A Guide to Building and Retaining Workforce Capacity for the Railroad Industry (2015)

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192 C H A P T E R 7 Strategies for Business Leaders and Executives Interestingly enough, one of the most recurring how to’s behind effective development and retention of railroad executives is taking a long-view approach, starting with the development of effective supervisors and managers. All interviewees observed that executive development really starts as far back as the first-time-supervisor training offered to railroaders who make the initial transition to formal leadership (Figure 47). While supervisory training may be offered and completed as a stand-alone course with appli- cation back on the job, interviewees indicated a minimum of 1 year was needed to teach pro- cesses aimed at developing mid-to-upper managers on their way toward executive positions. The individuals interviewed had experience in developing leaders ranging from in-house to academic institutions. There was great similarity in the strategies offered as the most effective for creating opportunities to build new knowledge and practice strategies for managing individu- als, crews, and departments. The strategies that the interviewees recommended fell into formal organizational, informal organizational, and voluntary categories. Formal Organizational Strategies The following 10 strategies characterize the organizational values, as well as the intentional decisions by organizational leaders, that contribute to the development of supervisors, manag- ers, and senior leaders in consistent ways across the system: • Blended learning: classroom + hands-on • Cohort approach • Continuous learning • Development through built-in accountability and ownership within role/responsibilities • Guest speakers/panels • Movement around different functions Strategies for Building and Maintaining a Railroad Workforce Figure 47. Executive development from supervisors to senior leaders.

Strategies for Building and Maintaining a Railroad Workforce 193 • Process approach • Projects and stretch assignments • Promote from within • Succession planning Blended Learning: Classroom + Hands-On Blended learning is a strategy that describes an approach to training that combines for- mal, typically instructor-led, classroom learning with experiential learning that takes place outside of the classroom where what is learned can be observed and applied. This approach recognizes the need for application and demonstration of learned concepts, skills, strategies, and processes. Nick Little at Eli Broad College of Business at Michigan State University (MSU) said about the approach to teaching the certificate course in railway management, “We make it as expe- riential as possible, very applied.” He also said that MSU provides enough information for people to go back and anchor their learning into their home organization’s issues, using the information gained to solve their problems. “We don’t provide solutions,” said Little. “We provide the toolkit.” NARS interviewees Tammie Barlow, manager II, and Dr. Terry Murphy-Latta, director, said that effective strategies for developing professional skills include prioritizing hands-on learning opportunities and constant development. Effective learning blends and combines conceptual classroom events with practical hands-on experience. Cohort Approach A cohort approach within an organization groups people with similar professional objectives in order to create a professional learning community where participants can learn and receive support from each other. This approach creates a support group, so to speak, going through a similar learning curve at the same time, although not necessarily within the same department or geographic location. An interviewee from a Class I organization described the preferred approach used currently is through cohort experiences. Groups of individuals from across departments are grouped together and learn from one another through assigned readings and projects focusing on real- world issues in need of analysis and resolution. Continuous Learning This approach is a broad organizational value that can just as easily describe a culture as an approach to something specific like leadership development. Continuous learning means that individuals add to their existing knowledge, skills, and abilities along their career path in order to respond to a dynamic professional setting that is ever-changing and evolving. A Class I interviewee reported that continuous education is encouraged, and the railroad lays out options for professional development within the organization, as well as tuition- reimbursement support for undergraduate or graduate college degrees. The interviewee fol- lowed up with, “More focused executive development is also utilized, such as public speaking and other leadership development programs through both vendors and universities.” NARS representatives Tammie Barlow and Terry Murphy-Latta pointed out that once estab- lished, senior leaders continue their professional development. Even with formal training provided, it can take decades to truly learn the industry. “If you stop learning, you’re pretty much done,” said Murphy-Latta.

