Investment in Training

Investment in Training Training is a key component of the present and future of HRM. However, why in the case of the United Kingdom are there so many concerns with this issue regarding organisational commitment to it? Are those concerns valid? Britain seems to have a poor record concerning its investment in training which has resulted in todays skills gap problem. The British governments goal is to bridge this gap by raising the bar on the workforce development. More precisely it envisages that promotion of workforce learning will enhance its competitiveness and will help her create an economy that will make her world leader. It has resorted to initiatives and strategies aiming at solving the so-called â€Å"training problem but obtaining the high-added value route has proved to be challenging and difficult. This paper attempts to present several dimensions of this training problem in the UK. It also tries to assess the severity of the skills gap as well as its chances of being resolved. It shall start by presenting some facts that have triggered a change in Britains attitude concerning the promotion of learning and the investment in training. After that it shall present the initiatives and strategies launched by the British government in its effort to improve the Vocational Education and Training framework as a means of encouraging people to assume their own learning and development and as a means of attracting employers interest in the countrys effort to foster its economy through human resource development. After examining a certain number of training policies and institutions facilitating them, this essay shall endeavour to point out potential flaws and weaknesses of the system. Then we will study some other aspects of the so-called â€Å"training problem† in the UK. One of th ese aspects is employers attitudes which also seem to play their own negative part in Britains desire to become a high skills society. We will also have a look at the â€Å"training apartheid† phenomenon and the inequality of training provisions in the British workplaces. Finally this paper will discuss the emergence of informal training practices, the importance of soft skills and the difficulties in assessing both the former and the latter. Britain is deemed to be trapped in a low-skills equilibrium (Finegolf and Sosckice 1988), meaning that its firms have low-skilled labour force and they produce inexpensive products and services to the detriment of quality. This is the strategy of differentiation that UK firms have been pursuing in their efforts for competitive advantage. That is also the reason why they insist on refusing to invest in the training of their workforce and on employing low-qualified workers (Marchingoton and Wilkinson 2008). This under-investment on workforce learning on the part of employers as well as the governments failure to properly invest in the Vocational Education and Training (VET) throughout the years has resulted in the so-called â€Å"training problem† which is inextricably linked to the skill shortages Britain has been experiencing. The breath of the problem is mirrored in reports and surveys conducted by governmental bodies. What is particularly worrying are the international compa risons which testify that due to this problem, the UK economy has been left behind by its international competitors. (Marchington and Wilkinson 2008) That is the reason why Britain has decided to rely of Human Resource Development in order to solve its problems and obtain the competitive edge against its rivals. Stuart(2007) cited in Stuart and Cooney (2008) explains that nowadays systems of training and skills are considered to impact positively on firms performance and ultimately on national economies. Therefore countries utilise them as weapons to improve their competitive position and to face challenges posed by the globalisation, technological change and the rise of the so-called knowledge economy. Britain has realised that in order to bridge its skill gaps and to move towards the creation of a high skills economy it has to maximise the skills and knowledge of its people. This dimension of Human Resource Management, that is to say training, and more broadly, learning and development has therefore drawn Britains attention as it is said to be the key that will offer the country the competitive edge in the global economy. As a result the government has decided to undertake training initiatives aiming at fostering the learning and development of its workforce. Therefore the state has assumed a more interventionist role in order to improve the VET (Vocational Education and Training) framework. It has designed many strategies as well as established many institutions whose goal is to facilitate Britains trajectory towards the creation of a knowledge economy. The creation of this type of economy is not only desired by Britain but it is also a legal request stemming from the European Un ion for its members. The European Unions wish to transform into the most competitive, knowledge-based economy in the world by 2010 is reflected on the â€Å"Lisbon Goals†. In other words Britain will not only be struggling in order to tackle its national skills deficiencies but it will be doing so in order attain the conditions set by the â€Å" Lisbon Goals â€Å" and its mutual targets with the European Union (Beardwell and Claydon 2007). Beardwell and Claydon (2007) mention that there is a proliferation of government-driven initiatives and they attempt to itemise a few. It has introduced a number of vocational qualifications such as the National Vocational Qualifications (NVQ) which have several levels and which depict the skills and knowledge which are indispensable for an employee wishing to exercise a specific job. Moreover, there are Apprenticeships which provide work-based training and which permit to the trainee to pursue a qualification at the same time. It has set up the Learning and Skills Councils whose duty is the implementation and finance of educative and training programmes (with the exception of higher education) for sixteen year olds and above. It has also established the Sector Skills Development Councils whose primary role is to deal with skill shortages and to act as voice mechanisms which give employers the opportunity to express themselves and to address the skills and productivity problems of their own businesses (Beardwell and Claydon 2007). Additionally, it has launched the Investors in People Standard which according to Hoque (2008) provides a benchmark for training practices and which prompts organisations to design and put into place training practices addressing their skills gaps. If they manage to meet the Standards criteria they are granted the Investors in People award. However the significance of the whole process lies in the fact that it is meant to increase organisational effectiveness and to entail profits . Finally