HUMAN RESOURCE STRATEGIES FOR EMPLOYERS (M Skills by Design I Strategies for employee development the people & w orkplace department Skills by Design: Strategies for employee development This book is for employers and managers who are interested in employee development programs. It outlines the benefits for establishing development and training programs and offers practical suggestions on how to create and run them. It will help you by: • providing the business case for investing time and money in employee development • presenting you with realistic choices for creating a more skilled and productive workforce • giving you specific suggestions on how analyse your employees’ needs, presenting you with options on how to meet their development and training needs and how to do an evaluation of the programs success • listing resources available to learn more about employee development and where you can go for further help. This information was accurate, to the best of our This publication is available on-line through the Alberta Learning Information knowledge, at the time of p rinting. Labour market information and educational programs are subject Service (ALIS) website — Alberta’s leading to change, and you are encouraged to confirm with on-line source for career, learning and additional sources of information when making employment information. To access career, education and employment decisions. this and additional publications, visit www.alis.gov.ab.ca/careershop For copyright information contact ISBN 0-7785-1611-3 Alberta Human Resources and Employment People, Skills and Workplace Resources © 2 005 Government of Alberta, Human E-mail [email protected] Resources and Employment Telephone (780)422-1794 This material may be used, reproduced, stored Fax (780) 422-5319 or transmitted for non-commercial purposes. However, Crown copyright is to be acknowledged. It is not to be used, reproduced, stored or To order print copies please contact transmitted for commercial purposes without Learning Resources Centre written permission from the Government of Alberta, Human Resources and Employment. 12360-142 Street This book is not for resale unless licensed with Edmonton, AB T5L 4X9 Government of Alberta, Human Resources Internet www.alis.gov.ab.ca/careershop and Employment. Fax (780) 422-9750 Telephone (780) 427-5775 Catalogue Item #567290 03/2005-30M © GOVERNMENT OF ALBERTA, HUMAN RESOURCES AND EMPLOYMENT Skills by Design: Strategies for employee development Skills b Design Strategies for employee development Acknowledgements Special thanks to the Alberta employees and employers who contributed information and expertise to this publication, notably: • Alberta Advanced Education • Alberta Building Trades Council • Alberta Chambers of Commerce • Alberta Food Processors Association • Alberta Home Builders’ Association • Alberta Hotel and Lodging Association • Alberta Personnel Administration Office • Alberta Restaurant and Foodservices Association • Banff Lake Louise Hotel Motel Association • Canadian Association of Geophysical Contractors • Canadian Federation of Independent Business • Merit Contractors Association • Petroleum Human Resources Sector Council of Canada © GOVERNMENT OF ALBERTA, HUMAN RESOURCES AND EMPLOYMENT 1 Skills by Design: Strategies for employee development Table of Contents Introduction 3 The Business Case for Building Skills 4 The story on skill shortages 4 Proven benefits for business 5 The real cost of employee turnover 6 Countering common arguments 6 Analyse: Know the Needs 11 What the business needs 1 1 What the job needs 12 What employees need 16 Where are the gaps? (Do you really have a t raining problem?) 17 What are your options? 18 Strategize: Plan, Package and Position 20 Set up the systems 20 Set SMART objectives 21 Recognize and reward employee development 23 Sign up the supervisors 24 Mobilize: Eight Great Ways to a S killed Workforce 25 1. Training 25 2. Self-directed learning 33 3. Coaching and mentoring 35 4. Moving up: Employee promotion 36 5. Moving within: Job enrichment 37 6. Moving around: Job rotation and cross-training 37 7. Moving over: Lateral moves 39 8. Job aids and written information 39 Evaluate: Monitor Results, Measure Return 41 Resources 43 2 © GOVERNMENT OF ALBERTA, HUMAN RESOURCES AND EMPLOYMENT Skills by Design: Strategies for employee development Introduction Skills by Design: Strategies for employee development is a t oolbox for employers looking to sharpen the skills of their workforce. It’s about employee development, or the planned activities to develop the skills and knowledge of workers. This book builds the case that any business in Alberta, no matter how small, should have the tools and know-how to do some regular inspection and maintenance of employee skills. Training (on the job, in the classroom) is certainly a p art of the package, but it isn’t the only method to learn skills or increase knowledge. Employee development can and probably should take many forms: coaching and mentoring, job enrichment, and even job aids such as a p ocket-sized card with reminder notes can all be tools you use to tune up skills. Skills by Design features the why to, how to and practical what-to-do of employee skills development, with success stories from around the province and readily available resources to get you started. We realized about