1. Setting the research Employees of today have differing expectations of their jobs and many from the younger generation are looking out for quicker promotion opportunities or well-planned career progression paths. Companies with a flat organisational structure may then be restricted to provide a desired career advancement path for them. Alternatively, these companies can plan to establish initiatives that will be attractive to the employee. One such initiative is to develop the individuals by giving them training and development opportunities.
Training and Development planning requires both a personal and an organizational perspective to be effective. When carried out effectively, the payoffs in improved performance, broadened skillsets and knowledge, increased competence to perform in jobs at the next-level of responsibility; as well as personal satisfaction – can all be very high. By increasing employee motivation, employees will want to continue to grow and develop in their jobs and career. This motivation to continue to grow and develop through training and development is one of the most important factors in employee retention.
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Despite the fact that training and development is a key factor in keeping the employee interested and engaged, there are also instances whereby employees leave the organisation upon completion of their training or holding their company ransom for a pay increment to match their new-found competencies. Such undesirable behaviours from employees have not only betrayed their companies’ trust in them, but also resulted in many companies to be more wary of over-investing in their employees’ development in fear of losing them faster, or promoting undesirable values and behaviour.
Many companies have also resorted to introduce training related bonds to protect on their investment on their employees for fear of losing them. In this assessment activity, we seek to determine the correlation between the impact of training and development activities and its effectiveness in potentially optimizing employee retention. Through the use of a survey method, this paper explores if the training and development provided to an employee is a determining factor for how long the employee would stay in a company.
Our hypothesis is that “The more satisfied employees are with the quality and quantity of training and development opportunities they receive, the longer they will stay with the company. ” ? 2. Literature Review Training and Development Emphasis on training really grew in the later part of the 19th century when there was grave concern by countries that their labour force was of a poor standard, leading to a lack of competitiveness. The emphasis on training was mainly initiated by governments to alleviate concerns about a possible shortage of skilled workers, while simultaneously mitigating long-term unemployment.
But the quality of the training was generally considered poor during that time, due to the lack of training techniques. Post-war years were a period of full employment, and so employers and employees reached a consensus that employers should bear the major responsibility for training their employees. Training then started to evolve with mostly apprenticeships regulated by industry-wide national agreements between employers and unions, formed by the widely varying custom and practice of each industry (History of HRD, 2011).
In the modern workplace, training and development describes the formal, ongoing efforts of organizations to improve the performance and self-fulfilment of their employees through a variety of methods and programs. These efforts have taken on a broad range of applications—from instruction in highly specific job skills to long-term professional development. In recent years, training and development has emerged as a formal business function, an integral element of strategy, and a recognized profession with distinct theories and methodologies.
Companies of all sizes have increasingly embraced “continual learning” and other aspects of training and development as a means of promoting employee growth and acquiring a highly skilled workforce. For the most part, the terms “training” and “development” are used together to describe the overall improvement and education of an organization’s employees. In general, training programs have very specific and quantifiable goals, like operating a particular piece of machinery, understanding a specific process, or performing certain procedures with great precision.
On the other hand, developmental programs concentrate on broader skills that are applicable to a wider variety of situations, such as decision making, leadership skills, and goal setting (Training and Development). Training and development has become an essential tool in today’s fast changing workplace, for employee to remain competitive and employable. Significant focus has been placed on training of employees on both knowledge and skills that are relevant to meet the changing needs of companies which in return help companies build capabilities from within and remain competitive.
And during times of turbulence, training have been adopted as an initiative to help companies and workers manage the economic downturn by saving jobs while investing in building skills for the recovery. Employee Loyalty Loyalty is a fundamental human characteristic defined by unfaltering allegiance or faithfulness. Most of the Fortune 500 companies owe their success to the enduring power of customer and brand loyalty. But employees are not quite like consumers. They want to be loyal and to have their loyalty cultivated and appreciated by employers, but not all employees perceive loyalty the same ways.
