Why the Classroom is Still King & Other Training Myths
Ever wondered why the average Canadian company spends only $852 per year per employee in training costs? After all the amount hasn’t budged in nearly a decade and has actually decreased by 17 %. This latest number represents the amount of formal training, typically about 25 hours of training, according to Michael Bloom at Conference Board of Canada’s International Workplace Education & Training Conference held last December.
It turns out that the reason for this, far from what we would expect after an endless churning of statistics, is incredibly simple. Canadians are already workplace smart when we enter the workforce. Apparently because the quality of people our educational institutions turn out is so good, Canadian companies are able to coast when it comes to delivering training. After two decades of being spoiled, it’s become a national habit. (With the exception of Quebec, which requires employers to reinvest a proportion of their payroll into job-related training.) But will it last?
Danger signals are looming. Canada slipped from 12th place internationally in 2002 to 21st place in 2006. And the proportion of staff who feel their organization is a “Learning Organization” dropped from 78% in 2002 to 56% in 2006. In a global economy where our fundamental ability to compete is based on quality, innovation and niche expertise, because we can’t win on the basis of low price, this is suicidal.
Education, in it’s current form of vocational, apprenticeship and other forms of post-secondary education, has been and will continue to be a provincial government focus because it is a growth industry and commands a lot more of baby boomer parents’ fat wallets than $832 per year, mostly to produce skilled workers for small companies who are crying out for qualified staff because they don’t want to train them and can’t afford to pay them a lot.
Who gets most of the training in organizations? 44% goes to supervisors and operations staff. Another 30% goes to executive and management functions.
Small companies, presumably because they lack the in-house capabilities of their larger brothers, tend to spend a lot more per person than large companies.
Meanwhile only 25% of immigrants actually find a job in their field after several years of being in Canada. Many of them will remain chronically underemployed and marginally impoverished due to magical hiring forces going on in workplaces, to the tune of a net productivity and wealth loss of $13 billion dollars annually, according to Robert Nixon, the Chair of RBC Financial
And then we face the reality that in the next 5 years (2012 to be exact) over 41% of the Canadian Public Service will be retiring, albeit on very fat pensions, effectively skewering the demographic and rank order of the current public service. But by then probably some of today’s extremely well educated university graduates will have managed to find jobs there, especially when they can give up their 2 or 3 other McJobs for a real one with a big salary so they can start paying for the pensions of the newly retired. A lot of good fun awaits them. It’s a good thing that with all this education, no one taught them that what they take home is actually the difference between “gross” and “net” before their living expenses. Shhhh…! We don’t want to spoil it for them. Surely they can live well and retire on the remaining $200 per month they’ll manage to save.
But let’s get back to training. There are clear correlations between high performing organizations, those that invest an additional $200 avg. more while achieving important business performance goals. For their investment they also experience higher customer satisfaction and produce products and services of higher quality than other companies do. That 20% extra training investment accounts for a 38% increase in quality and customer satisfaction as compared to medium learning performance companies, and a whopping 82% increase as compared to the low learning performance companies. The message here is also clearer than what dizzy eyes would be able to determine after reading through a stack of training investment statistics. It is this: Learning in the workplace pays back more than it costs.
Now translate this for your company. What would be the return in $ to your business if you increased your customer satisfaction and quality by 82%. That’s your number. Divide this by $200 (rule of thumb) per employee and here’s your payback on training. When you really get this and follow through, you’ll have become a learning organization already.
Then, add the following potential results $ values from increased learning:
· any increase in employee satisfaction
· any perceived workplace environment benefits
· any decrease in retention rates
· any impact on succession plans
· effect of other intangibles you might identify like better relationships, communication, and so on.
75% of training still goes on in the classroom. But an interesting picture is emerging concerning formal vs. informal learning. A lot of informal learning goes on that is not captured as easily by statistics. Formal learning is defined as structured events or programs, classroom courses, seminars, instructional CD’s and online courses. Informal learning is primarily unstructured; problem-solving, incidental conversations, coaching, mentoring, “lunch and learns” and communities of practice.
As of 2006 it’s estimated that 42% of the learning that goes on in organizations is informal and the trend is increasing. It could be that informal learning compensates somewhat for the absence of other formal training. Or it could also indicate the growing value of less formal learning interventions, such as coaching and other alternatives that may bring in more tangible performance advantages than formal programs.
Conclusion? Even learning about learning shows us that we still have a lot to learn.
Source: Conference Board of Canada, Learning & Development Outlook 2007