InquiryBy Markus Schwarz

NO. 54

SAP Center for Business Insight | Brief | Q&A | Case Study | Inquiry | E-Book 1

5 Ways to Make Corporate Training Deliver More ROI

Inquiry: 5 Ways to Make Corporate Training Deliver More ROI2 NO. 54©2014 SAP AG or an SAP affiliate company. All rights reserved.

One of the hidden problems of the global economic downturn is that it hurts companies almost as much as it does employees.

Today’s shorter product cycles, combined with rapid advances in technology, mean that skill requirements are changing quickly, and companies are having a hard time finding people with the skills they require. Even if companies are good about training their employees, the return is shorter lived because needs change so much more quickly today.

Many companies are increasingly working in geographically distributed, project-focused teams. This trend puts a premium on employees being flexible and adapting to constantly changing business demands. But as we know from the research, human beings are not wired for change and uncertainty.

Further complicating matters for employers is the fact that key people are increasingly not employees at all. They’re contingent workers: contractors, freelancers, supply chain and channel partners, and others with whom companies need to have long-term and productive relationships. Workers who are part of this ecosystem – what Deloitte calls the open talent economy – must have up-to-date skills, too.1 If they’re not well trained and trained continuously, companies put more than just their current product quality and service levels at risk. They also threaten their future competitiveness.

Meanwhile, employees’ needs from companies are changing, too. The loyalty contract went out the window a long time ago, and the paycheck recently followed it. Research from Deloitte shows that employees increasingly want help learning in order to advance their careers, and they’re rebelling against old-fashioned training and development by leaving employers who won’t help them achieve new skills and job experiences that will further their careers.2 Those kinds of needs are much more difficult for companies to meet and manage than annual raises and bonuses.

To be able to attract and retain the best workers, companies must rethink how they train and develop their workforce. They must make learning an essential tool in their competitive arsenal. And they must do so in an environment that is constantly in flux. Even the tools available to deliver training and development are changing so rapidly that it’s difficult for HR to adapt their services or measure their effectiveness. Yet they must do both.

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Many companies already have an in-house model for how to keep employees’ skills up to date in a rapidly changing environment: the IT department.The responsibility for ensuring that workers not only know current technologies but are also prepared for the emerging ones falls to CIOs, who often rely on a network of resources, including their vendors, peers, universities, and professional associations, to deliver training when it’s needed. In addition, when companies roll out new systems, IT and business leaders, not HR, typically arrange to have employees trained to use them.

CompTIA, a professional association for the IT industry that offers certifications and other educational resources, recently surveyed 700 office workers whose jobs involved using technology. Forty-two percent said they had undertaken tech-related training the previous

year. Sixty-eight percent agreed that training helps ensure they are not left behind by technology. 5

For example, CIO.com cites a decision two years ago by Reed Sheard, the CIO at Westmont College in California. Sheard planned to deliver many services on mobile devices, so he needed a developer with mobile programming skills. Rather than recruit someone externally, he found someone in house and sent him to learn a popular mobile development platform. Bill Brown, CIO for Avid Technology, found that his team had trouble completing projects successfully. He told his project managers to earn professional certification and required all IT staff to take at least one project management course. As a result, the team’s success rate in completing projects increased to 93%. 6

Ask IT How It Does It

There’s a strong consensus among training and development experts that the old ways of training – top-down, episodic, and focused on formal instruction – don’t fit the needs of today’s companies. Rather, learning should comprise continuous on-the-job training, as well as coaching by mentors and managers. Companies that encourage workers to learn what they need, when they need to learn it, and that provide regular feedback, can more easily maintain a workforce with up-to-date skills, ready to adapt as business needs shift. (See “Ask IT How It Does It.”)

1.Make Training Continuous

From Service Providers to FacilitatorsReshaping corporate training to meet today’s business challenges requires HR leaders to transform from service providers that deliver a product – training programs – into facilitators, helping business leaders, managers, and employees continuously acquire the knowledge, skills, and capabilities they need to achieve corporate goals and build successful careers.

“Learning must become part of the ethos of your corporate culture,” says Dan Pontefract, chief envisioner with Canada’s TELUS Communications Co. “You should be thinking about how it can be reinforced every single day of the week.”

The Problem with Corporate TrainingThe traditional corporate training department is a gatekeeper. The department hires instructors to teach courses, prescribes who should take them and when, and keeps tabs on whether they do.