Workers from different backgrounds will have different ideas about what it means to be loyal, as well as what factors make them feel more or less loyal to their employers. (Ferri-Reed, J. 2011) The employee trust in corporations was traditionally constructed such that loyal employees would be protected and cared for by the company. Employees will have no priorities outside their specific company if they were promised long-term opportunities and enhanced rewards would be given to those who stayed. However in many recent economic downturns, many companies have been adopting lay-offs as a first approach to keep their companies afloat.
These lay-off activities have created a general sense that companies are only looking out for their shareholders and executives but not employees. This in return has contributed to a sentiment that there is no reason for any employee to be loyal to any company when times are good. As a result, employee loyalty has faltered over the years as many employees have realised that devotion, in today corporate world, is no longer rewarded and also believes the old system of loyal service in exchange for security does not exist anymore.
Other factors would include demanding working conditions, limited advancement opportunities and declining compensation. During times when the economy is good, many companies would experience strong growth in line with the economy. There will be increased hiring as organisations expand their staff strength to meet their expansion demands. The buoyant hiring market will in return brings about a competition of talents. This is also the period whereby the “employees market” sets in, and employees are the ones that control the strings.
If the employees do not like the job, they would probably find another opening elsewhere that seems more promising and with a more attractive remuneration package. This presents the challenge of finding and keeping employees, and this also often translates to a greater challenge to small and medium enterprises (SME). To attract and retain the best candidates truly requires creative strategies in recruitment and retention practices. While attracting talents is important, it would be meaningless if companies do not have effective strategies on retaining them.
Thus, the first step to winning the war in talent retention is still to retain the existing employees while hiring the best for the future (Palmer). Employee loyalty is a critical factor for any company. While a certain amount of turnover is always expected, excessive voluntary turnover hurts the bottom-line. The total cost of replacing an employee can run up to five times of the employee’s annual compensation. Companies around the world are being challenged to keep their best employees while attracting new talent and this is driving considerable interest in programmes to strengthen the employee bond.
There has to be a shift in focus from embracing employer-centric tactics to implementing retention strategies that meet the expectations of employees. One example of such strategy would be through employee’s training and development. Companies must be able to create an experience whereby employees not only view it as a place to work but also a place for them to grow their career and aspirations. Training and Development as a form of Retention One possible retention approach was to promote training and development as part of its employer brand.
For smaller companies, this also serves to counter the growing trend of employees turning to bigger MNCs because of perceived better prospects. MNC have been widely viewed by employees as offering better development programmes – an area that many local SME are lacking in resources. Many MNCs also take steps to raise their profile as employer of choice through university recruitment often by highlighting the career development and training potential to prospective candidates. According to attendees at the Korn Ferry Leadership Transformation conference, the top factors that worked best in engaging and retaining key alent in their organisations were training and development opportunities, just behind compensation and benefits (Korn Ferry, 2011). One key factor in employee motivation and retention is the opportunity employees want to continue to grow and develop job and career enhancing skills. In fact, this opportunity to continue to grow and develop through training and development is one of the most important factors in employee motivation. Training and development opportunities will allow the company to create devoted, growing employees who will benefit both the business and themselves. When an employee is trained they become a better employee because they have better skillsets,” said David Morrison, Director of External Education. “Better skill sets make them more promotable or advance-able, which means they are going to stay with the company, be better tax payers and stay in our area longer. ” (Murray, 2011). These are also areas where management and Human Resources can implement in multiplying the value of the training and development by enabling the employee to pursue training and development in a direction that they choose and are interested in, not just in company-assigned directions.
Employees will be appreciative of their company support in their personal learning and not just in support of knowledge needed for the employee’s current job. One example is by having training credits whereby the employees have a choice to use it for any courses that they would like to attend. It is important for companies to recognize that the key factor in keeping the employee engaged is through the development of a life-long learner. This would no doubt be a determining factor on how long the employee chooses to stay in the company.
