Paying for Training that Pays

Financial institutions take staff education and development more seriously than most sectors, spending £2 billion and giving a quarter of all staff formal training each year. But Tom Caple and Pat Kenrick argue that this is no cause for self-congratulation.
Why not?
Whilst significant training is taking place, this is driven by an accreditation and regulation process which in many cases focuses on setting minimum standards beyond which the employer has difficulty gauging a return or benefit in a climate which is extremely dynamic.
Financial Services Sector Skills Dialogue Report,
DfES 2001
It is understandable that employers might feel aggrieved when their considerable efforts to develop skills are met with third-party critiques of this sort. Competence, training and qualifications are items high on the agendas of most managers, so why does the industry still attract criticism? And is that criticism fair?
Well – yes. The truth is that financial services companies, like many others, still live with myths about the link between training and business performance – and these myths prevent firms from getting a satisfactory return on their training investment. There are five important (but incorrect) assumptions about training that get in the way of using it to create better business.
Not just the individual
The first myth is that training is all about skilling-up individuals. The knowledge and skill that individuals apply to their work are valuable assets for a financial institution, and so ensuring that people have the knowledge and skill needed for the business is just common sense. As the Financial Services Authority (FSA) puts it succinctly:
The firm’s commitments to training and competence should be that: its employees are competent; its employees remain competent for the work they do; its employees are appropriately supervised; its employees’ competence is regularly reviewed; and the level of competence is appropriate to the nature of the business.
FSA – Training and Competence Sourcebook But this is only half the story. It is a truism that businesses thrive when the collective performance of individuals is directed toward clear and achievable goals. Put that together with the full potential of training and you get another, more business-focused purpose for staff development – enhancing the collective performance of the whole team. So when deciding whether to train, don’t just focus on individuals – it’s the team (however you define it) whose performance should be changed by your training investment.
Outcomes
A second myth is that training is simply a business cost, a consequence of operating in a highly-regulated sector. The trouble is that, if you treat it as a cost, any sensible manager will wish to minimize it. But that means spending less on one of your prize assets – the competence needed to deliver business objectives. The effect is to make business objectives harder to achieve. Strange logic, indeed.
To read the full article, please download the PDF above.