2.1 Why provide training?

Why should Small and Medium Enterprises provide training for their staff? There are a number of different answers - some of which overlap.

The most obvious reason is to protect future employment through developing productivity and competitiveness. Research shows that one of the biggest assets any company has is its staff and that those companies with highly skilled staff are more likely to remain competitive. Research also suggests that those companies who provide training and who employ highly skilled staff are more likely to be innovative.

This is especially so given the rapid change in technology development and implementation with short product life cycles, rapid innovation in product design and increasing customer demands for quality.

Training apprentices - or participating in initial training programmes - can be a cost effective way of maintaining a skilled staff for the future as well as playing a role in the local economy and community.

Providing opportunities for continuing training - or lifelong learning - is a way of ensuring the skills of the staff are up to date. It is also a way of maintaining motivation of the workforce.

Surveys also show that whilst many companies are confident that employees have the technical knowledge and skills needed in the workplace, they may lack the so called 'key competencies' required in modern enterprises - dealing with customers, the ability to work in a team, problem solving capability etc.

In many countries and sectors there are subventions and grants to help SMEs pay for training for staff.

However, we are aware that many Small and Medium Enterprises do not provide training, Our research tells us they feel they lack the knowledge and infrastructure, are worried about losing highly qualified staff to competitors, are concerned that training is too expensive or feel unable to spare key staff time to participate in training activities. All these are legitimate concerns. But, in the long term, for many companies the cost of not providing training may prove more expensive.

Training is not the answer to every problem facing Small and Medium enterprises. But it may prove the answer to many problems and as a long-term strategy a highly skilled workforce can be a key advantage in today's highly competitive markets.

2.2 What kind of issues can training address?

There are many different issues which training can address. These include:

• Guaranteeing a supply of skilled workers for the future through apprenticeships and initial training programmes
• Addressing particular skill shortages
• Enhancing the quality of production and products
• Meeting the challenge of implementing new technologies
• Enhancing productivity through redesigning work organisation
• Providing better service to customers
• Dealing with new work processes
• Developing new products and services

2.3 How are training needs recognised?

There are many ways to measure your staff training needs.

One of the most popular is to undertake a Training Needs Analysis and once more there are different methods and tools for undertaking a Training Needs Analysis. For example, Brooke Broadbent and Lise Froidevaux identify six areas of analyses associated with training needs. Training needs analysis, they say "is a process of gathering and interpreting data for identifying performance problems and suggesting solutions. The challenge is to obtain complete and accurate data. This amounts to answering who, what, when, where and why." Their six types of analyses are:

Context analysis

"Who decided there should be an intervention?" "Why do they think there should be a training program?" "What is the business need for this proposed training?" "What is the history of similar programs in this organization?" "What can an instructional designer do to ensure success when intervening in this organization?"

User analysis

"Who is going to take the training and what do they know about the topic?" "How do they prefer to learn?" "Who is going to instruct and what do they know about the subject?" "How do they prefer to conduct their sessions?" "What training has been given previously, and what were the results?"

Work analysis

"What is the job under review and what are the main duties?" "What are the high-level skills required?" "To what standards are people expected to do the job?" "Are they currently meeting these standards?"

Content analysis

"Are there essential building blocks one needs to learn in order to do this job?" "Are these building blocks of knowledge laid out in manuals or other documentation?" "In what order and how are these building blocks normally taught?"

Training suitability analysis

"Is non-performance due to a lack of knowledge and skills or are there another reasons?"

Cost-benefit analysis

"Is it worth our effort to undertake the proposed training?" "What will be the return on investment or ROI of the proposed training?" "Are there any cost-benefit benchmarks for the proposed training?"

What methods you choose to use will depend in the main on what training problem you are seeking to address and on the time, skills and resources available to you to undertake the training needs analysis. One Australian government web site suggests that employers consult with all staff on an annual basis to assess organisational training and development needs. They say that depending on your organisational needs, budget and time factors, the way you consult could be via a focus group, one-on-one meetings or a questionnaire.

Focus groups and one-on-one meetings involve a carefully planned discussion with a small number of participants and are designed to obtain thoughts on specific issues, programs or products in a permissive and non-threatening environment. They provide qualitative data, giving insights into attitudes, perceptions and opinions of participants. Information is sought through open-ended questions and through observing respondents during the discussion.

Questionnaires provide quantitative information and the first level of broad data. Issues can be followed up in detail through other mechanisms such as focus groups.

After consulting with your employees, the Australian website suggests, you should analyse the results of the questionnaire, focus group or one-on-one meetings to determine where the staff skill gaps lie. Compare skills already obtained with skills required to do the current job and those required for future development. You may find that an employee is better suited to a different role than that which they are currently employed to do.

One of the key issues is to judge what skills and competences you will require of your workforce in the future. Of course, to some extent, this depends on your future plans and aspirations. Do you want to be a market leader? Are you seeking to expand your business or extend into new product area or provide new services for customers? But, it also depends on the future development of your sector, on emergent technologies, on future competition and on customer and supply chain demands. You may have access to much of this information already. Much can be gained through informal contacts with other SME managers and people working in your sector. Sector organisations, supply chain organisations, regional economic bodies and Chambers of Commerce are all potential sources of information, as are trade journals and other such publications and trade fairs and exhibitions. There is an increasing amount of information available on the web on sector and industry trends.

2.4 Developing a learning culture

Training Needs Analyses are not the only way of deciding on training needs and may not be the most appropriate. Training Needs Analyses have been criticised for being too short term and overly focused on immediate task based skills, You may wish to build up a pool of skills and competences in your organisation for future development.

Some management specialists have suggested that it is more important to develop a learning culture than it is to just focus on immediate skills and competence needs. They point to the growing need for many employees to be able to solve complex work based problems. Therefore they suggest getting as many employees as possible involved in some form of learning or professional development, regardless of whether it is of immediate relevance to their work tasks.

Our research suggests that whilst there are many training opportunities for managers and professional and technical staff, there are far less for blue-collar workers or production workers. Over the last ten years this gap has been growing. Whilst this may reflect the actual training needs in many companies, it may once more not be in the long-term interests of those enterprises. Skilled shop floor workers can be more flexible and more efficient. Wider work force training may lead to increased productivity and quality.

You may also want to think about equal opportunities when considering training needs. Legislation varies between different countries. You may also have a company equal opportunities policy. Research suggests that women and people from ethic minorities have fewer opportunities for training. Even if there is no applicable legislation and you do not have an equal opportunities policy, providing better access to training for minorities may be in the best long-term interest of your company.

There is also evidence to suggest that it can pay companies to allow employees access to basic education provision to improve their literacy, numeracy and basic communication skills.

Finally you also should try to build on previous work and ideas and avoid re-inventing the wheel. If you have recognised a problem or challenge for your enterprise, is anyone else aware of it? Have you faced this problem before? Is anyone else doing something about it? What other approaches have been tried? Are other companies in your region of sector facing similar problems? If so how are they coping? There may be alternative options rather than providing training. You may be able to introduce new production methods, new technologies or to change your work organisation? Even if these options do not solve your problem, training may be most effective when combined with other approaches to the problem.

2.5 Key questions

What is the learning problem or need in your enterprise

Who does the learning problem or need affect and in what way?

How was this identified? By whom? Through what processes?

What previous ways has your organisation approached problems or needs like this

Who is doing what else to try and solve this problem in the company?

What other measures have been tried in the past and to what effect?

2.6 Further reading, tools and resources