194 A Guide to Building and Retaining Workforce Capacity for the Railroad Industry Development Through Built-in Accountability and Ownership Within Role/Responsibilities This approach ties leadership development to what is expected of an individual as he or she performs his/her job day to day, which contrasts with classroom learning events. As a part of leadership development, this can be accomplished by adding responsibilities or assigning special or short-term projects for individuals to manage through others. A Class I interviewee indicated using an approach to development that places 70% of atten- tion on real accountability and ownership, 20% on projects and go-and-see opportunities, and 10% on formal training founded in principles of adult learning theory [summarized in TEAL Center (2011)]. Another strategy for grounding learning in an individual’s existing full-time job is the inclusion of a management trainee’s boss into what he or she is learning and prepar- ing to apply. When asked how to develop the talent of individuals who may, in turn, be next-generation leaders, the AAR interviewee responded, “Throw work at them. Put them in positions where they’ll get a chance to excel. Give guidance and make sure they’re comfortable.” Railway Age editor Bill Vantuono emphasized the real-time learning experiences of focusing on customers and service. “When you go out to get new business, you are solving a particular problem—a logistical problem—in which you provide a transportation solution that is less costly and more efficient.” Leaders learn how to support the delivery of service quality, reliabil- ity, and safety by working with customers to develop mutually beneficial solutions. Vantuono described a similarly hands-on approach regarding leaders’ interaction with their own employees when he said, “Railroaders of the year make it their business to go out and make time to spend with their people out on the railroad.” Guest Speakers/Panels Nick Little of MSU indicated that in the current certificate course in railway management, there is a module on leadership in which two recognized leaders from the industry talk about what they did to get where they are within leadership. Little indicated feedback is good about that module. Movement Around Different Functions Moving individuals around as part of their leadership development experience is an intentional strategy used by an organization to grow or groom a leader-in-training. Often, this includes relo- cating to a new department; being assigned a new job title and/or position within the organiza- tional chart, sometimes to a new higher ranking position; moving to another geographic location. Sometimes, these changes occur simultaneously. One Class I interviewee noted that 70% of the railroad’s top leadership team had been in three or more major departments in their careers. That movement around different functions is linked to being able to view things from multiple perspectives in order to enhance collaboration and team work across functional areas. Currently, viewing things from multiple perspectives is a key competency that the industry values in its leaders. Alongside those perspectives, access to different departments exposes developing leaders to the multiple viewpoints and goals that span organizational departments. NARS interviewees Tammie Barlow and Terry Murphy-Latta confirmed that people are moved through different levels of the organization as part of their preparation for management positions. In addition, an important outcome for manager trainees is understanding that all departments within a railroad interconnect and are one another’s internal customers.

Strategies for Building and Maintaining a Railroad Workforce 195 Process Approach Process approach, like continuous learning, can be seen as an organizational value in addition to a specific strategy used in leadership development. In this report, this approach offers a contrast to classroom- or event-based learning, where individuals get a finite exposure to learning materials and opportunities to demonstrate what is comprehended and understood. Instead, learning as a process takes the long view in terms of the acquisition and demonstration of necessary knowledge, skills, and abilities. That railroads tend to value the evolution of senior leaders from those first trained as supervisors aptly illustrates process approach. In the following paragraphs, rail-leader developers characterize the presence, as well as benefits, of a process approach. A Class I interviewee said, “We like to find people who are strong on the fundamentals of business or their craft. We’ll be happy to let them experience, grow, and learn their railroad knowledge from within.” That patience and expectation that time and experience will supply learning opportunities regarding management and leadership skills is an indicator of a propo- nent of process learning. Another indicator was when the individual pointed out that there are “so many kinds of disciplines, functions, and processes within a railroad, it is not practical to attempt to develop training courses on every facet.” Seeing the limitations of content delivery as a means of imparting knowledge is another char- acteristic of the process approach, which often focuses more on experiential learning and appli- cation, as well as coaching and on-the-job observation to assess performance. Pasi Lautala of Michigan Tech had a recommendation to evaluate the benefits and drawbacks of current recruitment and development processes affecting new managers and future leaders. “We really need to look internally whether the current