By having the right type and range of training and development activities will further ensure and optimize the employee’s motivation and potential retention. The objective of this survey is to do ground sensing and analysis on employees opinions and perceptions on i) Job Commitment ii)Perception on the quality of training received iii)Perception and attitudes towards training This survey aims to establish the correlation between these three areas. Since surveys provide a systematic methodology to collect data from a larger number of people over a short period of time, and also allows the company to tudy relationships among variables like attitudes and the amount of training received, the use of surveys in this research would be helpful in enabling us to determine if there is any relationship between employee satisfaction of their training and development opportunities, and their intentions to stay with the company. The survey conducted also tried to surface out possible areas for improvements regarding the training and development opportunities in the company. ? 3. Survey Design Data will be collected from at least a sample of 50 respondents out of a 400-strength workgroup.
The Likert Scale used is six-point, ranging from “Strongly agree” to “Strongly disagree”. For each item, the respondent would be asked to rate the degree of which they agree or disagree to each dimension using a six-point rating scale, without a neutral option and then these points are assigned a score from 1 to 6. The purpose of using the Likert scale is to sum the scores for each respondent, and the ratings on the Likert scale will reflect the sample’s attitudes towards the respective statements in the questionnaire (Brace 2004, 86). The survey is designed to help stimulate recall and motivate the respondent to respond accurately.
The sequence of questions would also help to create an orderly flow to ease and maintain the respondent’s interest and overcome possible doubts about the survey’s intent. We have chosen to conduct the email survey through a web-based medium such as Surveymonkey or Zoomerang. Individual invites to the survey would be sent to the entire workgroup, thru their personal corporate email address. The main consideration would be the assurance of confidentiality, which would encourage a more truthful response from respondents. Also, respondents of this survey have access to the office email, which makes this medium accessible and practical.
Web surveys can also do an automatic collation of the results and present them in an easy to understand manner. Possible Limitations and obstacles of the survey The limitations of the survey are that the question are limited to only training matters and does not touch on other factors that could impact engagement such as leadership or staff welfare. The survey also makes the assumption that staff would be truthful when answering the question, rather than answering it in a ‘socially acceptable’ manner or being pressured to answer in a certain way.
One way to overcome this limitation would be to protect the confidentiality of the respondents, by only doing analysis as a whole group and not to present data that could lead to their identity being deduced. Other obstacles would be that the response rate could be low, as staff could be busy or on long leave during the year end period. A possible solution would be to open the survey for at least three weeks or to provide gifts and prizes for early birds. This would encourage a high response rate which will lead to more representative results. Discretion should be exercised when interpreting the results.
There should not be over-generalizations from the findings, as the sample might not be fully representative of the entire population. Hence, there is a need to conduct focus group discussions to discuss and verify the conclusions from the survey. ? 4. Interpretation of Survey Results The analysis of the survey was done in 2 stages. First a topline analysis of the overall mean and variance scores, calculated based on a 6 point scale are presented. Then correlation studies based on the results of pairs of questions are carried out so as to give a deeper understanding of the results of the survey.