Britain has followed the example of the dual German VET system which involves many stakeholders in its national learning strategies, including the trades unions. The government has passed legislation leading to the formation of Union Learning Representatives whose main responsibilities is to analyse training needs of the union members, to provide information and to advice on training, to arrange training practices, to promote the value of training and to consult the employer concerning these activities (Hoque and Bacon 2008). Despite the efforts of the government to maximise the skills and knowledge of its people by reforming the VET system, the VET framework is characterised by many weaknesses. According to Keep (1999) the most important one is that the government continues relying on a voluntaristic approach which allows employers to choose not to engage in learning policies and investment on training if they do not want to. On the contrary other European countries utilise coercive measures backed by legislation. He considers the dearth of governmental mechanisms and of regulation able to enforce the provision of training as problematic because this means that each employer follows their own strategies dealing with their own needs and do not partake to the countrys aims for the creation of a knowledge workforce. Another flaw is that the VET is so complicated and inconsistent that employers tend to be unaware of the training programmes available (Harrison 2009). The initiatives launched by the government are also deemed to suffer from limitations. Grugulis (2003) makes a strong case against the National Vocational Qualifications and questions whether they are accurate certification depicting indeed the abilities of their holders to practice an occupation. She suggests that their level is lower than the level of the qualifications they replaced and that they do not offer financial returns to their holders. Marchington and Wilkinson (2008) explain that Apprenticeships have been also heavily criticised on the grounds of low completion rates, bureaucracy and lack of flexibility. Nonetheless, the main argument against them is that they do not respond to employers needs. As a solution, in 2007 the government took the decision to authorise the accreditation of in-house training schemes of major companies in order for the vocational qualification system to fit better employer needs and in order for employers to be able to run their own accredited training schemes (Harrison 2009). A case in point might be Tesco which has created its own internal training scheme that has been accredited by the Qualifications and Curriculum Authority and that has become eligible for public funding (Marchington and Wilkinson 2008). Another example is McDonalds which became one the first employer s who had their in-house training schemes accredited by the Qualifications and Curriculum Authority in January 2008 and whose target was to form loyal and committed staff able to provide high quality service. The course was equivalent to an A-levels (Brockett 2008). Governmental actions such as the accreditation of the firms in-house training raise two issues: The first problem is the possibility that the whole vocational qualification system will lose its credibility (Harrison 2009: 84). Moreover, the accreditation of in-house training demonstrates that the government endeavours to satisfy employers. Thereby the question raised is whether it is correct for the government to carry on financing training tailored to employer needs, such as in-house training (Marchington and Wilkinson 2008). The authors argue that these training schemes which are designed by companies themselves aim at developing skills relevant to their needs, thus excluding education and other skills emphasised by the government. In the end this runs counter to the governments aims. Finally, Britain being a liberal market economy, there is a bias against vocational qualifications in comparison to academic qualifications. Academic qualifications are deemed to be superior whereas vocational training systems as Bosch and Charest (2008) argue suffer from poor reputation and low social status in liberal market economies. Notwithstanding the existence of vocational routes the UK carries on overestimating tertiary education. Marchington and Wilkisnon(2008) claim that this has as subsequent repercussion the fact that many young people opt for the academic pathway but many of them drop out before qualifying and end up in low low-skill and poorly paid jobs. Other impediments to Britains struggle to bridge the skills gap come from the employer side. From the employers perspective there seems to be an unwillingness to cooperate with the government in their endeavour to upgrade the skills of the workforce (Harrison 2009). This reluctance to invest in training is due to several reasons. Harrison (2009:30-31) attempts to list a few such as the fear of poaching, the fear of the unpredictable market conditions as well as the fact that the benefits of the investment in training are difficult to be foreseen as they come in the long term. Loyds (2002) cited in Marchington and Wilkinson (2008) mentions other reasons such as the lack of time and the lack of information on the economic benefits of training. Finally, Beardwell (2007) explains that employers hold an unfavourable position towards employee learning and they seem reluctant to invest in the training of their workforce on other grounds: the likelihood that employees will stop being committ ed to their employer because their skills will be desired by other employers and the likelihood that employees will be poorly trained. A research study conducted by Matlay (1999) in 2000 businesses, among which the overwhelming majority were micro-, small- and medium sized companies demonstrated the â€Å" training paradox â€Å" in the small business sector. According to this paradox even though the vast majority of small businesses acknowledge the importance of and adopt a positive attitudes towards training practices, most of them had failed to provide them over a period of 12 months before the interviews. They respondent also recognised some direct reasons such as market positioning, prevailing economic conditions and availability of relevant firm-specific training as well as indirect reasons such as costs of training, time constraints, lack of in-house trainers, lack of motivation and interest. The owners/managers of these firms also claimed that some training initiatives in the UK lacked the necessary focus, coherence and clarity and suggested that the government should encourage the training industry, throu gh subsidies, to offer cost-effective training solutions tailored particularly for the need of SMEs. Hoque (2008) deals with another aspect of the training problem in Britain which is the inequality of training provisions in the British workplaces, a problem labelled