A highly-skilled workforce is a must in today’s competitive business environment. But as many companies slash their budgets in the relentless pursuit of efficiencies, is employee training becoming yet another victim of austerity?
Companies that fail to invest in talent will undoubtedly learn the hard way that this is a short cut to failure. Chris Ross presents a crash course in the current market for training and development.
There are mixed views on whether companies’ training and development activities are taking a hit in the current global economy. Recent mid-year analysis in the US revealed that global spend on training this year has been around 7–9% higher than in 2010. But Training 2011, a study by UK market intelligence company Key Note, presents a different trend.
The report estimates that spending on off-the-job training by UK private and public sector employees fell by 3.2% in the year to April 2010 – and that spending on external trainers dropped by around 17% in the same period. The study reports that training investment most likely dropped further by around 2.5% up to April 2011, but forecasts a slight recovery of 1.5% by April 2012. These are worrying times.
Companies are desperately seeking to increase their capabilities as the markets in which they operate are changing; but to drive real growth, continued investment in talent is essential. The Chartered Institute of Personnel and Development (CIPD) says that whilst organisations will undoubtedly expect people to do more with less, they should not expect employees “to want to do more with less learning and talent development.”
Learning and Talent Development 2011, the CIPD’s annual survey report, revealed that resources and budgets for learning and development had decreased in two-fifths of organisations in the past year, whilst a third of companies had reduced their headcount.
The study showed that although most businesses have a training budget, in most cases these have not only suffered cutbacks, but are also expected to cover a broad range of activities and costs. Unsurprisingly, the majority of budgets cover items such as external courses and conferences (93%), hiring external consultants and trainers (83%) and books/training manuals (81%).
But for two-fifths of the organisations surveyed, the training budget is also expected to cover fixed costs and salaries for in-house trainers. Clearly, the battle to upskill the workforce is being played out in the most testing of circumstances.
The employment market
The employment market is certainly creating challenges for employers and candidates alike. Unemployment is rising as organisations continue to reduce their workforces – but those companies that are hiring are finding that many job applicants are not sufficiently skilled and are therefore unsuitable for employment.
Conversely, in a stagnant job market, those who are in employment appear reluctant to move. Talented individuals are staying put. But is enough being done to nurture and develop them? Or are they too likely to stagnate as opportunities fail to emerge?
Likewise, less talented but generally reliable employees –the ‘safe pairs of hands’ that populate every organisation – are in many industries failing to receive adequate skills development, leading to an uncomfortable paradox: they are safe in their roles, but as their markets evolve they are not ‘fit for purpose’ to perform them.
In difficult times, the need for increased investment in human capital is significant. Training and talent development is a major priority for businesses large and small. In a market characterised by growing shareholder expectations and shrinking operational budgets, what are the options for training and developing the workforce?
Learning and Talent Development 2011 says that most companies are continuing the 2010 policy of “switching to more cost-effective development practices”. This has seen organisations reduce their use of external training service providers and instead increase in-house development programmes, internal knowledge-sharing events and coaching by line managers. In addition, the use of e-learning solutions continues to grow.
Technology-led learning tools are becoming increasingly popular across Europe. Training today, training tomorrow, a present-day analysis of learning trends across Europe by Cegos Group, says that uptake of solutions such as ‘serious games’, mobile learning and online learning has grown considerably. This, it says, is driven by an emerging younger demographic in the workplace, and widespread corporate objectives to reduce costs yet maintain productivity.
Learning solutions that are delivered in a medium that is more familiar to this emerging user-group, and that mirror the new “social, global and mobile environment”, are not only easier to integrate into employees’ daily activities, but are also considered more engaging and effective. According to Cegos Group’s 2011 survey, half of those trained in Europe have used informal learning tools such as videoconferencing, wikis, blogs, forums and podcasts.
Old school still rules
So the rise of e-based learning solutions is tipped to continue. But, despite rhetoric to the contrary, not at the expense of traditional learning tools. Face-to-face training remains popular – external courses, seminars and conferences continue to play a valuable educational role.
In heavily knowledge-based and technical industries such as life sciences, traditional methodologies remain both popular and effective. In medical markets, despite the obvious growth of e-learning tools, tried-and-tested lecture-style learning still appears to be the preferred option, with many participants choosing it as their favoured route for CPD.
The CIPD study shows that external conferences and events are rated as being among the most effective learning methods for leaders, potential leaders and middle management. Despite this, more than a third of companies (34%) have reduced their use of external events in the past year.
In other areas, classroom-style lectures are being replaced by individual one-to-one sessions that enable more individualised, targeted training. There has been significant growth in activities such as coaching and mentoring, which are being recognised as important tools to encourage individual accountability and nurture talent.
According to the CIPD survey, coaching takes place in more than four-fifths (86%) of companies polled, with its main objectives being to support performance management, prepare people for leadership roles and assist learning and development.
A third of companies employ coaches, while two-fifths hand responsibility for it to line managers. Only one-fifth use external consultants for coaching. Group training – such as team coaching sessions and collaborative workshops – is evolving to become more interactive, customised and flexible – giving facilitators the opportunity to adapt training quickly, based on employee feedback and needs.
The need for speed
Speed is emerging as a key consideration in companies’ training and development strategies. Businesses are becoming more impatient. They want their employees to develop quicker and to become more proficient and productive faster than ever before. Such corporate impatience is, in fact, often mirrored by learners themselves. Employees want the fast track to success and, where it exists, will choose the crash course over longer-term learning.
As a result, multimedia and web-based training tools have seen a real surge in uptake. The benefits are clear, but the approach is not without its challenges. The dropout rate in self-monitored online training is apparently high, with too many participants failing to complete courses.
Developers need to work hard to ensure that online courses are engaging and exploit the opportunities for interactivity and connectivity that the medium provides. Critics claim that too many courses appear little more than traditional training manuals that have been uploaded to an online format.
Clearly, as the global business environment continues to evolve in challenging times, training models and methodologies are having to adapt to meet changing needs. The emergence of collaborative, interactive and dynamic learning tools, enabled by rapid advances in technology, have opened up new opportunities for training and development – but it only really completes the circle of learning solutions available to the market.
Training is, after all, demand-driven and should be designed to meet the varying, and often individual, needs and tastes of its end users. As such, training managers should continue to consider the full suite of learning tools open to them – in dialogue with learners and their line managers, to find the most effective solutions to meet organisations’ and individuals’ objectives.
Undoubtedly, however, the biggest demand from a business perspective is to nurture a skilled, talented and engaged workforce. To do this, companies must continue to invest in training and development, rather than chip away at training budgets for short-term efficiency gains.
The potential long-term impact of that approach is a disengaged, unmotivated and unproductive workforce that is not fit for purpose. And that really would be learning the hard way.
Data in this article have been sourced from Learning and Talent Development 2011, the Chartered Institute of Personnel and Development’s annual survey report. This is available for download from the CIPD website. Training today, training tomorrow, an analysis of learning trends across Europe and global comparisons, is available for download from the Cegos website.