To compliment another piece published today on Training Zone, Mary Clarke reflects on the same research report published by the CMI, and what the next steps are for training managers in this continually frugal climate.
New research published this month by The Chartered Management Institute (CMI) reveals that 43% of managers fear their training budget will be cut in 2011, causing business damaging skills shortages. Given that spending on skills development has already dropped by 52% over the past year, according to the Chartered Institute of Personnel and Development's (CIPD) 2010 Learning and Development Survey, this new report is worrying.
Training is often a casualty when cuts have to be made, but it is risky. Companies that fail to provide employees with training and career development opportunities tend to experience lower employee engagement levels and higher employee turnover. Whilst turnover in UK companies has decreased as a result of the poor current economic climate, things will no doubt reverse when the economy picks up. Interestingly, a new report out from Hays this month week revealed that the UK has the lowest levels of employee engagement, so if companies want to retain good people, they need to engage them and training and development is essential.
"If companies are not assessing their workforce regularly, managers won't have up to date information about their employees' skills, knowledge and competencies. Equally, they will be in the dark about their skills gaps and training needs."The CMI urges people to 'train on a shoestring', and recommends that online training is the best way of doing this. This is sound advice, but I would argue that an essential first step before embarking on any kind of training is to assess employees. If companies are not assessing their workforce regularly, managers won't have up to date information about their employees' skills, knowledge and competencies. Equally, they will be in the dark about their skills gaps and training needs.
Assessments that test people in realistic work scenarios and ask them to use their situational judgement provide managers with accurate information about an employee's knowledge, skills and confidence. This information is gold dust. Managers can identify what coaching, mentoring or training is needed for every individual and create tailored learning and development programmes that will be effective. And, they will no longer send individuals on one-size-fits-all training courses that can prove totally ineffectual and a waste of money. Targeted training and/or individual coaching and mentoring helps employees improve their skills, knowledge and confidence and more quickly and boosts their career development prospects.
Placing employees on secondment in other areas of the business can prove a highly cost-effective way of delivering training and improve employee morale and engagement. Fresh challenges, new responsibilities and the opportunity to work with different colleagues can foster creativity, improve productivity and ensure new skills are developed. Using assessments managers can build up a complete picture of their organisational skills and make informed decisions about which skills can be transferred effectively across the business. It will enable them to recognise individuals capable of taking on more responsibility and those who would relish a fresh challenge. Then they can transfer them to a new role, secure in the knowledge the secondment should be successful.
Star performers in the organisation can also be identified using assessments. These individuals may have the potential to deliver training to their peers or coach and mentor others. So if a manager is faced with training budget cuts, these people could be called upon to start a peer-to-peer training programme.
"Placing employees on secondment in other areas of the business can prove a highly cost-effective way of delivering training and improve employee morale and engagement."
By providing employees with the training they need at the right time, companies can not only enhance performance and productivity but reduce business risk. A 2008 report from industry analyst firm IDC, 'Counting the Cost of Employee Misunderstanding', showed that one in four employees do not understand certain aspects of their job role and that major knowledge gaps remain unaddressed in many organisations. The research also showed that a third of companies who do know where their knowledge gaps lie do nothing to rectify them.
A misunderstanding can range from the misinterpretation of an organisational policy, process or job function, to a combination of all three. In any organisation, these kinds of misunderstandings are inevitable, but they can also be incredibly costly. The research showed that UK and US businesses are losing £18.7bn a year as a result of employee misunderstandings. This shows how imperative it is that skills and knowledge gaps are identified and addressed and that managers can be certain their employees understand their role if they want to reduce business risk and improve performance.
Whether the economy is recovering now or not, companies need to ensure they are not putting themselves at a disadvantage in 2011 by overlooking employee learning and development. If the UK has the lowest employee engagement levels in Europe, then companies need to take action and ensure their employees have training and development programmes in place so that their staff can achieve their full potential. Training budgets don't have to be huge, the secret is knowing what training is needed and whether improvements can be made through individual coaching and mentoring to increase employee confidence in the application and knowledge already gained. But, without up-to-date employee assessments any return on investment in training is uncertain.
Mary Clarke is CEO of Cognisco
