Investing in training offers a competitive boost

Spain has emerged from what’s known as the Great Spanish Depression, a financial crisis that rocked the country hard and changed, in many ways, its business climate. Today, one can see cranes and construction, and organisational training is up about 20% compared to a year ago, noted Alan Walker, owner of Alan Walker Training, a corporate coaching firm near Madrid. "I just had a call this morning asking for a proposal," he said.

Spain's renewed sense of optimism is mirrored in other countries as well. Globally, 84% of organisations are boosting their investment in reskilling programmes in the face of automation, and 53% say they will increase their training budget by 6% or more this year, Deloitte found in its 2019 Global Human Capital Trends report. And recruiting company Robert Half Finance & Accounting recently reported that 94% of CFOs surveyed said their US companies pay some or all of the costs for their employees to obtain professional certifications.

"The labour market has gotten so competitive and there's such a war for talent out there," said Washington, DC-based Steve Saah, executive director of Robert Half Finance & Accounting. "Companies are recognising that they have to do many different things in order to both attract and retain talent." Professionals want to be challenged and advance their careers, and if unmotivated or unhappy may go elsewhere, and training gives businesses more options for succession planning, he added. Companies that invest in professional development gain a competitive advantage — and likely revenue growth — if they do this wisely.

The low US unemployment rate is also prompting 84% of employers to hire and later train candidates who lack required expertise, Robert Half reported. And upskilling is not just focused on new hires: Companies worldwide are training mid-tier career professionals along with seasoned leaders on everything from digital dexterity to communication skills to management expertise. These programmes can be on-site, off-site, or online.

Simply put, "The benefit of training is to improve the productivity and profitability of an organisation," noted Ken Jones, CEO of BPI Consultancy and Strategic Coaching Plus Two in South Wales. Ironically, professional training opportunities have declined in his region, he said, largely because of dwindling government grants once offered to companies to educate their employees. In Britain, added Walker, "The perennial complaint has been the lack of skills."

There are other global problems as well. Companies immersed in training often fund programmes without knowing if they will truly better their organisations, noted Michael Griffiths, principal for Deloitte's Learning & Career Mobility practice in North America. "They throw content at the wall and hope some of it sticks," he said.

So how does an organisation implement a successful training programme that meets its ultimate goal of increased productivity and profitability? Experts offer the following tips:

Know your people. Before you pay for training, engage your staff. What are their workplace needs? What would they like to study? How do they want to learn (classes, online, one-on-one, etc.)? Conduct employee surveys and hold one-on-one and team discussions, in collaboration with the human resources department, to determine your direction. "There has to be an alignment between what's in the best interest of the organisation and what is in the best interest of the employee — and the best way to make sure those two are aligned is to talk about it," Saah said.

Evaluate the investment. Jones divides training monies into two parts. The first is cost, which includes continuous professional development needed to maintain accreditations or compliance training for such things as health and safety. Most organisations spend their money in these required areas, he said. "Investment" training, in contrast, is optional and entails developing employees to follow a company's mission or help achieve its vision. This division prompts companies to make decisions on their training budgets in conjunction with their strategic plans.

He advises companies to first identify what training will be needed to make improvements, and then calculate the costs (including loss of income while employees are being trained). "Plan for what it is going to cost and measure whether the investment is worthwhile," he said.

Benchmark. Before making a financial training commitment, "Benchmark yourself against your competitors to identify where they are performing better," Jones said. "If everything between you and the competitor is the same [such as equipment and location], then your improvement has to come from improving your efficiency of your workforce."

In addition, noted Saah, talk with your network and area recruiters about training trends. Once you've determined the best education for your staff, don't skimp. "If you really want to get a competitive advantage ... you need to be looking at about 8–10% of your budget" for training, Walker advised.

Assess the long-term benefits. Conclude whether your desired training programme will attract and retain talent, boost productivity, and enrich company morale. Conduct an in-house audit, reveal what you are trying to accomplish, and then fully understand the curriculum before committing, Griffiths added. "Put the effort into your strategy around learning, and then align the right content," he said. "Spend your money wisely."

Propose a mix. Offer a blend of in-person and online training options, including outside seminars, guest speakers, and collaboration work opportunities. "Be creative," Saah noted. "There are myriad ways to provide professional development — don't limit yourself or your employees." In addition, he said, generate excitement by highlighting how training can help advance employees’ careers.

Follow up. After training completion, "Carefully monitor that you are receiving the return on investment you expected," Jones advised. He suggests using tools like Kirkpatrick Partners' four levels of evaluation to determine the efficacy of the programme. Conduct post-training evaluations of employees and ask them what did and didn't work, Saah added. "Coordinating a training program isn't a one-time transaction," he said. "It's an ongoing process that you'll need to continually update and refine."

— Cheryl Meyer is a freelance writer based in the US. To comment on this article or to suggest an idea for another article, contact Drew Adamek, an FM magazine senior editor, at Andrew.Adamek@aicpa-cima.com.