Upheaval : White Collar Retraining: New Options

Nearly a year ago, Susan Staton became operations manager of a Bank of America branch in Corona. It was a proud day in her life, the achievement of a long-sought goal. “I changed from a second banana to a top banana,” Staton said.

But just six weeks later, Staton was informed that her branch--like 130 others around the state--would be closed as part of a major corporate reorganization. “It was heart-rending,” said Staton, who had to make a fundamental reassessment of the direction of her career.

Fortunately, there was a good option open.

The Bank of America had a contract with the state of California to get $5 million in funds to retrain people who faced displacement as a result of automation or other changes in the way the bank operated.

Staton signed up to be a computer analyst and recently completed her training course. She is now working at the bank’s Embarcadero Center headquarters in San Francisco.

White-Collar Crisis

The crisis Staton faced is one that increasingly is being encountered by white-collar workers in California and the rest of the country.

The upheavals taking place in the nation’s offices are just as profound as those in its factories, said Jerome Rosow, president of the Work in America Institute, a Scarsdale, N.Y.-based think tank. He said the need to retrain employees in banks, telecommunications and electronics firms has become as great as the need to retrain auto and steelworkers.

Not all of California’s displaced white-collar workers can boast of such immediate success at getting another good job through retraining as Staton. But the state’s 2 1/2-year-old Employment Training Panel program has given thousands of those facing the loss of their jobs a jump on getting back into the employment mainstream.

The Employment Training Panel provides retraining to experienced workers, whether they are white or blue collar, who either are unemployed or about to be displaced from their jobs. The program is financed by diverting $55 million a year that otherwise would go into the state’s unemployment insurance system.

Drawing High Praise

All training is directed toward specific jobs. The employer has to make a commitment to hire the trainees and is paid only if the trainees actually go to work for at least 90 days. Steve Duscha, the program’s executive director, said this guarantees that people will not be schooled for jobs that do not exist, a chronic complaint about retraining programs.

The program has drawn high praise from people in the academic community who specialize in job training and development programs.

“It looks like a liberal or left-wing idea--further extension of the state’s responsibility,” said Stanley Nollen, associate professor at Georgetown University’s School of Business Administration. “On the other hand, it’s a conservative idea--spending money on private employers so they can compete better in the marketplace. You can look at it either way.

“It’s part of the public interest now to generally contribute to the skill level of the adult work force in the same way everybody has for a long time thought it’s the state’s responsibility to pay for the education of children,” he added.

Rosow said the program is working so well that it could become a national model. Delaware, Illinois, Kansas, Massachusetts and New York have made inquiries to state officials, looking to replicate the California undertaking, according to Sandra Glackin, a panel staff member.

Duscha said the rationale for the program emanated from massive changes taking place in the state’s economy.

Flurry of Plant Closings

“The panel was created in 1983 out of a recognition that the economic transformation California faces today is as profound as that in the 1930s,” Duscha wrote in a report last year.

The immediate impetus for the program was a flurry of plant closings in the auto industry and other manufacturing sectors that primarily affected California’s blue-collar workers, said Ben Munger, a consultant to the state Senate Industrial Relations Committee.

But, he said, once the Employment Training Panel began functioning, companies seeking to improve the skills of their white-collar workers--such as Bank of America--also began to utilize it. About a third of the Employment Training Panel’s programs are directed toward white-collar retraining, according to Duscha.

Art Reimers, Bank of America’s director of human resources, said his company at first was hesitant to turn to a government program.

“We had some trepidation about getting involved with a government entity--the normal bureaucracy,” he said. “But these people said not a lot of bureaucracy would be involved. And we checked them out with other employers who said the program had worked well.”

Since its inception, the program has awarded more than $115 million to 2,500 employers involved in 252 training projects. (About 60% of the training contracts are held by educational institutions, such as the Los Angeles Community College District, which run them in conjunction with companies. The rest are held directly by corporations.)

Duscha said the program is assisting California business to implement new technologies and retrain workers to fit in at companies where the nature of jobs is undergoing fundamental change. He said that about 80% of the people who enroll in programs complete their training. So far, that translates to 38,000 workers getting retraining.

