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HOW

C-LEVELEXECUTIVES

VIEW

are directly impacting and af fecting the ways in which business is conducted.

To remain competitive, companies are realizing that they must invest in

employee development and skills training programs to maintain a skilled and

nimble workforce. Productivity, better customer service and company culture

are all at stake, along with the need to promote innovation and recruit

talented next-generation executives.

G L O B A L I Z A T I O N ,CH A N G I N G D E M O G R A P H I C S

A N D T E C H N O L O G I C A L C H A N G E S

So, what are the shared perceptions around learning and how can HR and learning professionals speak the language of business? What do business executives expect from training?

To explore the ties between workforce development and business outcomes, the Economist Intelligence Unit (EIU) surveyed 295 executives from around the world in June 2014, on behalf of CrossKnowledge and Future Workplace.

The executives surveyed, who were evenly balanced across the Asia-Pacific, Europe, North America, and Latin America, represented a wide range of industries, from IT and financial services to telecommunications and manufacturing, and occupied a variety of C-suite roles. Half of the companies have

annual revenues of more than $500 million, and a quarter reported annual revenues of at least $5 billion.

Executives were asked how workforce development contributes to a company’s brand and bottom line; what types of worker competencies companies hope to develop through training; how development schemes can help companies retain talented employees; and which training strategies have worked best for their organizations.

The findings from this research allow us to analyze the ways in which our leaders think of training, and what they see as the main benefits that businesses get from investing in it. These ideas and visions are likely to influence how companies approach training and development for their workforce in the future.

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EMPLOYEE TRAINING IS CRITICAL TO ATTRACTING AND RETAINING KEY TALENT

Attracting and retaining the better elements of a company is an essential challenge for top management as it constitutes a true competitive advantage. As the research findings show, this goal is a key strategic driver behind many corporate training and development schemes.

Naturally, salary and benefits remain the most important strategy in future staffing, followed closely by investment in employee learning: 35 percent of respondents indicate that this type of investment will be critical. Executives also understand that workplace flexibility (28 percent) and strong corporate values and responsibility (23 percent) are important to attract talent.

The survey results also show that traditional advantages such as profit sharing (16 percent) and incentives like gym, food and transportation (12 percent) rank far below learning and development strategies.

WORKFORCE DEVELOPMENT IS A HIGH PRIORITY BECAUSE IT GENERATES LARGE PAYOFFS

Today, the survival of companies in a fast-paced and global marketplace strongly depends on employees and executives who maintain and upgrade their skills.

Almost all survey respondents agree on the importance of development schemes: 94 percent say that workforce development requires continuous investment and improvement.

More interestingly, 82 percent of respondents believe workforce development has contributed to the success of their business. This statistic testifies to the recognition that effective learning and development skills always lead to a satisfactory return on investment. Thus on the business side, training is seen more and more as an investment rather than a source of cost.

EMPLOYEE COMPETENCIES MOST IN DEMAND OVER NEXT THREE YEARS: LEADERSHIP, INNOVATION AND GLOBAL MINDSET

Companies are looking for a new set of competencies in their recruits and employees to keep up with a changing, evolving marketplace. Overall, leadership development will continue to be a top need for companies, while innovation and global mindset follow right behind. This portrays the growing need for companies to have their talents working cross-culturally to achieve business results. Indeed, more and more companies are delivering value and increasing their revenue outside of their home market.

Companies will also be looking for other types of qualities in their workforce in the coming years, including the ability to manage virtual teams (15 percent to 22 percent), social media literacy (15 percent to 18 percent) and innovation (28 percent to 31 percent). More traditional skills, such as project management, are expected to decline from 31 percent to 22 percent in the next three years. Financial literacy will also shrink from 21 percent to 17 percent.

C-LEVELS EXPECT TO SEE THE EMERGENCE OF A WELL-TRAINED, BUSINESS-ORIENTED WORKFORCE

As executives are investing in corporate learning programs, they increasingly expect it to pay off in the form of improved business outcomes.

When C-levels were asked what business outcomes would justify a substantial investment in workforce development, they massively answered increased productivity (55 percent) and a greater responsiveness to new opportunities in the marketplace (40 percent). Respondents thus consider that long-

KEY TAKEAWAYS

because it generates large payoffs in the form of business outcomes, profitability, and employee engagement.

culture of continuous learning and using this to attract and retain key talent.

include leadership, innovation, and a global mindset.

develop employee skills, which suggests less reliance on business school executive education programs, both general and customized.

open online courses (MOOCs) inside the company for workforce development.

their investment in development initiatives.

