EL FONDO EMPRESARIAL

Training, whether short courses or tertiary education, is expensive and predicted to increase over coming years. From the literature survey it is clear that to address this problem there has been a worldwide trend towards “employability” and a consequent shift of the expense of training and education from the company to the employee. This has generated some debate at the heart of which is who benefits most from training and education and therefore who should pay, the company or the individual. In brief this poses that education, such as a degree, benefits the individual most and therefore the individual should pay. In contrast, job-specific training benefits the company most and hence the company should pay. The essence of the debate centres around the “grey area” between these two extremes.

Whilst the current investigation does not seek to resolve this conundrum, it has significance for the study as if companies will not pay for industry focused short courses, and individuals can not afford to pay, then this has a direct impact on the uptake of such courses. The first group of questions in this section therefore investigated what affect cost of courses had on company commitment to training and how they dealt with this factor.

The starting point therefore was to investigate why companies undertake training and what they wanted to achieve from that training – there were a variety of answers. Company B undertook training to develop future general managers by identify high flyers, providing them with knowledge and then monitoring whether they apply that knowledge and therefore are in a position to move up the ladder. They focus on particular areas of importance for the company and they receive funding – customer service is a low priority but supply chain, sales and management are a high priority.

Company D was committed to training because he recognised the affect step-by-step training had on his own professional development. Company A train because it provides them with a competitive advantage as demonstrated by the company out performing the S&P (Standard and Poors) index by 280% over the last five years, and basically because that is the way they have always done business.

For Company C and D training was not only a retention devise but an essential business function: “you either spend the money on staff development or you spend it on staff replacement and recruitment and I know which is more expensive,” and “you get the people you deserve by investing in them.”

There was also a diverse opinion over the benefit to the company from training.

Company B picked out setting the overall impression of the company as one dedicated to a culture of learning and development as this assisted recruitment and retention of staff. Two respondents wanted staff to have a better knowledge and skill base so that they could do their job exceptionally well at a level recognised by the trade (D) and to understand the requirements of different leadership styles, decision making and to develop an attitude that “I can improve myself” (Company C). Company C also noted that training shows people you are engaging with them. This develops loyalty so that they do not just work for their weekly pay but develop an attitude that “I get my money but this company is investing in me”, this produces a motivated employee.

Company A wanted improved individual performance and resultant improvement in the company’s bottom line. Company E supported training as an aid to staff retention, but also viewed it as providing the company with ability to “do more with less”, noting an additional benefit that in hard financial times staff view money spent on training them as compensation in place of pay rises.

All of the respondents agreed that there should be a benefit to the individual as well as the company from training, but in reality their answers identified concrete benefits to the company and only “nebulous” benefits to the individual. For example, for Company B the benefit for the individual was being able to do their job better (really a company benefit) and giving them some form of “better self esteem” or “contentment in their job” because they think the company is taking an interest in them by investing in them,

regardless of whether it is a $500 or a $5,000 course. In addition, “training encourages people to stay in the organisation….if you spend $1,000 and that person stays an extra year that is money well spent for them and the company.” In reality, the latter is also a company, and not individual, benefit.

Company D followed a similar line by identifying a nebulous or unspecified benefit for the individual employee which was in fact a company benefit: “Whilst we want to improve our people, one of our company anchors is to provide premium service to our New Zealand customers and exceed all their expectations” (company benefit). In reply to a supplementary question “Is your focus for training your staff to get the best outcome for the company and your customers?” he confirmed the company, rather than individual, focus. He stated: “We work to meet (our customers’) expectations that we are New Zealand, if not World, standard in the service we give and the professional way we go about their business.” Company A was perhaps more realistic in stating: “There is no separation between the individual and the company; the company benefits and the individual benefits” – it is interesting that in this direct quote the company was positioned before the individual. Company D was the only respondent which enunciated real individual benefits such as increased employability specifically in the FMCG sector, broadened range of skills, improved adaptability and related ability to cope with the changes that inevitably come along.

In answer to the “who benefits, who pays” conundrum, all respondents agreed that the company should (and in most cases does) pay where the direct benefit from the training was to the company. However, there were some differences of opinion in the “grey” areas where the training benefits the employee more than the company. Company C was unequivocal – the company should pay for all training. For Company B, in the “grey” areas, if individuals want to do something that relates to their own progression and career path it is at their cost unless the company can see some form of benefit. For example, as achieving CA registration is a pre-requisite of an accountant doing the job they would contribute towards that. Whereas, in terms of a dedicated FMCG tertiary qualification, even though it might help the company, the company would view this as something the employee wanted to do. Hence, the company would be generous in terms of making time available for attendance, but would not pay for it.

By contrast Company A has an education assistance programme. Hence, if an employee wants to do an MBA the company considers the benefit of that to the organisation and makes an offer to pay from 25% to all of it. However they seek assurance about the employee’s ongoing commitment to the business, particularly where the degree is not directly related to the business (e.g. a degree in astronomy) but even then they might contribute a small amount. They contribute in all respects (time and money) where there is a reasonable correlation with the person’s personal development and the business. For Company E the main consideration was how long they intend to retain their people. If companies typically keep staff for 10 years then they should cover the cost of training as they are getting a good return on their investment. If they turn over staff faster, for whatever reason, then the training decision is a values one – do we provide training for staff because it will make them a better person?