criteria for selecting and developing managers produces optimal outcomes for the industry.” The “one-size-fits-all” approach makes candidate pools small, as they limit managerial candidates to those who are willing to fit them- selves to the form, potentially leaving great talent outside if their personal or family situation does not meet the requirements of the career path. “I don’t think that would fly with Google, or with Apple, or with anyone else,” he said. Lautala points to successful process changes that have already occurred in the industry as an indicator that workforce changes have, in fact, improved some since previous generations and result in a more stable workforce. Those changes include providing more leeway in terms of time frames by which employees are moved around the system, allowing an employee to decline a less- desired physical location without fear of losing future opportunities, putting effort into finding promotion opportunities within a desired location, and creating nontraditional pathways for progressing careers of talented individuals. The research team points out that the potential to tweak/improve practices is another positive feature of a process approach. Projects and Stretch Assignments Integrated into the above-mentioned preference for developing leaders within a cohort was embedding learning experiences into assigned projects and/or stretch assignments. This is worth examining a bit more closely. As a Class I interviewee described it, the development of senior leaders and executives starts at management training. An important leadership development project at that point in an individual’s career is shifting from being a team player to being a team coach, the metaphor offered by the interviewee. Deliverables such as financial reports and budgets also provide new opportunities to demonstrate the application of management skills that, upon mastery, position an individual for the potential to work toward other leadership roles down the road. On the topic of preferred assessment methods for leadership skills, a Class I interviewee listed project outcomes and leaders-in-training’s observations from the management of

196 A Guide to Building and Retaining Workforce Capacity for the Railroad Industry projects alongside their depth of understanding communicated during cohort discussions and demonstrated assertiveness and willingness to stick their necks out with ideas and perspectives. From these observations, the research team sees that a Class I interviewee values performance- based indicators that leadership knowledge, skills, and abilities have been learned and provides leaders-in-training with multiple opportunities to demonstrate their proficiency in order to be considered for additional opportunities for promotion. Promote from Within One of the most common responses to the question of preferred approaches for developing leaders was the response “promote from within.” Interviewees representing both a Class I and a short-line railroad said this. Railway Age editor Bill Vantuono said about CEOs that many “have long-term experiences within railroading, and most still come up through the ranks.” Nick Little of MSU indicated that engaging in leadership development at or after the 5-year mark in the railroad industry helps employees demonstrate their marketability for the next level within an organization. Nick reported that over 85% of participants of the certificate course in railway management have been promoted within 2 years of course completion. In most cases, that promotion has been within their current organization, not achieved by moving to another railroad or company. Succession Planning Related to promoting from within is keeping an eye open for replacements to today’s leader- ship corps, which came up in both Class I and short-line railroad interviews. At a Class I, exten- sive succession planning takes place, including annual assessments of available candidates to fill positions for both highest levels and several layers into the organization. The short-line inter- viewee referred to that organization’s succession plan as a “leadership-in-waiting group.” While those people may still need to be brought along, they are under consideration for promotion. Informal Organizational Strategies The following three strategies describe approaches to developing leaders that occur more organically as a result of relationships that naturally build among leaders-in-training and their supervisors and colleagues: • Informal mentorships • Professional association conference attendance and/or participation • Work groups made up of multiple generations Informal Mentorships Informal mentorships represent a workplace-specific approach in which an individual learns and grows through opportunities to work alongside and talk to supervisors or more experienced colleagues in their workplace. While the leader-in-training is the one being mentored, it is likely that the learning goes both ways, particularly as railroading is characterized by communication and interaction. In this report, the research team views this as distinct from networking, which is discussed in more detail in the section on voluntary strategies. Over the course of a manager’s career, informal mentorships naturally develop to help a person learn their roles and continuously improve, according to a Class I interviewee. Relation- ships are encouraged, sustained over time. In a similar vein, the short-line interviewee said, “The leadership aspect becomes relevant when your breadth of experience becomes wide enough that you can see yourself as a valuable mentor of others.”

