Despite a majority of executives believing that training and development boosts productivity and profits, new research shows reluctance to back this belief by investing in it during this time.
A 2012 survey of UK and US senior executives by the Economist Intelligence Unit (EIU) found that 90 per cent agreed that additional training would boost worker productivity by five per cent or more, while 86 per cent said the same effect could be achieved for customer satisfaction. Respondents to the study – entitled ‘Training Out of the Recession’ – agreed that these benefits would boost the bottom line, with a fifth predicting a jump in profits of as much as 20 per cent.
Despite this strong belief in the benefits, few senior executives are devoting adequate financial resources to skill building programs. In many cases training becomes the first casualty of recession impacted sectors. U.K. respondents (44 per cent) and nearly two-fifths (37 per cent) of U.S. respondents admit that their organisations could be doing more to promote innovation through training. Another global study by DDI (Development Dimensions International) showed that in 2011 nearly 60% of the 12,000 plus leaders across 74 countries that were surveyed had flatlined or cut their training spend.
So why is this so? Why do executives believe in the significant contribution that training makes to growth and yet continue to not support this value creating spend at a time when growth is imperative? How persuasively has HR mounted the case for different thinking around the executive table? Have companies taken an objective enough look at investment/cost items that create value and those that do not, and made their decisions carefully enough, challenging the ‘slash n burn grim reaper‘ in a more nuanced debate? Has the contribution skill building makes to the longer term sustainability of a business been argued compellingly enough? Perhaps not.
The vital role training plays in stimulating growth is an issue that all employers, employees and countries battling recessionary forces need to recognise and policy adjustments made accordingly. This has to go beyond the policy contribution governments are making now by ramping up apprenticeship programs. Companies must take a more strategic view of the skills that will determine their competitiveness in the next 5-10 years and then make targeted investments in training and development and bring their senior executives along with this thinking.
Written by Meena Thuraisingham, June 2012
Written by Meena Thuraisingham
Director and Principal, Talent Invest
Meena Thuraisingham is a consultant, author, executive coach and thought leader in the area of People and Culture. An organisational psychologist by training, she founded TalentInvest, a niche consulting practice, advising global clients in the UK, Asia and Australia in Capability and Culture. Meena is also a regular speaker internationally on leadership effectiveness and culture change.
Her published books are The Secret Life of Decisions, Careers Unplugged and Derailed!. Get Your Copy Today