Training must be driven by needs of firms

MANAGERS ON MANAGEMENT:TRAINING SHOULD be a key element in the competitiveness of any organisation. But the reality is that it's often undertaken without any clearly defined targets or hard-nosed idea of the impact it will have on a company's bottom line.

“Yes, some companies certainly take the view that training is just another item on their shopping list because managers feel it’s the appropriate thing to do,” says Alan Nuzum, chief executive of Skillnets, the State agency responsible for enterprise-led training.

“But that’s not enough, particularly in a difficult economic climate. Managers need investment in training to be targeted – and they need it to give them a competitive edge which will benefit their businesses, particularly in times of adversity.”

That’s where Skillnets comes in. Essentially its brief is to bring together and fund networks of companies, advising them on how to define and access the training that best suits their needs. This year it will spend around €26 million.

“We don’t deliver training but we set standards for best practice in terms of the approach the training companies need to take – and our key requirement is that the type of training is clearly driven by the needs of the businesses.

“The training has to work in two ways: it must contribute to the competitiveness of the company and it must contribute to the trainee’s employability.”

The success of training programmes has generally been measured over the years on the basis of the trainees’ own reactions, by measuring what they’ve learned, how they apply what they’ve learned and its impact on the business. That’s known as the Kirkpatrick model.

Skillnets takes that model one step further, using return-on-investment (ROI) measurement, essentially an extension of Kirkpatrick developed by Dr Jack Phillips of the ROI Institute.

“The aim of that additional step is to look at the impact of the training across a number of headings and then to quantify its benefit in financial terms,” says Nuzum.

“To do that you have to eliminate reasons, other than training, why an impact would have taken place . . . a company must know why it’s doing the training in the first place.”

He continues: “Ultimately, with a full ROI study, the very end figure will be a percentage return on investment. From a business point of view, any return on investment of more than 100 per cent has made a contribution, and the majority of companies achieve that.”

Ironically, though, the process is perhaps most revealing about the companies which fall short of that target – who have “negative ROI”. “What can happen, for example, is that someone goes on a course, they learn lots of good and useful stuff, but when they return to the workplace the environment is not conducive to applying it.”

He concludes: “In management terms it’s a bit like spending a lot of money on a new machine, then not plugging it in and wondering what’s gone wrong. You’ve got to plug in the machine, show people how to work with it and everyone benefits.”

Next Week: Eithne Fitzgerald, director of corporate finance at AL Goodbody, on why it’s crucial for public companies to have a corporate defence strategy to defend against hostile bids.

petercluskey@yahoo.fr

Name:Alan Nuzum

Organisation:Skillnets www.skillnets.com

Job:chief executive

Management advice:Use targeted investment in training to enable your organisation to cope with adversity and be ready for recovery.