Companies invest in employee training to reduce global skills gap’s effects

Employers facing a global shortage of skilled workers are looking inward for the solution.

The “wow” factor is missing from the résumés and job applications companies receive. So they are dealing with the talent shortage by increasing investment in learning and development for their employees. In some cases, companies are hiring and then training workers who have demonstrated strong work ethic and character with some necessary skills missing.

Companies also are devoting extra resources to grooming current employees for positions of greater responsibility and authority. Employee development budgets, which often were cut in cost-saving measures during the recent recession, are making a comeback.

Spending on learning and development (L&D) rose an average of 12% among more than 300 training organisations surveyed by research-based human resources programme provider Bersin by Deloitte. This follows a 10% gain in 2011.

“Corporate spending on training is shooting up, just skyrocketing, to try to counter this [skills gap],” said Josh Bersin, principal and founder of Bersin by Deloitte. “Regardless of how hard you try, for the critical skills, you’re going to be competing for a much more narrow pool of talent. So companies just have to put more money into internal training.”

But devoting resources to a problem won’t necessarily fix it. Although L&D can contribute significantly to an organisation’s success, many companies could use training in how to develop an effective L&D programme.

Some of these programmes at companies are immature because cutbacks in L&D occurred during the recent recession. Bersin estimates that about 10% to 15% of companies possess well-developed L&D programmes that are properly aligned with strategy and outcomes.

The foundation for a successful L&D programme is what Bersin calls a “learning architecture,” which is an organisation’s road map of agreed-upon learning needs, learning strategies and delivery strategies for its training.

This helps trainers and managers understand the types of problems the organisation needs to solve and the tools they will need, and it focuses the efforts of learning and development teams.

Characteristics of an effective L&D programme, according to Bersin, include:

• A federated model where the centralised team responsible for all training and development is closely aligned with the business units. Staff members located within the business units should coordinate with the group so that skill-specific training can take place in an integrated way, Bersin said.
• A targeted and coordinated approach. Rather than making a course available to everyone through a corporate university on a sign-up or informal basis, Bersin suggests having line management track employees to make sure they get the right training at the right time in their careers.
• A consistent technology architecture. Many companies purchase a wide variety of small tools that individually can be effective in training, Bersin said. The problem is that the variation in formats and presentations can leave employees with inconsistent experiences in the training programme.

Leadership gap

In addition to addressing the skills gap, companies are using L&D to combat a talent management problem that Bersin said might be even more serious. That problem is a “leadership gap” that exists at many companies for a number of reasons, according to experts.

In the United States, members of the highly populated “baby boom” generation have begun to retire, and there aren’t as many mature, skilled younger workers to move in and take their place. Sometimes, highly skilled technical workers are getting promoted to management positions, and their technical skills are sorely missed in their previous jobs, Bersin said.

And workers with technical backgrounds who get promoted to management need to learn to manage people. The worst-prepared employees in an organisation are first-time managers who have been promoted from individual-contributor jobs, Bersin said.

“You’ve now just basically changed your career entirely,” Bersin said. “It’s not [just] a promotion. It’s a new profession.”

Companies are turning to L&D to help fill the leadership gap. Grant Thornton leaders go through the company’s partner leadership programme, which teaches how to achieve results through managing others, according to the firm’s Chief Learning Officer Mark Stutman, CPA. Much of the training focuses on skills such as communication, developing relationships, strategic thinking and problem-solving that have little to do with the technical side of the company’s projects.

“Developing and learning doesn’t stop simply because you’ve gotten to the partner level,” Stutman said.

The development of L&D programmes themselves also should be a constant process, Bersin said. Technologies and job functions are constantly changing, and training needs to reflect that.

As companies grow through acquisitions, they also inherit training departments and platforms. The resources acquired must be integrated into the overall company L&D strategy and platform to ensure consistency, Bersin said.

Mistakes to avoid

With organisations increasing spending on L&D, Bersin lists three common mistakes to avoid:

• Believing e-learning solves all problems. Many corporations have concluded that e-learning plays a significant role but should not eliminate face-to-face learning, Bersin said. About 30% to 50% of training should be done face to face, he said.

• Outsourcing too much. Although Bersin said a lot of excellent L&D content is available from third-party providers, he said businesses’ most important training communicates their own culture, programmes, strategies and unique value propositions.
• Failing to measure L&D effectiveness. At a minimum, employees should be asked at the end of a course if the training was effective and enjoyable, Bersin said. Ideally, before starting training, companies should figure out a way to measure the problem they are trying to solve. Measuring the problem before and after training will help them figure out how much the training helped, according to Bersin.

—Ken Tysiac (ktysiac@aicpa.org) is a CGMA Magazine senior editor.