Who wants to be a railroader?

An increasingly "invisible" industry may find it hard to recruit new talent.

By William C. Vantuono, Editor

	Railroading can be a rewarding lifelong career, but many railroads are finding that the available talent pool at colleges and universities has been slowly but steadily shrinking. Norfolk Southern Photo

A railroad management crisis is brewing, one that is beginning to show signs of boiling over. "The railroad industry has been downsizing for about 20 years, since deregulation," says Kansas City Southern Railway President and CEO Mike Haverty. "Certainly, we needed to downsize, take the fat out, change some of the work rules. But in the process of downsizing, offering lucrative buyouts and early retirement packages, we've lost a lot of experienced people."

That wouldn't be too much of a problem if there were a large crop of eager young college graduates primed for careers as railroad managers, knowledgeable of railroad operations as well as logistics, marketing, economics, and all the other skills that go into running a successful railroad. But, like the armed forces, there aren't enough interested recruits out there, and the industry isn't really doing as much as it should to attract more.

How can railroads improve their chances of attracting college graduates? "I think they have to raise the general awareness of their business," says Dr. George Smerk, professor of transportation at Indiana University's Kelly School of Business. "I have faculty colleagues who tell me, 'It's a shame the railroads went out of business,' and it's kind of funny because the Indiana Rail Road runs right through the heart of our campus-behind the business school! And the IRR does one heck of a business here. The railroad industry-actually the transportation industry in general-has not done a good job of informing teachers in business and engineering schools about career possibilities." Smerk acknowledges, though, that "recruiting is an expensive proposition for a railroad, and when times are tough, it's one of the first areas to be cut back."

Out of 150 or so students each year who enroll in the transportation program at the University of Tennessee-Knoxville's Department of Marketing, Logistics, and Transportation, "maybe five are interested in a career with the railroads," says Dr. Barton Jennings, an adjunct professor of transportation and logistics who also runs the railroad program at the university's Center for Transportation Research. Why? "Railroads are invisible," says Jennings, who spent much of his career in the engineering department at Union Pacific and later held executive positions with Arkansas Short Lines. "Most people don't know what a train is until they get stopped at a grade crossing."

Human resources managers at the Class I's acknowledge that they're finding it tougher to attract and retain qualified management candidates. "Recruiting in general has become a lot harder," says CSX Transportation Vice President-Human Resources Bob Haulter. "Economic conditions and low unemployment rates have made it a lot more difficult." Add to that the fact that today's far-flung carriers don't have the local presence and name recognition that, for example, CSXT predecessor roads Baltimore & Ohio or Chesapeake & Ohio had years ago.

Entry-level railroad management salaries are competitive with those in other heavy industries, says Haulter. But how does a railroad compete with the dot-coms and other high-tech "new economy" businesses where it's perceived-realistically or not-that one can strike it rich fresh out of college? "I believe there are people who want to manage something tangible early in their careers," says Haulter. "A railroad is a great opportunity to do just that, as a trainmaster or a roadmaster, for example."

But after young managers have put in a few years and gained some experience, how do you keep them? The "job for life with one company" perspective that parents of days gone by often instilled in their children is anathema to the "Generation X" people coming out of college today. Expectations have changed, and people often move on to other things. How, then, do you retain the institutional knowledge that's so critical to a complex railroad operation?

"We have a realistic expectation that the attrition rate is going to be higher than it was a long time ago," says Haulter. "You have to accept it, but at the same time try to keep it at a reasonable level. You do that by providing continuous training and by shortening the learning curve. People coming out of school today don't have the same expectations their predecessors had. They're looking for certain things. They want a job where they can get training and continue to advance. They want a chance to understand what a company's expectations are and how they're performing their jobs. They also want to know why are they doing something-sort of a 'why am I here' outlook."

It also, to an extent, involves a change in the workplace environment. "The long work hours and being on call 24 hours a day for some jobs are indeed a real issue," says Haulter. "We're addressing those issues in some of our territories, as we're finding that people want more-predictable time off."

It used to be that the number of times one moved-and frequently it was far away-was almost a badge of honor among railroaders. That's not so much the case today, says Haulter. "We've recognized that relocations are expensive, and that there are more two-career families where the spouse's career is as important as the railroader's," he says. "We're addressing that issue as well, and we recognize that it shouldn't be necessary to move 17 times to advance your career."

Railroad human resources professionals like Haulter recognize that the industry needs to do more to attract and retain fresh talent, in terms of working closely with educators and, once someone one has been hired, provide the kinds of opportunities and incentives that will keep a railroader a railroader. "The industry's biggest problem is that, historically, it hasn't done a good job nurturing people, developing a career path where they see a progression in job responsibilities and titles," he says.

As for finding that talent, it's a matter of working closely with the few schools that offer specialized transportation programs, schools like the University of Tennessee-Knoxville, or, in CSXT's case, Marshall University in Huntington, W.Va., which is described as "a huge feeder" to the railroad's Central Region headquarters. "It's a partnership, a long-term relationship," says Haulter. "Those students know who CSXT is, and the program we're involved in at Marshall is a model for relationships we want to establish at other schools." Haulter adds that providing things like an executive sponsor who can interface with the faculty, guest lecturers, or summer student internships is extremely important.

"It's our job to sell the attributes of the railroad to our prospective employees," says Haulter.

