Corporate Vocational University: Aligning skilled labor qualifications with the needs of multinational manufacturers

For multinational manufacturers with production sites in all corners of the globe, qualified skilled labor represents a critical success factor. Though novel manufacturing technologies are now available at locations anywhere in the world, many countries find they have a skilled workers shortage. Getting the right people to work correctly and efficiently in manufacturing facilities is no easy task. Not all countries have national education systems that fall in line with internationally comparable training standards to meet the demands of companies. As a result, companies have to think of approaches that go beyond proposed state and institutional models. Thomas Eichberger has concentrated on this issue as part of his doctoral work at Steinbeis University Berlin. He has researched the global availability of skilled labor with comparably good qualifications for multinational manufacturers.

Productivity, quality, costs, flexibility, innovation – these are the typical keywords ascribed to the standard repertoire of every manufacturer. Increasing globalization, as well as ever-shorter product life cycles for increased product variants and shrinking batch sizes, are the challenges that companies must face if they are looking to survive and thrive in international competition. This production strategy is a key element of the overall business strategy of multinational manufacturers. Companies are always looking for ways to efficiently network their manufacturing locations in order to make the most of possible synergies. This is because, in contrast to products, manufacturing know-how cannot be readily copied by the competition. So it can present companies with a real competitive advantage.

Labor costs are one criterion in the selection of manufacturing locations. However, the wage disparity between industrialized countries and so-called low-wage countries is shrinking.

But even customer demands have changed. These days, customers expect the highest quality at the lowest possible price and maximum flexibility, even for consumable goods manufactured in batches of millions of units. One way to try and meet these demands is through the implementation of innovative manufacturing technologies that offer a high degree of automation. Machinery and processes can be made readily available in Asia, the U.S., Latin America and Europe. The difference lies in the effectiveness and efficiency in their handling. That is, it ultimately depends on the qualifications of the operating staff. In comparison, automated manufacturing calls for fewer workers, but these workers must be capable of handling the technical systems involved. To meet this need, companies are looking for sufficiently qualified skilled workers on a global scale, particularly in commercial, manufacturing-related fields. In terms of management, the leadership levels at international companies have long achieved parity. But this is distinctly different when it comes to the professional level of the skilled workforce. The competence levels for completing comparable tasks varies greatly across the manufacturing locations, a byproduct of globally varying educational systems. Multinational manufacturers, however, would like a more balanced level of know-how across global production sites.

Thomas Eichberger’s empirical research covers three main questions: What significance is given to worldwide access to skilled labor, particularly with respect to the global manufacturing strategy of companies? How do multinational manufacturers and potential trainees envision internal company training programs for skilled workers? And how would such a concept be established in the form of a “Corporate Vocational University”, in order to meet the needs of both target groups?

Companies regard skilled labor qualifications as a key success factor. The research shows that 87% of the companies questioned do not deem current vocational training systems suitable for meeting the global demands for a skilled workforce. 69% of the company experts see this as having an adverse effect on the implementation of their global manufacturing strategy. It is also interesting to note that 60% of these company experts do not assess the wages and social status of skilled workers as sufficient within the company.

Companies expect an internal company training program to promote the social and intercultural competence of its trainees. From the onset, potential trainees ask for transparent development perspectives and a higher appreciation of their vocational training in comparison to academic qualifications. It would be particularly interesting to research how different training program formats might influence the preferences of company experts and skilled workers with respect to the overall training concept. Interviews and group discussions with both experts from multinational manufacturers and trainees were held as part of a pre-study devised to address this aspect. The main study took the form of an online Discrete Choice Experiment (DCE) in which company experts and skilled workers from Germany and the U.S. were surveyed. Participants were presented with pairs of potential program formats from which they could choose their preference. A total of 477 datasets were evaluated. Among other things, the results show that companies and potential trainees, alike, place a high value on the training spectrum covering several qualification levels and also including non-specialist learning content. In terms of delivering the learning content, both target groups prefer more flexibility in the form of additional educational offerings.

The results of the empirical study have served to elucidate the demands of companies and trainees, and have helped to identify how individual attributes of a training program can affect their preferences. The sample training concept of a “Corporate Vocational University”, which was developed based on the results of the study, is comprised of the following six components: basic structure and training spectrum, curriculum design, teaching and learning methods, testing and certification concepts, and organization structure and business models. The curriculum design is based on the guiding principle of a “training triad” which places the “practical”, “theoretical”, and “social” training areas in context and on an even footing. Further guiding principles of a “Corporate Vocational University” are neutral graduate titles such as “Operator”, “Specialist”, and “Expert” in addition to transparent development paths – both horizontal and vertical. A case study spanning several years would be necessary to investigate whether this model could establish itself in the competition for talented trainees across educational systems, particularly in comparison to traditional vocational training systems. The research project is currently being finalized and includes the core elements of a “Corporate Vocational University” as a recommendation for companies thinking about offering global, internal company training for skilled workers.

Thomas Eichberger
Steinbeis University Berlin (Berlin)
thomas.eichberger@stw.de