Training and Development Has Become an Essential and Integral Part of Good Business Practices

Ask a company executive or owner how managers are chosen in his organization, and you’re likely to hear: “Usually it’s because a vacancy comes up—somebody gets promoted, demoted, fired or quits—and we choose the next person who’s been in the position the longest.” Do they have the skills to manage people even though they know the technical aspects of the job? Not always. Do they receive any type of training to teach or hone those leadership skills? Not usually. Especially in small to medium sized companies.

But those kinds of leadership training decisions seem to be changing. According to the latest training industry report, “U.S. organizations spent a total of $55.8 billion on training (including staff salaries) in 2006, with $15.8 billion earmarked for external learning products and services. These numbers are up from last year’s figures…”

The increases seem to be coming from the businesses that need it the most—small businesses. Larger corporations have always made training an integral part of how they do business. Most offer in-house training from their own training departments. But smaller businesses usually can not afford to staff an entire training department so they’ve opted for external training methods if they offer any training at all.

According to Training magazine’s analysis of employer-sponsored training in the U. S., “organizations of all sizes and across nearly all industries reported higher budgets and staffing this year. But the biggest increases are within small businesses (those with fewer than 1,000 employees), in which both training budgets and staffing are up approximately 7 percent over last year”.

So who’s increased their training budgets over the past year? Healthcare has
shown the greatest increase, up 20% over last year. Other big winners include the technology and financial services sectors. The healthcare sector has seen increases in job growth which has been reflective of the economy overall. And now, hospital administrators are deciding that giving Mary the nurse supervisor position because she’s been on the floor the longest isn’t good enough. Mary may know nursing, but she may have very limited understanding in the soft skills like communications with her direct reports or problem solving or customer service training.

Following healthcare, technology and financial services companies are reporting large budget increases in training of 10% or more.

Where are the training dollars being spent? Primarily in sales training and management or supervisory training. About 30% of organizations cite these program areas as their top priorities in terms of dollars and resources.

Executives still trust instructor-led classroom training to be the best method of delivering leadership skills training. The classroom is preferred 62% of the time over self-study or e-learning.

Training people in leadership positions in the ten core competencies preferred by most company executives—customer service, communications, employee motivation, priority management, stress management, change management, strategic planning and thinking, employee hiring/training/retention, coaching and mentoring, and performance management—can lead to greater productivity and ultimately profitability in competitive environments.