Survey scores The 3 areas of the survey were on i)Job Commitment ii)Perception on the quality of training received iii)Perception and attitudes towards training A. Job Commitment #ItemMeanVariance 1I intend to work for the company for the foreseeable future4. 62. 0 2I am satisfied with my job5. 31. 1 3I am utilizing my full potential at the company3. 81. 8 4I rarely think about leaving this company to work in another company4. 01. 7 5Those who contribute the most to the overall success of our group are the most highly rewarded4. 11. 4 B. Perception on the quality of training received #ItemMeanVariance Employees receive the necessary training to do their jobs. 4. 62. 0 2I am satisfied with the training and learning development opportunities in the company job. 3. 81. 1 3The training I received is relevant to my work. 3. 51. 9 4The quality of the training I received for my current position in the company is satisfactory. 3. 81. 5 5I am clear on my training and development roadmap. 2. 82. 0 C. Perception and attitudes towards training #ItemMeanVariance 1b) The training that I received prepares me for more challenging assignment3. 71. 3 2Training opportunities are evenly allocated across work units. 3. 52. 3The training that I received increase my ability to compete for jobs at next level of responsibility3. 62. 5 4My supervisors/team leaders support efforts to learn outside the job (e. g. , conferences, cont. education, membership in trade or prof. org. )3. 51. 3 5a) Training and development is an important factor in employee retention4. 20. 8 Overall, survey respondents were positive on their job commitment in the company, with a majority indicating Agree or Strongly Agree (overall mean of 4. 36, variance 1. 5). The perception on the quality of training was also positive, although of a smaller scale ( overall mean 3. , variance 2. 3) ,especially for staff clarity on their training roadmap. For Perception and attitudes towards training, it was also positive (overall mean 3. 7, variance 1. 3). The results of the survey will be used in the discussion during the next step, which is to carry out Focus Group Discussions. Interpretation of Survey Results : Correlation Study For the correlation study, the responses to the following questions were paired: Graph 1: “I am satisfied with my job. ” (Job Satisfaction) and “The quality of training received for my current position in the company is satisfactory. (Quality of Training) Graph 2: “I rarely think about leaving this company to work in another company. ” (Loyalty to company) and “I am satisfied with the training and development opportunities in my present job. ” (T&D Opportunities) Graph 3: “I am intending to work for the company in the foreseeable future. ” (Future Intention) and “Training and development is one of the most important factors in employee retention. ” (Employee Retention Factor) Graph 1 has a correlation coefficient of 0. 84, indicating the presence of a positive strong relationship between the responses to both questions. Graph 2 has a correlation coefficient of 0. 3, indicating the presence of a relatively strong positive relationship between the responses to both questions. Graph 3 has a correlation coefficient of 0. 54, indicating the presence of a positive correlation between the responses to both questions. From the correlation graphs above, we can see that there is a positive relationship between training and development and employee loyalty, which supports our hypothesis. However, there are also instances whereby employees leave the organization after receiving training, or holding their company ransom for a pay increment to match their new competencies.
As such, although there is a relatively strong correlation between training and employee retention, there are clearly other factors that affect employee loyalty, and further research has to be done to explore this area. After the survey, the following proposed action plan, including a Focus Group Discussion, will be carried out to find out more about employee retention factors through qualitative research. Other findings from the survey revealed that staff that had been sent for training and development courses in the last three years, as well as staff who have worked for more than 5 years, tended to have lower scores than the rest.
The Action Plan also includes a list of action items that the HR Learning and Development Coordinator can implement to better complement the training that employees receive, so as to better retain them with the company. Conclusion Based on the results of this survey, training and development is shown to have a positive impact on employee loyalty within the company. However, other factors must also be taken into consideration in determining employee loyalty, including job satisfaction, compensation and benefits, as well as career progression paths.
Additionally, research can be done to also find out whether the employee’s age group, type of job as well as the level of position held, have any correlation with the length of the employee’s stay with the company. More importantly, a follow-up research should be conducted to ascertain whether the Action Items listed served to enhance the training, and retain the employees. ? Reference List Ferri-Reed, J. (2011). Whatever Happened to employee Loyalty. Retrieved from http://www. CLOmedia. com Murray, KY. (2011). Employee Development and Retention Begins with Training. Retrieved from http://www. rweb. com/releases/2011CAJONESMGT/04KYWINS/prweb8340260. htm Palmer, M. Shift in focus: It’s an employee’s market. Retrieved from http://www. ceridian. com/recruiting_article/1,6266,15762-69450,00. html The history of human resource development (HRD) (2011). Retrieved, from http://www. cipd. co. uk/hr-resources/factsheets/history-hr-cipd. aspx#link_1 The Korn Ferry Institute (2011). Leadership Transformation powers growth for firms in Asia Encyclopedia of Busines, 2nd ed. Training and Development. Retrieved, from http://www. referenceforbusiness. com/small/Sm-Z/Training-and-Development. html