Training and development is said to be beneficial for both firms and employees. Why then are some organisations and individuals reluctant to invest in training?
This essay attempts to understand the benefits of training for firms and employees and why some organisations and individuals are unwilling to invest in training. The essay will define training and development, identify four types of training, discuss the advantages of training for firms and employees and discuss the reluctance of both individuals and organisations to training.
There are multiple definitions for training and development depicted in several literatures, which define both factors as singular entities which operate independently. There is thus a clear distinction made between training and development which is outlined in further detail below.
Grugulis (2007) suggests, training and development can take place over the course of many years or can occur in a day; it may involve the introduction of a worker to an organisation, it's health and safety practices; a break for workers in an organisation that are excluded from the more flexible or perhaps dull tasks.
Training is often considered as an increase in the effectiveness of employees in their position at a specific period in time while development occurs to improve the skills of employees over a long period of time; it's an ongoing practice that is enhanced by one-off events like training which is compatible with the organisation's future strategy (McDowall & Saunders, 2010).
According to the Chartered Institute of Personal Development (CIPD, 2010) training is defined as 'an instructor-led and content-based intervention, leading to desired changes in behaviour' and development is 'a longer process of learning, acquiring skills or knowledge by different means such as training, coaching, formal and informal interventions, education or planned experience'.
Although there are many different types of training methods, only four approaches to training are defined in this essay. Firstly on-the-job training as proposed by CIPD (2010) is the process whereby individuals attain skills and knowledge within the workplace, whilst also putting those acquired qualities into practice, therefore increasing employee expertise and credentials. The second form of training is through formal training; OECD (2010) defined formal training as taking place in a formal setting. It is specific, structured and has a clear training outline. The third form is known as online training otherwise known as e-learning is carried out via the internet mainly to train employees and it is often used by firms due to its flexibility (CIPD, 2010). Finally, off-the-job training occurs outside the work environment (CIPD, 2010).
Training has many benefits for both employees and employers in an organisation and they are discussed below.
With regards to employees, one of the advantages of training is that it's an investment in the employee. Research findings by Xiao (2001:575) argued that employee training resulted in an improved job performance, higher productivity and increased earnings; which increased the future job prospects for employees (Barrett and O'Connell, 2001:21). This is with respect to 'human capital theory' by Becker (1964, cited by Xiao, 2001) who suggested that training is an investment in employees to improve their skills, enhance their knowledge and increase their earnings.
Grugulis (2007:17) and Tamkin (2005:5) cited Dearden et al, (2000) whose research provided evidence that is in agreement with Becker's theory; 'Men who have first degrees earn 28 percent more than men with GCSEs and men who have A-levels earn 17 percent more than men with GCSEs and likewise, women who have first degrees earn 25% more than women with GCSEs'. This makes it clear that degree holders are likely to earn more than non-degree holders, due to advancement in training and expertise which is essentially an investment in skills and human capital.
Even though literatures by Grugulis (2007) and Tamkin (2005) and research findings by Xiao (2001) and Dearden (2000) are all in agreement with Becker's theory that is 'human capital theory', Livingstone (1997) argued the theory is somewhat flawed in certain aspects. He related the theory to what is taking place in society at large and found that although the main argument of the theory enhanced training will increase earnings is accurate, the flaws lies in the justification it fails to provide with respect to high unemployment rate among educated individuals in society as well as a 'stagnation' of income for the highly trained individuals; resulting in a widening gap between training and jobs. Livingstone suggested the government could step in with sweeping economic reform policies to address this issue. I'm in agreement with the notion of Becker's theory but I think that perhaps, what Livingstone failed to consider is the fluctuation in the economic climate such as a recession or outsourcing the by-product of globalisation both scenarios will increase the jobs skill gap in society.
