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June 2008

Rail News: Norfolk Southern Railway

Class Is must invest in human capital today to meet tomorrow's traffic demands, rail execs say


By Pat Foran, Editor

North American railroads aren’t just in need of investment capital to meet tomorrow’s traffic demands. Given their aging workforce, they also need to raise capital of the human variety.

“The fact of the matter is, we’re losing people throughout the organization, including at senior levels,” says Union Pacific Railroad Chairman, President and Chief Executive Officer Jim Young. “We have 52,000 employees, and we’re losing about 5,000 a year right now.”

The talent drain has put people development near the top of rail strategists’ “chief concerns” list. As a result, so-called “soft” issues are anything but these days, and left unchecked, they’ll get even harder to contend with in the years ahead. So, forward-thinking human resources execs are rethinking the way they recruit rank-and-filers and management trainees, and tailoring training programs accordingly. They’re also checking their assumptions about what work means to people at the door and weaving next-generation employees’ quality-of-life concerns into job descriptions.

“We’ll need to do a lot more recruiting over the next five years than we’ve done in the last 15, and retention is going to be extremely important for us,” says Cindy Earhart, vice president-human resources for Norfolk Southern Railway, where nearly half of the employees are age 50 or older. “Our challenge is to keep the attrition numbers as low as we can, and address some of the issues that new employees are looking for us to address.”

Sharper predictive powers

The first step was sharpening their predictive powers. From the mid-1990s through the early 2000s, Class Is were cutting employments rolls, not adding to them.

“When I arrived in June 2001, CN was at the end of the major downsizing period, so the organization really did not have a focus on people development,” says Les Dakens, who retired May 1 after serving CN for seven years as VP-people. “We talked about the ‘boomer bulge’ that was coming, but it really wasn’t taken seriously.”

It is now. CN forecasts workforce needs in general, and retirements in particular, on a monthly basis by terminal.

“If you don’t connect the market to your model, all you’re going to do is replace the people who are leaving, and that’s not going to be enough,” says Dakens, who now runs Pineridge Consulting Inc., an H.R. consulting firm. “You can lose business if you’re caught short.”

And you can lose your chance to recruit top talent if you make assumptions about what’s important — personally and/or professionally — to Generation-Nexters. What do they want? A work environment, location/climate and schedule that suits their lifestyle needs.

“Quality of life is definitely an issue,” says Earhart, adding that NS expects to hire 50 management and 280 operations/supervisor trainees this year. “People also want more responsibility early on in their career. Especially management trainees coming out of college — they are very interested in knowing upfront what their career path will be.”

They want feedback ...

Workers also want to know their opinions matter, that management’s listening. And they want professional feedback — early and often.

“It’ll be particularly important at the first-line level, making sure employees know what’s expected of them, that they’re doing their work in as safe a manner as possible — and that they’re enjoying their jobs,” says Dakens. “That’s the way they’ll give you the discretionary effort you need to get to the next level.”

At some roads, that could require a leadership-style adjustment. The “command-and-control” approach might have netted results in the past, but won’t produce the “next level” kind, rail execs acknowledge. Besides, as Dakens puts it: “I don’t think the younger people would put up with reverting to the old way.”

That’s presuming rail recruiters are able to get them in the door in the first place.

“It’s something we all have to work on — to better brand ourselves to college graduates,” Earhart says. “They just don’t know that much about the industry.”

And given rail’s relatively recent re-entry into the “growth industry” realm, there’s plenty to show, tell and teach them.

“Most people would never put railroads with ‘technology, ’ but look at what’s out there,” says UP’s Young, citing the range of sophisticated communications systems in place and the R&D work under way. “I think people would be shocked if they saw what this industry does.”

Let the “shock and awe” campaign begin.


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