, bartenders, whatever. But we can’t train them to be kind, thoughtful of each other, and [to] interact well with colleagues and guests.”

The approach of hiring for attitude enables Bubba Gump Shrimp to begin grooming potential leaders from the first day on the job, using a combination of job shadowing, classroom work and relevant skills training.

“The goal isn’t to have people complete training in a set number of days,” Moreau says. “The goal is to train them so they’re prepared” to do the job confidently

Bubba Gump Shrimp illustrates how attitudes toward employee training are shifting within the restaurant industry. For years, restaurants were content to tolerate high staff turnover as a way to keep payroll costs low. It is a practice that experts say is slowly dying out, as large dining chains recognize the value of staff continuity brought about by career development.

“If you’re spending lots of money to find good people, it makes good sense to invest in their development,” says Teresa Siriani, president of People Report, a Dallas organization that tracks human resources trends in the food services sector.
Siriani’s organization notes that two-thirds of casual-dining restaurants plan to launch new training programs in 2007, with one in three fast-food chains doing so.

Competition for consumer dollars is intensifying. The restaurant business may be the unheard signal of a strengthening U.S. economy. As consumers grow more confident, they are eating out more and spending more when they do. Restaurants across the country are looking forward to a record-breaking year, with sales expected to jump 5 percent to $537 billion in 2007, according to the National Restaurant Association, a Chicago-based trade group.

The skyrocketing sales are generating above-average job growth in the industry. Roughly 13 million people work in the U.S. food service industry, second only to the federal government in total employment, according to the Bureau of Labor Statistics. By 2014, employment growth in dining establishments is expected to increase 16 percent. That equates to about 1.9 million new jobs. By comparison, the total U.S. labor force is projected to increase 1 percent annually during the same time frame.

To prepare, restaurant chains are pushing food services as a potentially lucrative career option, especially for people who aspire to positions in management. To overcome the grueling schedules, companies have begun to pay restaurant managers handsomely. General managers are usually between 30 and 33 years old, much lower than the average age for managers in other U.S. industries, and operate franchises that generate about $2.5 million in annual sales, Siriani says.

“How many people in their 30s can say they’re running a $2.5 million business?” Siriani says, adding that it it’s not unusual for established GMs to earn six-figure salaries.

Top-flight managers at Bubba Gump Shrimp often get recommended by their peers for an advanced development program known as President’s Camp. Instituted in 2002, the invitation-only program is part of Bubba Gump Shrimp’s succession planning.

President’s Camp enables restaurant managers to meet with top executives to hone the skills they’ll need to move up to more advanced managerial slots, Moreau says. During the weeklong event, promising top performers get some of the tools they’d need for management, including lessons in how to read financial statements and courses in personal development.

Managers are chosen by peers based on sets of objective criteria, such as a manager’s rate of employee retention, guest satisfaction surveys and guest return rates—although selection also is somewhat subjective. If an established manager believes a younger manager can benefit, that is another valid criterion for recommendation, Moreau says.

In addition, Bubba Gump Shrimp runs an in-house coaching program that certifies fast-rising professionals as employee trainers. They include bartenders, chefs, head waiters and other managers who interact with employees and coach them on the job. In a sense, these trainers embody a type of retention success by assuming greater leadership roles and “ownership” of the business, Moreau says.

With the employee-trainer piece in place, new managers assigned to run a store already have a ready-made support system to ease their transition. Restaurant managers at Bubba Gump Shrimp also undergo a form of reverse mentoring, learning each job skill from employees in a real work setting. Managers train a minimum of three days in each job, with employees coaching and evaluating them. This approach does two things, Moreau says.

“First, it establishes empathy [in managers] for what employees go through and the demands they face,” he says. “Second, it establishes our trainers as valuable assets for managers once they graduate” from training to run the restaurant. On average, general managers stay with the company about 6½ years before changing jobs, Moreau says.