a y ear ago that we have to make employee development a p riority here. We started making a conscious effort to make people aware of s kills and the importance of e mployee development. We are seeing measurable benefits as a result. —Hotel general manager, Banff The industry is starting to see that the successful organizations are the ones involved in training. — CEO, employer association, construction industry, Edmonton 3 © GOVERNMENT OF ALBERTA, HUMAN RESOURCES AND EMPLOYMENT The Business Case for Building Skills The story on skill shortages A 2 002 study by the Canadian Federation of Independent Business found that up to 265,000 jobs remained unfilled due to a l ack of skilled workers1. The Conference Board of Canada predicts a shortfall of nearly one million workers within 20 years.2 In Alberta, close to 60 per cent of small- and medium-sized businesses report problems with a shortage of labour3 and predict that this trend will continue. In addition to the benefits of operating a b usiness in Alberta, now and in the foreseeable future, companies must adapt to a v ariety of specific factors that are behind these human resource issues. • Strong economy - A lberta continues to grow and diversify, with many industries experiencing job growth and labour shortages. • Aging labour force - b aby boomers, who make up the largest segment of our workforce, are nearing retirement. • Earlier retirements - more people are choosing to retire before the age of 65. • Declining birthrates - f ewer young people are available to enter the labour market. • Immigration needed - skilled workers from other countries can face barriers to having their qualifications accepted when seeking employment. • New jobs, new skills - i n all industries, the new jobs being created are skilled jobs, most requiring some form of p ost- secondary education. • Competition in a g lobal labour market - as many countries face labour shortages, employers find they are competing with other countries, not just companies, in finding and keeping good workers. Whats a b usiness owner to do? If y ou are an employer faced with these circumstances, you have difficult decisions to make. Will you need to hire underqualified people, or, increase the responsibilities or workload of y our current staff? New, less labour intensive technology might offer some relief, 1 C anadian Federation of Independent Business, “Our Members’ Opinions” Survey #24-51, 1989-2002. 2 T he Conference Board of Canada, Performance and Potential, 2000-2001. 3 C anadian Federation of Independent Business, “Our Members’ Opinions” Survey #51, 2002. 4 © GOVERNMENT OF ALBERTA, HUMAN RESOURCES AND EMPLOYMENT Skills by Design: Strategies for employee development but this option, like the others, comes back to the same requirement: employee development. Somehow, you are going to need to find a way to be sure that employees can work well and safely, can manage the new workload, and can adapt to new information and technology. Proven benefits for business Why should you put time and money into developing the skills of y our employees? The bottom line is y our bottom line: employee development in the form of skills training and education is shown to have a real return on investment for companies, with tangible, measurable benefits, including: • better margins • increased customer satisfaction • a competitive edge • stronger sales performances • reduced errors or defects • lower turnover (resulting in lower recruitment costs) • fewer accidents • improved compliance with government regulations and internal procedures • increased productivity • opportunity to take advantage of new technologies • fewer grievances • improved employee morale, staff relationships • more loyal employees • ability to expand and grow the business • more freedom for the boss — competent employees can manage while you are away! Employee training pays dividends big time. Our injuries are way down, we have more well-rounded, happy employees. — HR manager, construction company, Calgary The original outlay in training was expensive, but we began seeing returns in the f irst year and now, after a couple of y ears, we get it back three-fold... Weve had financial institutions take note of o ur training and see it as a g ood indicator of t he kind of b usiness we are. We landed one very big client in p art because of t he quality of o ur training program. — Welding contractor, Rocky Mountain House 5 © GOVERNMENT OF ALBERTA, HUMAN RESOURCES AND EMPLOYMENT Skills by Design: Strategies for employee development The real cost of employee turnover If y ou think employee development is expensive, try employee turnover. Research shows that a small business can spend the equivalent of three full weeks of time on informal training for one new hire. A c ommon estimate is that recruiting, hiring and orientation for one new employee will cost you Finders & K eepers: between 70 and 200 per cent of that persons annual salary! Recruitment and Think about what employee turnover is costing you. retention strategies Direct costs: includes blank • termination templates and • vacancy completed samples • recruitment to help you calculate • selection and hiring your turnover costs. • orientation and training. See the Resources Indirect costs: section at the end • lost productivity of the worker of this publication • lost