Findings from the research conducted by Burke (1995:11-12) suggests, the benefits of training to employees has increased job satisfaction. As a result, employees delivered excellent services to clients and meeting clients needs all of which have had a positive effect on the firm's 'bottom line performance'; thus in the process of reducing limitations that might hinder the organisation's success. In addition, employees felt better about their firms i.e. their opinions of the firm became increasingly optimistic, for instance employees held a positive perception towards the value of training they received and saw an opportunity for further personal development with regards to training and job promotion.
Training provides employees with the opportunity to join professional bodies that consists of like-minded individuals (Wilson, 2010). This provides subordinates with the possibility to gain knowledge and understanding of the latest changes, issues and vital information, related to a particular profession. One also has the opportunity to engage in networking, increasing the quality of contacts likely to enhance future business prospects for the individuals as well as the organisation. Employees can more importantly attend training recommended by a professional body, thus develop their skills which later are applied to the practicalities of the job requirements such as; improving products and services offered to clients, increase in sales revenue and improve employees overall performance.
Burke (1995:12) and Garcia et al. (2002:21) argued that one of the benefits of training for a firm is employees viewed the organisation in a higher esteem, which consistently enhanced the organisation's reputation, culture and image both internally and externally. This led to a reduction in employee turnover, which reduced potential costs of recruiting and replacing employees whilst ultimately improving the overall performance of the organisation.
One of the advantages of training and development for employers, who train workers that are on a short-term employment contracts, is that employers gain from a 'flexible work force' and reduced costs (Barrett and O'Connell, 2001:25-26). This will be a cost saving incentive for firms in hiring part-time workers.
Another advantage of training for firms as suggested by McDowall and Saunders (2010) is the lack of skills shortages in the organisation which can be attributed to renewed loyalty from trained workers and the effects of training can be seen visually and measured through improvements made by the employees at work. (counter argument plus my point of view)
Grugulis (2007) argued training can be seen as a 'positive symbolic function' by employees in a firm. Reason being, firms that sponsor their employees on training sessions to further develop their skills are most often viewed highly and encouraging by the employee, also employee loyalty to that firm accelerates since they see an ongoing future with that firm. Yet this could be an issue, as employees may acquire full training from one organisation but take those skills elsewhere for better jobs or pay (Wilson, 2010). Therefore the organisation incurs costs which later cannot account for and further increases due to additional recruitment and training costs of new staff.
Training allows organisations to adapt to changes in the business environment (Wilson, 2010). This is due to the constant change taking place in the business environment as a result of new technology, new product development and innovation, new skills are needed by workers therefore organisations invest in training workers to acquire the skills to maintain a lead, ahead of competitors and to capitalise on workers enhanced skills as a form of competitive advantage. This is vital to the organisation's HRM strategy.
Training is known to be beneficial to both individuals and organisations, yet both parties are reluctant to invest in training and the reasons are revealed below.
According to Grugulis (2007), individuals are reluctant to invest in their training because they have been discriminated against; therefore, their skills and qualifications are not perceived to be of a high standard by the employer and this brings a low rate of return. Grugulis (2007) used several examples to illustrate the undervaluing of employee skills by firms. In the case of female employees who have technical skills, they carried out tasks more complicated than their male colleagues, yet they were undervalued despite the technical skills were observed and measured. Grugulis (2007) further argued that men who have the role of caretakers at schools had the privilege of being on a full-time employment contract whereas the women who were sometimes in tedious positions had their jobs downgraded to low-skilled and were placed on part-time employment contract with little or no benefit. The examples above illustrate the existence of bias in the workplace and unfortunately, it has not been eliminated since the passage and implementation of the Equal Pay Act 1975.
Grugulis (2007) suggested that individuals who possess soft skills are viewed through gender and racial stereotypes, struggle to find a suitable job because their skills are not transferable; also it's only a small number of employers who value soft skills but don't necessarily reward them. This is perhaps due to the lack of full recognition and importance of such skill and the fact that individuals who have these skills mostly women and minorities who are major occupants in the low-skilled jobs in society.
