Training better buy than new equipment: report

The increasing value of effective training

A new report suggests Canadian organizations would be wiser to put their money into employee training than new machines. The Canadian Council on Learning (CCL) report, Connecting the Dots... Linking Training Investment to Business Outcomes and the Economy, is a Canadian compilation of research showing training’s impact on business performance.

“We commissioned (the study) because fewer than three in 10 Canadian employees ever receive any training that helps them do their job and also because Canada’s investment in workplace training lags significantly behind other countries,” said Alex Stephens, the co-ordinator of the Ottawa-based Work and Learning Knowledge Centre of the CCL. The CCL is a national volunteer group of more than 150 member organizations representing employers, unions, researchers, educators, trainers and governments.

“Our members know well what the value of workplace training is up at the macro level. But what makes the Connecting the Dots study unique is that it shows, really for the first time, what training can mean down at that micro level of individual businesses and organizations,” said Derwyn Sangster, business liaison for the Work and Learning Knowledge Centre. “The report’s case studies in particular show what training can do for the bottom line of companies big and small.”

Sangster and Stephens hope to make that point especially clear to Canada’s small and medium sized enterprises (SMEs). SMEs are the country’s biggest employers, but are also the most gun shy when it comes to taking a shot at improving employees’ skills.

In his executive summary, study author Allan Bailey wrote: “A key reason behind the reluctance to invest in training is cost. As well, many employers are concerned about lost production time and disruptions to business activities while employees are on training. These concerns are exaggerated in smaller firms (that) traditionally pay lower wages, have higher turnover and face higher costs of credit. The higher cost of borrowing, for example, makes training relatively more expensive for small firms.”

A concern SMEs share with larger outfits, wrote Bailey, is the fear of “poaching.”

“Another frequently expressed disincentive to train is the fear by organizations that workers, as a consequence of acquiring new skills, are of greater value to competitors who may lure them away with the promise of higher salaries.”

Bailey said research shows, however, that poaching fears are largely unfounded. Indeed, studies Bailey dug up in Europe, Australia and elsewhere tend to support the opposite view — offering training to employees not only raises productivity but also makes them less likely to leave.

That’s a view Lynn Johnston, president of the Toronto-based Canadian Society for Training and Development, endorses. She said Bailey’s report is a potential godsend to HR departments.

“Traditionally training has had a somewhat negative aspect. You were sent on training. So it was something done away from the job. And that naturally made managers wary because of what that absence could mean to production,” said Johnston. “But we advocate better learning not away from but rather in the workplace. And when you drill down through Allan’s report you can see specific instances of the measurable benefits such training brings to an organization. That’s the kind of thing the HR department can use to get the CEO on board. Once that happens, the training floodgates will open.”

Bailey, himself a learning consultant, heartily agrees.

“HR departments can take heart from what’s in this report,” he said. “It’s really a body of evidence from around the world that helps HR people push harder to upgrade the skills and capacities of the organization’s employees.”

To aid that push, Stephens said the Learning Council will take Connecting the Dots on the road.

“We’re going to engage our stakeholders with the report in a series of regional roundtables to see how we can further overcome the barriers to more and better workplace training,” said Stephens.

One particular challenge to be discussed is how to aid and abet what the Learning Council calls “informal learning.”

“So much of the training that goes on and the knowledge that is transferred in any organization occurs not in classrooms, but informally right on the workshop floor or in the offices day to day,” said Stephens. “And we really don’t know yet the best way to improve that informal learning.”

Finding out how will be important to Canada’s economic survival. In the study, Bailey cited a 2005 Organization for Economic Co-operation and Development study that indicated Canada has been slipping in productivity since 2001. Part of the blame for this is “low levels of investment by Canadian firms in workforce training and skills development. For example, the participation rate of U.S. employees in training is 50 per cent greater than that for Canadian workers.”

Andy Shaw is a Toronto-based freelance writer.

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