Bob Gibbon, managing director at the National Skills Academy for Manufacturing, explains why an economic downturn is the right time for employers to undertake an organisational skills audit, identify where the gaps are and invest in the training of its existing staff to ensure that those gaps are plugged
While for many investing in training during a recession is counter-intuitive, those that see the bigger picture and are committed enough to make a difference can reap big rewards when recovery inevitably looms on the horizon.
Deep in the recession of the early 90s, a mixture of visionary leadership, workforce commitment and the support of a challenging customer spurred Power Panels Electrical Systems to embark on a journey that was to transform the business beyond recognition.
Perhaps a surprise to the company, but less so for the judging panel, this year Power Panels was voted Best Factory of the Year. While being extremely proud of this accolade it is testament to the company’s commitment to training that, on an evening where it won this crown and a number of other trophies, chairman David Fox acknowledged that the trophy they were most proud to win was the one for Best Skills Development.
Unfortunately Power Panels is currently an exception. It is estimated that the skills gap in UK engineering and manufacturing costs the economy approximately £823 million a year. In times of boom, that can be accommodated as there is growth elsewhere, but when recession looms and businesses need to look to shore up their financial defences it is dangerous for employers to ignore this.
Research from the Sector Skills Council for science, engineering and manufacturing technologies (Semta) shows that 17 per cent of engineering companies have hard-to-fill vacancies, 21 per cent have skills gaps in their existing workforce of which 70 per cent is made up of technical skills. On top of this, 42 per cent of the workforce is over the age of 45 so there is a need to ensure that the bespoke skills of the older workforce are
not lost when employees retire.
So how should we address this deficit? Skills gaps will always be part of an evolving economy. They are a product of the nature of work shifting and stronger global competition. This is especially true in manufacturing where the pace of technological change is intense and the range of skills needed is vast – from the shopfloor to the boardroom.
Unfortunately the general approach to work-based learning is too often one-dimensional. This usually makes results difficult to evaluate, offering little evidence that training has delivered a tangible business impact. This, in turn, fuels the misconception that training is a cost that most employers can do without, and initiates a spiral of decline whereby the employer reduces the investment in learning because they see little tangible benefit.
On the contrary, training is at the very heart of every business’ potential. But until employers are encouraged to take a more systematic, considered and targeted approach to learning, they are unlikely to realise that potential. At present, less than three per cent of all training fulfils its true potential and up to 80 per cent does not deliver a return on investment. Such a poor performance is reflected in the UK’s position in the international skills leagues where we sit at number 20 for intermediate skills.
And yet by using a systems approach the Skills Academy is helping businesses achieve six-fold returns on their training investment.
This is called the Learning Engine and is designed to help employers, learners and training providers work together to get the most out of training. The Learning Engine identifies five steps in the training process designed to ensure that any investment in skills training provides the optimum return. They are:
1. Analysing the need – understanding the skills needed to meet business objectives is critical to business success.
Not all skills are equal and so being able to determine precisely which skills will make the biggest impact on a specific business outcome is extremely beneficial. Additionally it is also critical to determine precisely which specific performance measures will underpin the business objective and to ensure that the chosen skills will indeed cause sufficient improvement in the critical measures.
Finally, during the analysis process employers can begin to identify what kind of training will best support their needs and by creating a rough map of the learning process incorporating all the factors they can estimate the financial benefit of the learning before the programme even begins.
2. Prepare together – ensuring both the business and the individual understand the training programme and related expectations will deliver superior results for all.
Employers should be cautioned not to launch into learning without due consideration. Training has the greatest impact on employees and employers when everyone is properly prepared. Once the business objectives have been set and the skills gap identified all those involved need to understand what they need to achieve through their training and what the resulting personal and business benefits will be.
3. Powerfully delivered training – research shows that training taught in an engaging informative manner will result in more enjoyment, retention and a better overall result.
Different people require different approaches. Learning needs to be designed around learners, not training providers, and must take account of the full range of tools on offer. Too much learning is a ‘knowledge dump’ and this is not conducive to understanding, long-term recall or application of knowledge in the workplace.
4. Follow through – ensuring you use any new skill is the vital step in achieving results and striving for excellence.
This is where learning moves from ‘knowledge gained’ to ‘benefit delivered’. Mentoring and coaching learners to apply their new knowledge to a real working environment means the business can see an immediate benefit from its investment.
5. Evaluate – asking ‘how did we do?’ and ‘what can we build on?’ will create the virtuous learning spiral required to move your business and employees to the next level and achieve excellence.
After experiencing the Skills Academy Lean Foundation programme last month, Gary Schultz, business improvement manager at Relyon, said: “At Relyon we believe that a period of economic uncertainty is the perfect time to invest in the skills of our employees – that this will help us to progress as a business and ensure that our competitors cannot steal a march on us.”
So now is the time for employers to look to this model, use it to find the skills gaps, power up their learning, propel performance improvement and drive their businesses safely through to the sunnier side of the recessionary storm.