Although the UK service sector consists of highly skilled jobs, majority of jobs in the service sector are low skilled roles occupied mostly by women who are mostly employed in this sector (Grugulis, 2007). Jobs in the sector are poorly paid and the job design 'limits the skills' of workers. Due to such limitation, workers don't have access to training that will enhance their skills and encourage job promotion; however, what is offered is low-level training available to the workers which is accompanied by the least of rewards. Additionally, biased employers view workers position in the labour market before the workers skills as there is a presumption that low-level workers have limited skills and consequently such conjecture limits the possibility for advancement in the work environment, therefore many could remain stagnant and non-progressive.
Employees are reluctant to take part in training due to under-utilisation of their skills in the workplace. Grugulis (2003:5) and Redman and Wilkinson (2009) noted that although employees have the autonomy to dictate their tasks and carry out their jobs in ways that suit them, they are sometimes hindered when the job is tightly controlled and employees are given little or no autonomy with regards to their contracts and tasks. As a result, employees aren't making full use of their skills which increases their unwillingness to take part in training and it also separates employees from the organisation in the process de-motivating them. To prevent under-utilisation of skills, employees need to notify their employers about this issue.
Bratton and Gold (1999:55) suggested that globalisation and the increasing use of outsourcing by firms, has made employers view employees as suppliers of skills. Since the employer's main aim is to lower labour costs, this action served as a threat to employees because their job security has been reduced and by viewing employees as suppliers of skills, employers dehumanised the work process and risked the workers' trust. This approach enhanced employees reluctance to invest in training because it under-used their skills and it is 'Hard' HRM practice treating employees as 'costs that must be controlled' (Bratton and Gold, 1999:5).
Organisations are reluctant to invest in training because it is perceived to be expensive and the organisation may be limited financially (Abdel-Wahab et al, 2008). Instead, the organisations divert the funds to important projects that need money urgently and will have an immediate impact on the business. Although, training might be expensive and unaffordable for some organisations, yet it is vital because it can have a positive impact on the productivity and bottom-line of the organisation with regards to the goods and services offered by the organisation to its clients.
One of the reasons behind employers' reluctance to training is due to employee turnover. Grugulis (2007:44) noted that in this case, employers are unwilling to invest in training due to rival firms 'poaching' their employees and seeking out highly skilled and trained employees offering higher earnings and job security. On the other hand, Crouch (1997:369, cited in Grugulis, 2007:35) argued that employers should view employee training as a 'long-term investment resource'. It is advisable for employers to view training as an investment that will ultimately pay big dividends for the firm in the long run. To prevent employees leaving the firm for better paid jobs and competitors from poaching employees, firms need to show their employees they are valued and reward their employees with good pay packages and benefits.
Firms might choose not to invest in training because it is difficult to measure the effects and outcome of training. In this case, it is suggested that firms use performance appraisals for their employees after the training session in order to monitor the employees' progress, and maintain quality control.
According to Redman and Wilkinson (2009), some employers are unwilling to invest in training because they compete on costs and not on quality therefore, their employees aren't required to have any special skills. But, research findings by Barrett and O'Connell (2001) suggested that training should be given not just for specific jobs but also for general jobs that require minimal skills. Reason being, employees on general training are enthusiastic and dedicated than employees on specific training because the training received is beneficial to them not only at work but also, outside the work environment. As a result, employees raise their efforts at work and this is reflected in increased productivity for the employer. Also, in relation to Becker's theory, training is suggested for firms that compete on costs because it is an investment over time that will enhance employees' skills and performance and for the organisation, it will raise their reputation and reduce employee turnover.
In conclusion, training and development is important for both firms and their employees and the benefits of training outweigh the reasons behind both parties reluctance to training. Employees, whose skills are under-utilised and undervalued by their employers, need to notify their employers about the issue at an appraisal session. Before getting involved in training, I suggest employers identify a need for it in their organisations and view it as a solution to their problems. Employers should not put off training because it's difficult to measure the effects instead, employees should view training as an investment and use performance appraisal to measure the effects of training and monitor their employees progress.
