Also I would like to thank the Virginia Society for Human Resource Management for hosting this forum.

Transcription

1 Bill Ermatinger Remarks Virginia Chamber of Commerce Business Needs to Provide Leadership in Workforce Training Nov. 2, 2011 First, let me begin by saying thank you Governor McDonnell and Secretary Laura Fornash for working with Barry DuVal and the Virginia Chamber of Commerce and the Planning Committee to put this much needed program together. Also I would like to thank the Virginia Society for Human Resource Management for hosting this forum. Well good morning, everyone. I think we can all agree that education and workforce training are very important not only today, but for longterm success for our businesses and for the well-being of the Commonwealth. As we all know, CNBC ranked the best states for business in June, and Virginia came out on top. In fact, it was the third time in five years Virginia has won that honor we have alternated with Texas since the poll started in That s the headline. The fine print tells us a little bit of a different story. It said: Not all is rosy in Virginia. Virginia lost some ground in the Workforce category dropping three places to number 12. But that was mainly because an improving unemployment rate is shrinking the pool of available workers. So we re 12 th out of 50 in the Workforce category not bad still in the top quartile. But look at CNBC s logic: Our Workforce ranking dropped because our unemployment rate is improving. Does that make sense to you? Let me tell you a little secret about what s really going on: There are jobs available in Virginia. Our population just doesn t have the needed skills to fill them all. It s more than just a problem. Four years ago, when I spoke at the chamber s Conference on Economic Leadership, I referred to it as a war on talent. Today, I ll update you on the war, and hopefully I ll convince you that it s time to join the fight if you haven t already. 1

2 First, let me put this war in context from the perspective of my company, Huntington Ingalls Industries. HII, which spun off from Northrop Grumman Corp. in March, owns three shipyards: Newport News Shipbuilding here in Virginia, Ingalls Shipbuilding in Mississippi and Avondale Shipyard in Louisiana. We also own a ship repair yard in San Diego. We build and maintain ships for the U.S. Navy and Coast Guard, and thanks to the Navy s 30-year shipbuilding plan, we can, with some level of confidence, forecast our work and therefore our workforce needs decades ahead of time. This ability to forecast our business so far in the future is indeed very rare but it does provide us with the unique ability to see workforce challenges in a way most businesses cannot. Today we have nearly 38,000 employees and we are the largest employer in both Mississippi and Louisiana and the largest industrial employer in Virginia. Due to natural attrition and anticipated retirements of an aging workforce, we ll need to hire more than 10,000 people in the next five years at Newport News and another 10,000 at Ingalls in the next three years. That s 20,000 people over the next five years! So why do we have unemployment? Let s see: Is HII going to hire the 21-year-old who just graduated from college with a degree in French literature? We might, but it s extremely hard to find jobs for this kind of graduate. Are we going to hire a foreign national who graduated at the top of her class with an engineering degree? Unfortunately we can t at NNS due to the nature of our classified nuclear work. In fact, all Newport News Shipbuilding employees have to be U.S. citizens. What about the 26-year-old with an accounting degree with a few years of professional experience? Well, we d like to hire him, but we may need him for a job that requires a security clearance which means that his lifestyle choices he made as a young person may eliminate this possibility. So the challenge is taking a shrinking resource people and doing whatever we can to bolster it. In other words: workforce development. It s a challenge. HII considers workforce development a core business objective and we are more than up for the challenge Are you? Let s talk about education. 2

3 The three examples I just used included college graduates, but we also look for technical school and community college graduates to satisfy our workforce requirements. In fact most of our jobs do not require a four-year degree. We recruit many of the work-ready high school graduates who have the educational foundation and whom we believe we can train to be successful on the waterfront. However, work ready can be a barrier too. Consider these job requirements for a position at one of our shipyards: Need to know geometry for calculating plate weights of steel Have to know how to read blueprints and interpret two-dimensional information into threedimensional lines and planes. Some of you might think the posting is for an engineering job, but it s not. These are just some of the requirements for a shipfitter. A degree is not required, but the higher math skills are a prerequisite, as is the ability to synthesize large volumes of information. Ask yourself: Is our public education system in a place where it routinely provides these kinds of skills to help position students as qualified candidates for the workforce? As shipbuilders, we are proponents of value stream thinking. We have to think this way, we build floating cities. This means for every process and we have thousands of them we identify: Who owns it? What are the products? And who are the customers? We believe this builds efficiency into each aspect of our business, resulting in a better product and a more satisfied customer. Our CEO, Mike Petters, has taken to applying this thought process to workforce development and, more specifically, to public education. Think about it: Who are the customers of public education? Some of you are probably inclined to say it s the students themselves. But what if you thought of the students as the product? Who is the customer then? My wife, a former teacher herself, and I have this debate all the time. She would tell you the parents are the customer. As a human resource guy responsible for 38,000 employees, I would tell you it s the employers. I tell educators all the time, you may have them for 12+ years, but employers will have them for 30 and in some cases 40 years. 3

