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New research sheds light on the costs of employing redundancy as a cost management technique. As the UK economy experiences a downturn, a new report from Cranfield School of Management, commissioned by learndirect Business, reveals SME organisations that ‘make’ rather than ‘buy’ employees are best placed to save money; improve staff motivation; and increase employee retention.
The Nurturing Talent Report, which is the first piece of work to examine the impact of external recruitment versus developing internal talent, also found employers making strategic rather than operational staff development decisions are best placed to achieve these benefits.
For example, successful organisations are typified by those that use formal training policies to nurture talent (45%). While less successful organisations were more likely to train staff on an ad hoc basis (46%).
However, although the report highlights training and development can have significant benefits such as increased staff motivation and retention, only 16 per cent of SME employers have a formal training strategy.
The report, which was compiled using responses from 1,189 training and recruitment decision makers, reveals over three quarters of employers (78 per cent) see skills development as more beneficial to their organisation compared to recruiting staff externally.
Dr Emma Parry, Senior Research Fellow, Cranfield School of Management, who authored the report, said: “With training budgets arguably amongst the first to go in a recession, this research demonstrates that growing your own is an effective way for SME organisations to obtain the skills they need while saving money.
“For employers, the nurturing talent concept means managing and developing employees to achieve business goals. This could include training; employee coaching; staff mentoring; and job enrichment to stretch employees with new tasks.
Sarah Jones, Chief Executive of Ufi, the organisation responsible for learndirect and learndirect Business, said: “Nurturing staff is a vital strategy for employers, whatever the economic situation although, in tougher times it can become a challenge as other business demands take priority. However, as this research highlights, organisations do not just stop hiring during an economic downturn - they simply work harder to ensure their available resources are allocated more effectively.
“Organisations must focus on nurturing talent if they are to survive, grow and succeed. As a CEO, I know the continuous development and growth of people is inextricably linked to business performance. At Ufi we have a structured process of evaluation and assessment to help ensure employees realise their full potential. Each member of staff has a structured development plan, which is aligned to specific business and individual needs.
“As we’ve seen, the business case for developing staff is compelling. Effective training can reduce staff turnover and absenteeism, improve motivation, increase productivity, help boost and improve customer satisfaction. By focusing resources on nurturing existing talent, organisations can ensure they reap significant rewards.”
To ensure employers can gain access to high quality flexible training opportunities, learndirect Business has developed a dedicated network of highly responsive training centres through which organisations can access online and work-based learning covering a wide range of business issues.
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