Whether outsourcing or keeping it in-house, failing to treat training and learning & development (L&D) as a means to an end can prove costly for an SME
Arguably the most memorable episode from Ricky Gervais’s hit BBC comedy The Office is ‘Training Day’. Who can possibly forget David Brent’s guitar-led intervention as Rowan the trainer attempts to offer some valuable lessons on customer service? Unfortunately, some would suggest that Gervais’s take on training is a fair reflection of many employees’ attitudes. Workers can often be left wondering whether a training session actually merits the time away from the desk or, alternatively, provided a suitably welcome break from all the number-crunching.
As far as startups are concerned, when and where does one begin when it comes to building up the skills and competencies of a small and growing workforce? Moreover, how can an investment in training and L&D be justified at a time when every single penny counts? Yet with technology advancing at a rate of knots and the race for talent more competitive than ever, the need for sophisticated training and learning & development (L&D) functions has hardly been greater.
“The first thing to consider is that learning and development doesn’t always have to mean training,” says Ruth Stuart, learning and development research adviser at the Chartered Institute of Personnel and Development (CIPD). “Training can be associated with quite large expenditure, whereas there’s a whole range of L&D activities that can be quite low cost to implement.”
Stuart goes on to explain that technology is helping drive a new wave of L&D activities, which, for start-ups, can prove invaluable. “What we are seeing at the moment is the rise of what we call social and collaborative learning,” she adds. “People are starting to use things like social media or other internal networks to share and comment on content. By doing so, they are able to develop. Sometimes it pays to think more creatively about what learning and development actually is.”
Undoubtedly, one of the key considerations for a small business when it comes to tackling training and L&D is whether to deliver it in-house or employ the services of an external specialist. The CIPD’s 2014 learning and development survey suggests that internal techniques are still proving a popular option across the board. However, it also reveals that smaller firms in particular have more of a tendency towards external coaching and conferences, workshops and events. Indeed, they are less likely than larger organisations to include in-house development programmes (25% vs 53%) or on-the-job training (44% vs 53%) among their most common L&D methods.
According to Stuart, this preference of smaller enterprises to seek external help can be explained by a couple of factors. “Sometimes it might be because the organisation hasn’t reached a particular size where it needs a dedicated learning function,” she says. “There’s also perhaps a sense that the organisation might not feel it has got the capability and skills itself to deliver that learning function.”
This is by no means to discount the value of internal training and L&D provisions for start-ups, many of whom do steer clear of outsourcing from the outset, or complement it with an in-house offering. “It can be beneficial because you have people who really understand the culture and values of the organisation – which is obviously really important to a start-up, says Stuart. “Having internal learning and development professionals can also really help in terms of providing some credibility.”
It goes without saying that whatever approach a start-up chooses, the decision must take the needs of the business into account. “The key is asking yourself ‘what’s the outcome for this specific piece of training or development?’” says Karen Meager, managing director of Monkey Puzzle Training. “There is no one formula that works for every industry and every business.”
A large part of this process is nailing down what ‘success’ actually looks like. The last thing a start-up wants is to invest its precious time and money in a well-intentioned training or L&D programme only to see next to no returns from it. “Setting benchmarks for success and communicating this with all relevant parties is important to prevent L&D becoming a wasted exercise,” says Penny de Valk, managing director of talent practice at Penna, the HR services provider. “Being able to come out of an L&D programme and say ‘as a result we’ve seen an increase in productivity and efficiency, our customers are happier and they are sharing positive feedback’ confirms to all parties that it added value to the business.”
The CIPD’s report highlights that more businesses are starting to realise the importance of assessing the impact of L&D initiatives. Moreover, the proportion of businesses encountering difficulties when it comes to evaluating the effectiveness of their L&D output has dropped to 60% – from 76% last year. Stuart believes this is because businesses are beginning to appreciate that financial outcomes are a fairly unrealistic way of measuring L&D success.
“Something that is starting to be talked about within the L&D community is this idea of return on expectation rather than return on investment,” she says. “It’s having quite a lot of resonance with people because whilst something like return on investment is a really important metric, people do find it really difficult to measure. Sometimes it can be quite hard to make a direct link between a learning initiative and what the outcome is in terms of sales, profit or other business performance metrics. With return on expectation, you can then guarantee you’re hitting the needs of the business.”
Without a doubt, training and L&D is something that any business should be thinking about from the very start – and that should be delivered to employees at every level of an organisation. “Some businesses may be guilty of focusing their L&D investment on new recruits in order to get them up to speed with the business quickly,” says de Valk. “But it’s important that everyone – right up to the board – is regularly challenged to learn more and stay market relevant. Business doesn’t stop evolving, so neither should learning.”
The Crunch Academy
Crunch Accounting, the online accountancy start-up, has grown rapidly since its launch in 2007, owing largely to its success in disrupting an age-old industry. And the recent launch of Crunch Academy – which will see the company’s training and key accounting qualifications delivered in-house – could see Crunch stealing a further march on the competition.
Laura Hughes, training manager at Crunch Accounting, says the significant expansion of the firm’s workforce made the opening of the academy nothing sort of a necessity. “We used to outsource to local colleges but because we have now got so many more staff, it’s too costly to have lots of people out at the same time,” she explains. “We can now be flexible with the delivery and do a couple of hours of training every day if necessary in order to reduce the amount of time that each person is away from their desk.”
Needless to say, Crunch is already seeing the benefits of not having to do business according to an academic calendar. “Productivity is higher than when we outsourced to colleges because they worked on a 39-week academic year whereas we can increase the number of hours per week that they study and get the syllabus covered far quicker,” Hughes says. “We are also giving them hands-on experience to complement that training, which helps speed the process along, and means we can tailor the training to what fits with our business.”
Hughes adds that the academy will go on to offer customer service training for Crunch’s account managers as well as additional qualifications for people in all parts of the business. “For us, this has been put in place to support the growth plans of the business,” she says. “We firmly believe that by training from a grass-roots level, you get the best out of your staff and that, ultimately, will work out better for our clients as well.”