Lisa Katz| Crain’s Detroit Blog
According to The Talent Equation, companies spend more money on coffee than on training. In fact, on average, companies spend less than $68 per day training their workers to get and stay up to speed. This finding is both surprising and not. On the one hand, Southeast Michigan employers have been forced to be leaner than ever — cutting even marginal costs to stay competitive in one of the toughest economies of all time. On the other hand, employers cite frequent difficulty finding workers they need to compete. According to a 2013 CareerBuilder report, most employers have open positions for which they cannot find candidates, and 81 percent say it is at least somewhat difficult to fill vacancies.
In conversations with employers, members of the Workforce Intelligence Network (WIN) team frequently hear that companies expect the talent system — colleges, universities, Michigan Works! agencies and others — to prepare workers. In fact, only 33 percent of companies surveyed by CareerBuilder stated they would consider offering training if they were having trouble filling a position.
In an age of rapidly shifting technologies and job demands, training workers for job-specific skills is a tall order for talent institutions. Necessary equipment and software is expensive, and each employer uses a different machine, software or other tool, and those needs are constantly changing. Still, the institutions like community colleges provide great value in meeting employers’ needs, providing cost-competitive customized training where there is sufficient demand. Michigan Works! agencies can help screen, train and provide an array of other supports for firms looking for good hires and even up-skilling for their current workforce. The state of Michigan also has lent a hand, providing $10 million last year alone to help train existing and new workers (Skilled Trades Training Fund) and making available $50 million through a debt-funding mechanism to support training for new hires (Michigan New Jobs Training Fund).
These efforts have been helpful, but on their own, employers are realizing the critical need to invest in their employees directly. A recent study by Bersin & Deloitte shows corporate spending on employee training has increased by 15 percent over last year. The companies contributing to this increase have shifted from looking at the dollars spent on training as a straight expense (like coffee) and started looking at it as a long-term investment.
Not only do companies benefit from developing deployable resources for their firms, data shows that companies that invest in employee training are more likely to retain those employees. This is because employees like it when their company takes a genuine interest in their future. This means combining training with clear strategies for development, including strategic career pathways that help workers advance their salaries and responsibilities, to ensure that skilled people have incentives to stay. This helps build loyalty, and loyalty increases productivity. According to the CareerBuilder survey, an overwhelming 92 percent of employees become more loyal to a company that invests in training them, debunking the myth that training workers only incents them to look at better opportunities at other companies. Mature companies that have seen first-hand the value of such investment spend 37 percent more on training on firms just beginning to provide such employee investment.
For training to be successful, a business must take the time to analyze its needs, plan an evaluation process and set a climate for learning. Another important step is to be sure that employees have the opportunity to apply what they have learned or teach others in the organization a new skill. When offering online job training, it is important to ensure the training is interactive. Research indicates that, unsurprisingly, workers prefer training that integrates gaming, simulations and other engaging experiences. Universally, employers agree that it takes more than training to reap the full value of a worker; often it can take three to five years before a worker is fully seasoned and productive.
While training can be expensive, employers who do it now will argue adamantly that they gain valuable returns from their investment, and there are tremendous resources available in the community to help defray these costs. While a good caffeine buzz can be valuable to productivity, having knowledgeable, skilled workers will provide more bang for the buck. It is time for firms to start investing more in worker training.
Note: Sarah Sebaly, Project Manager – Strategic Pathways, for the Workforce Intelligence Network provided research for this blog.