$1 Million to Hughes

For example, the panel awarded Hughes Aircraft Co., California’s single largest employer, more than $1 million to retrain about 1,100 people to operate its new, highly sophisticated manufacturing system. Grants also have been given to Pacific Telesis, FMC, Lockheed and other giants of California industry. And it has given money to medium-sized architectural firms to teach draftsmen computer-aided design, which is replacing old-fashioned drafting.

“The Employment Training Panel is based on the notion that retraining is something we all have to think about,” Duscha said. “Whoever thought a major bank would have to do major retraining to keep its people employed?

“We identify who’s going to hire people. That’s a radical notion in the job training business.”

James L. Quillin, executive director of the California Conference of Machinists, agreed. “The ETP is a can-do, job-based training program,” he said. “That distinguishes it from the old programs, such as CETA (the Comprehensive Employment Training Act), which seemed to train for training’s sake.”

And so far, it has been remarkably free of scandal. The only blemish on the program’s record is a controversy that arose at Project JOVE, a 13-year-old San Diego-based social service program that assists ex-offenders, veterans and the unemployed. In April, the state suspended some of its funding because of alleged financial irregularities. Then in May, JOVE filed for a Chapter 11 bankruptcy reorganization.

“That was necessary because of the way in which the Employment Training Panel determines liability under their contracts,” said Tom Wornham, JOVE’s executive director.

Duscha said the Employment Training Panel has referred 160 trainees in JOVE programs--including recreational vehicle repair training in four cities--to other training programs.

In addition, he said, the panel had made a written demand to JOVE asking for repayment of $264,820. Wornham contends, however, that the panel owes JOVE almost $500,000 “for money we have actually expended in properly serving their participants in a total of four projects.”

Some Question Approach

Elizabeth Stanley of the Los Angeles Business Labor Council said the program’s requirement that a company must have specific jobs to offer before it receives any training funds is a key reason why there have been so few problems. “This requirement keeps out the poverty vultures,” she said, referring to fast-buck artists who attempt to capitalize on the misfortunes of the unemployed.

Still, some job training experts question the program’s approach.

Goetz Wolff, assistant professor of urban studies at Occidental College who specializes in labor problems, said it is important to keep in mind that the program does not deal with problems of the hard-core unemployed or youths seeking their first jobs.

Another job training specialist who asked not to be identified said that the panel’s desire to maintain a high job-placement record is good but has had the undesirable side effect of making companies unwilling to risk bringing into a program people who are not sure-fire prospects for success. This specialist said the panel should build incentives into the program for companies to work with “harder-to-train” people so that a broader base of the population could be served.

And Ellen Green, executive director of the California Project, a liberal group that works on economic development issues, said she liked the idea of putting unemployment funds to use for training. But, she said, the program has inherent limitations.

“I don’t think the ETP will stop mass layoffs or the kinds of reorganizations that are taking place because of major economic forces, such as mergers,” she said.

Green also questioned whether the program--although designed to help individual employees--might be providing substantial benefits to large corporations that do not really need help.

“For a big company, to train your existing employees is a further investment in your own profitability, icing on the cake,” she said.

Training a Low Priority

Duscha, however, said he would not apologize for the program’s focus. He said that other government programs, such as the Job Training Partnership Act, deal with issues involving the chronically unemployed or new job seekers. And, answering Green’s second criticism, he said that about half the panel’s projects involve small businesses.

Duscha said it is appropriate for government to assist business. And he stressed that in this instance government policy was having a positive impact on corporate decision-making.

“Training, unfortunately, is one of the last functions that a business has on its list of priorities,” he said. “We’re able to move that up, just as the tax laws affect certain business decisions. We are giving business an incentive to take care of their people, and to take care that its people are more productive, and to help ensure that those people are not displaced or if they are displaced to put them back to work.”

However, he does acknowledge the panel’s limitations: “Training does not create jobs and cannot solve all the problems of the unemployed.”

Roy Azernoff, project administrator for employment training at California State University, Northridge, noted that the program is getting such widespread support because it confers benefits to both the public and private sectors.

“It’s a win-win program,” Azernoff said. “The companies are getting funds for training. The employees are getting training for modern technology. The state wins because these people don’t go on unemployment.”

Organized labor also benefits in instances where a collective bargaining agreement is in place at a company receiving funds from the program. In those cases, both the applicable unions and management participate in designing the training programs. So far, about a third of the panel’s programs fall into that category, said Quillin of the California Conference of Machinists, one of three representatives of organized labor who serve on the seven-member panel that decides how funds are disbursed.

