The Power of People

Excerpt from Tooling U-SME’s white paper, “People Power: Human Capital Drives Manufacturing Competitiveness.”

The term, “human capital,” was coined back in the 1960s by Nobel Prize-winning economist Theodore W. Schultz and later popularized by American economist Gary Becker.

It is the understanding of, and commitment to, investing in human capital that sets world-class companies apart from their competitors. While there are several components to developing human capital such as talent acquisition, performance management, rewards and recognition, succession planning, and system/process system design, one critical area is workforce development.

Model companies are outperforming others in large part because they manage and train differently. A well-trained workforce is a competitive advantage, allowing companies to drive innovation, customer satisfaction, quality, productivity, and growth. The beneficial by-products are engaged and loyal employees, satisfied stakeholders, and a thriving economy.

With so much depending on business outcomes, it is surprising that 43 percent of manufacturers have no formal knowledge transfer process in place, and 40 percent have no regular training budget, according to SME research.

In Tooling U-SME’s white paper, “People Power: Human Capital Drives Manufacturing Competitiveness,” the company reveals critical information to help manufacturing executives and leaders make better strategic decisions and more effectively manage operations. The report explores the benefits of investing in people, demonstrates the importance of human capital for meeting business objectives, and outlines industry best practices in training and development.

Below is an excerpt from “People Power: Human Capital Drives Manufacturing Competitiveness” highlighting training best practices.

Training Best Practices

Successful companies recognize the importance of recruiting the right people for the right job and providing the right training. Current manufacturing training and development best practices often integrate competency models, blended learning, and a data-driven approach.

Competencies: Some manufacturers increasingly are turning to competency models—a structured system to develop the needed knowledge, skills, and abilities for specific jobs—to build the high-performance teams they need to meet the demands of their current business environment as well as in the future.

A study by Bersin & Associates, “Key Findings—Becoming a High-Impact Learning Organization,” indicated that high-impact learning organizations are better able to drive value from a well-designed, well-adopted, and sustainable use of job/role profiles and competency frameworks. The study found that effective use of profiles and competencies provides a common language to describe talent throughout the organization. This language allows productive conversations in areas such as skill gaps, performance management, talent acquisition, and leadership development.

In today’s manufacturing environment, it’s necessary to validate that knowledge has been transferred—not just that a class has been completed. Competency models such as Tooling U-SME’s Competency Framework provide the rigor needed to meet ISO quality objectives, guidelines, and reporting requirements, as well as those outlined by certification organizations such as National Institute of Metalworking Skills (NIMS), Manufacturing Skills Standards Council (MSSC), SME, and American Welding Society.

Blended Learning: One way companies can improve their workforce development is through a blended training approach, combining theory and application. Giving employees the ability to access training through various delivery methods such as instructor-led sessions, online training, and Webinars, increases their opportunities for learning, and in combination, provides the consistency they need.

Each mode of training complements the others, and provides employees with multiple opportunities to learn and apply the material. For instance, employees who can access online courses to build their base of standardized knowledge will be more prepared to take advantage of their time with an instructor. Or as they move to on-the-job-training, they will be ready to apply classroom or online knowledge. A blended training approach also gives employers the flexibility of customizing the mix to maximize outcomes.

Data-Driven Approach: Technology is changing the way people learn. Employers and employees expect training today to be on demand, anywhere, any time. This approach, often based around online training, is gaining momentum with both employee training facilities and educational institutions—high school through college/university level—which feeds the employee pipeline.

Technology empowers employees by providing access to tools, knowledge, and other resources to help build them into high performers. This allows employees to access knowledge when they need it, no matter where they are, and can even help accelerate skill development.

Through a robust Learning Management System (LMS), it’s easier than ever to track an employee’s progress from onboarding through career management, allowing employers to design custom training programs for individuals and identify high-potential team members.

Excerpt from Tooling U-SME’s white paper, “People Power: Human Capital Drives Manufacturing Competitiveness.” For more information about the connection between training and growth, and to access other Tooling U-SME white papers, visit:

Jeannine Kunz is the director of Tooling U-SME. For more than 80 years, Tooling U-SME has worked with manufacturers to build training programs and support workforce learning initiatives.


Jeannine Kunz
Jeannine Kunz is the vice president of Tooling U-SME. For more than 90 years, Tooling U-SME has worked with manufacturers, educators, and other organizations to build training programs and support workforce learning initiatives.