Benefits of investment in training

ContentsIntroduction..................................................................2

Importance of training.................................................3

Training as an investment............................................4

Conclusion....................................................................8

Appendix..................................................................10

Introduction

Training and Development is the framework for helping employees to develop their personal and organizational skills, knowledge, and abilities. The focus of all aspects of Human Resource Development is on developing the most superior workforce so that the organization and individual employees can accomplish their work goals in service to customers. All employees want to be valuable and remain competitive in the labor market at all times. This can only be achieved through employee training and development. Employees will always want to develop career-enhancing skills, which will always lead to employee motivation and retention. There is no doubt that a well trained and developed staff will be a valuable asset to the company and thereby increasing the chances of his efficiency in discharging his or her duties.

Trainings in an organization can be mainly of two types; Internal and External training sessions. Internal training involves when training is organized in-house by the Human resources department or training department using either a senior staff or any talented staff in the particular department as a resource person. On the other hand External training is normally arranged outside the firm and is mostly organized by training institutes or consultants. Whichever training, it is very essential for all staff and helps in building career positioning and preparing staff for greater challenges. Employers of labor should enable employees to pursue training and development in a direction that they choose and are interested in, not just in company-assigned directions.

Companies should support learning, in general, and not just in support of knowledge needed for the employee's current or next anticipated job. It should be noted that the key factor is keeping the employee interested, attending, engaged, motivated and retained. For every employee to perform well especially Supervisors and Managers there is need for constant training and development. The right employee training, development and education provides big payoffs for the employer in increased productivity, knowledge, loyalty, and contribution to general growth of the firm. In most cases external trainings for instance provide participants with the avenue to meet new set of people in the same field and network. The meeting will give them the chance to compare issues and find out what is obtainable in each other's environment. This for sure will introduce positive changes where necessary.

Importance of trainingTraining employees do have a significant role in modern business era. Not just to equip them with latest tools your company has implemented, there is a lot more to it. I have sorted down them in a list. This is a must read if you employ or mean to employ in future at least one person.

Training in an organization is mainly being conducted for three reasons:

Improving the quality or the business excellence Improving the performance Developing the human capital for future growth to achieve the vision through

employee satisfaction.

Training your employees is important because

1. Rapid technological innovations impacting the workplace have made it necessary for people to consistently update their knowledge and skills

2. People have to work in multidimensional areas , which usually demand far more from their area of specialization.

3. Lack of proper and scientific selection procedure.

4. For career advancement.

5. For higher motivation and productivity.

6. To make the job challenging and interesting

7. For self and development

8. For employee motivation and retention

9. To improve organizational climate

10.Prevention of obsolescence

11.To help an organization to fulfill its future manpower needs.

12.To keep in pace with times

13.To bridge gap between skills requirement and skills availability

Training as an investmentIs investment in the area of training and development linked to the bottom line within the business? Increasingly, high performing organisations today are recognising the need to use best training and development practices to enhance their competitive advantage. Training and development is an essential element of every business if the value and potential of its people is to be harnessed and grown. Many studies have highlighted the clear links between well designed and strategic training and development initiatives and the bottom line within the business. The image of an industry and of individual employers is also influenced by the extent and quality of staff training and development. Potential employees in such an open labour market will assess the track record of prospective employers in this vital area. Career progression and development is an increasingly attractive or even basic requirement for many such employees. In today’s business climate where all industries are experiencing staff and skills shortages, companies are faced with stiff internal and external competition for quality employees. Each employer who invests seriously in the area of Training and Development will reap the benefits of an enriched working environment with higher levels of staff retention as well as increased productivity and performance.

Before investing in training we must consider the need of the training as per matching with the strategic goals of the organization to prove itself as an investment. Before doing that we need to assess the need of the training. A large body of research, accumulated over decades, has firmly established that education delivers a variety of benefits at many levels. These include benefits for individuals, benefits for companies, and benefits for society as a whole. Individuals profit from investment in education through higher wages. No less important are the lower probability of unemployment and higher rates of labour force participation for more highly educated individuals. Firms reap benefits from education via the higher productivity of their employees. Better-educated employees are not only more productive, but also raise the productivity of their less-educated colleagues. Societies benefit from education through the direct effect of higher productivity on growth. A number of additional benefits including better public health and greater social cohesion have also been found. A commonly used measure to determine whether investment in education, or in any other project, is worthwhile is the internal rate of return. This measure compares the current and future value of costs and benefits arising from education Both private and social rates of return can be calculated to judge the returns of further investment in education for individuals and governments. The main objective of the sent study is to estimate the rates of return of the investments necessary to achieve the education targets.

