March 23rd, 2011
Training critical for productivity improvements – new research
Businesses believe investing in better trained staff will improve productivity but in practice are more likely to change processes than people, according to a new research paper published by Industry Training Organisation (ITO) Competenz.
The paper entitled ‘Perceptions of productivity – How medium-sized businesses approach productivity’ revealed the majority of respondents gave an unprompted response of ‘better trained people’ as a key way to improve productivity yet, when asked what they actually did, most went on to invest in changing business processes over training their people.
“There’s a perception that it’s harder to train people than it is to change business processes, and clear evidence that businesses don’t know where to turn for guidance on training as a key part of the productivity improvement mix,” says Competenz chief executive, John Blakey.
Last year Competenz commissioned a survey of 200 medium-sized firms employing between 20 – 50 people to gauge their perceptions on how to boost productivity, and uncover what they actually invested in to make productivity improvements.
The research findings suggested that an investment in people rather than processes is the key driver in improving productivity.
Businesses that experienced high growth rates within the last two years favoured investment in people over high decline businesses who favoured investment in process.
The results also showed high growth firms experienced more actual business process improvements while high decline firms, who invested in changing processes more than in people, ended up with fewer improvements.
“Industry feedback indicates that staff upskilling has the effect of promoting innovative behaviour while the investment in skills also creates employees who are more capable and able to adapt to new technology.
“Investing in upskilling people should therefore be an attractive proposition for business owners,” Mr Blakey said.
“While investment in processes is important, investment in people is paramount for the long-term health of a business as well as reaping the full benefits of investment in processes.”
Worryingly, the survey also found that 78% of respondents would seek advice on lifting productivity but did not know where to turn for help; the remaining 22% said they would not even ask for assistance for a range of reasons, including that it was unaffordable, unimportant or the firm was too small.
The paper says New Zealand currently has no co-ordinated leadership from Government or the tertiary education sector around productivity improvement issues for businesses.
“Companies face a confusing array of consultants, gurus and disparate agencies when they are looking for sound and objective advice on improving their staff and processes,” says Mr Blakey.
“This presents a strong case for industry-owned training organisations (ITOs) being tasked to present independent and well-researched guidance.”
The Government’s new Productivity Commission which began operating in early April could be good for industries if it provided leadership and direction.
“The challenges faced by businesses to remain competitive have led to growing demand from medium-sized manufacturing employers for external support and advice on improving productivity and performance,” says Mr Blakey.
New Zealand faces a major challenge to improve its global competitiveness and lift productivity rather than continue to lag behind producers such as Europe and Australia, and ignoring the issue will only put us further behind.
“The effective development and utilisation of workplace skills is vital to improving New Zealand’s competitiveness and requires a focussed effort and strategic approach across training institutions, industry, unions and government,” says Mr Blakey.
Click here to download the full research
Competenz is the industry training organisation for the engineering, manufacturing, baking and food and beverage industries.
It assists companies to achieve greater efficiencies and increased productivity through the ongoing development of industry skills training and workplace learning.
For more information on training your people as part of a robust productivity improvement plan, contact Competenz on 0800 526 1800.