Bet on L&D function to save the day
While most of the HR processes are focused on 'here & now', L&D is focused on tomorrow
Experts believe that 2010 will be a better year for L&D
Organizations in India are yet to recognize that L&D can emerge as a true strategic partner and can be designed as a function that can contribute to the sustainability of the organization
L&D is an integral part of the employee’s growth process within any organization, which in medium and long term contributes immensely to the evo-lution of the organization itself. In India though L&D is considered as an essential element of employee-grooming, it has been observed empirically that among all other HR processes, this particular segment does not always get its required share of attention.
Key Challenges in India
In India, L&D teams are faced with the up heal task of demonstrating direct value to the business. Here training has been considered as a mechanism that imparts limited efficacy, whereas development processes by nature are time-consuming and are difficult to evaluate. Organizations are often cynical about the L&D function as it does not readily generate tangible value and people tend to miss out how the function can actually create sustainable and long term growth for the organization. We have identified a few challenges for the L&D function in India. They are:
Recognition as Strategic Partner: The training function in India faces the biggest challenge of acceptance as a facilitator for growth of an organization. It has to be recognized as a strategic partner and a function that can contribute to the sustainability of the organization, says Cavita Mehra, Founder and Managing Directors, Mindskillz.
Lack of funds: The budget constraint is so severe that there is enough ground to doubt the basic intention of providing requisite training to the employees. Says Anila Rattan, Managing Director, IKH, “everyone claims an understanding of the importance of training. However only a few are willing to put money behind that belief”. The fact is that the companies are always looking at aspect of economic viability while deciding on L&D activities. According to Lovely Kumar, Vice President, IKH, “L&D is typically not high priority. All organizations claim that their employees need L&D. But the question they are actually grappling with is if it makes economic sense to invest in employees especially with the level of job mobility.” The traditional mindset of organizations still does not allow them to visualize training as a facilitator of organization’s own growth process.
Intangible results involving long gestation lag: As compared to other HR activities, training is a continuous process and involves substantial gestation lag where result are not immediately comprehended. “Training and Development teams are struggling to demonstrate direct value to the business. Besides recruitment and rewards, it suffers the same fate as the other HR processes in showing tangible value to the business,” says Mohinish Sinha, President, iDiscoveri. According to Consultree “While most other HR processes are more focused on the here and now, L&D has the unique mission of creating leaders for tomorrow, with the existing resources today. However, talent development has to work closely with talent acquisition and talent management to make a difference. Unless competencies are accurately identified for each critical role, it becomes difficult to recruit right, leading to challenges later on. This is where L&D could work closely with other HR processes.” Companies also need to consider that training could not be a panacea expected to resolve all productivity issues. Some challenges are best handled by reviewing processes and policies of the organization as well, Consultree points out.
Relevance in Post-crisis Scenario
L&D has been one of the worst affected components of shrinking corporate budget during the recent economic downturn. It is very difficult to quantify the percentage of the impact as in India L&D data is not tracked accurately and from the budgeting perspective, the training budget is a subset of the HR Budget and hence difficult to track in companies’ financial statements. According to Pallavi Jha, the Executive Chairman of Walchand TalentFirst, “The downturn resulted in slowing of recruitment, rationalization of workforces and a stronger focus on revenue growth.” Around 90% of companies have reduced L&D budgets, according to Consultree. Chandresh Dhebar, Founder and CEO, HR Advisory Services opines “The downturn has really impacted the L&D budgets of most organization. In my personal view, the L&D domain is in “LIFO” category of the budget – i.e. Last In First Out.”
The silver lining was that some of the companies understood the fact that amidst the severe economic crisis, their employees will not be able to perform with their usual flair unless some additional skill set is offered to them in the form of L&D. Companies began investing more on building the leadership pipeline, retaining critical skills workforce while driving measures to reduce operational costs. There was more interest in focused content, crisper design and methodologies that focused on direct business relevance and measurable ROI. According to the 2009 Corporate Issues Survey, published in the United States by Ken Blanchard Companies, only 17% of the respondents stated that they planned to spend significantly less money on L&D in 2009 compared to 2008, and almost half (49%) of respondents stated that they planned to spend the same or more on training in 2009 in comparison to 2008. This data may indicate that organizations recognize the strategic value and competitive advantage in connection to training and developing people.
It is imperative to keep in mind that there are certain training interventions which are needed to be carried regardless of the status of economic condition. According to Chandresh Dhebar, HR Advisory Services, some initiatives should always be priority for the organizations, which include, client retention, hunting & mining skills, new and innovative offerings, etc; employee efficiency and effectiveness; organizational environment management in terms of stress management, aspirations management, best talent retention, aligning, conflict management, bad news delivery management etc; stake holders relationship management; innovative thinking and execution frameworks and trust building (with self, team, organization) and side stepping the negative dynamics. According to Consultree, besides the Regulatory and statutory workshops e.g. AML and KYC, IRDA / AMFI licensing training, training stipulated by regulators like RBI, TRAI, SEBI, companies should also maintain training in Sales, Team Building and Change Management.
