Oct 26, 2004

on why investment on training is slow and low

Got this from the Egon Zehnder newsletter:

While poor performance is often blamed on the skills shortage, many
companies are reluctant to invest in training, reports Gill Plimmer in the
Financial Times. Companies often prefer poaching top players from competitors or
overseas as an alternative to developing existing staff. Despite pressure from
policymakers to promote professional development, estimates suggest that
corporate spending on formal training has dropped 10 percent in the last two
years. High employee churn and the difficulty of assessing return on investment
have discouraged some companies from investing in training, explains the author.

Continuing professional development was sidelined by many companies during
the 1990s in the quest for shareholder value, say experts. However, with
downsized, flatter organizations, companies are now realizing that getting more
out of their staff is the key to competitiveness. Increased regulation is
forcing companies to invest in professional development in areas like
accountancy and law. Companies are also under pressure to show shareholders the
impact of training on their results, which should help them to justify bigger
training budgets in the long run. Firms seeking to attract top talent must
realize that the best people want professional development, concludes the
Full story. Gill Plimmer: "Emphasis on more skills investment" in Financial Times (October 11, 2004). Search archive on title to retrieve article. Subscription required :(