Why be a railroader?

Where are today's managers coming from? That's the immediate question. Longer-term, where will tomorrow's managers come from? Consider this scenario:

A young man is about to graduate from college with a bachelor's degree in transportation and logistics. He's maintained a high grade point average throughout four years. He's been exposed to the latest computer-age technology, and has interned at a couple of large corporations. His entire professional life is ahead of him, and he's been recruited by several large companies, among them a Class I railroad. He wants a career that, besides providing financial security for him and the family he wants to have someday, will be professionally rewarding, with plenty of opportunity for growth and enough variety to keep him interested in what he's doing. Like many young people of his generation, he values personal time, and would much rather be spending weekends and holidays with family and friends than working 70-hour weeks and burning a lot of midnight oil.

Why would he want a career in the railroad industry?

Railroading, after all, is perceived by the general public as an unimportant, 19th-Century "bricks and mortar" industry. It doesn't have the appeal, the sexy image, of a dot-com or other high-tech business. It's a field that generally requires a long-term commitment if one is to advance professionally. The hours can be grueling, and, with the immense geographic size of today's merged carriers, relocating several times is usually a requirement, not an option. Mike Haverty says, for example, that experienced railroaders have largely been replaced by younger people with lower starting salaries but whose territories or job responsibilities are larger than those of their predecessors. "They're in tough positions," he says. "We've got a lot of these young people in beginning- and mid-level positions stretched pretty thin. They didn't come up through the ranks understanding that working nights and long weekends is part of the job."

Gone, mostly, are the days of second-, third- and fourth-generation railroaders like Haverty with a family history in the industry. The "old guard" is gradually disappearing, being replaced by a younger generation that may not necessarily have railroading "in the blood," or a sense of commitment to a particular industry, much less a particular company. The Christmas trees have been harvested and have served their purpose. Problem is, there hasn't been enough re-seeding.

What sort of managers are needed? There are those who maintain that what this industry should be looking for are managers who think differently from so-called "traditional" railroaders. They point to relatively young, yet highly experienced, transportation executives like 41-year-old Burlington Northern and Santa Fe President and CEO Matt Rose, recently described in the Wall Street Journal as "the first baby-boomer to run a major North American railroad" who "could lead to a whole new view of this industry." Rose is known for being open to new ideas and new sources of business, and for being committed to making BNSF more accessible and responsive to customers.

Too few candidates

If you want to be a railroader, what sort of education is required? More important, is the higher-education system turning out people who want to work for the railroads?

Railroad-specific programs (not including community college programs geared toward the operating and maintenance-of-way crafts, which are actually doing quite well) once proliferated at many U.S. colleges and universities. Today, "I would consider them dead," says Barton Jennings. The University of Illinois at Champagne-Urbana, for example, discontinued its railroad civil and mechanical engineering programs in the 1930s, as did Purdue University. (Illinois, though, is considering reviving its program.)

Today, virtually all transportation curricula is focused on logistics. But even then, the logistics courses are geared toward the shipper, rather than the carrier, side of transportation. "What you see today at colleges and universities are pockets of courses related to the railroad industry, some in business, some in engineering," says Jennings. "The days of programs like the one at Illinois are pretty much gone. Today, logistics is what's taught."

Approximately 20 colleges and universities in the U.S. offer degree programs in transportation and logistics. Among them are Penn State, whose program is among the largest, the University of Maryland at College Park, Iowa State University at Ames, the Indiana University Kelley School of Business at Bloomington, Northwestern University in Chicago, and Michigan State. Massachusetts Institute of Technology offers a program in transportation engineering that covers, among other things, courses in public transportation policy. MIT's program has fed people into the rail transit field, and works closely with Boston's MBTA.

"The problem," says Jennings, "is that many of these programs are oriented specifically toward who their donors are. Michigan State's program, for example, is oriented toward inventory control, because their sponsors have typically been the automotive industry and other industries very serious in that area. Railroads, for the most part, come to us and fund specific projects or studies, and some are very good about providing internships. But as far as them just coming in and saying, 'Here's $10 million for an education program on railroads,' you don't see that. Quite frankly, you don't see much of that from any industry, much less the railroads."

In some cases, the strength of a transportation program's railroad component depends upon the interest or experience of the instructors. Such is the case with Jennings, or with Dr. William DeWitt, a former vice president of marketing and intermodal at Burlington Northern who now lectures at the University of Maryland. Jennings, for example, teaches inventory management, contract negotiations, purchasing, rate-making, routing decisions, and other tools that transportation and logistics professionals need. As a former UP roadmaster, he also teaches a railroad engineering course.

"Typically, what happens is that after students have taken a course or two with me, I've attracted a few more to the railroad industry," says Jennings, "In a good semester, we'll put about 20 students who graduate from the business school into the railroad business, in management-trainee to management-level positions. Some go into the short line business, and I encourage them to work for a short line because of the opportunity for them to gain experience in all disciplines."

The railroads, says Jennings, actively recruit from his university's transportation program, and they usually have quite a few positions available. "Problem is, they're unable to attract as many graduates as they'd like," he says.

Part of the solution may be educating young people about the railroad industry long before they enter college and begin to make their career choices. Programs like Rail Awareness for Youth (see From the Editor), which is affiliated with the Boy Scouts and Girl Scouts of America, is a step in the right direction.