Strategies for Building and Maintaining a Railroad Workforce 197 The value of mentoring to Millennials was brought up during the conversation with NARS; Millennials are defined as those born after 1980 [see Pew Research Center (2010) for more infor- mation on Millennials]. According to Terry Murphy-Latta, Millennials prefer constant access to feedback, so it stands to reason they will appreciate and rely upon the opportunities to make mentoring relationships with their colleagues. Professional Association Conference Attendance and/or Participation Attending a conference and/or participating in a professional association incorporates some of the previously mentioned strategies, such as blended learning and stretch assignments, such as when an individual volunteers as a presenter. In addition, it is often through association events that an individual experiences the two-sided nature of mentoring, both finding people who mentor them and acting, in turn, as a mentor to others coming up behind them on a learning curve. This dual nature to mentoring was described well by the short-line interviewee. The interviewee pointed to the American Short Line and Regional Railroad Association as an industry meeting place that is attended by leaders who are in the process of growing their skill sets and expanding their influence. Although mentioned once already, it feels appropriate to repeat that this individual connected mentoring others as an important aspect of leadership, which occurs during and as a result of industry meetings. Work Groups Made up of Multiple Generations In this report, work groups are considered distinct from cohorts. Interviewees described cohorts as a way to group a body of leaders-in-training as part of formal leadership develop- ment processes. Multi-generation work groups naturally occur in a department because of the range of ages and backgrounds among coworkers, a characteristic general to today’s workforce and not unique to railroading. “We’re seeing great things come because of the mixture of seasoned, middle-term, and short-term employees pulling together,” said a Class I interviewee. This perspective strikes the research team as extremely valuable considering the number of generations working side by side in today’s workforce, not only in railroad but across industries. Voluntary Strategies Interviewees also described two approaches to leadership development that individuals take upon themselves, sometimes outside the context of the workplace or railroad organization: • Club or professional association participation • Networking While it may seem redundant to list professional associations as both an informal organiza- tional strategy and a voluntary strategy, this demonstrates that some organizations encourage employee participation and provide release time to participate in conferences and meetings. The extent to which those opportunities are used to develop and extend an individual’s leadership skills, however, depends upon the person, ultimately. Club or Professional Association Participation Participation in professional associations or clubs represents a leadership development tool; they offer one of the most available avenues for open peer exchange across industry companies. A metric that Michigan Tech pays attention to in order to assess the attractiveness and competitive- ness of its program include participation in the railroad club, number of students involved in the program and rail-content classes, and number of AREMA scholarships awarded to Michigan Tech students over other academic institutions.

198 A Guide to Building and Retaining Workforce Capacity for the Railroad Industry Networking Networking refers to another kind of relationship-focused approach to professional develop- ment that is related to, but different from, informal mentorships. Networking is not necessarily tied to a person’s workplace or organization. As part of a focus on diversity and inclusion, a Class I railroad represented in the interviews provides informal, voluntary professional networks to employees based on a distinctive identity or demographic, although all groups are open to all employees equally. These groups are great for networking, said an interviewee, and helps put people into contact with others outside their department, giving them resources outside of their immediate boss and coworkers. Further, these groups create informal leadership opportunities that alert upper management to prospec- tive future leaders because of the focus on interpersonal skills, teamwork, and motivating others. Pasi Lautala shared an approach used at Michigan Tech to help make students ready for industry jobs, although, he pointed out, railroads are the ones best suited for talking about their specific requirements for new hires. Michigan Tech works with students one-on-one and through the rail- road club to educate them on specific jobs within the railroad and requirements for being qualified for them. Nick Little of MSU also discussed the power of networking. In the railway management pro- gram offered at his learning institution, people who work within the rail industry learn in a mixed stakeholder group, which includes customers and suppliers. The value of networking, says Little, results in a tremendous degree of powerful discussion about how each stakeholder helps out the others. Through networking, “people can work better with their suppliers.” Relationships Among These Strategies Although listed individually, these strategies work together as a unified approach to leadership development. With organizations valuing continuous learning as a process, it is easy to imagine leaders-in-training experiencing, for example, broadened accountability, movement to a differ- ent function, informal mentorship with a superior, and attendance at an association conference pretty much simultaneously. While there may be some challenge in keeping track of all that is being learned and the many types of skills being developed and reinforced, individuals who encounter these approaches will not come up against experiences that contradict one another. Observations About Competency Needs of Future Leaders When asked what is different about developing tomorrow’s railroad leaders in contrast with today’s, two professional