In today’s fast-paced world, standing still is not an option for any organisation. The way skills development is managed can make or break a business, as outlined in a new report from City & Guilds: Investing in skills for growth.
Skills to drive your business forward
Businesses must now be prepared to evolve continuously. This also applies to training.
Those who do not invest in developing their people run the risk of falling behind.
Whether you’re aiming to adopt greener practices or find your next generation of leaders within your current workforce, giving your employees the right skills is a key driver of success and sets your business apart.
It’s also become increasingly important for retention – according to The 5% Club, a movement of over 820 employers committed to skills and training, members who prioritised long-term skills training saw a 71.2% increase in employee retention as well as a 94.2% increase in employee engagement. This is compared to only 38.2% and 41.2% increases in typical organisations. See the report ‘L&D’s role in employee wellbeing: A 2023 survey, The Open University and The 5% Club’ for more information.
Navigating the investment case for training
We have seen time and time again how L&D leaders run into a common challenge – investment in training tends to take a back seat until the business can see the return on investment.
Unfortunately, it’s a catch-22 situation, because that return usually only shows up when you’ve invested in high-quality learning experiences.
The report outlines the importance of investing in training and the benefits:
- Organisational growth: Whether it’s training sales teams on new software or teaching managers advanced leadership techniques, tailored training fosters agility and flexibility. As a result, this drives organisational growth.
- Improved retention: Investing in employee growth and advancement demonstrates a company’s commitment to its staff’s success. This commitment leads to increased engagement and enhanced loyalty among employees.
- Innovation: Prioritising L&D enables organisations to be proactive rather than reactive. A skilled, engaged and loyal workforce can prepare the company for the future and drive innovation. Which allows everyone to keep pace with the rapidly evolving business landscape.
- Strong leadership: Quality training facilitates career progression within an organisation. By providing existing employees with the necessary knowledge and skills for high-level roles, businesses can effectively cultivate their future leaders.
4 common challenges employers face
Despite the clear benefits of training, employers still encounter challenges:
- Creating meaningful staff progression: 86% of professionals surveyed noted this challenge. Without structured learning pathways, training can feel disjointed, leaving employees disengaged.
- Delivering high-quality training: 85% emphasised the challenge of building engaging and effective training programmes that resonate with the target audience.
- Skills shortages: 85% expected skills shortages to be a major concern in the coming years, as employees increasingly seek better opportunities elsewhere.
- Measuring impact: Nearly 80% highlighted the importance of proving that training programmes have a measurable impact on business performance. To achieve this, measures need to be set out as part of the design process so we can get meaningful reporting around progress, outcome and impact – this challenge in particular is what led us to create Kineo Analytics!
The cost of getting it wrong
The report also highlights the costs to businesses that don’t invest in high-quality learning:
- Lower productivity: Low productivity costs British businesses £143 billion annually, with an average cost of £4,467 per employee each year.
- Higher turnover: A lack of growth opportunities can lead to higher staff turnover and increased hiring costs (up to £22,000 per person).
- Poor customer service: Inadequately trained staff can result in poor customer service, costing UK businesses £11.4 billion monthly.
- Increased safety incidents: Insufficient safety training can lead to more workplace incidents and potential fines of up to £3 million for health and safety breaches.
- Missed innovations: Without advanced training, employees may lack the knowledge to stay updated with technology, hindering their ability to innovate and costing an estimated £64.7 billion annually.
- Leadership gaps: The presence of unprepared “accidental managers” costs UK employers approximately £84 billion annually.
- Weak compliance: Failure to provide training on rules and processes can result in regulatory non-compliance, with potential fines of up to 10% of a company’s turnover. A £50 million turnover company could face a maximum fine of £5 million.
Quick wins for training success
It’s not all bad news though! For organisations who want to tackle these challenges head-on, and set themselves up for success, the report highlighted these quick wins:
Align with organisational strategy
Ensure that training aligns with the organisation’s goals to have a meaningful impact.
Involve key stakeholders
Engage stakeholders early, including managers and end-users, to gather input and quantify the benefits of training.
Set clear evaluation metrics
Establish upfront what you will measure to demonstrate success, such as employee retention, recruitment costs, or engagement.
Prioritise employee needs
Focus on developing a training framework that supports employees’ career growth and recognises their achievements, building loyalty and trust.
Cultivate an internal learning culture
Promote internal mentoring to create a culture where learning is valued, leading to improved productivity and innovation, ultimately benefiting the organisation’s bottom line.
By prioritising high-quality training and addressing key challenges, businesses can stay competitive, drive innovation and achieve sustainable growth.
What next?
It’s clear that investing in skills for growth should be a priority for any organisation that wants to improve its return on investment and bring more value to its workforce. We are here to support you with the quick wins and the long-term wins. If you’d like to discuss any of the insights shared in the report and this blog, please get in touch with our friendly team.