The top three were health and safety, technical changes and customer service. In other words, organizations are now using training and development as an incentive to retain and motivate their people and to be recognized as an employer of choice as well as giving staff the skills and knowledge needed to keep up with technological change and customer service. A further key finding in this survey was that the vast majority of companies surveyed (9 out of 10) stated they provided support to employees to pursue outside educational programmes. This support consisted of both financial aid as well as time off for both study and exam leaves. Both of these initiatives may have benefits which are difficult to quantify, but areas such as staff turnover and morale are clear indicators of success in this field. While research indicates an increased interest in and awareness of the benefits of training, the question needs to be asked as to whether this translated into Irish organizations establishing training policies and / or increasing their spend on training? A National Survey of Training and Development in Ireland conducted by Garavan and Heraty in 2003 outlined a number of key trends which are emerging in the Training arena in Ireland. Some of the key ones include the following: 2 Irish organizations spend on average 3.55% of payroll on training which does not compare favourably with other EU member states. (The IBEC HR Benchmarking Survey indicates a figure of 3.15%). The average number of days training provided per employee per year in 2004 was 5.35. (IBEC HR Benchmarking Survey indicates an average figure of 3-5 days). There is evidence of a positive attitude to training and development among those surveyed with many viewing it to be an important component in the organization’s strategy. Smaller firms are more likely to deliver training in an ad hoc way with larger companies applying a more formal approach to managing training. Line managers and employees seem to have a greater role in the organization and design of training and development. There is still a strong usage of the traditional forms of learning strategies including classroom teaching and subject driven courses, although there is a growth in the use of new technology to deliver training. Learning in teams is an increasingly popular form of learning in the workplace. Employees are now taking more personal ownership for their own development. However, the percentage spend and number of days spent training staff may be useful in order to get an overview of the company’s commitment to training and development, but it is the manner, approach and content of the training initiatives as well as their assessment and follow up which determine success. It is all too easy to throw money at a performance problem and assume that a training course will sort it out, when this may well be just putting a plaster over an open wound. Training initiatives need to be strategically aligned to the overall company mission and goals. They need to be designed and delivered with the aim of helping staff to achieve their departmental as well as personal goals, so the trend of increased involvement by line managers and employees is a positive development in terms of ownership of the training and learning. By adopting a strategic approach to training and development rather than an unplanned and ad hoc one, training and development

initiatives become more targeted, measurable and effective. However, increased flexibility in terms of training delivery may need to be expanded in the future to facilitate participant’s different learning styles as well as lifestyles. They also need to be assessed in terms of reaction, learning, behaviour change and results to determine the added value to the organization. This area of evaluation is one whereby many organizations simply evaluate the effectiveness of the training intervention based on the initial reaction of participants, an area which clearly needs to be expanded. A sample training and development approach is outlined below describing the essential elements in a strategic approach:

Figure: Investment in training

In order to remain competitive and to ensure excellent staff are attracted to and remain within the organization, companies need to ensure that the training and development of all employees is an issue which is taken seriously. By investing in 4 the development of the people who are the face of the business, companies can get ahead of the competition and excel in what they do. One of the most important aspects of managing people lies in helping employees become more effective at their

Monitoring the training outcomes for better jobEvaluation and improvement of trainingINVESTMENTTrainingTransfer of Training