â€Å"training apartheid† . According to this problem there are disadvantaged employee groups which suffer discrimination regarding access to training. Almeida-Santos and Mumford (2005) cited in Hoque (2008) argue that this discrimination takes place against women as well as members of ethnic minorities. Hoque (2008) also cites Arulampalam and Booth (1998) who dealt with reduced training provided to temporary/fixed-term and part-time employees and Addison and Belfield (2004) who included older employees to these disadvantaged groups. Furthermore Harrison (2007: 269) added disable people to this long list. Moreover, Westwood (2004) cited in Hoque(2008) claims that firms invest more in the training of their professionals and already qualified employees rather than the training of their low-skilled employees. The â€Å"training apartheid â€Å" is an issue which undermines Britains attempt to tackle its skills gap problem which remains unsolved despite the reform of the NVET institutions and the launch of strategic initiatives by the government aiming at the upskilling of the workforce. Hoque (2008) offers an example which might illustrate the failure of the Investors in People (IiP) Standard to tackle this phenomenon. After the launch of its revised version in 2000 the Standard was meant to guarantee equal access to training to all employee groups. Nevertheless his study which was based on the analysis of data collected from the 2004 Workplace Employment Relations Survey indicated that the Standard did not contribute to the resolution of the problem but to make matters worse it also demonstrated that inequality of training opportunities was more common in IiP workplaces than in non-Iip workplaces. There is also the issue of the assessment and evaluation of training provision in todays economies, which has become very difficult as firms tend to resort to informal training in order to cover their training needs. Beardwell (2007:289) explains that many companies might adopt learning strategies which are not systematic or planned. Nowadays firms have in their disposition several types of training which are usually informal. A case in point might be e-learning which enjoys wide popularity because it is flexible and easily accessible as it allows employees to learn with the help of technological tools. Moreover mentoring can also be informal and that takes place when an inexperienced employee is guided and advised on learning and development issues by an older and more experienced colleague. Informal learning is also linked to tacit knowledge. Myers and Davids (1992) define the notion of tacit skills as skills which are obtained through experience rather than training and which are embedded in the context where they are acquired. Both informal and tacit knowledge cannot be gauged which implies that they cannot be certified by qualifications. Apart from the technical and tacit skills there is also the need for the development of soft skills which is also of a great importance. Keep (2006) takes the service sector as an example where the development of generic and interpersonal skills and of some attitudes such as self-discipline, loyalty and punctuality are of vital importance. Nevertheless they cannot be measured which means they cannot be certified. However they continue to constitute skills even though they cannot be represented as qualifications. Thus, Marchington and Wilkinson(2008) argue that there is no appropriate proxy for measuring skills because they are not as qualifications. Most importantly Britains reliance on international comparisons in order to assess its skill shortages is highly debatable because if informal training cannot be measured and i f tacit and soft skills cannot be assessed either there is no way of reaching accurate conclusions concerning which country has the most skilled labour force and thereby the most competitive economy (Keep 2006). A case study is provided by Abbott (1994) whose study in small service sector firms demonstrated that people who work in the services are required to possess friendly and lively personalities and other personal attributes and generic skills which are indispensable for their work. His study also demonstrated that vast majority of small service sector firms provide informal training which is often considered to be of inferior level of training in comparison to formal training. Sometimes it is not classified as â€Å"training† even by employers themselves. According to him informal training is linked to tacit skills because they are usually learned informally and tacit skills are associated to some forms of soft skills such as inter-personal skills and cooperativeness. Soft skills and tacit skills cannot be measured but this does not underestimate their importance for people who work in the sector. This paper has reviewed the major aspects concerning the â€Å"training problem† in the UK. It has managed to study the setting where it takes place and to understand the factors that have prompted the UK to acknowledge the problem. International comparisons clearly indicate that the UK workforce is poorly educated and trained. This also accounts for the low skill equilibrium in which the UK has remained trapped. The solution for the economic strength of the nation is the creation of a learning society. Britain has embraced the strategic role of human resource development and its potential to offer the country the competitive advantage. The governments goal of upgrading the skills of its workforce depends on the VET framework which has gone through changes. Nevertheless it is still characterised by significant weaknesses. The most important mistake is that even though the government has assumed a more interventionist role than in the past it continues to make mistakes such as its insistence on relying on voluntarism which prevents it from coming into conflict with employers. The severity of this approach lies in the fact that the government has ended up conceding power to the hands of employers. With this sort of power employers will have the opportunity to seek strategies and aims covering their needs and therefore diverging from those adopted by the government. This and many other unsolved issues illustrate that the UK has still a long way to go before becoming a high skills society. REFERENCES Abbott, B. (1994). Training strategies in small service sector firms: employer and employee perspectives. Human Resource Management Journal, 4, 70-87. Beardwell, J. and Claydon, T. (2007). Human Resource Management: A contemporary approach. 5th ed. Pearson Education. Bosch, G. and Charest, J. (2008), Vocational training and the labour market in liberal and coordinated economies. Industrial Relations Journal, 39(5), 428-447. Brockett, J. (2008). HRs role in â€Å"McA-levels†. People Management, 14, 3, 7 February:9 Finegold, D. and Soskice, D. (1988). 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