needs emerged. Although not directly tied to approaches and strategies for developing leadership knowledge, skills, and abilities, the research team thought it appropriate to duly note interviewees’ comments about next-generation leaders’ needs. Technology Railroads must prepare up-and-coming leaders for a world of constantly changing technology, said Terry Murphy-Latta from NARS. The representative from AAR corroborated this insight when he said, “People have to be technologically savvy. Technology is taking over the world, not just the railroad industry.” He went on, “Knowing how it works, how it can be made reli- able, knowing what its faults are, and how to use the data that comes from technology to provide business solutions—those are important skills for people coming up in the industry today.” Supply Chain When asked, Nick Little indicated next-generation areas of focus for tomorrow’s railroad leaders must include the supply chain in order to “understand how it applies to the big picture

Strategies for Building and Maintaining a Railroad Workforce 199 of commodities.” He pointed out that railroad professionals “can be change agents within the industry.” Up-and-coming railroaders need lessons in transportation and modal choice in order to educate customers about how railway can best help meet their needs. Little’s insight integrates with the previous discussion about college degrees, since MSU offers a master’s degree in supply chain management that includes an elective track in railway management. Little pointed to that program as an avenue for up-and-coming rail leaders. Strategies for the Workforce A review of existing research and extensive efforts in data gathering highlighted some of the biggest challenges involved in recruiting, educating, training, and retaining the workforce of the railroad industry: • Passing along the knowledge. With a majority of the current workforce retiring or nearing retirement, there is a need to pass along information that these individuals possess. Persons with years in the industry understand not only the history of the railroad, but have a keen sense of best practices in their individual crafts. Educational institutions offer courses or practicums; however, access to these programs are severely limited by location, accessibility, and affordability. The railroads provide their own training, yet the participants in the study indicate that often times these do not adequately prepare for the job at hand. Railroads also offer mentorship programs, but new hires may be paired with either a new employee or an experienced employee who is unwilling to train. • Tailoring industry practices to fit the needs of multiple generations. Attrition rates are the highest in the first 2 to 5 years. During the recruitment process, the railroads provide a realistic job preview. Employees report that this outlook is often worse than reality, but unpredictable schedules still can greatly affect family relations. Rate progression policies deter, and increase frustration among, new hires. For some positions, such as dispatchers or train and engine personnel, it takes 5 years to reach full pay. All partakers in this study agreed that, once one is doing the job with full responsibility, one should be earning full pay. • Disparaging outlook on labor–management relations. Throughout this study, a common “us vs. them” theme was observed among craftworkers about management. Craftworkers felt that managers are hired by nepotism or favoritism that is masked under management-labeled programs. They were discouraged by the hiring of new managers with college degrees and no railroad experience. The sentiment was that these new managers do not understand the tasks at hand and take disciplinary actions that are short-sighted, and often times far too harsh. • Evolvement of recruiting techniques to embrace a technology-centered generation. Public relations are one of the strongest tools to brand a company and recruit new hires. The railroad industry is slow to recognize the power of social media. The industry is taking proactive steps by utilizing online job screening methods in order to streamline the recruitment process, but other opportunities exist using social media. Following is a review of the reported challenges and successes and suggested strategies in recruit- ing, training, and retaining employees in order to build and maintain a strong workforce capacity. Recruitment Practices and Recommendations Recruitment Successes Structured interviews and focus group results revealed the following railroad employee recruit- ment successes: • Increased use of the Internet for ease of application process. At this time, most Class I rail- roads require job seekers to apply online. More recent hires reported applying online and that it “wasn’t difficult at all.” The time from application to job offer ranged from 2 to 4 months,

200 A Guide to Building and Retaining Workforce Capacity for the Railroad Industry although there are cases of the process taking 6 months. The railroads dedicate websites to job opportunities and include explanations of careers. The websites provide an overview of the hiring process and an explanation of the benefits offered at each railroad. • More realistic outlook on working for the railroad. As an effort to screen out applicants and increase retention among hired workers, the industry provides a comprehensive job preview including the work schedule. One individual stated that “they make it sound harsher than it actually is. Once you are there, you see it’s like that but you can still have a life.” • Selling the desirable aspects of working in the rail industry. Rail workers were attracted to the railroad industry because of earning potential and the benefits in a stable industry. Several of the focus group participants pointed out that there were not many places where someone with a high school education could make the same amount of money. A few others reported they wanted to work outdoors. • Success partnering with or hiring from the U.S. military and NARS. HR personnel high- lighted the success from targeting recruitment efforts toward military personnel. A screener and an interviewer for the railroad industry look for individuals who can handle the environ- ment