INVESTMENTS IN LEARNING AND DEVELOPMENT

ARE AIMED AT GETTING COMPANIES

SOME CONCRETE, MEASURABLE

RESULTS.

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term strategic business stakes are worthy consequences to invest in training, rather than shorter-term indicators, such as positive ROI (22 percent) or reduced costs (18 percent).

Other business outcomes that would justify a substantial investment in workforce development include increased employee engagement (39 percent), higher profitability (37 percent) and lower turnover (36 percent).

Those results show that C-levels continue to invest in training for positive reasons, and are searching for hard business metrics to measure the impact of training.

COMPANIES RELY ON INFORMAL AND SOCIAL LEARNING TO DEVELOP EMPLOYEE SKILLS

When C-suites were asked what modes of delivery are the most important for learning and development in their company, they massively pointed to informal and social learning as well as to mentoring, peer-to-peer sharing and MOOCs. Those new ways to learn prevail over other more traditional forms of learning. The research thus shows that executives are recognizing that adults learn more through informal and social training schemes. The 70:20:10 model, according to which 70 percent of all learning is done on the job, 20 percent from peer interaction, and only 10 percent through formal learning, has taken up across the world.

On the other hand, there is a severe decrease in business school open enrollment programs. As learning is becoming more and more customized and tailor-made for learners, open enrollment is becoming too standardized. In training, the one-size-fits-all approach is no longer sufficient.

MOOCS ARE IN DEMAND BY EMPLOYERS FOR LEARNING AND DEVELOPMENT

When MOOCs first made their apparition, the focus was on how they were going to impact and revolutionize higher education. No doubt it has, by democratizing learning and making it accessible to a larger crowd.

However, the disruption is also essential

in corporate learning. Companies have a growing desire to curate MOOCs, and to align them with competencies that they want to develop or are already developing. Companies are also creating their own MOOCs, to develop not only employee training, but to providing learning opportunities for outside stakeholders. As MOOCs continue to develop, it seems like their goal is to make education more accessible, and to make learning a lifelong process, and not just a fleeting experience.

TRAINING AT RISK: BUDGET AND LMS

According to our polled executives, the biggest obstacles to workforce development are insufficient development of learning management systems and inadequate financial resources. Approximately, 43 percent of respondents cited them as one of the two top difficulties their companies face in developing effective, long-term training programs.

Lack of financial resources is a rather usual predicament, and understandably a bigger obstacle for smaller firms, cited by half (50 percent) of respondents, compared with only 36 percent for larger companies. Insufficient engagement of HR and learning specialists is also significant (39 percent).

The perceived insufficient development of learning management systems proves that innovation in learning is not currently meeting companies’ needs. To stop being an obstacle, and to become an actual mean of empowerment, learning management systems need to focus more on learner engagement and on the customization of learning.

SUMMARY

C-level executives are recognizing that development and learning programs are an essential part of their companies’ success – to attract and retain rising

talents, and to provide them with the necessary tools and skills to successfully achieve their business objectives.

This survey’s results demonstrate that investments in learning and development are aimed at getting companies some concrete, measurable results, such as tangible improvements in business outcomes, for instance. The methods used by companies to achieve those results are evolving toward more social, collaborative, connected learning.

In 2012, Harvard Business Review published a survey revealing that young employees who were considered “high potentials” at dozens of top global companies were unsatisfied with the development efforts implemented in there companies, to the extent that it was cause for many of their early departures.

In many cases, firms are unwilling to develop young managers, as they foresee their investment will not be worthwhile and that young talents will leave the company within a few years. However, providing high-level development and training courses represent an undisputable competitive advantage, which global companies should pitch to their potential recruits.

Learning leaders should create a relationship of trust with their workforce and future employees. Investing in their staff will generate investment from them in return, and lay the groundwork for success.

Steve Fiehl is co-founder and CIO at CrossKnowledge. Passionate about the impact new technology is making on learning, he frequently takes part in the international discussion on the future of learning. Email Steve.

COMPANIES ARE REALIZING THAT THEY MUST INVEST IN EMPLOYEE DEVELOPMENT AND SKILLS TRAINING PROGRAMS TO MAINTAIN A SKILLED AND NIMBLE WORKFORCE.