VITAL STATISTICS
 Think training skills A monthly chat with Peter Francese, left, director of Demographic Forecasts for the New England Economic Partnership.
Published: August 2006
SV: How have the education and training need of workers changed over the past 10 years?
FRANCESE: They have substantially changed. For example, the equipment used at most workplaces has become far more complex. Ten years ago the Internet was in its infancy as a business tool. If you had research to do back then all you had to do was walk over to the library. Now many library holdings are on line. Even in manufacturing, computer-aided design and computer driven machine tools have made the whole production process far more complex than in the past. Secondly, the nature of work has changed.
Millions of low-skilled jobs have been outsourced to other countries while higher-skilled office-based jobs are increasing. If you haven’t got the skills to get or keep one of those better paying but more demanding jobs you’re just out of luck.
The job mix of the whole region has changed. There are fewer and fewer jobs that pay a livable wage that require no skill at all. Even a previously low-skill job like waiting tables in a restaurant now requires more training because
the order system has probably been computerized and customers expect better service.
Competition is also more intense. An employer can’t compete unless employees work smarter than they did in the past. If I was going to start a company that needed a lot of workers with little or no skill I’m almost certainly not going to locate in New Hampshire, or anywhere else in New England, because the cost of living and therefore average worker pay, is so much higher than in other locations.
SV: How important is ongoing training for workers?
FRANCESE: “Ongoing” is the key word. As we have seen nationwide, jobs disappear all the time and the nature of jobs changes much more quickly than in the past. In that regard, it might be useful to point out the nature of employment on the Seacoast.
About a quarter of jobs on the Seacoast are knowledge-based. That is they are in information services, financial services, real estate, professional, scientific/technical, or in management/administrative services. These knowledge-based jobs have jumped 31 percent in the Seacoast area during the past five years. In comparison, all employees in all other industries went up about 10 percent. Knowledge-based private sector jobs on the Seacoast are growing three times faster than lower-skilled jobs in other industries. Only about one in ten workers here are now employed in manufacturing, but the number of those previously higher-paid but lower-skilled jobs in that industry have declined 17 percent in just the past five years. And that’s the only major industry that has any job decline.
Another category which makes up another 25 percent of the jobs on the Seacoast is wholesale and retail trade. Retail trade is a big deal on the Seacoast. But that industry has also changed. No one in that industry can afford to have employees that just stand behind a counter. Employees have to be trained in the merchandise, selling and, we hope, in how to properly serve customers.
Today’s more-experienced shoppers in downtown Portsmouth don’t want to talk to somebody who doesn’t have a clue about what’s in the store. That’s another example of what used to be a simple low-skill job that has changed.
About 15 to 20 percent of the jobs in the Seacoast are hospitality, which includes accommodations, dining and entertainment and is a growth industry. It used to be that a waitperson just took your order, served your food and smiled. But today there is more intense competition among fine dining restaurants on the Seacoast. Now the server needs to know more about the food being served as well as a little something about wine, such as why an un-oaked Chardonnay might be preferable. A restaurant with untrained waitstaff will probably not last long.
SV: What is the cost-to-benefit relationship for employers to foot the bill for job-related training?
FRANCESE: Since three quarters of all employers on the Seacoast employ fewer than 20 people, not many businesses can afford to pay for just any college courses or degrees. But small businesses should be willing to pay, and get a good return for, job-related training. The more skills employees have the more valuable they become. Some employers worry that if they pay for training their workers will also want to be paid more. And yes, it’s possible they will. But the training can also improve the relationship between employer and employee. If the employee becomes more productive because of higher training, and if that increases the amount of business the firm does, then perhaps any additional profits need to be shared with that employee in some fashion.
SV: How valuable is a well-trained, highly skilled employee in today’s marketplace?
FRANCESE: Ask any restaurateur: how valuable is your highly trained chef? They would probably say: “Without at least one I’m not in business.” And that can be translated into many other businesses. A carpenter in construction who is not well trained will work slower, less efficiently and produce lower quality work. Perhaps in 1956 you could get away with minimally trained employees but you just can’t do it today. All employees need to understand the business they are in as well as better understand the customers, and the goods or services being provided. All that means they need more training than in the past.
SV: Is all training equal or are there some types of training of greater value than others?
FRANCESE: All training is not equal. The bottom line is higher education has the greatest payoff. On average, for every $100 someone can earn with a high school degree, someone with a bachelor’s degree can earn $200. The payoff for a graduate degree is even higher while those who drop out of high school have almost no hope of succeeding economically.
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