ROI on L&D - the stats
During a time of recession any spend needs to be carefully evaluated. However, improving the skills of your workforce is definitely a worthwhile investment, enabling employees to carry out existing tasks more effectively and to take on additional responsibility. Ultimately, a well-planned and well-executed L&D programme can go a long way towards organisations improving their overall productivity, competitiveness and ultimately their profitability.
Independent research carried out on behalf of Thales UKs training services business, Thales Training & Consultancy by Loudhouse Research, suggests that the better an organisation performed in the past 18 months of the economic downturn, the more likely it is to have increased investment in L&D; those that performed considerably better than expected in the past 12 months had increased investment by 6.2%. Those that performed a lot worse had decreased investment on average by 15%.
This clearly demonstrates a relationship between L&D and business survival during difficult times. The recession has inevitably forced all businesses to aggressively reduce their overheads and cut-the-fat within their organisations. But L&D has often proven to be a key resource to help businesses develop their workforce effectively in order to weather difficult times.
Staff training and development is an effective way to enhance your companys in-house skills base and raise your game. By ensuring your workforce is equipped with the most-up-to-date skills, training and qualifications available, businesses can continue to meet customer needs now and be prepared to react quickly when the upturn arrives. Companies that invest in L&D will be well-placed to take advantage of opportunities, use new technology and expand into new markets.
L&D alternative to pay rises & bonuses
Some sceptics may suspect businesses of only upskilling their workforce to avoid making new hires during a time of uncertainty and transition. In some situations this might be the case. However, the majority of businesses are aware that investing in L&D is a great way to engage and motivate employees when they might not be able to offer pay rises and bonuses. It can also help with staff retention and build loyalty so that when the job market is more buoyant, employees remember the investment the business made in their development during difficult times.
Upskilling your workforce during a time of recession is a positive step towards preparation for the upturn. While every penny spent needs to be carefully accounted for, businesses need to focus on the long-term Benefits L&D can deliver. British Gypsum, a major authority in the UK construction industry, saw the downturn as an ideal opportunity to invest in L&D training in their factories.
Competitive times demand skilled professionals
Mike Emson, operations manager at British Gypsum Robertsbridge says: "As a result of the downturn, weve had to make some tough decisions and cut-backs, but during this period we have continued to upskill our workforce through L&D and utilise the opportunities the downturn has presented. For example, our warehouses have been quieter, which we predicted, but we have utilised the time to send key shift workers on an external training course without impacting on the business performance or customer service."
"By continuing to invest in our employees during the recession, they understand how much we value each individual and their standard of work. It also prepares us for the upturn by increasing and improving our employees skillset. We are 100% committed to upskilling each individual in our workforce and we havent let the downturn affect this objective."
Almost all businesses are now operating in wider markets, with competitors disappearing, those that have survived are often being pushed harder to deliver a more competitive service and demonstrate that they are the best in their field, with the most skilled workforce. Businesses have to raise their game in training employees to offer a more superior level of service and demonstrate the strengths of their offering compared to their competitors.
After years of being considered a disposable area of many businesses, L&D is now increasingly recognised as a way to accelerate the road to recovery for leading businesses. As a result of the recession more than half (56%) of UK businesses now consider upskilling their workforce more important. However, businesses must not forget their middle managers or purely focus on compliance training.
Upskilling middle management
Often middle managers can be overlooked for L&D and its important that businesses avoid this situation as it can have a negative impact. Through its ongoing management development programme, British Gypsum identified that its shift managers will play a vital role in the businesses performance in the upturn; however, when the warehouses are running at optimum levels it can be difficult to fulfil training due to logistics and time constraints. Therefore, the company has targeted this specific group of managers and taken advantage of being able to send them on external training courses.
Report writing and finance are two of the most requested courses Thales Training & Consultancy currently offers. The demand for these is likely to be due to employees being required to broaden their skillsets and meet new demands in their day-to-day roles due to the current climate. Many middle managers are now required to apply more detailed scrutiny to budgeting, financial forecasting and develop their written communication skills alongside their core remit, so these courses often prove vital for people to develop these critical skills.
Upskilling your workforce regardless of the economic climate can only bring Benefits to your business. Improved productivity and competitive advantage are just two of the Benefits of investing in employees' skills and development. It also boosts staff confidence, competence and motivation, therefore improving employee retention rates.
As a result of their dedication to upskill their workforce, British Gypsum has a strong staff retention rate. Emson says: "L&D has a high visibility at British Gypsum and our employees understand they can have a career with us, not just a job. Growing numbers of employees are requesting training to drive their progression and as a direct result we are seeing more employees move up the ranks, for example, starting as an apprentice and becoming a plant manager."
Investing in L&D demonstrates a companys commitment to an individuals personal development. If an employee becomes bored and demotivated the business will inevitably suffer. But by carrying out regular reviews and appraisals, its possible to identify areas of development and provide employees with the opportunity to progress, try varied roles and identify a clear career path, ultimately creating an engaged and motivated workforce.
Unlocking talent in every employee
For many years, talent has been about recognising the human capital of high fliers. Today, following the economic downturn, it’s about finding and unlocking the potential in every employee. Talent doesn’t necessarily mean the person who is best at their job right now. Instead, it’s more about having the qualities a business might need in the near future and developing them; motivation, dedication and creativity.
Businesses are increasingly placing more value on L&D and building this into their overall strategy. This is important because training is only ever a catalyst for change and needs to go hand-in-hand with businesses day-to-day operations and deep understanding of their customers, industry and most importantly their employees.