Making training investment pay

WORKING out the best ways to spend the training budget is an increasingly important decision for a business’s management.

While well-trained staff can make or break a business, training can be a significant cost for many organisations. Human resources experts counter that, if used correctly, it can be a valuable investment.

During the Hawke-Keating era, the Federal government put in place a training guarantee levy that forced employers to pay a percentage of their payroll towards staff training to try and boost the level of training in workplaces.

Many human resources experts slammed that approach, saying it led to wasted training dollars.

Training still looms as one of the union movement’s key priorities, however.

AJ Durack Management Consulting principal Tony Durack said he believed businesses were best to first work out what their organisation’s goals were.

“Part of that is to set objectives agreed between management and staff for the business,” he said.

“From that you can find out what training you need in order to achieve those objectives.”

University of WA Graduate School of Management lecturer Tim Mazzarol said training needs were often identified after some sort of failure within the business.

“A problem means there is either a systems failure or a people failure,” he said. “If it is a people problem then you need to train your people to do their jobs better.”

Dr Mazzarol said a lot of money could be wasted on unnecessary training so it was important to work out what objectives staff members were being trained towards.

“It is also important to work out the standard you need your people trained to,” he said.

“In some cases, such as welding, it is easy to identify the standard a worker has to be trained to so as to do the job properly.

“However, when you’re talking about something like customer service, it’s hard to establish a standard to train to.

“In some cases the training system has allowed training providers to decide what training will be offered and what standard that training will be towards. It may not fit in with the objectives of your company.”

Bell Personnel director David Anderson said his company used the assessment development centres’ approach to deciding what training an organisation needed.

“The company’s objectives need to be taken into account,” he said.

“We audit where the staff members’ skill levels are at now in the context of the company and then look at where the organisation needs them to be.

“That involves assessing the individual workers and working out what training is needed for them to reach their full potential.

“It looks at their suitability to their role. The key is to maximise each employee’s potential and the value of the company’s training dollars.”

Mr Anderson said paying for the correct training should be seen as an investment rather than a cost.

“If the right training is used for the right person then it is valuable. However, if training dollars are spent willy-nilly then training becomes very expensive,” he said.

Dr Mazzarol said research had identified that the highest costs of training came at the lower end of the skills base and that the highest value came in improving the skills of an already highly skilled worker.

“If you look at our education system, that argument makes sense. For example, primary school is much more intensive and hands-on teaching, while at a university level the student does a lot of the learning for themselves,” he said.

“However, the counter argument to that is the view of the employer that says he would rather get somebody who is untrained and train them up himself to avoid having to correct any bad habits.”

Mr Anderson said the training guarantee levy had resulted in a lot of companies spending money for “the sake of the training levy” and not on the right training to suit the needs of their workers and their company.

The levy was suspended in 1993 and abolished by the Howard Government in 1996.

However, a recent University of Sydney study found that, with the removal of the training guarantee levy, the amount of training in Australia had fallen considerably.

The study found workers in managerial, administrative and professional positions were more likely to receive training than employees in sales, machinery and labouring positions.

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