4 What if the customer is the community, or the Commonwealth or society at large? At HII, we believe if our measure of success in public education is the quality of the students, then we are getting decent products at a high cost. If we are the customer, what changes can we make to help improve the quality and efficiency of the resulting product? This is value stream thinking. Of course, in the case of education, the customer is not always heard. For example, we ve been saying for years we need more people with background in STEM science, technology, engineering and math. The National Assessment of Educational Process reports that roughly 75 percent of our nation s high school students are not proficient in mathematics when they complete 12 th grade. The U.S. Department of Labor projects that 15 of the 20 fastest growing occupations in 2014 will require science or mathematics knowledge to successfully compete for those jobs. Is it working? Princeton Review publishes a list of the top 10 college majors. Business ranks first. For the sciences, psychology ranks second, biology fourth and computer science 10 th. Engineering and math aren t even on the list! What about workforce development? My message here is simple: Get into the fight! Too often, businesses sit on the sidelines. Instead, business needs to actively engage by investing time, talent and resources in the state s workforce development pipelines. Lacking that participation, states create programs in a vacuum that try to be all things to all people and, for the most part, fail. A lot of my colleagues will point to the educational system as the problem. I disagree. The problem is not the educational system; it is the lack of engagement in the business community. 4

5 At HII, we are always asking, How can we work with the programs already in place and help tailor them? How can we as a business better take advantage of the existing infrastructure so it yields us greater dividends in terms of our most important resource people? We strongly believe it takes industry working with the states collaboratively to invest in workforce development in a manner where the return on the investment is mutually beneficial for both the industry and the state. Basically, you get back what you invest. We ve all heard the adage, If you re not part of the solution, you re part of the problem. Let me tell you what HII is doing to be part of the solution. We have apprentice schools in Virginia and Mississippi that provide the best feeder system of highly skilled employees into the yard. In fact, Gov. McDonnell and the Commonwealth have been very supportive and a very recent example of this is a $50 million state training grant, half of which is being used to build a new 80,000 square foot Apprentice School in downtown Newport News. We ve partnered with municipal school districts to implement a Career Pathways program to help graduates prepare for a seamless transition to positions within our workforce. We ve also partnered with regional career and technical high schools such as New Horizon Regional Educational Center, where we helped develop the curriculum that includes welding, electrical and carpentry. We work closely with the Virginia Community College System on a wide range of education initiatives. Specifically, we developed a state-of-the-art manufacturing curriculum for Thomas Nelson Community College so when students learn to weld and do other craft as part of their training, they are learning it the way we do it in shipbuilding. We also have senior-level leaders actively involved in both Virginia and Mississippi workforce development efforts. We do all of these things and more because there is a vital need for long-term planning for workforce development, where looming retirements of the Baby Boom generation will result in a significant decrease in our most experienced and knowledge employees. Let me tell you four (4) things we ve learned along the way. First: The current focus is too scattered. Businesses must align themselves internally and externally to deal effectively with the education and workforce readiness issue. 5

6 The business sector must speak with one voice and deliver one message to maximize impact and move the needle. The language of the debate must be changed from the usual K-12 reform to one that focuses on competitiveness. This transforms education into a global business issue and creates a renewed sense of urgency. Second: Corporate philanthropy alone cannot improve workforce readiness. Just throwing money at the problem hasn t worked in the past and it won t work in the future. Truly collaborative long-term public/private partnerships that look at affecting systemic change will eventually have the greatest impact. While business may view this as primarily a responsibility of the education community, it is important to remind the business sector that it too has a critical role to play. Like I said earlier, the business community is a consumer of graduates, it should have a say in how the system meets its demands. Third: Companies rarely leverage their greatest assets when supporting educational programs their own expertise in their core competencies. It is important for corporations to share their most valuable resources time, talent and experience. While teachers are very good at teaching the curriculum they are given which speaks to content they find it much more difficult to put that content in a real-world business framework context. The business community can help solve this conundrum by opening its doors to teachers and those educating through after-school and community-based initiatives. This can make abstract lessons relevant to students. More than anything else, I believe the biggest impact businesses can have on workforce development, is providing context to what is learned. Lastly: Leadership is critical. Business has a bully pulpit, and if it gets behind an issue, it can force real changes in behavior. If businesses and especially CEOs get and stay behind this issue, change will come. I started by mentioning CNBC s rankings of the best states for business. Does Virginia s ranking really matter? I suppose it does but only in the short term. As business leaders, we re supposed to look out for the long term and think strategically. 6

7 Instead of asking what our ranking will be next year, ask yourself: Will I be able to attract, hire, and retain the people I need to be successful next year? What about five years from now? Twenty years from now? If the answer is no, what are you going to do about it? Coming to this event is a step in the right direction, but you need to acknowledge the fact that we have a war on our hands, and you have to be willing to join the fight. Thank you, and enjoy the rest of the forum. 7