Other franchises are following similar development paths. Monical’s Pizza, a 57-store chain in the Midwest, has partnered with Harvard Business School Publishing to provide a suite of workforce development programs for its 1,000 employees, from people in entry-level jobs to upper management.

In an industry where turnover is as high as 300 percent, Monical’s recognized that motivated managers can quickly make a positive impact on a restaurant’s bottom line and its ability to satisfy customers, says Harry Bond, the company’s president.

By focusing on individual training for managers and giving non-managers a chance to prove themselves, Monical’s companywide annual turnover has dropped to 53 percent. Management turnover is better, at 7 percent, Bond says.

Turnover by the hour
   As effective as management training is in the industry, similar programs for hourly employees aren’t having the same impact. The rate of hourly turnover spiked to 114 percent in 2006, its highest level since 2003, according to People Report. At 127 percent, Bubba Gump Shrimp’s hourly turnover rate is slightly higher than industry average, a fact partially attributable to many of its restaurants being in areas that thrive on seasonal tourism.

But restaurant chains of all types, from fast-food joints to fine-dining establishments, face similar woes. Siriani notes several factors conspiring to make staffing an acute challenge for restaurants and other firms in the food service and hospitality industries.

For one, she notes many people between 16 and 24—traditionally a strong demographic for finding hourly workers—are opting out of the workforce. Many are deciding to attend college before joining the workforce, but a good many view restaurant jobs as dead-end positions.

Also, now that the U.S. economy is on firmer footing, other talent-hungry industries are aggressively recruiting restaurant employees to fill their own needs.

“If you need energetic, hospitable people who can think on their feet—all the criteria that make for a terrific restaurant employee—why wouldn’t you want that [person] in your business?” Siriani says.

The restaurant industry is trying to capture the attention of would-be workers much sooner. The National Restaurant Association Educational Foundation has been successful in getting its ProStart curriculum in 1,400 schools in 47 states. About 54,000 students take the courses annually.

“We see this as an opportunity to change students’ perceptions of the food service industry and get them to focus on it as a career,” says Wendi Safstrom, vice president of management development at NRAEF.

ProStart consists of two years of coursework, exams and 400 hours of work experience for students to receive a national certification of merit that is widely recognized within the industry. The program also enables students to compete for scholarships and other forms of advanced study in food services at about 60 U.S. colleges and universities.
Those are the types of initiatives that could help restaurants change their approach to training and professional development.

Notes Moreau: “It doesn’t serve us in any way to turn over staff randomly. That’s old-school thinking that just isn’t productive.”

Scientists working on the Yucca Mountain Project are learning more these days than how to safely dispose of radioactive nuclear waste. Since January, they have been trained and tested on tasks ranging from communication skills to the proper procedures for recording research data.

Refining these and other skills could come in handy should they need to testify before Congress and defend their research—a likely scenario when lawmakers hold hearings in 2008 on the future of Yucca Mountain.

Rather than sitting in classrooms, scientists receive training online via 20-minute modules that are followed by exercises in which they demonstrate applied knowledge of the information. Flash-animated and narrated PowerPoint demonstrations are used to drive home key points and make the material interesting.

Training is oriented around common procedures that scientists use on a daily basis, says Cheryl Ann Seminara, who in January was hired to lead organizational development initiatives for Yucca Mountain’s 625-person workforce, including about 400 research scientists.

“What we’re doing is training them not just on how to follow a procedure, but also the impact on the entire organization of not following those procedures,” Seminara says.

Renewed focus on training corresponds to organizational change taking place at Yucca Mountain, a research arm of the U.S. Department of Energy. Federal officials envision Yucca Mountain, situated about 100 miles northwest of Las Vegas, as a possible dump site for the nation’s nuclear waste. A congressional committee in October 2006 appointed Sandia National Laboratories, based in Albuquerque, New Mexico, to manage the Yucca Mountain Project, replacing Bechtel SAIC as prime contractor.

