Training flexes small firms' competitive muscle

Citation

(2001), "Training flexes small firms' competitive muscle", Industrial and Commercial Training, Vol. 33 No. 3. https://doi.org/10.1108/ict.2001.03733cab.001

Training flexes small firms' competitive muscle

Training flexes small firms' competitive muscle

Keywords: Training, Small firms, Productivity, Competitive advantage

The UK's smaller businesses are making progress into the same league as larger competitors and overseas counterparts through more systematic management training.

Through research entitled Achieving Management Excellence, the Institute of Management (IM) has shown for the first time that consistent training has a marked improvement on turnover. Smaller companies, with fewer than 100 employees, have increased formal training by 25 per cent in only four years. Of these, around 60 per cent are now reporting financial benefits.

There is also a significant increase in SMEs, raising the priority of management development by making it part of business strategy. Thirty-seven per cent of organisations now have an explicit training policy, a significant improvement from only 8 per cent in a similar study in 1996, A Portrait of Management Development. A quarter of small businesses now have a dedicated budget to help achieve the potential of their managers.

Informal training has also risen up the agenda with a manager spending on average eight-and-a-half days on activities such as job rotating, job shadowing or being coached and mentored. While small companies mostly prefer informal training (42 per cent) to formal methods (35 per cent), more than two-thirds had some formal training in the past year, favouring external seminars (42 per cent) or in-company training (41 per cent).

HR professionals and managers are in agreement as to what the urgent skills needs of their organisations are. "Soft" or people skills such as managing staff, teamworking and customer focus ranked highly in organisations of all sizes. Surprisingly, the exploitation of the Internet and e-commerce come low down on short-term priorities, although they feature in long-term objectives.

Two-thirds of small businesses hold staff appraisals (as opposed to around three-quarters in larger companies), and training needs are discussed in almost all cases. However, managers report that training is triggered as a result of their appraisals only 26 per cent of the time. Over half of managers say that training is their own initiative taken for a job or career change.

A larger than expected number of organisations, over 70 per cent, are committed to at least one national programme. Managers use National Vocational Qualifications (NVQs) above all other programmes to expand their qualifications. Three-quarters of managers using Management Standards and Investors in People say they have a positive impact. A quarter of HR professionals say they do not measure the benefits of management development. Those who do use performance and satisfaction, productivity, improved quality, staff retention and motivation as indicators.

The report, Achieving Management Excellence – A Survey of UK Management Development at the Millennium, by Dr Chris Mabey and Professor Andrew Thomson of the Open University Business School, is available, price £50.00 (IM members £25.00) from the IM public affairs department. Tel: 020 7421 2704.