Experts believe that 2010 will be a better year for training and allied activities and the focus will be on training initiatives with measurable business impact. This is where the training teams would have to justify investment in these activities under such trying times. Pallavi Jha, Walchand TalentFirst, believes that “In 2010, we see improvement in hiring and with opportunities opening, companies are focused on retaining their best talent. Employee engagement interventions are increasing. Effective communication training ranging from business communication to media training is a critical growth area. Leadership training will continue to be a big demand area as this has now percolated down from top to middle managers in organizations. Further people are now looking for the certainty of proven approaches which will ensure measurable results.”
Calculating ROI of Training
There is no denying the fact that organizations would like to be able to measure the costs invested in training initiatives against anticipated results. One of the most elusive but sought-after objectives of organizations is to determine return on investment that unveils how much impact a training program has on an organization.
Given the continuously changing business environment, the technology, the competition and the expectations of clients are even more challenging. There are several methodologies available to quantify results and measure ROI of training. According to Cavita Mehra, Mindskillz maintains that “measuring the effectiveness of training programs consumes valuable time and resources...companies will have to gather data pertaining to the training need pre and post training and then a detailed analysis needs to be done. This will result in a quantifiable result to display the ROI.” According to Anila Rattan, IKH “Trainers who appreciate business can create a ROI on even behaviorial topics. Eg. Time management as a topic can be theoretical if we do not understand and are unable to state that the cost of a delay by 2 hrs means loss of revenue of Rs 1 Lakh.”
There can be a four-step process for measuring the savings that training provides and comparing it to the costs.
First calculate the cost of training including facilitator fees, training design, course materials, videos and workbooks, facilities rental, equipment rentals, production downtime (including employee time off the job), videoconferencing facilities, specialized computer equipment and administration (such as registration procedures or confirmation notices). All the relevant costs, divided by the anticipated number of participants, gives the cost per participant.
Secondly, the potential savings accruing from the L&D programme need to be determined, that includes, fewer errors, reduced customer turnover, less equipment downtime, increased revenue collection, faster equipment startup time, reduced employee turnover, when turnover is attributable to poor supervision, proper implementation of new customer strategies, higher workplace morale through more effective management practices, less time lost to grievance hearings and work stoppages because of ineffective supervision, reduced recruitment costs (because training can create more job-ready candidates for promotions) and maximized productivity of new employees through efficient orientation training.
Thirdly, to calculate potential savings, goals are set for post-training achievements by identifying and quantifying the changes a training initiative will produce if all other factors are constant. The factors include, current level of performance, identifying the change that training can produce, calculating the savings that the target criteria will generate, identifying a meaningful time line for realizing savings, based on best business predictions about factors contributing to errors remaining unchanged.
Finally, one should compare the cost to savings. For this, one must multiply the cost per participant by the total number of participants; multiply the savings per participant by the total number of participants; compare the figures to establish business case (economic viability) for training.
The above exercise not only identifies actual costs and realistic savings but also ensures that training expectations of an organization are reasonable and targeted to measurable business outcomes.
Hold the Right Hand!
While choosing a training provider, any organization first must look for a trainer/s who fully meets the needs of the business. Hence the logical way is to first remind what the organization wants to achieve through the training both in terms of employee skill enhancement and business growth. In a way, companies need to look at a wide gamut of specifications before collaborating with training providers. We believe that one of the most important prerequisite for selecting a training provider is that he/she must understand the outcome expected by the organization and what is its basic intention behind offering training to a particular subset of employees. “Right selection of training providers is a function of credentials, capability and accountability,” says Pallavi Jha, Walchand TalentFirst.
To make matter simplified, we can identify certain core pointers which much be checked and verified before selecting the training providers for your organization. Firstly, the training provider assigned for the task must fully understand the training objectives. As Cavita Mehra, Mindskillz prefers to put it, “A training provider has to be looked as an organization’s partner to success. Hence, there has to be an alignment to company’s goals. There should be an understanding of the business processes and the challenges faced by the organization to be able to relate to the participants and their issues.” Secondly, the L&D team must decide whether the training is set at the right level for those in the business. Thirdly, the relevant persons in the organization must also check whether the training lead to an accreditation or qualification. Fourthly, one needs to verify whether the provider has prior experience in dealing with the sector and businesses in which the company is involved. As training is a crucial means to empower the employees and meet the medium and long term business needs of organization, budget for the same must be exhausted in the most optimized way. According to Chandresh Dhebar, HR Advisory Services, “many organizations are following the “Train The Trainers” route to achieve the L&D by developing internal resources. This is a good strategy so long as the internal trainers are matured, experienced and committed to the desired objectives of the teaching”. For Mohinish Sinha, iDiscoveri, what counts is the ability demonstrate that the training investment counts. We showcase our tools that bring repeatable results, showcase the understanding of the conditions needed to make the training investments count and finally demonstrate our facilitators who bring a background of managing business in global environments.
Above all, select those training providers who work together as partners for achieving the desired outcomes, rather than just deliver training. In other words, “best training providers are those that offer ROI – based training solutions”, says Pallavi Jha, Walchand TalentFirst.
Sudakshina Basak is Senior Editor in People Matters