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Steelmaker Revives Apprentice Program to Address Graying Workforce, Forge Next Leaders

January 27, 2006
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In 2000, Dofasco’s senior managers commissioned demographer David Foot to study the makeup of the Canadian steel company’s workforce, hoping to gain a deeper understanding of its workers and their competencies.

    Instead, Dofasco’s executives received a rude awakening: The average employee age was 47 and climbing, and the average length of service was 23 years.

    That meant that over the next five to 10 years, 50 percent to 70 percent of the company’s employees would be eligible to retire. In the meantime, the study’s glimpse into the broader community’s talent pool in small-town Hamilton, Ontario, revealed a dearth of qualified candidates for the years ahead.

    "It was a bit of a surprise," says Brian Mullen, Dofasco’s director of human resources, noting that it can take as long as four years to properly groom a worker for a skilled-trades position.

    Faced with an aging workforce and a limited supply of qualified replacements, Dofasco launched a pre-emptive strike by revitalizing its apprentice program and creating leadership development programs that could rapidly fashion fresh recruits into future leaders, Mullen says. Today, Dofasco spends about $13 million a year on the training and development of its 7,200 employees in Canada.

    It’s a hefty investment that has earned the company industry accolades including a Financial Post 10 Best Companies nomination as well as the rapt attention of some of today’s global steel giants. On January 24, Luxembourg-based steel company Arcelor agreed to buy Dofasco for $4.86 billion after topping bids from Germany’s ThyssenKrupp.

    Before the deal was reached, Dofasco spokes­man Bill Gair speculated that the company’s training and development initiatives would be likely to remain intact, regardless of its new owner. "None of these companies are looking to change anything or disassemble (programs). They want us for the way we are," he said.

    That would be good news to the nearly 300 apprentices who are enrolled in the company’s system at any given time.

"Try before you buy"
    Dofasco supports one of the largest industrial apprentice training programs in Ontario, developed in conjunction with the Canadian Steel Trade and Employment Congress and Mohawk College, a Hamilton-based institute of applied arts and technology. The program is a combination of college semesters and paid company work experience that spans a period of 32 months.

    At the end of that process, participants are eligible to be hired by Dofasco, where these new recruits spend another 32 months in an internal training program. The result is good for students and employer alike: Participants have the opportunity to experience a company’s corporate culture and work environment before committing to a full-time position, while Dofasco executives are able to see candidates in action and can recruit from a broad base of technically proficient workers.

    "It’s a two-way try-before-you-buy deal," Mul­len says. What’s more, by gra­dually acclimating candidates to Dofasco’s work environment over the 32-month period, Mullen says that the company’s apprenticeship program minimizes the recruiting costs associated with trial-and-error attempts to find the right skilled workers.

    For Ryen Dickson, 25, Dofasco’s apprenticeship program was a prime opportunity to sample a variety of disciplines, from hydraulics to computer-based steel building, before embarking on a career as an industrial mechanic.

    "The first year gave you a taste of everything, just so you could see what you were heading towards," says Dickson, who enrolled in the program in May 2001. Upon completing the program in May 2005, Dickson accepted a full-time position as an entry-level millwright.

    Dofasco spends more than $200,000 on each apprentice who completes the program, even though there’s no guarantee that the participant won’t scurry into the arms of a competitor, Mullen says. It’s the high-priced risk of investing in a workforce that he says is well worth the odds.

    "Employees aren’t a depreciating asset, so why wouldn’t you invest in them?" Mullen says. "Too many companies take the approach that employees are a cost and you shouldn’t spend any more than you have to because there’s no return. An engaged, productive workforce—I don’t think you could ask for much more of a return than that."

Creating leaders
    Another way Dofasco plans to minimize the impact of a mass exodus of employees is through the Dofasco Leadership Academy, a set of learning devel- ­op­ment programs and focused skill development courses. At the core of this curriculum is Dofasco Leadership Foundations, a three-day off-site program designed in conjunction with the University of Western Ontario’s Richard Ivey School of Business.


"No matter how great you are, you also need to look at how your shareholders look at you, how the financial world looks at you and how your customers look at you."
--Dave Santi, Dofasco’s HR
manager

    The program is intended for those in management, or those moving into positions in which they are asked to lead a team of people. Over the course of three days, participants familiarize themselves with the business strategies, values and competencies that Dofasco holds in high regard.

    These strategies, values and competencies are then compared with those espoused by corporate giants such as Dell, General Electric and Motorola via detailed case studies. Senior executives, including Dofasco CEO Don Pether, deliver portions of the program to stimulate dialogue between managers and seasoned executives, and participants are often whisked away on field trips to customer sites so that they can learn how others perceive Dofasco’s approach to business.

    "No matter how great you are, you also need to look at how your shareholders look at you, how the financial world looks at you and how your customers look at you," says Dave Santi, Dofasco’s manager of human resource development.

    Coaching for High Performance is another program that aims to prepare a generation of young employees for leadership roles. The 11-day program, held over a period of four months, examines the importance of team development, communication, coaching, managing per­formance, leading change and providing leadership when overseeing a team of workers.

    In addition to attending seminars, participants are required to meet with managers from local companies such as Wal-Mart, Canadian Tire or Tim Hortons in order to hear about management strategies that later can be applied to a Dofasco division.

    For employees who are new to the role of leader, Dofasco offers the Orientation to Leading program. Through eight days of on-site training, attendees participate in case studies and small-group discussions to learn about leadership accountabilities, managing diversity and legal policies.

    All of Dofasco’s new hires, meanwhile, attend the company’s Play to Win team-building retreats, in which participants spend three days at a ski resort participating in activities like climbing. Since its launch in 1993, nearly 7,000 Dofasco employees have been through the program. By having new hires interact with senior executives in an isolated environment, Santi says Dofasco has been able to flag candidates displaying leadership qualities from the start of their employment. The programs also foster a sense of camaraderie among workers.

Employee perks
    Rather than just hope that the good vibes from the retreat will keep young employees engaged enough to replace its veterans, Dofasco also offers workplace perks to foster employee satisfaction. There is the company’s 70-year-old profit-sharing program, in which employees can elect to take up to 10 percent of their compensation tied to company performance. And the company has a nearly 100-acre recreational facility in nearby Stoney Creek, Ontario, featuring a two-pad hockey arena, baseball diamonds, soccer fields and a driving range. Dofasco’s main plant features three 24-hour gyms.

    In the end, though, it’s Dofasco’s apprenticeship, training and development programs that are the primary tools the company has to engage young employees for long-term leadership, just as the company’s seasoned veterans prepare to retire.

    "It (typically) takes 10 to 15 years to develop a good leader," Santi says. But confronted with the aging workforce, the company found a way to do it in five to six years. "The learning curve has certainly diminished," Santi says.

Workforce Management, January 30, 2006, pp. 40-42 -- Subscribe Now!

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