and the unpredictable work schedule, have strong work ethics, and are rule driven in their job performance. Additionally, many technical and decision-making skills acquired in the military are valuable to the rail industry. Programs such as NARS identify highly skilled applicants who are likely to succeed as a conductor. Recruitment Challenges • Improving the railroad industry’s brand. The railroad still has an “old” image that does not necessarily attract younger generations of workers. The railroad is not viewed as an appealing, viable, and long-term career option. • Visibility of the railroad industry as a career. A majority of the participants from focus groups sought the railroad industry as a career because a family member or close friend worked there. Others learned about positions through Veterans Administration staff or the military out- placement service. This appears to be the strongest trend in the recruitment methodology. Only a few participants reported finding their railroad job through an Internet search. • Lack of visibility into open positions, internally and externally. Some participants in focus groups stated that open positions were not always well advertised to internal applicants. • Lack of predictable schedule, no work–life balance. All focus group participants reported having a job preview that covered the need to travel and work holidays, weekends, and irregu- lar schedules; however, some stated it is hard to understand what it will actually be like until one is in the job. One participant did comment that, “Until that phone rings at three in the morning or you have to miss your son’s birthday party, you don’t understand what the job involves. That’s why you lose so many people in that first year.” • Hiring appropriate people into management roles. Current employees believe that manage- ment has no practical experience working on the rail. • Recruiting individuals with the right disposition and skill set for the rail industry. The rail industry requires individuals who are comfortable working in outside environments and unpredictable schedules and who understand that their personal life may take a second seat to the industry. Recruitment Recommendations • Focus on marketing and branding the railroad as a serious contender. When it comes to branding and marketing, the rail industry needs to emphasize new technology and process improvements in the railroad. This includes showcasing the dichotomy between the rich his- tory behind the railroad industry and the future of rail. Market the marriage of tradition with technology. After a railroad commercial aired on television, one worker “started getting ques- tions from lots of people about railroading,” suggesting that marketing is effective in informing

Strategies for Building and Maintaining a Railroad Workforce 201 people of the career options available in the rail industry. The U.S. rail industry can also look to international initiatives discussed in this report that focus on highlighting the environmental friendliness of the rail industry as well as other benefits to society. These include STM’s Green Plan and RAC’s image rebranding, which highlight rail and other industries’ advances in envi- ronment, economy, innovation, and safety. • Presence in social media. In today’s market, much of recruiting and industry knowledge comes from a social media presence. Utilize social media platforms such as LinkedIn, Monster, Facebook, and Twitter to have a greater impact on advertisement and recruitment. • Encourage the choice of a rail career for younger generations. This can be done through vis- iting more high school and college career fairs. Significantly increase participation in STEM and technical competitions. The railroad industry can take advantage of these highly visible branding opportunities. Talking to students earlier in their career about the viability and perks of working for the railroad can have a large impact. Again, looking toward international initiatives may prove beneficial when trying to appeal to younger generations, drawing from previously reported initiatives in this report like CUTA’s Youth Summits. These summits appeal to younger generations by hosting activities like DJ dance parties on light-rail trains, while educating attendees of possible career opportunities in transportation. Another exam- ple is RAC’s use of advertising in Career Options magazine, targeting young readers through free distribution to high schools and community colleges. The magazine has a quick-response scan code that directly links to RAC’s Career on Track website, which will connect users with employers in the railroad industry looking to hire. This also helps build a presence in social media. Additionally, follow similar recruitment strategies employed by the military targeted toward young generations. • Highlight the benefits, stability, and longevity of a railroad career. Focus group participants mentioned that there were a number of factors that made a railroad job desirable. All were attracted by the money and stability offered. The health insurance was also considered highly attractive. At the time of hiring, most were not concerned about a pension, but this benefit became desirable once they were working in the industry for a few years. • Detail the perceived negatives of the industry. Although applicants received a comprehen- sive job preview, hired individuals reported impactful surprises once on the job. These include a 12-month waiting period for dental coverage, the claims process, drug testing policy, and bumping. HR personnel stated that they try to emphasize the cost to a personal life that a job in the railroad entails, particularly before much seniority is gained, such as missing birthdays and anniversaries, or being on call at undesirable hours. Perhaps establishing a mentoring program of experienced employees to discuss the benefits, as well as the downsides, of work- ing for the railroad from a true-account perspective would be beneficial to new hires. • Increase visibility of open positions to current rail employees. Participants indicated a high degree of nepotism and favoritism when it comes to promotion. Additionally, the railroads do not advertise positions to internal applicants, according to the focus group. • Capitalize on the high employee-referral rate. Sixty-eight percent of all new hires are through internal networks. Create a special employee-referral bonus for those who refer applicants within a specific age demographic. • Focus recruiting efforts in specific target areas. Continue efforts to recruit military veterans but expand efforts to recruit more women and minorities. Training Practices and Recommendations Training Successes • On-the-job training with experienced, willing mentors. New hires typically receive classroom- style training. The greatest advantage to new hires was a partnership with an experienced worker in their particular craft. “The only way to learn a job is to do the job. . . . You need to attach

