L&D's ROI is fading - is bite-sized training the solution?

If ever there was a contender for that well-used marketing phrase - “half the money I spend on advertising is wasted; the trouble is I don't know which half’ – to be applicable elsewhere, it’s got to be in relation to employee training.

For years training has been seen to be discretionary spend – something that is not always a given; something that’s the first to be cut when times are tough.

This easy-come, easy-go appreciation of training has done little to enamour FDs and CFOs to its need – even though (for years), employers have been bewailing the fact they don’t have the right skills in their organisations, and that re-skilling or up-skilling is now essential.

Much of the debate about training’s value for money and ROI rests on long-debated theories about knowledge retention (see later), and whether off-the-job abstract training can continue to cut it against on-the-job, just-in-time training.

Several studies have shown that as much as half of any new information imparted is forgotten within a day and up to three-quarters can be lost in a week. After a month, these same studies show, very little is retained at all. To those that do the bean counting, that’s a whole lot of training budget seemingly vanishing into thin air.

These conversations will no doubt continue, but what is now for certain is ‘just’ how much training is now estimated to be ‘wasted’.

A recently published report suggests that around 21 million working hours a year are literally “lost” being apportioned to training that only enables employees to meet the bare minimum requirements for their job (let alone anything else that would actually make staff more productive), costing an estimated £416 million per year, or the equivalent of 11,147 full-time roles.

The report, by Skillcast, found a significant proportion of existing training spend just isn’t delivering measurable improvements in workforce capability, with the business services sector topping the ‘most inefficient’ list.

Here, it found employers in this sector were spending 3.3 million hours – at a cost of £65.3 million – on basic and mandatory training.
Hospitality ranked second at 2.8m hours (£55 million), followed by wholesale and retail at 2.6m hours (£51.4m).

A depressing story

What makes this so depressing is that separate government data shows that UK businesses collectively invest more than £50 billion a year in training and development, yet the nation continues to lag behind the US, G7 and EU on productivity.

Read more from us

Crisis consumption loop | Is negative news coverage making your staff less productive?

Is it any wonder FDs are wondering where is all this training money is actually going?

Missed opportunities

“It’s not just the time and money spent on training itself that is being wasted, but it’s the missed opportunities to develop employees’ skills in a way that delivers value that is becoming a hefty price tag for businesses,” says Vivek Dodd, CEO of Skillcast.

He adds: "Business services, which includes compliance-heavy sectors like accountancy and legal, appeared top of our list, suggesting that the bulk of training time is taken up with mandatory rather than value-added sessions.”

In further depressing news, Skillcast’s researchers measured the so-called ‘skill gap density’ across 11 sectors, to find out the proportion of employees who are not fully proficient in their role.

It finds that the national skills density gap now stands at 4%, which means one in 25 UK workers lack the skills to do their job as effectively as possible.

Hospitality has the biggest deficit at 6.2%, followed by the public sector at 6%. Information and communications has the smallest shortfall at 2%, then charities at 2.9%

Dodd said that the research uncovered an interesting pattern between mandatory and value-added training. He says: “As the time spent on mandatory training increases, so too does the proportion of staff who are not considered fully proficient in their role.”

All of this will no doubt sound deeply depressing for training managers pressing for more budget in these cost-strained times.