The rewards of staff development
UK plc seems to be missing a trick. The post-recession war for talent is costing many employers big bucks to recruit highly skilled staff, but a more cost-effective solution that can help to boost employee engagement in the process is right under their noses – the training and development of their existing workforce.
Career opportunities ranked as the highest driver of employee engagement in the 2013 Trends in Global Employee Engagement report, published by human resources firm Aon Hewitt. This was followed by organisational reputation, pay and recognition, which makes for interesting reading when so many employers remain preoccupied with devising pay-setting policies to retain key talent.
“Even when you look across the regions and geographies we analysed subsequently, the sense that employees have of a future within an organisation which is prepared to invest in them is a key element in making sure they remain connected and committed and enthusiastic about the organisation they work with,” says Jenny Merry, UK engagement practice leader at Aon Hewitt.
But employers perceive a number of challenges in delivering effective and cost-efficient staff training as a critical aspect of career development. Perhaps the biggest is the fear that employees might leave with their newly acquired skill sets in tow.
Bill Shedden, director of the Centre for Customised Executive Development at Cranfield School of Management, says: “Generally speaking, employees don’t massively move around. They stay with organisations for significant periods of time if they are getting development and promotion, and are motivated by what’s happening to them.”
Organisations that are financially successful are taking a much more differentiated approach to learning and development, and what different crucial role groups might need
Peter Bennett, managing director of training provider QuestionBank Management, adds: “If any company is frightened of training their people in case they then leave, there is something very wrong with the way the company is being run.”
And then there are employers who argue they cannot afford to invest in staff training, particularly following a recession.
However, Mr Shedden warns: “That’s a bit like saying you can’t afford to have an effective IT system. For many organisations now, particularly in the services sector, the main thing that differentiates them from the competition is the quality of their staff.”
Training need not be expensive. Increasingly popular and cost-effective approaches being adopted by some organisations include internal strategic projects that help to develop new skill sets outside employees’ core job specifications, and staff mentoring by senior staff, including executive directors.
“If you want effective employee development, which is also effective organisational development, then it has to be driven by the most senior levels of line management,” says Mr Shedden. “I’m not saying that HR or talent management don’t play a role, but it has to be owned by the critical players at the senior levels of the organisation to get buy-in from both the organisation and from employees.”
Ms Merry agrees, adding that successful employers have dispensed with sheep dip-type training and development programmes which kick in at certain career points. “Organisations that are financially successful are taking a much more differentiated approach to learning and development, and what different crucial role groups might need,” she says.
A segmented approach to training can prove more effective in engaging staff because of its targeted content. It can also help to maximise employers’ return on investment because of the ease with which they can track the success of their efforts among smaller groups of staff, rather than across their whole workforce.
Measures of training programme success and the impact on employee engagement may include sickness absence levels, staff surveys, staff retention rates and employees’ individual performance ratings according to their line managers. “It’s very much about looking not at one measure, but at a range of measures,” Ms Merry advises.
But Martin Clarke, programme and business director at Cranfield’s Centre for General Management Development, says training success depends on employers identifying their desired outcomes at the outset of any programme they plan to run.
“What’s important is clarity about what it is they want people to do differently. Often there isn’t that clarity and therefore people aren’t really clear what outcomes they’re looking for because organisations very often think of the method before the outcome,” he says.
Mr Clarke advises employers to consider their business strategy, the employee capabilities they need to execute the strategy, the organisational behaviours they need to encourage in the business to help support that execution and the most appropriate training route.
“The types of development I find have most bang for their buck are those which give people time to think about their own motivations for the job they do, time to think about their career and time to think about the job challenges they face,” he says. “Then they can make choices about how they want to tackle that.” Staff motivation, he adds, is also key to training programme success.
Employers still unconvinced about the need to invest in staff training and development, and its impact on employee engagement, should consider the workforce planning challenges that their organisation currently faces, not least those involved in managing an ageing workforce.
Employees can now work for longer following the removal of the default retirement age of 65 in 2011, but the changing nature of work, together with the fact that a large proportion of baby boomers did not attend university, means employers will need to address this skills gap at some point.
David Sinclair, assistant director, policy and communications, at the International Longevity Centre, says: “It’s really important employers have skills for the modern workplace, so it strikes me they will either have to create more jobs which people are able to do or re-skill staff accordingly.”
Dr Zofia Bajorek, a researcher at The Work Foundation agrees, adding: “Coming out of this recession, employers actually need three things of their employees – someone who’s skilled at their job, healthy and engaged. And if they have those three traits in their employee, they will see themselves able to develop more business productivity and opportunity.”
LEARNING HOW TO MANAGE MONEY
The Financial Services and Markets Act 2000 prohibits unauthorised businesses and individuals from providing investment advice, but this should not deter employers from supporting employees to manage their finances.
Many employers have been introducing financial education programmes to their organisations as part of their pension auto-enrolment projects. Auto-enrolment, which was introduced in October 2012, is a new legal requirement requiring employers to automatically enrol eligible workers into their workplace pension scheme.
Financial education programmes, typically, explain how auto-enrolment works, what it means for employees and how their pension scheme contributions will be invested.
Some employers have extended their content to help employees plan for their retirement, as well as to explain the importance of an investment strategy review for staff who wish to work longer.
But some organisations are instead focusing on more practical financial guidance, such as budgeting and debt management.
Jo Thresher, head of money at insurance and employee benefits consultancy Jelf Group, says: “Many people have had very little financial education from school or parents, and they face huge consumer and peer pressure all the time. Literally every second of the day someone’s trying to get them to buy something and they’re very confused.”
Ms Thresher is working with employees to help them understand the importance of budgeting and, where possible, saving. “If it’s more complicated than that and they really are struggling with day-to-day budgeting, which we are seeing, employees won’t engage,” she warns.
A good starting point for employers considering implementing a financial education programme is to identify employees’ financial worries and needs. “They need to ask HR what problems staff are experiencing before they go educating them on something they don’t need,” she says.
Programme funding can be shared between employers and employees or, as is often the case with independent financial adviser sessions, fully funded by staff through their employee benefits programmes.