202 A Guide to Building and Retaining Workforce Capacity for the Railroad Industry yourself to someone and learn the job through them and learn it as quickly as you can.” This sentiment was echoed numerous times throughout the interviews and focus groups. • State-of-the-art railroad education and training centers. Several of the railroads developed centers for new hires to receive not only classroom instruction but also OTJ-style training. Centers, such as the Railroad Education and Development Institute (REDI) in Atlanta, Georgia, have over 10,000 students participate in their programs geared toward conductors, locomotive engineers, management trainees, yardmasters, communications and signal workers, track workers, and more. Training Challenges • Education and experience levels. The survey responses indicate that only 68% of survey responders had a high school diploma or GED. It is important that there is an examination of the content of the training to make sure that those receiving the training can understand and apply what they have been taught in order to safely and efficiently perform their jobs. There were a very small percentage of respondents (8.4%) who received any education or course work specific to the railroad industry. This also needs to be taken into consideration when looking at training. The railroad needs to think through how they can train new employees who have no previous experience working in this industry. • Consistency and standardization of time in training. Training is not consistent across the different roles prior to starting the job. The amount of time spent receiving training fluctu- ated greatly with some receiving 6 months of training and others receiving none at all. This needs to be standardized and reinforced across the different roles, training centers, and dif- ferent railroads. • Lack of quality and experienced trainers. Many respondents made comments on the lack of qualified trainers responsible for conducting the training. Quality of instructor was viewed as being just as important as the content being taught. There should be a thorough and formal review of those responsible for training the workforce. • Provision of OTJ training. The majority of respondents preferred OTJ training to the tra- ditional classroom-style training. However those already working in the yard are averse to mentoring or OTJ training, afraid that if they make any mistakes, they will be held liable. If OTJ training is the most beneficial and practical way to provide training for these new employees, the perceived risk needs to be lessened for current employees. Training Recommendations • Build world-class training facilities and programs. Create a railroad training center where new hires receive high-intensity classroom training and extensive hands-on training. Stagger the learning process with classroom training, hands-on experience, then more classroom instruc- tion, followed by a practicum. Model programs after centers like REDI or take examples from outside programs such as GE and Johnson and Johnson. • Create greater standardization and emphasis on training across all railroad companies. Create a standardized curriculum or suite of training programs. The programs should entail tutelage of an essential foundation of knowledge about the railroad industry and the crafts. The goal of the programs should be to develop and foster subject matter experts in their craft as well as create a greater breadth and knowledge of different roles. There should be an oppor- tunity for individuals to develop specialized skills and in-depth knowledge. • Create a culture of preceptorship and mentoring. Each employee, prior to starting on their own, should go through a preceptorship, where they shadow someone else who is in their role to understand the logistical and tactical requirements of the role first-hand. This will set them up for success during the first days/weeks/months on the job. Following the preceptorship, there should be a formalized and encouraged mentoring program to pass on historical and institutional knowledge to newer/younger employees. Furthermore, creating a more informal

Strategies for Building and Maintaining a Railroad Workforce 203 “buddy” system may be warranted, given suggestions from focus group discussions centered around many new hires’ confusion related to processes such as bidding on jobs, collective bargaining agreements, bumping, etc. Retention Practices and Recommendations Retention Successes • Benefits, retirement plan, and pay. Those interviewed indicated that the benefits, retirement plan, and pay were the driving reasons for continued work in the industry. Without these highly sought-after perks, the industry would see a higher attrition rate among their employees. “For someone without a college education, you are making good money.” • Sense of pride and camaraderie. Workers enjoyed seeing first-hand the fruits of their labor and felt fulfilled by the work they accomplished together. “When you fix a switch and see the train go by, you know you did your job.” Retention Challenges • Work schedules. With the unpredictable schedules, railroad employees find it difficult to maintain a family and social life. On-call junior-level staff are the first deployed at undesired times (early morning calls). This is just one way in which working in the rail industry may place stress on family life through missed birthdays, anniversaries, and other important events and the stress it places on family takes its toll on the individual. “The