Do you see management development as an investment or a cost?
The UK spends almost £40bn a year on training and development. But just how effective is that investment? The CMI is keen to hear your views and experiences of management and leadership development and the impact it can have on personal and organisational performance. (Click here to take part in our latest survey).
Establishing the business case for management and leadership development is critical, not only to provide organisations with a strong rationale for continued or new investment in development, but also to address the UK’s well documented management and leadership skills shortage.
One of the barriers to greater investment in these vital skills may be explained by research suggesting that many employers do not fully understand the business impact of training and development investment. With only 64 per cent of organisations carrying out an evaluation of the impact of training and development on employee skills and performance,[1] a significant minority are unaware of the business benefits of MLD and unable to identify what steps they can take to enhance individual and organisational performance.
CMI and Penna are carrying out research into this area to understand what the impact of management and leadership development is on individuals and organisations. We would like to hear from you about your experiences of management development, which forms have been most effective and in what ways. To take part in this survey please click here.
[1] UKCES (2010), National Employer Skills Survey for England 2009: Key findings report
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It's well known that when money is tight that the training budget is the "low hanging fruit". My own view is that the investment/damage to morale far outweighs the costs saved.
I wrote about this earlier in the year, based on new research coming out of America. Management training is clearly of value, but it must be aligned with clear career progression, or there is the chance that it will backfire and you will merely train managers for other organisations.
http://www.dlcandtraining.co.uk/distance_learning_blog/management/guest-post-when-management-training-turns-bad/
There's also this research from Middlesex Uni revealing how large the gap is between the training people want, and the training they get.
http://www.managers.org.uk/practical-support/management-community/blogs/managers-suffering-training-desert
Management development is not just about training. It should include mentoring, developmental objective setting and support to achieve those objectives.
The problem with training is that it is often expensive and general. Managers need help applying those skills to their specific circumstances. Especially in SMEs.
Interesting paper on this below
http://ideas.repec.org/p/iza/izadps/dp2442.html
During the early Nineties the proportion of UK graduates doubled over a very short period of time. This paper investigates the effect of the expansion on early labour market attainment, focusing on over-education. We define over-education by combining occupation codes and a self-reported measure for the appropriateness of the match between qualification and the job. We therefore define three groups of graduates: matched, apparently over-educated and genuinely over-educated; to compare pre- and post-expansion cohorts of graduates. We find the proportion of over-educated graduates has doubled, even though over-education wage penalties have remained stable. This suggests that the labour market accommodated most of the large expansion of university graduates. Apparently over-educated graduates are mostly indistinguishable from matched graduates, while genuinely over-educated graduates principally lack non-academic skills such as management and leadership. Additionally, genuine over-education increases unemployment by three months but has no impact of the number of jobs held. Individual unobserved heterogeneity differs between the three groups of graduates but controlling for it, does not alter these conclusions.
With many organisations seeing a diminishing training budget I feel that individuals must take some degree of personal responsibility in this area, if you want to progress. Due to the constraints imposed upon myself on my colleagues, those of us with a desire to progress our knowledge and abilities have sought to personally fund CPD. Whilst it is true that this knowledge and the developing skills will be of direct benefit to our current employer, ultimately we are ensuring that we are best placed to develop ourselves in support of our future employment objectives and goals. Whilst the cost is our own, we are investing in our own future.
I agree wholeheartedly with Darren, in that CPD is an investment in your future employability / promotion, so if companies can't / won't fund CPD, then individuals should seriously consider maintaining CPD at their own cost (be it time and /or monetary cost).
It will almost certainly be worth it in the long run.
As professionals we have a responsibility to keep our knowledge and skills up to date. Good employers will support managers to embed the skill and knowledge through the work they carry out. Both then gain from the learning experience as the return it brings makes it an investment and not a cost.
Where it comes to industry, new system specific or organisational training then the employer should pay in those circumstances. They should have already carried out a cost/benefit analysis to ensure ROI.