Rather than try to coordinate training remotely through the Albuquerque headquarters, Sandia officials decided to bring programs in-house. That necessitated creating training programs from the ground up, says Patrice Sanchez, the business operations manager for Sandia’s Yucca Mountain Project office.

Particularly challenging is the fact that all employees—from scientists to administrative support workers—are bound by certain procedures.

“We have some very unique requirements around procedures that we have to follow, particularly because all of our processes are auditable,” Sanchez says.

For example, scientists are being trained to follow prescribed procedures when they make entries in scientific notebooks. Haphazard scribbling is out; instead, researchers have a long list of painstaking rules to follow.

Stipulations include what information can be written in page margins, whether accompanying documents may be affixed with staples or adhesive tape, how corrections are to be handled, how often the recorded work has to be reviewed by superiors, and a slew of other details.

“All of our data is recorded into scientific notebooks, and [the data] forms the basis for longer documents such as reports. Everything we do is based off that data,” so failing to adhere to the procedure could cast doubt on the validity of the research, Seminara says.

Previously, training consisted of little more than scientists acknowledging that they had reviewed existing procedures, she says.

The need to improve training procedures was underscored in 2005 following allegations that some former Yucca Mountain scientists had fabricated their data. A Department of Energy report in March blamed upper management at Yucca Mountain for failing to hold workers accountable and neglecting to put effective reviews in place to ensure the integrity of the research being performed.

The new training initiatives are an attempt to address those concerns, Yucca Mountain officials say. Thus far, about eight programs have been developed, with a catalog of 30 training courses expected to be available by July, Seminara says. A committee comprising representatives from the training department, a manager and subject-matter experts is assigned to evaluate each new training initiative every six months, “to make sure it’s still applicable.”

Scientists are performing tests and analyzing various scenarios in connection with a license application to be submitted this month to the Nuclear Regulatory Commission. Obtaining the license is required before the Energy Department can begin construction of the repository.

Train & Retain: Employees at multinational companies in Europe shouldn’t expect big pay raises next year. According to Mercer Human Resource Consulting, only 16 percent of companies plan to increase salaries. Instead, companies are shifting their focus to retention, with career development considered a linchpin. Nearly 60 percent say they will funnel more money into training and development opportunities for employees. According to Mercer, which surveyed more than 430 European companies, 83 percent rank retention as their top concern heading into 2007.

Dannon Yogurt knows that the best-laid plans for workplace safety can’t prevent every injury. The Fort Worth, Texas, food-products giant emphasizes safety precautions as the greatest preventive measure. But Dannon also has a transitional-duty program, which aims at getting injured employees back on the job as soon as possible for their own physical and mental well-being, and for the fiscal health of the company.

    Working with medical doctors, Dannon officials modify an injured employee’s existing job whenever possible. Sometimes, however, an injury is so severe that even modified duty is impossible. On those occasions, the Volunteer Center of North Texas tries to match Dannon employees with local nonprofits in need of additional short-term staff.

    Lending out employees as local volunteers, with the approval of their doctors, has had a big impact on Dannon’s bottom line. The company has reduced lost workdays by about 30 percent. Medical costs dropped between 32 and 35 percent. Recovery time has been slashed 27 percent. “The program reinforces the habit of going to work each day, which is a very strong trait. The quicker employees get back to doing work, the quicker their healing,” says Joe Baldwin, Dannon’s workplace safety manager. JPS Health Network, a Fort Worth hospital, has been a chief beneficiary. One Dannon employee puts in a 40-hour workweek at the hospital’s gift shop, and another night-shift employee mans the information desk for five hours each evening. “Volunteers are getting harder and harder to find. That’s why Dannon’s program appealed to us,” says Traci Day, the hospital’s director of volunteer services.

    Dannon pays a portion of the employees’ wages while they work for nonprofits. Baldwin says the payoff comes in the form of reduced insurance premiums. Plus, getting workers healthy quicker helps reduce the length of time that replacement workers are on the payroll.

