There's a new trend afoot in corporate America. Lean and mean is out; lean and smart is in.
More employers are sending their employees back to class -- or bringing the classroom to them -- in order to compete in a global market.
Corporations are focusing on growth, with a realization that effective management of human capital is key to organizational performance, according to the American Society of Training and Development 2005 State of the Industry Report. It shows that companies spent an average of $1,000 to $1,430 per employee to provide 34 to 41 hours of training in 2005, an increase in expenditure over previous years for most companies.
Several factors are driving the increased focus on training, explained Suzie Price, managing principal of Priceless Professional Development.
"We have a restless job market. A Spherion Emerging Workforce Study (2005) of 3,200 employees and 502 U.S. employers showed that 40 percent of employees planned to leave their job in the next year, and 85 percent were passively looking, while employers thought they were only going to lose about 14 percent," Price said. "With less workers coming into the work force to replace retiring baby boomers, the need for employee retention is great."
The same study showed that employee demands are increasing, with 86 percent saying work/life balance is a top priority.
"Additional skills are needed, because the complexity of jobs is increasing," Price added, "but training is also a way to keep employees engaged and committed, and -- as a recent Gallup Organization study showed -- the impact of an engaged employee is huge on a company's profits, success and turnover."
Keiko Humphries, president of Humphries Consulting Inc., said that "having a company invest in their personal education and career development makes employees feel valued. They recognize it as a benefit that the company doesn't have to provide, and it generally increases company loyalty."
While retention is an excellent byproduct, corporations aren't interested in generic learning for its own sake. They see training as a tool to give employees additional skills to meet specific company goals.
With his company expanding to almost 100 employees and into a new 100,000-square-foot facility in Norcross, EZ Prints CEO Jamie Bardin hired Price for her human resources expertise to help his managers make better decisions about hiring, supervising and mentoring.
"Our employees told us early on that they wanted a systematic process for training, and we have our own internal training program for operations and customer care because we want our people to be successful," Bardin said. "But we don't have the specialized background in personality assessments and communication styles to help people learn how to hire, coach and motivate their employees that Suzie does."
Contract training is up 8 percent and is expected to climb higher, with the areas of health and safety, executive coaching and program management in high demand, according to the Learning Resources Network (LERN) 2005 Annual Conference Report. Companies are outsourcing to educational institutions and private consultants because it's a fast, efficient way for employees to learn skills that are not part of a company's core competencies.
Bardin sums up the decision to outsource training with a car-maintenance analogy: "An owner might change the oil in his car but probably not his transmission. For that, he'd go to an expert."
Bardin also is sending his engineers through a $5,000 Microsoft Certified Systems Engineer course and is considering executive MBA programs for some employees.
"Training is expensive, but it's a subject near and dear to my heart," Bardin said. "I believe, unequivocally, that it's a good investment. There's an absolute return on your money. You get better employees, higher productivity and a better company culture."
Hard and soft skills
Humphries has seen training requests go up with increased corporate hiring and the strengthening of the economy.
"Leadership is an area where companies want to see development, and many are looking for customer service training, wanting to use improved relationships with members and clients as a way to differentiate themselves in the marketplace," Humphries said. "They see investing in leadership and customer service as a formula for greater success."
"Companies want to keep good people, and they're willing to pay for them to develop the skill sets they need to make them successful," said Andrea Rosenthal, who wears two hats as principal of Career Soulutions Inc. and as a career coach with Lee Hecht Harrison. She's seeing companies pay for employees to gain hard skills -- such as computer and Six Sigma certifications or compliance with the accounting Sarbanes-Oxley Act -- and to learn soft skills (leadership or team-building, for example), which are considered key in today's marketplace.
Rosenthal often is called in for corporate team-building training. She helps team members gain clarity on their own and other people's communication styles so that they can become stronger, work more effectively and move their projects forward.
Diversity training is another growing area because of the multicultural workplace and four generations working side-by-side in many offices.
"Executive coaching is definitely on the rise," Rosenthal said. "Companies are looking at managers with potential. Maybe they have great organization and budgeting skills, but they need more leadership and motivational skills to advance."
Companies will pay for a month to a year of one-on-one career coaching. "It's very directive coaching, with everyone agreeing on what's needed, the milestones to hit along the way and the desired end results," she said.
Most employers and employees see it as a win-win. The employee gains valuable skills and knows he or she is supported; because the training is tied to company objectives, the corporation gets an engaged and highly motivated manager.
"The cost of replacing a dedicated employee who has potential for growth and understands the company culture is very high. It's much better to invest in the talent you have," Rosenthal said.
Corporations are sending their people through business, computer and other types of courses at local universities, or they are requesting customized training in-house.
"Business has really picked up. We're seeing companies invest in their employees by sending them through our successful supervisor, customer-service, communications, technical and management-skills courses," said Karen LaMarsh, director of professional development and life enrichment for continuing education at Kennesaw State University.
"But, just as often, they're turning to us to provide customized training with specific learning outcomes," she said. "They know we have professional instructors who like the challenge of adapting course content to address specific issues.
"When they hear that a course changed a company's way of thinking or improved its culture, they get really excited."
Innovative education initiatives are on the upswing. Recently the Coles College of Business at Kennesaw State University designed a Masters Certificate for Experienced Professionals Program for the Smyrna office of IBM.com, which is paying for 30 sales, service and support employees to take the evening courses at their office.
"We expect that the advanced skills our sales representatives will acquire through this 20-month program will help them both in their day-to-day interaction with [top-level] executives and with their long-term career advancement," said Tanya Morris, IBM senior talent manager.
The courses are designed to gives sales representatives a better understanding of business processes and marketing to high-level clients, to increase their corporate and industry knowledge, and to help them develop "executive suite perspective," according to Larry Bell, director of the executive education program at the Coles College. "At the same time, the chance for advancement these skills can deliver may encourage top performers to stay with the firm and realize their long-term potential."
The tragedy of Sept. 11, 2001, and the troubled economy for several years afterward caused many companies to shrink their training and education budgets, noted Nelson Baker, associate vice provost for distance learning and professional education at the Georgia Institute of Technology.
"Now we're seeing a pent-up demand. Requests for customized training and enrollments are up in our entire portfolio of courses," he said.
Georgia Tech is adding more classes of its existing courses as well as designing new ones to meet the demand. Courses in business improvement, technology enhancement, leadership and Occupational Safety and Health Administration safety training are especially popular.
"Many businesses are doing quite well, and they are investing in professional education for themselves and their employees," Baker said. "They expect to gain lower costs, enhanced productivity, improved safety measures and more skills and knowledge to run their companies."