Meanwhile, most businesses remain skeptical of the value of training and treat it as an expense. According to a survey by the Society for Human Resource Management (SHRM), during the global recession in 2008–2009, companies were more likely to cut funding for professional development than for refreshments and snacks.3

Not surprisingly, then, though they may provide input into what employees need to know, business leaders and managers don’t have an active role in training. Indeed, a 2011 study of companies by the Chartered Institute of Personnel and Development (CIPD) in the United Kingdom and by SHRM in the United States and India found that training and development specialists are more likely to spend their time delivering courses at training facilities than building relationships with senior and line managers.4

Here are five ways to fix the problem.

Inquiry: 5 Ways to Make Corporate Training Deliver More ROI4 NO. 54©2014 SAP AG or an SAP affiliate company. All rights reserved.

Free online classes delivered by leading universities could help companies lower the costs of classroom-based education and make it more convenient.

University-supported MOOCs, through companies such as Coursera and Udacity, offer free, self-paced courses. Both companies offer certificate programs that, for a fee, enable employees to offer employers proof that they have completed their coursework. The companies are

also pursuing partnerships with employers to incorporate online courses into employee training programs.10 Udacity, for example, has launched the Open Education Alliance through which technology vendors and universities have partnered to develop and deliver courses in programming, computer science, and data analysis.

Training and development departments can also apply the MOOC model to their own training programs. In fact, given how rapidly business needs change and how much companies rely on nonemployees to execute critical business functions, MOOCs could become essential for training a company’s employees and extended workforce of contractors. For example, InformationWeek reported that Aquent, a temporary staffing firm that specializes in placing creative and marketing professionals, recently launched a MOOC, Aquent Gymnasium, to teach skills such as Web design.11 Aquent ended up placing 200 of the 367 professionals who completed the first course it offered.

How to Add MOOCs to the Training Arsenal

Companies can’t expect to hire people with exactly the right skills off the street. Knowledge advances so quickly that universities, high schools, and vocational schools can only provide a foundation in any field. Meanwhile, the average age of the workforce is getting younger, which means that in the future, even the best workers will be less likely to have as much industry experience as the typical employee does today.

Yet companies are not addressing these shortages with a strategy that makes corporate training and development a core piece of the solution. According to the CIPD/SHRM study, at many companies talent development is focused on high-potential employees and future leaders.7 While companies should invest in their best workers, they can’t neglect the rest and expect either to maintain high levels of performance or to retain their employees. As Karie Willyerd, vice president for learning and social adoption with SuccessFactors, an SAP company, has found in her research, millennial workers in particular expect their employers to invest in their development.8 According to a Deloitte study, lack of career progress topped the list of reasons why people leave their jobs. 9

The rest of the typical pool of employees today goes beyond the rank and file. It includes an ecosystem of partner companies, contractors, and freelancers who are critical contributors to a firm’s value chain. They also need adequate skills to perform the jobs they are hired to do. An oil company that outsources its drilling operations, for example, wanted to ensure that the personnel running its rigs were well trained in safety and security procedures. So the oil company decided to deliver the means and the materials for its contractors to learn.

Several years ago, Randstad Germany, an employment services agency, began a program to train temporary workers who needed specialized skills. “Skilled labor is getting scarce, and in some markets, such as Germany, unemployment is very low. Personnel services providers cannot easily find the people that customers need without having to train them,” observes Alexander Spermann, director of talent management, flexworker, and public affairs with the firm. “More companies see the need for training agency workers or freelancers to get them productive, and they want us to provide that service.”

2.Stop Focusing Only on the High Performers

Inquiry: 5 Ways to Make Corporate Training Deliver More ROI 5NO. 54 ©2014 SAP AG or an SAP affiliate company. All rights reserved.

Mobile technologies can extend the reach of internal experts beyond their work groups by making tutorials, instruction manuals, and presentations accessible on smartphones and tablets. Mobile is a knowledge enhancer because employees can access instruction when and where they need it.

Willyerd and Jeanne Meister, who is the cofounder of Future Workplace, an executive development firm, offer one scenario in their book, The 2020 Workplace. A salesperson presenting a product to a customer for the first time can view a video by a colleague who is already successful at selling the product to learn how to make the pitch. If videos are posted to a platform with social networking features, such as YouTube, or to an internal collaboration environment, viewers can indicate which ones they find most helpful. The endorsements make it easy for employees to quickly sort through training materials and find the information that is most valuable to them.12

What’s more, if employees are using social technologies daily to collaborate on their work, these platforms can become natural places to ask questions, search for experts, and share information. Newer workers are more likely to have fresh skills, including knowledge of new technologies. An approach to corporate training that helps the generations exchange knowledge helps all workers progress and keeps a company competitive.