One of the places where a union is involved in structuring the retraining program is at Pacific Telesis. The Communications Workers of America represents a growing number of employees there whose jobs are being threatened because of technological changes.

Career Opportunities

“A lot of people have been retrained as electronics technicians whose jobs as operators were being phased out,” said Elizabeth Stanley of the Los Angeles Business Labor Council. “These jobs represent not only retraining but real career opportunities.”

One of the participants in the Pacific Telesis program is Janet Alonzo, whose current job is to monitor the progress of installation work. While the job involves both paper work and computer work, Alonzo said, it eventually could become “surplus. There will be more mechanized ways to check information, so less people will be needed.”

She is now taking a rigorous 160-hour course to become an electronics technician. All the training is done either before or after her workday ends. Alonzo said it will take her about eight months to complete the training and then she will be eligible for 10 different jobs, ranging from splicer to communications technician.

“I’m excited about being in the technical end of the company,” she said.

Alonzo and the other Pacific Telesis employees involved in the retraining program were in jeopardy of displacement, said Joe Richey, the company’s employment manager.

“The job we have is to try to match surplus employees with existing opportunities,” Richey said. “When you try to do that, it’s sometimes difficult because they don’t always make a perfect match. This training program gives them an opportunity to become a closer match for the job.”

Richey said most of the Pacific Telesis workers who are being retrained are going from non-technical to technical jobs. “It could be in an area they never thought about,” he said. “It’s an excellent program. The community college district has to be given a lot of credit; the class was written by them per our prescription.”

The Pacific Telesis project is one of several being administered by the community college district, which has $9 million in Employment Training Panel contracts, according to Linda Thor, the district’s senior director of occupational and technical education.

“We have placed emphasis on occupations affected by technological change,” Thor said.

And these days that could be almost any job, as the gigantic health care industry has discovered. Several California companies in that field have turned to the Employment Training Panel for help in bringing their employees into the Computer Age.

Key Part of Job

A spokeswoman for Cigna Health Plan of Southern California said the company’s manual system for dealing with patient claims became unworkable and the company decided it had to computerize. The panel funded a program that will train 120 people to learn to use computers as claims examiners.

Beverly Hills-based American Medical International Inc. is using $371,340 of panel funds to train nurses, clerks, dietitians and other hospital personnel to use computers at Valley Medical Center in North Hollywood and two other local hospitals.

“We had a very typical situation of computers coming into the workplace and (employees) needing retraining,” said Camille Caizzo, the company’s retraining director. “They (program officials) asked me if people could no longer do their jobs without this retraining. I said, ‘Yes.’ The computer is now a key part of the job.”

She said that by the end of June the hospitals will have an internal computer network that should improve the efficiency and delivery of patient care.

Sally Bell, a clerk in the respiratory therapy department and one of the 180 American Medical employees going through training, said the advent of the computer has definitely improved operations at Valley Medical because vital patient information is now much more accessible. “You don’t have to call the floors. You don’t have to call the pharmacy. It takes away a lot of phone calls, a lot of running around,” she said.

Nurses can put X-ray orders and prescription requests into the computer, said Coby Ramoy, American Medical’s corporate media manager. “Instead of having these things hand-carried throughout the hospital, they’re transmitted simultaneously with entry to different departments throughout the hospital,” Ramoy said. “For nurses to learn how to use these systems is a survival skill.”

Practice at Hospital

American Medical personnel are taking their computer lessons at the hospital on the same computers they will be using in the future. Their progress is monitored by teachers who can sign on to the computer and see how the students are progressing. And they are able to progress at their own rate, Caizzo said.

Representatives of American Medical and several other companies said they would have retrained employees even without the state funding. But most of those companies also said they probably would not have done as thorough a job.

“I don’t know if we could afford to do the training to the degree we did without state funding,” said Todd Blackford, a personnel specialist at Hughes Aircraft Co. “It certainly has helped the success of the training.”

Reimers, Bank of America’s director of human resources, made similar remarks. He said the company’s goal was to avoid laying off any employees as a result of automation or the massive consolidation of its branches. He said the Employment Training Panel has helped the bank achieve that goal thus far.

“This was very unique, really an incentive to retrain, particularly with automation,” he said. “We’ve spent a lot of money on retraining. We’d do this anyhow. But this is an incentive for us to do more.”