Improving the odds
    It’s not hard to figure out why companies like Dannon want creative strategies to rein in the runaway costs of medically related absences. The likelihood that a person will return to work decreases with each passing day, from 90 percent at four weeks to a mere 2 percent after 52 weeks, according to a joint study by Intracorp, the Washington Business Group on Health and the Journal of Workers Compensation. The same study found that employers could save $3 to $10 for every $1 invested in a return-to-work program. Employers benefit by potentially reducing premiums for workers’ compensation.

    A recent survey of more than 720 employers by Mercer Human Resource Consulting and Marsh Inc. found that workers’ compensation costs jumped 20 percent in 2001. Employees likewise gain by going back on the payroll, earning more than they would from workers’ comp. They also accrue benefits and don’t go back to their regular jobs out of shape and prone to re-injury, experts say.

    “Companies are more inclined to have transitional-duty arrangements with nonprofits today, particularly when an injured employee can’t be placed in a modified job at the company,” says Anne Ritter, senior vice president with Aon Workforce Strategies in Shelton, Connecticut.

Unexpected thanks
    Spherion Corp., a staffing company with 4,000 employees and $987 million in revenue, unveiled a transitional-duty initiative in 2000. About 700 workers have qualified for it, and most have been given medically approved modified jobs by their employers. About 70 people–10 percent of those in the program–have been placed at community charities or other nonprofit organizations for transitional duty.

    “Transitional employees go back to work at full duty usually about 30 days sooner, so that reduces the wages and the medical expenses we have to pay,” says Susan Shemanski, Spherion’s director of claims. “They’re back into the productive workforce, and we’re able to bill clients for them again.”

    It’s not every day that an employee expresses gratitude for going back to work. So when Shemanski received such a telephone call six months ago, she was understandably delighted. On the other end of the line was a man who had suffered a leg injury at a manufacturing facility, causing him to miss several weeks of work. Fortunately, he had qualified for transitional duty. As soon as doctors gave the go-ahead, Spherion loaned the man out as a volunteer to a local charity, and the company continued to pay a portion his salary–more that he would receive on workers’ compensation. He was given restricted duties and spent part of each day helping out with various tasks, such as repairing small equipment. In addition to receiving the emotional lift of resuming work, the employee rebuilt muscle strength and started earning a regular paycheck again. “He called to thank us for placing him in the program, since he had been worried that he wouldn’t get back to work after his injury,” Shemanski says.

    Indeed, physical recovery isn’t the only issue for injured employees while they’re missing work. They also must deal with loneliness, doubt and worries about their future. “The longer that people are away from their jobs, the more difficult it becomes for them to return to the workforce in any form,” says Jeffery Jordt, a Chicago-based senior vice president with The Segal Company, a consulting and actuarial firm. “On-the-job rehabilitation plays a critical role in recovery. It targets in a person’s mind that there is an expected date for [full] recovery.”

A transition that leads to change
    Comcast Corp., a Philadelphia-based cable services company with about 50,000 U.S. employees, offers transitional-duty assignments, although it doesn’t have an arrangement with nonprofit organizations. Instead, Comcast has a wide range of jobs that can be restructured to get employees back to work as soon as is practical. When one of its technicians fell off a ladder last year, sustaining several bone fractures, Comcast designed a modified job with restricted duties that were specified by doctors. The job was in sales, a completely new field for the employee, but it was work.

“The longer that people are away from their jobs, the more difficult it becomes for them to return to the workforce in any form. On-the-job rehabilitation plays a critical role in recovery. It targets in a person’s mind that there is an expected date for [full] recovery.”

    Serendipity then took over. Knowing the ins and outs of cable systems helped the erstwhile technician readily adapt to selling. By the time he was cleared to return to full-time duty, the employee had decided he preferred sales to climbing ladders. He turned in his tool belt and never looked back. “He wound up staying in the sales position and got a higher-paying job as a result,” says Andrea Smetana, a Comcast claims manager.