Organizational goal achievement and growth

jobs and being able to adapt to that job or another job as he/she matures within the organization. This requires a high level of co-ordination between employee training and development and the range of other personnel functions, such as recruitment and selection, performance appraisal, reward systems and employee relations. Identification of a company’s training needs, designing a relevant training plan, selecting and implementing the resulting training programme and evaluating its success are therefore integral elements of the overall Human Resource process. However, for any of these functions to be effective, the Training plans and policies must be in line with the organization’s strategic objectives. The Training function is increasingly considered to be a key player in helping the organization to achieve its goals through its people as it is becoming more generally accepted that there is a strong correlation between organizational success and investment in training and development. There is now a growing awareness of the importance of a planned approach to training and development as a tool for competitive advantage, staff recruitment, selection, retention and motivation. The whole Training and Development function has increasingly acquired status as the instrument for breaking new ground and bringing about change through its developmental activities. Training managers must provide expert advice to top level management, usually about the value to the organization of a particular kind of training. Furthermore, they must have the means to persuade management as to a systematic approach to training outlining for example, the extent to which changes in structure and procedures will be necessary to support training. The training must take place within a framework of partnership between the trainer, employer and employee. This relationship must be characterized by trust between all stakeholders so that training does not simply reflect the views of the employer. This commonality of interest must be identified and worked towards. Training and development is about making a difference to the bottom line, both in terms of how people feel about their jobs as well as in the area of performance and productivity. Ultimately, it is about adding real value to the organization and those who comprise it.

ConclusionEvidence from macro-level research suggests that formal training is a good investment that can possibly yield higher returns than investments in physical capital. Studies also suggest that increasing the level of skills development leads to increases in wages for employees as well as enhancing an organization’s productivity. At the firm level, much of the case study evidence from around the world demonstrates that companies can reap substantial returns from investing in training. In some research, the benefits for companies with higher levels of training investment was shown to extend beyond improving business outcomes to include driving higher total shareholder returns by comparison to those firms with lower levels of training investment. Much of the macro-level research and the growing body of case study research indicate convincingly that investment in training yields value to companies, employees, and the economy as a whole. Such evidence suggests that formal training is a good investment with the potential to yield higher returns than investments in physical capital. These findings are especially significant in light of Canada’s comparatively weak track record in investing in workplace training, productivity, and economic growth. Further, combining the two lines of inquiry—macro- and firm-level—substantially enriches the evidence base making it more useful to a wider community.

The KSA of an employee is the measurement of his working productivity and overall performance to contribute to achieve the organization its vision. Training is the only way to Achieve, attain, retain and develop the KSA. So companies should strategically invest on training to increase the KSA of its Human capital to grow more to Achieve the Vision.

Appendix

Survey on Training for business exellenceQ 1 Do you conduct training programmes in your organization? (If No Jump to Question

number 4)

Yes....................................................................................O

No.....................................................................................O

Q 2. How frequently do you conduct training programmes?

Daily.................................................................................O

2-3 times a week........................................................O

Once a week.................................................................O

2-3 times a month.....................................................O

As per management need......................................O

Q 4. How do you describe your company’s Growth in comparing the respective market?

Less Moderate High

Weak = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = Strong

10 20 30 40 50 60 70 80 90 100

Q 5. In dealing with Strategies like training employees, do you think employees develop their skills in achieving company’s goals?

Agree strongly………………………………………………..O

Agree a little.................................................................O

Neither Agree nor Disagree..................................O

Disagree a little...........................................................O

Disagree strongly.......................................................O

Q 6. In achieving the goals of the company how important is to minimize the cost ?

Extremely important --:--:--:--:--:--:--:-- Less Important

Q7. How much do you spend in your organization to train your employees?

Tk.- 1 lac – Tk. 4.9 lacs………………………………………………..O

Tk. 5 lacs – Tk. 9.9 lacs………………………………………………..O

Tk. 10 lacs – Tk. 14.9 lacs…………………………….. ………....O

Tk. 15 lacs – Tk. 19.9 lacs.......................................………….O

Tk 20 lacs +...................................................................………….O

Q8. What Costs you will prefer while making the employee’s development to increase your competitiveness to achieve your goals?

…………………………………………………………………………………………………………………………………………………

Q 9. In this Question, there are six factors of development that can be achieved by training. Please allocate 100 points among the attributes so that your allocation reflects the relative importance you attach to each attribute. The more points an attribute receives the more important the attribute is. If an attribute is not at all important to you please assign zero points. If an attribute is twice as important as other it will have twice points than others.

Attributes PointsOrganizational productivity

Higher Cost management through better productivity Technological update

Business exellence

Creativity , research and development

Effective benefits and rewards model for employees

Sum 100

Q10. Do you think Business strategic training programmes are adequate enough to develop the human capital for any organization?

Yes....................................................................................O

No.....................................................................................O

Don’t Know…………………………………………………… O

Name:

Email address:

Cell phone no. :

*Thank you very much for your time and support*