productivity of co-workers or subordinates for more detail. • lost productivity of the supervisor during vacancy, orientation and training • lost productivity of the new hire during transition. • increased defects or operating errors • dissatisfied or lost customers during vacancy or transition. Countering common arguments The following quotes represent some common arguments used by employers for not investing in employee development. The responses are suggested by best practices research and various industry representatives in the Alberta business community. “If I d evelop my employees’ skills, they’ll walk out the door to another employer.” • Research shows that those who train, retain. Employers who offer opportunities for skills development are shown to have lower levels of employee turnover. • It is a mobile but “internal” workforce, i.e. workers may change jobs but generally stay in the same industry, and so you’re also likely to benefit from a worker trained by a competitor. 6 © GOVERNMENT OF ALBERTA, HUMAN RESOURCES AND EMPLOYMENT Skills by Design: Strategies for employee development • Enhanced skills are shown to benefit the worker, the worker s family and the community, because the worker is more efficient and productive. This helps the worker bring more money into the community, while feeling less personal stress and reducing the need for overtime. Yes, they may leave. But you might just win yourself an employee that stays with you for a l ong time, and while they are with you, they will do a b etter job. — General manager, hotel, Banff “Employee development is too expensive. I d on’t have time to train...” • Formal training is not the only way to employee development. This book highlights a range of options that need not cost a dime, including job enrichment, job enlargement, lateral moves and cross-training. • “Expensive” is a relative term. Employee development may cost a fraction of the financial or personal costs of lost-time accidents, damaged equipment or unsatisfied customers. • Many of y our competitors disagree — recent research shows that despite rising costs, almost half of small- to medium- sized businesses expect to increase the amount of training they offer in the next three years. Yve got equipment that will kill y ou if y ou mishandle it. I h ave molds that if y ou drop one you lose five grand. What costs me more money than training is when someone hasnt got the training and they dont finish it p roperly and then we ship it across North America and then have to ship it b ack — that costs me more money than the p art is worth. —Owner, manufacturing company, Crossfield You are going to spend it anyway— in lost-time accidents, WCB claims, replacing people. Its better to spend it on the f ront end than lose it on the back end. —District manager, construction company, Calgary If y ou dont train you may as well pack it in, because you re j ust looking for an accident or a b reakdown. If I l ose one days work it takes me a week to earn it back. — Owner, seismic drilling company, Spirit River 7 © GOVERNMENT OF ALBERTA, HUMAN RESOURCES AND EMPLOYMENT Skills by Design: Strategies for employee development “Employee development is not my responsibility.” • An estimated 50 per cent of the workforce of 2015 is already in the labour market and there are a shrinking number of y oung people poised to enter the workforce. This means there are not enough graduates to meet the demand for skilled workers. • Employee development is a shared responsibility. Skills, like physical health, follow the “use it or lose it” p rinciple, and the workplace is shown to be the primary venue for exercising those skills and developing new ones. If this responsibility is left to third party institutions or personal initiative (and finances), worker productivity will suffer. • More than half of small business owners feel that responsibility for development of employee skills rests with them, and some of your competitors are likely to be among them. If I l ook at companies that have invested in employee development, I s ee workers who are more confident and self-assured in their roles. Not only at work but also in the community. With that confidence grows their self-esteem and their willingness to become more active in their own communities. —Business agent, union local, bakery sector, Calgary You don’t have any choice but to do training when it comes to safety and using specialized equipment. Its all hands-on here — they aren’t going to learn this anywhere else. — Co-owner, mulching company, Fairview “No schools in my area provide the kind of training we need ” • Some very technical or specialized training may not be readily available locally. In this case you may need to send someone farther away to get training or set up your own program with in-house trainers. When it comes to in-house training, Alberta’s post-secondary institutions have a l ot to offer. They have courses for evaluating your company’s needs, the design of training programs, developing course materials and train-the-trainer. Some institutions will design and present training programs upon request. • Industry associations and sector councils are increasingly involved in training support, and if they do not offer it, they can often refer you to local resources. 8 © GOVERNMENT OF ALBERTA, HUMAN RESOURCES AND EMPLOYMENT