But to make so-called social learning a standard practice, it can’t be an afterthought. Too often, observes TELUS’s Pontefract, learning executives aren’t involved in choosing social tools or deploying them, and they don’t take the initiative to demonstrate how the tools might be used. “Often, someone else, marketing or IT, for example, is in charge of designing the collaboration environment, and the learning function in HR is trying to catch up. They should be leading, or at least working in parallel, with other functions,” he says (see How TELUS Engages Employees Through Learning and Collaboration).

4. Foster Social Learning

Meanwhile, employees are no longer relying on companies for training. Companies should support this more informal learning but generally don’t. Sometimes, that’s simply because they don’t know how.

Companies can help by integrating traditional classroom and other formal training with new ways of delivering knowledge – and by keeping out of employees’ way. They can encourage the workforce to create and share their own learning materials using mobile and social technologies. And they can expand access to corporate or university classes, or create interactive courses of their own, using emerging education models such as massive open online courses (MOOCs) (see How to Add MOOCs to the Training Arsenal).

3.Find Out How Employees Are Learning on Their Own and Support It

Even if companies are ready and willing to improve training for their employees, many simply aren’t able. That’s because they don’t have the data they need about their workforces’ capabilities, much less what it will take to advance them. Yet mining data about employees and their performance can lead to important insights for learning. During the U.S. radio program On Point recently, Teri Morse, a human resources executive at Xerox, described how the company uses the results from the tests given to applicants for its call center positions not

5.Fill the Data Void

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TELUS, a Canadian telecommunications carrier, has deployed a wide range of social and collaboration tools to help employees get their work done more efficiently and build relationships across the globe. The same tools are essential to the company’s training and development strategy. They enable workers to access interactive training programs as well as to communicate their knowledge, coach each other, and share work practices, creating a culture of pervasive learning.“We believe that culture is our competitive advantage,” says Dan Pontefract, the company’s chief envisioner. “We have data points to show that the more open and collaborative you are with people, the healthier your culture becomes.” The more engaged employees become, the better the company performs, he adds.

In his book, Flat Army: Creating a Connected and Engaged Organization, Pontefract describes how one engineer used the corporate blogging platform to educate colleagues about IPv6, a new Internet protocol that expanded the number of available Internet addresses.13 TELUS had to im-plement the protocol, so the engineer started a wiki explaining what IPv6 was and set up multiple channels, including a discussion forum, a micro-blog, and a video, for discussing the issue and sharing informa-tion. He also provided a list of formal training programs.

Corporate career development programs also have elements that encourage social connections and sharing. For example, leaders in training spend eight weeks coaching a virtual Olympic speed-skating team, competing against colleagues to earn gold medals.14 Winners don’t just have

to beat other teams, they also have to demonstrate, through their actions within the game, the leadership behaviors that TELUS values.

During the past five years, Pontefract says, the percentage of employees who report they are engaged with their jobs has increased from 53% to 83%. He attributes the improvement in part to the deployment of collaboration tools. In addition, in fall 2013, 75% of TELUS team members reported a change in their performance as a result of learning programs, up from 62% three years earlier.

“Engagement is a multifaceted strategy,” says Pontefract. “It shouldn’t be treated as a silo, as a separate line item. You can’t engage your people

if you’re just yelling at them in a classroom to do better on a test. If you include learning as part of your holistic approach to

your organizational culture, I think you’re in a much better spot.”

To learn more about how Telus developed and manages its training programs, download the case study How TELUS Engages Employees Through Pervasive Learning.

How TELUS Engages Employees Through Learning and Collaboration

only to screen the best candidates but also to later identify which new hires may need extra training to excel.15 “It helps trainers train better,” she said.

According to McKinsey Quarterly, Boys & Girls Clubs of America (BGCA) was able to use data to design a program to develop leaders prepared to meet its strategic goals.16 Several years ago, the nonprofit faced a leadership shortage. So it designed a study to correlate aspects of leadership with the performance of its local clubs on measures such as members and fundraising, and it then created a training program to teach the capabilities that were most important to meeting those goals. To evaluate the program, BGCA examined how clubs with leaders who went through the program did compared to clubs where leaders did not go through the training. The clubs led by people who had been trained beat the other clubs on every outcome measure.

Inquiry: 5 Ways to Make Corporate Training Deliver More ROI7 NO. 54©2014 SAP AG or an SAP affiliate company. All rights reserved.

Thank you to J.P. Finnell, head of mobile strategy and FSI mobile co-innovation, SAP Services North America; Brigette McInnis-Day, SAP executive vice president, human resources, global customer operations; and Karie Willyerd, vice president for learning and social adoption with SuccessFactors, an SAP company, for their insight, and to Elana Varon of Cochituate Media LLC for writing and research.

