Corporate education programs need more planning

by 27 May 2008

ORGANISATIONS ARE increasingly seeking ways to measure return on investment from their education and training expenditure, however, recent research has found that about only 60 per cent of organisations actually link their corporate education programs to specific corporate goals.

While organisations generally invest an average of about 4 per cent of payroll on employee education, training and development, 75 per cent of private companies link their corporate education and training programs to corporate goals and only 55 per cent of public companies do the same.

“A strategic approach to corporate education can facilitate the development of corporate culture, collaboration among employees and the building of an organisation’s future capability through the development of its employees,” said Lindsay Ryan, who conducted the research for a PhD on university-corporate education partnerships.

Corporate education will also become increasingly important as a means of attracting and keeping good employees,”he said.

“Corporate education is a means of demonstrating to employees that they are valued and the organisation is investing in their development. Employees also develop a better understanding of their role and what they do contributes to the organisation.”

The research found that only 45 per cent actually have a documented plan for managing and developing their corporate education program.

Private companies appear to perform better than public companies in this regard, with 56 per cent of private companies having a documented plan compared to 44 per cent of pubic companies.

Ryan said the old adage that if a plan is not written down, then it is not really a plan, might apply to the findings of his research.

“As industry continues to increase expenditure on corporate education and employee development, the most effective means of measuring return on investment is to align the corporate education program with the achievement of corporate goals,” he said.

Documented plans should include: corporate goals; the role and purpose of the corporate education program aligned with the corporate goals; the proposed corporate education program and key learning outcomes; the number and level in the organisation of the participants; and the capabilities and competences expected of participants as a result of completing the program: both quantitative and qualitative measures

“It is also important after a program is completed to review and measure the learning outcomes against the corporate goals. This could be immediately after a program concludes and, ideally, six months and 12 months later to measure the level of knowledge retention from a corporate education program,” Ryan said.

Over the next five years, he said that industry will start to treat corporate education and training as an investment, not just a business cost.

“Therefore, the amount invested in corporate education will probably double from current levels. However, as an investment, organisations will see a return on their investment with a higher percentage of engaged employees and greater depth in the organisation with a structure for the internal development of future leaders,” he said.

“As industry starts to embrace the concept of the knowledge economy, corporate education will play a strategic role in innovation relating to developing new products, new services, new processes, new markets and new channels to market.”

Ryan said that organisations need to adopt a strategic approach to human resources and organisational development in order to retain existing employees and to be in a position to attract good employees.

“Integral to an organisation’s strategic plan should be its plan for organisational development and the development of employees,” he said.

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