Investing in employee growth has evolved from a consideration to a vital attraction and retention tool with 80 per cent of new hires expecting training and development as a condition of employment, according to the quarterly American Express Small Business Monitor.
Nine in 10 (92 per cent) of 500 Canadian small business owners surveyed believe well-trained employees are the key to a company's success. However, more than one-half (61 per cent) said the average worker doesn't have enough of the skills or knowledge their company needs to succeed.
"Business owners are taking the necessary steps to continue to invest in their human capital," said Athena Varmazis, vice-president and general manager of small business services at American Express Canada. "With the needs of the skilled workforce constantly evolving, employers are feeling an increased pressure to keep pace with their training and development programs."
The primary motivation for investing in staff training and development opportunities is to make the company more competitive (36 per cent), retain quality staff (26 per cent) and keep up with new technology (14 per cent).
In the past two years, small business owners reported job-specific technical skills (52 per cent) was the primary source of training followed by company-specific knowledge or skills (49 per cent) and sales (34 per cent). Of these, 67 per cent of small business owners reported company-specific knowledge or skills training provided the highest return on investment.
"Gaining a competitive advantage appears to be the greatest motivator for small business owners investing in training and development," said Varmazis. "As such, they are placing a greater emphasis in this area when evaluating annual budgets as they are seeing a viable ROI."
Twenty-nine per cent of small business owners reported training and development takes budgetary priority over most strategic and operational initiatives, found the survey. On average, small businesses spend eight per cent of revenue on training and development and expect to nearly double spending during the coming years (average increase of 7.5 per cent over the next two years).
Employees should take proactive role
Small business owners also feel employees should play a larger role in obtaining an advanced skill set. While many (83 per cent) said employees embrace the training and development opportunities they are given, 78 per cent feel employees need to take more responsibility for their own development.
"While employees seem receptive to training programs overall, business owners are looking for more involvement from their staff in shaping their own development," said Varmazis. "They feel employees could be taking more initiative by either seeking out their own programs or bringing suggestions to the company."
While employees could be more proactive, 78 per cent of small business owners reported staff use the skills learned and 74 per cent said employees want more training and development. However, busy schedules seem to be a challenge, as 43 per cent of employees said they don't have enough time for more training.
Canada's small businesses remain increasingly hopeful about future revenue growth, profitability and their overall financial state, found the survey. More than one-half (60 per cent) said their business's current financial position is improving — up 27 points since April 2011. And 90 per cent remain confident their business will grow over the next six months.
© Copyright Canadian HR Reporter, Thomson Reuters Canada Limited. All rights reserved.