In today’s highly competitive business world, technology can be a vital source of advantage. But the best software in the world is useless unless your staff know how to use it. That’s why, when insurance firm Close Premium Finance (CPF) rolled out new Oracle 9i business software, the broker spent six weeks training 50 staff in every aspect of it.
The company had limited time and money to invest in training, so it made the decision not to send staff out to instructor-led courses. Instead, it utilised an online learning system developed by CSF that offered a pay-as-you-go model. Close Premium Finance paid for a set number of staff hours in advance, and individual brokers could then access training when it was convenient for them.
The strategy was highly cost-effective, says Jonathan Cattle, IT director at Close Premium Finance. “As well as reducing the ongoing training spend, this allowed us to reduce the time taken to manage the process,” he says. “We didn’t have a separate lot of paperwork for everyone who took each course and separate bills.”
You might believe you don’t have enough time or resources to invest in training. The current economic downturn has persuaded many SMEs to simply cut training from their budgets, says Terry Watts, chief operating officer of eSkills UK. “Many SMEs are fighting for survival, and don’t have the time to think about training,” he says.
Eliminating training might save cash short term, but Watts believes it’s a mistake. “Training is what gives your company the ability to respond to new opportunities or threats, and that’s what saves you in a tough market,” he says. In a competitive sector, there’s nothing to stop overseas companies targeting your customers. But the right technology and business training could enable your staff to counter the threat and perhaps even poach the competitions’ customers.
The first step in addressing training issues is to devise a strategy. In large companies, this is the responsibility of the Human Resources (HR) department, but you may not have one. “In many SMEs, if there is an HR department it’s more concerned with payroll than training,” says Peter Lloyd, deputy chief executive of UFI/Learndirect. “This means there is no single person responsible for making sure the company has the skills it needs to progress.”
In Lloyd’s experience, most firms approach training tactically rather than strategically. Rather than providing training to meet your future goals, you should look for training that meets a specific, current business challenge. “SMEs don’t want training in employment law, they want to know how to make someone redundant next month,” he says. “Or they need to make a presentation, so they want training in PowerPoint.”
However, this approach can mean spending more on training long term. Paying for one course in Microsoft Office skills is cheaper than paying for several ad hoc courses in specific Office applications. By investing in training before it’s needed, staff are also in a stronger position to take advantage of new opportunities.
Business Link advises thousands of companies like yours on business and training strategies every year, and the most common mistake is not planning ahead. A training strategy will reduce overall training costs and improve staff retention, says Peter Klaasen, an HR advisor with Business Link for London. “There is often a fear that if you train staff, they will leave,” he says. “But what happens if you don’t train them and they stay?”
To draw up a training strategy, Klaasen advises that your key managers create a list of key business objectives, and the changes needed to achieve them. Next, consider which people will be involved in delivering those changes, and identify which skills will be needed to do so. Ask whether these skills are present in your organisation – where they aren’t, you have a training need. “At the end of the process, you should have a training needs analysis for each member of staff, that will help you prioritise what training you need to invest in,” Klaasen says. “We advise companies to build this into quarterly appraisals so that training becomes part of the ongoing business, not something you only think about once a year.”
The good news is that training doesn’t have to cost the earth. Many training courses you could buy are subsidised by the government and some are free. UFI/Learndirect offers thousands of courses to SMEs for under £100, says Peter Lloyd. That’s a small investment considering the benefits that good IT training can deliver. “A simple user skills course could be enough to put an SME on a level playing field with bigger competitors,” Lloyd says. “If you look for the right level of training and target it very closely, you’re looking at a relatively small investment.”
The key to keeping training costs down is selecting the right course for the right people – and delivering it in the right way. Traditional classroom-based training is expensive, and may involve travel and accommodation costs if the course is off-site. However, e-learning (via the Internet) is significantly cheaper. If your company doesn’t have fast Internet access, many training providers also offer computer-based training, which essentially puts e-learning content onto a CD-ROM.
If e-learning isn’t appropriate for you there are other options. Good sources of information about local courses include Business Link, the Learning and Skills Council, eSkills and Learndirect. It’s also worth approaching local further education colleges to see what courses are available locally, before you spend a small fortune on commercial training providers. “Colleges are much more interested in small business then they used to be, partly because funding is dependent on how well they meet the needs of industry,” says Klaasen.
If your company needs highly product-specific or customised training, then the likelihood is that you will need some classroom-based training from a commercial provider. In this scenario there are still ways to limit the cost. For many years, charities have formed consortia to buy training services, says Peter Jackson, a consultant with SAP Education. “It’s a good way to boost your negotiating power with bigger vendors, and SMEs can do the same by linking with other local businesses they have relationships with,” says Jackson.
Reap the benefits
Having invested in a training programme it is vital your business reaps the benefits. This might sound obvious, but IT skills are quickly lost if they aren’t practised and reinforced. It’s also difficult to justify a training budget if managers don’t record whether the skills objectives identified in the training strategy have been met.
“So often someone goes on a course and is then left to their own devices, as though they’ve been magically altered,” says Karl Parkinson, chairman of IT training provider Computeach. “It’s important to support people when they complete training, and help disseminate the information.”
Possible strategies include using training delegates as ‘evangelists’ to help train other workers. Alternatively, your managers should be alerted to the skills an employee has acquired and ensure these skills are tested in the days following the course. Many training companies also provide follow-up tests and services to see the extent to which new skills have been retained.
Without effective skills developments, you can easily find yourself paying over the odds for ad hoc skills training, or outsourced services, says Parkinson. In the long term, this will certainly be more expensive than training, and may harm the company irreparably. “The only thing more expensive than an SME training the workforce,” says Parkinson, “is not training the workforce."
A small division in a larger company, Channel 4 Interactive faces considerable challenges in delivering training to its staff. “We have to be careful about using off-the-shelf solutions because we need to customise a lot of information for our particular industry,” says Evan Perkins, an interactive learning advisor with the broadcaster. “Last year we spent £14,000 on one particular set of training programmes and nobody used them.”
Channel 4 Interactive needed a high level of training for staff, but couldn’t afford to send them out of the office on residential courses. The company considered e-learning, but was concerned that its small IT department would struggle to manage the number of courses that would be required. “We couldn’t have afforded the £30,000 it would cost to develop and manage an e-learning system internally,” says Perkins.
Instead, the broadcaster opted for a fully hosted e-learning system delivered by Knowledgepool. The training company hosts a web-based portal that Channel 4 staff can access over the Internet. Through the portal employees can access hundreds of different bite-sized courses that take only a few hours to complete. “People can access courses whenever they want using a web connection, and the content is easily customised because it’s all web-based,” says Perkins.
The key to successfully using e-learning is marketing, Perkins believes. Channel 4 Interactive promotes the portal on the company intranet, and has created an HR initiative called ‘4macy’ (like pharmacy), which promotes skills development to workers. “A training programme could be fantastic, but if nobody knows it is there, what’s the point?” he says.
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This was first published in December 2003