The SAP Center for Business Insight is a program that supports the discovery and development of new research-based thinking to address the challenges of business and technology executives.

Markus Schwarzis senior vice president and global head of SAP Education.

There’s more.TO LEARN MORE ABOUT HOW COMPANIES ARE CHANGING THEIR APPROACHES TO MANAGING LEARNING, DOWNLOAD DOWNLOAD THE Q&A WHY COMPANIES SHOULD INVEST IN REVAMPING CORPORATE LEARNING.

83%of employees asked were planning

to look for a new job in 2014

Help Employees Develop, and Success Will FollowHR leaders have long understood that learning and development are critical tools for recruiting and retaining employees. And that’s becoming more important as workers pursue a new form of job security by ensuring they are always marketable. They won’t hesitate to leave for a chance to gain additional skills and different experiences. According to a poll of 871 employees in the United States and Canada by Right Management (part of Manpower Group) in November 2013, 83% were planning to look for a new job in 2014.17

It’s time for companies and workers to behave like partners who have the same goals: to maximize the use of their talents and reap the rewards from it. For workers, the reward is a fulfilling career; for companies, it’s a profitable, competitive business.

SAP Center for Business Insight | Brief | Q&A | Case Study | Inquiry | E-Book 8

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1 Barbara Adachi, Michael Gretczko, and Bill Pelster, Human Capital Trends 2013 (Deloitte Development LLC, 2013), http://www.deloitte.com/view/en_US/us/Services/consulting/human-capital/268bfb80ddbcd310VgnVCM2000003356f70aRCRD.htm.

2 AliceKwan,NeilNeveras,JeffSchwartz,BillPelster,RobinErickson,andSarah Szpaichler, Talent 2020: Surveying the Talent Paradox from the Employee Perspective (Deloitte University Press, January 23, 2013), http://dupress.com/articles/talent-2020-surveying-the-talent-paradox-from-the-employee-perspective/.

3 SHRM Poll: Financial Challenges to the U.S. and Global Economy and Their Impact on Organizations – An Update (Society for Human Resource Management, January 2010), PowerPoint presentation, http://www.slideshare.net/shrm/shrm-poll-economy-fall09-final.

4 Learning and Talent Development 2011: International Learning and Talent Development Comparison Survey (Chartered Institute of Professional Development, July 2011), http://www.cipd.co.uk/hr-resources/survey-reports/international-learning-talent-development-comparison-survey-2011.aspx.

5 Generational Research on Technology and Its Impact in the Workplace, (CompTIA, June 2013), http://www.comptia.org/research/complimentary-research-reports.aspx.

6 Martha Heller, “Finding the Talent Your Business Needs,” CIO.com, July 27, 2012, http://www.cio.com/article/711441/Finding_the_Talent_Your_Business_Needs.

7 Learning and Talent Development 2011.

8 Jeanne C. Meister and Karie Willyerd, The 2020 Workplace: How Innovative Companies Attract, Develop and Keep Tomorrow’s Employees Today (Harper Collins, 2010), http://www.harpercollins.com/books/2020-Workplace/?isbn=9780061763274.

9 Kwan, Neveras, Schwartz, Pelster, Erickson, and Szpaichler, Talent 2020.

10 “Coursera Plans to Develop Corporate Training Program,” Education News, accessed March 13, 2014, http://www.educationnews.org/online-schools/coursera-plans-to-develop-corporate-training-program/.

11 Michael Fitzgerald, “Companies Create MOOCs to Fill Skills Gaps,” InformationWeek, http://www.informationweek.com/software/companies-create-moocs-to-fill-skills-gaps/d/d-id/1110142.

12 Meister and Willyerd, The 2020 Workplace.

13 Dan Pontefract, Flat Army: Creating a Connected and Engaged Organization (Jossey-Bass, 2013), http://www.danpontefract.com/the-book/.

14 Deanna Hartley, “The Psychology Behind Learning,” Chief Learning Officer, July 3, 2013, http://clomedia.com/articles/view/the-psychology-behind-learning/2.

15 “The High-Tech Hiring Market of Today,” On Point, December 3, 2013, http://onpoint.wbur.org/2013/12/03/high-tech-hiring-employers-big-data.

16 Jenny Cermak and Monica McGurk, “Putting a Value on Training,” McKinsey Quarterly, July 2010, http://www.mckinsey.com/insights/organization/putting_a_value_on_training.

17 Manpower Group, “Most Employees Plan to Pursue New Job Opportunities in 2014, Reveals Right Management Poll,” Yahoo! Finance, November 19, 2013, http://finance.yahoo.com/news/most-employees-plan-pursue-job-164100951.html.