employees are not treated with respect by the railroad. The hours and lack of a schedule are detrimental to our lives and those of our families.” • Labor–management animosity. Many of the railroad employees expressed a culture of us (craftworkers) versus them (management). They stated they often felt like they were being watched for the sole reason of being caught doing something wrong and were not acknowl- edged by management for a job well done. • Finding qualified and experienced managers. Many of the participants were critical of the railroad policy to hire only people with college degrees without experience in the railroad industry. They felt that having a degree does not guarantee success in a railroad position. “Lower or entry-level management hiring for the transportation department from sources outside the rail industry has negative effects on work performance and management/worker relations. Those hired often lack the ability to perform their jobs efficiently even with con- siderable training. They often have no concept of the actual time or knowledge required to perform a task they assign, as they have never done that task themselves. Many are too unwilling to take suggestions or criticism to help improve relations and performance.” • Passing on knowledge from employees nearing retirement. As many workers are set to retire from the railroad in the coming years, the industry faces the challenge of maintaining the knowledge these experienced workers have acquired throughout their careers, through pass- ing it on to newer generations of workers. • Disciplinary practices of the rail yards. Seventy-two percent of respondents said increased job satisfaction could come from improved labor and management relations. Disciplinary practices enforced by management are viewed as adding additional stress and lowering morale. Associated with these disciplinary practices is high turnover and turnover is incredibly costly to any organiza- tion. “Employees don’t leave jobs because they don’t like the organization or what they’re doing, they leave their jobs because they don’t like their manager.” • Promotion process. Current employees believe that the bulk of hiring for higher-level posi- tions happens externally or through favoritism and nepotism. Employees are looking for greater visibility into open positions and want to be incentivized to apply, for example, through an increase in pay. Interestingly, all members of the focus groups did not seem motivated to apply

204 A Guide to Building and Retaining Workforce Capacity for the Railroad Industry for their supervisor’s job, agreeing that they would face a pay cut by going from an agreement position, where overtime is possible, to a salaried job. As a result, current promotion processes may impede the railroad’s ability to hire managers with experience. Retention Recommendations • Increase benefits. Employees recommended railroads pay for medical insurance, provide more vacation time, and offer paid sick leave, a 401(k) match, and a stock purchase program. • Implement a rewards and recognition program. Statistics show that younger generations have greater loyalty to organizations if they are recognized and rewarded for their contributions. This program would also provide the opportunity to recognize the tenured employees, encourage peers to recognize one another for their hard work, and for management to acknowledge a job well done. • Improve disciplinary practices. The industry could benefit from a review and revision of the standardized disciplinary practices across the different organizations as well as a review of ad hoc practices to review efficiency and appropriateness. Practices should be evaluated as to whether they are outdated or simply have remained on legacy principles. The focus group participants felt that an employee who makes an error needs remedial training; having unpaid time off does not correct the underlying problem. There needs to be a greater emphasis and understanding on allowing employees to try out different or new roles. Railroads should place less of an emphasis on the repercussions or liabilities that are associated with mistakes but encourage employees to seek out new and different experiences in order to develop and retain human capital. • Encourage experienced and willing personnel to mentor new employees. Seventy percent of how employees learn and develop is through hands-on experience; twenty percent is through mentoring; and only ten percent is through formal classroom training. Pairing mentorship and hands-on experience creates the biggest opportunity to pass along knowledge. Those surveyed stated that a common problem is that “you have new people training new hires.” “Stop having babies train babies.” Conclusions This report has highlighted several important factors related to workforce capacity across the railroad industry, accounting for business executives and leaders, engineering and operations managers, and craftworkers. This information was drawn from many varied sources to include all stakeholders in the railroad industry. These extensive efforts included a review of existing literature and educational resources, both in the United States and abroad; interviews with business executives and human resource professionals; focus groups held with craftworkers in three different locations in the United States; and two surveys distributed nationwide and targeted toward engineering and operations managers as well as craftworkers. This research ultimately led to the development of competency models, completion of a needs/gap analysis, and finally suggested strategies for building and maintaining a strong workforce capacity. From these efforts, the research team recommends the railroad industry work toward improv- ing labor–management relations; employing managers with experience on the railroad who are also willing to serve as mentors; accounting for the varied needs of multiple generations of workers; offering solutions for a positive work–life balance, especially when it comes to retaining workers from younger generations; and rebranding the image of the railroad to make it an appeal- ing and attractive career option. It is hoped that these findings will guide the railroad industry into a successful future.