The Secret to Better Globalization: Train the Company, Not the Worker

Last Updated Aug 20, 2007 12:53 PM EDT

In July a Financial Times poll found that US citizens were three times more likely to believe globalization is having negative rather than positive effects. Because of increasing interconnectedness, many resources, human or otherwise, have been relocated. Competition is fierce and many feel their lifestyles are threatened. In everyday words, people lose their jobs (sometimes their whole industries) and need to find alternative work and be retrained. In the meantime, they're idle. So what can be done to both reduce the human cost of globalization, as well as productivity lost to retraining?

In an article today for Business 2.0 on CNNMoney.com, Jeffrey Pfeffer offers an alternative to the U.S. government's current policy of "providing funds to retrain displaced workers and then relying on the free market to reallocate labor and capital."

The model he offers is the New Paradigm Center at the Korean Labor Institute, in Seoul. This government financed institute has "a mandate to study, consult on, and promote people-centered management practices, primarily in small and medium-size enterprises." And so far the results have been impressive:

NPC's client companies have increased sales an average of 7 percent and boosted profits more than 26 percent. The companies also report a 60 percent rise in quality of products and services.
The results are every managers dream -- increased profits combined with better industrial relations. One example:
Good Morning Hospital, a 400-bed facility in Pyongtaek that was struggling to reduce work hours and fill beds. NPC ran employee orientation programs and offered courses in nursing skills, stress management, foreign languages, and computer use. Hours decreased, new jobs were created, and revenue rebounded.
By following the Korean example and investing in training at the company level, rather than in training individual unemployed workers, the US government might be better able to cushion the jarring relocations necessitated by globalization, and to keep US companies staffed with happy, productive workers well-armed with the skills needed to compete in a global market.
  • Jessica Stillman On Twitter»

    Jessica lives in London where she works as a freelance writer with interests in green business and tech, management, and marketing.