Presented by KIS Finance
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Talent management is the process of investing in staff to attract, engage, develop and retain them in a way that adds value to your company.
Investing in training and development for your staff is all about maximising their potential to support your business. However, this obviously comes at a cost, so why does it make sense for companies to invest in staff in this way and what are the benefits to your business?
Some of the main ways that training and development can support your business are:
Well trained staff will certainly add value to your business. New staff need to be trained to undertake the tasks required of them whilst existing staff may need to develop new skills to keep up with changes in work practices. Legislative changes may also trigger the need for staff to be re-trained.
Staff who have been fully trained to undertake their roles are likely to be more effective and hence more productive. This could be linked to an improved ability to undertake processes more efficiently. Alternatively, there will be less unproductive time if staff are better trained to respond more quickly to resolve issues.
Customers will value dealing with well informed and skilled staff. Having the right people, who are trained and able to deliver a consistently good standard of work, will give you a competitive edge against others in the market.
Similarly, well trained staff can save you money by making less errors that could be expensive, both in terms of direct financial costs and reputational damage. This may enable you to price yourself more competitively in the market.
Companies that are seen to invest in their workforce may see a return on their investment in the form of an enhanced reputation as a “good” organisation. Customers may see you as a good place to do business, whilst prospective employees will see the company as a good place to work.
The best candidates will be drawn to organisations where they see a future and feel that they will be valued. Organisations with a reputation for investing effectively in their workforce will benefit from attracting the best talent.
Many employees will value highly the opportunity for personal development and gaining new skills. Even if you are not able to be the highest payer in the market, staff may regard learning and development opportunities as a direct investment in them as an individual. This can result in a loyal and committed workforce, with above average retention rates, saving you the costs associated with high levels of staff turnover.
Staff who feel valued by their employer will usually be more motivate and will go that extra mile for your business. This is especially the case for staff in lower level roles who may otherwise regard themselves as relatively unimportant to the organisation. Where they can see a direct link between training and how their role impacts on the company as a whole, they are more likely to be enthusiastic and committed. Reinforcing an individual’s feelings of self-worth will almost certainly deliver benefits back to the organisation
Effective training can help teamworking in a number of ways. Firstly, just by having a shared experience through training can help strengthen team bonds and have a positive impact on the team’s effectiveness. There is also value in a team spending some time away from the front line as this can create space for stimulating creative thinking and joint problem solving, both of which can have a direct benefit to the company.
Training especially designed to develop team-working, by focusing on behaviours and communications skills, is also a well proven method of improving team effectiveness. Many people have a fear of the traditional “team building” type interventions, involving outward bound style activities! However, you don’t need to invest in something that elaborate. The simple act of getting a team to perform a task together and then reviewing what worked / didn’t work and why, can be a very effective method of improving team performance.
Once you have made the decision to invest in training your workforce you need to develop a strategy to ensure that you invest effectively to deliver results to your business.
In order to do this your “talent” strategy needs to be closely aligned with your business strategy. In other words, you need to make sure you are investing in the right types of training to support your business and to really add value.
The key steps you need to consider to develop an effective training strategy are:
Consider what your business plans are for the short, medium and longer term. For example, if your business plans to expand its range of services or products, staff may require training to enable this to happen. Alternatively, you may want to take certain activities in-house that you currently outsource but you need staff with the right skills to do this.
This is simply identifying the gap between the skills that your staff currently have and those that they will need in the future to support the business’s plans. Some gaps will be relatively easily and quickly addressed where as others will require more long term planning.
It can also be helpful to create a “Training Matrix” for each role in your company. This simply means looking at what skills are required for a particular post and then deciding what training is required to equip staff with those skills.
You are likely to be faced with a range of identified needs as well as individual requests in relation to personal development. Therefore, it is essential that you prioritise which areas of training will have the greatest benefit to the company.
This form of cost / benefit analysis needs to be undertaken before you invest in any training for your staff. You should consider;
Once you have identified your priorities you will need to consider your budget which will dictate how far down your priority list you can action.
There is no magic formula for deciding how much to invest in developing your staff, however a rough rule of thumb is between 1% to 3% of your total payroll bill, although some organisations may choose to invest 5% or more. However, you may prefer to simply consider what you feel you can afford to invest, based on what you consider the likely returns to be.
A key factor which will affect this is the sector in which your business operates. For example, those working with high levels of regulation, such as financial services, may require staff to undertake a higher level of training. They may also have set requirements for staff to undertake continuous training (known as continuous professional development or CPD). Therefore, this will dictate to some extent the level of funding that you will need to allocate to staff development.
Even when things are tight financially, it is still important to think about how you could invest in skills for the future. Training budgets tend to be one of the first things cut in an economic downturn, but this can be short sighted. Staff may feel undervalued if there is no on-going investment in them and may vote with their feet by leaving for a competitor. This loss of skills could be far costlier for you in the longer term and may actually increase the current financial pressures.
Once you have decided on your key priority areas and your budget you need to draw up a training action plan, setting out how the various training objectives can be met.
This can be kept quite simple, and just needs to capture the key components:
What training is to be undertaken and why (i.e. the intended outcome)
What training method is to be used
Timescale for training to be undertaken
When considering what approach to training to take you should consider the different learning style that exist within your team. Whilst it would probably not be practical to allow everyone to undertake training in a different way, you should bear in mind the general characteristics of your workforce. For example, a team with generally good IT skills will probably feel at home undertaking training on line (often known as e-learning). However, a workforce who are generally not so familiar with IT may prefer a more traditional approach, e.g. class room based learning.
We will consider the different types of training and the pros and cons of different approaches in more detail in the next section of this guide.
Once you have decided on your training priorities and how much you are going to invest, you then need to ensure that you communicate this clearly to your staff. That way they will understand the rationale behind your decisions. This is particularly important if some staff will not be able to undertake training that they have requested as it has not been seen as a high priority. If staff just get told “no” they may resent the decision, causing them to lose motivation in their role. However, even if they are disappointed, if they understand the business reasons behind your decision they are more likely to accept it. Similarly, staff are more likely to engage in training and development activities if they can see a direct relevance to their role and to the success of the business.
Having spent money on training your staff you will want to know if it was worth the investment. This is where review and evaluation come in.
Review - this needs to take place promptly after the training has been completed. A review should ask staff about their experience whilst undertaking the training. For example, was the pace of the training about right, was the content clear, were the practical arrangements suitable e.g. venue, timings.
This gives you some initial feedback on how the training went and will allow you to make any changes going forward to improve the learners’ experience.
Evaluate - this involves taking a longer term look at the impact of the training and whether it has delivered the required results. You will want to consider things such as:
It is important to compare a couple of key measures from before the training against the results afterwards to see what the impact has been. Again, this doesn’t need to be complicated – 2 or 3 measures should be enough for you to judge if the investment has been worthwhile.
It really is worth spending the time to evaluate the benefits as this will enable to you to decide where to priorities your future training expenditure.
Investing in staff training is investing in your company’s future and needs to be a key element of your business plan.
In the next section of the guide we will consider the pros and cons of different approaches to training and development and consider what are the most appropriate methods for small businesses.
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Last updated: 18 November 2022 | © KIS Bridging Loans 2024 | Terms & Conditions