More than a nice gesture
    Still, companies don’t implement transitional or modified-duty plans merely to be nice to employees. Research suggests that return-to-work strategies help curtail the rising costs of unscheduled absences, which cut into productivity and eat away at profits. Direct costs of unscheduled absences, including those for workers’ compensation, disability and family and medical leave, average 4 percent of payroll, according to another study by Mercer Human Resource Consulting. Indirect costs–overtime, lost productivity, and hiring and training replacement workers–could be two to three times higher.

    What’s more, employers don’t have a lot of control over workers’ compensation costs, which get paid out over many years. Those costs mount over time and put a drag on a company’s balance sheet. Ritter of Aon knows of one 35,000-employee company that’s facing about $120 million in workers’ comp payments during the next 10 years. And that isn’t unusual, she says. Transitional duty is “not only about trying to get people back to work, but also about controlling costs,” she says.

    Also, insurance companies put pressure on companies to cut disability claims, either through safety initiatives or by getting workers to resume limited duties more quickly. “Insurers know full well that the longer someone is off work, the more expensive a claim becomes. And it goes up exponentially,” says James Kremer, vice president of workers’ compensation with Workers Transition Network, a third-party administrator in Deerfield, Illinois.

    Premiums sometimes have little bearing, though. Comcast, for instance, carries “very high deductibles” and has never gone above them, according to Smetana. The goal is to keep medical payouts as low as possible. “We’re playing with our own money, so we want to be very careful how we spend it,” she says.

The downside risks
    There is danger in putting too much emphasis on controlling costs. Companies should never make employees feel as if money comes ahead of their well-being, says Bill Catlette, an independent human resources consultant and founder of The Westar Group in Memphis. “That just leaves people with a bad taste in their mouths [and reminds them of] managed care,” he says.

    A March 2003 study by the Hartford Financial Services Group found that 73 percent of companies offer temporary alternative assignments for injured workers. Despite that, the study found, only 33 percent have adopted formal return-to-work plans. A principal reason could be the way that many companies are organized. Jordt says transitional and modified-duty jobs must have the buy-in of supervisors to really work. Since their performance and their pay frequently are linked with productivity ratios, supervisors may be reluctant to “babysit” a restricted-duty worker. Jordt gives the example of a 10-employee shipping department. If one of the workers is injured and placed on 50 percent restricted duty, the supervisor somehow has to replace the lost productivity, through either overtime or replacement workers. “So he’s increased his cost with marginal or no gain in production. That’s not a real incentive,” Jordt says.

Breaking down walls
    Kremer agrees. In many companies, human resources and risk-management departments don’t interact when it comes to addressing the issue of employee injuries. Human resources tends to focus on staffing, recruitment and training, while risk management oversees the insurance issues. What’s needed, Kremer says, is for the two disciplines to work as a team. “They need to break down that wall if they’re going to understand the impact that absences have on their organization. That’s the only way they’ll be able to talk the language that senior management will understand.” He also points out that devising a plan should not include make-work. “It’s not about counting paper clips,” he says. Instead, companies need to look at existing work demands and find creative ways for someone who is disabled to help, without aggravating their injury.

    Ritter says that the best place to begin is with a comprehensive transitional-duty policy, including specific physical requirements for each job. It makes it easier to modify jobs if the need arises. Education is important, too. Tell your employees how the program will work, especially what the company is pledging to do. Ritter also says that workers must understand that “if they are offered a transitional-duty job, they need to accept it or risk losing workers’ comp benefits.” Transitional programs link money with employee morale, Catlette says.

    As an executive with Federal Express Corp. in the 1980s, he developed and implemented the company’s modified-duty plan. It produced a savings of about $1 million in its first year. FedEx employees also gained a deeper appreciation for their company. The same holds true today. “If you do this with the goal of treating people right,” Catlette says, “you will return more money to the company. Period.”

Workforce Management, December 2003, pp. 75-77 — Subscribe Now!