Wednesday, 14 August 2013

Off of site, out of mind

By Carl Romanos, Stanford Energy and Environment Policy Analysis Center Fellowship Intern, Motu Economic and Public Policy Research

A recent news article says that off-site course-based learning has been an ineffective way to approach staff training for Kiwi small businesses. While this approach may generate some human capital, it requires much employer follow-up in order to relate some of these generic courses to the unique needs of a small business. And by unique needs, I am referring to the jack-of-all-trades mentality that many employees at smaller firms must take. Without the specialized departments you see in bigger firms, employees at smaller firms be versatile and take a generalist approach. 

Regardless of firm size, staff development is a key part of maximizing both profits and productivity. The cost of a generic course may be low, but the actual returns to productivity can be limited when the learning does not directly translate to the firm’s workflow. While larger-scale corporations may see benefits from this off-site approach, smaller firms should consider other methods of training their employees. A more hands-on approach to staff training by supervisors in the firm would be more ideal. A caveat is that supervisors in these small firms may have less spare time or may not have enough expertise in order to effectively train their employees in meaningful ways onsite.

Staff development is definitely a key part of small businesses because it helps promote a culture of loyalty in the staff. Investing in employees, especially younger ones can help reduce turnover. At the same time, business owners are motivated to ensure that employees gain firm-specific human capital that cannot be easily transferred to another job, in an effort to minimize the employees taking their increased skill set elsewhere. A more involved on-site approach to dealing with staff training could promote loyalty and tight bonds within the firm and also increase productivity by increasing firm-specific human capital at the same time.

My solution would be for the "boarding school" mentality to be reversed- perhaps it is the bosses themselves that need to be more proactive in the developmental area. I argue that these bosses should take the time to look into problem areas in their business and find quality courses that teach the skills that can help cover those gaps. By investing time and money in being able to train their staffs effectively and efficiently, they will see the benefits of constant on-site staff development as well as a reduced loss when highly trained employees jump ship.

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