In these difficult economic times, with many businesses under pressure to decrease costs and increase efficiencies, some companies are neglecting employee training and knowledge development.
But in an increasingly globalised economy, where a greater importance is being placed on knowledge-based activities, the development of employee knowledge is critical for businesses to remain competitive.
An April 2009 study by Paul Mizen, economics professor at the University of Nottingham and fellow at the Centre for Growth and Business Cycle Research, University of Manchester, entitled `Knowledge – The New Commodity,’ revealed that in the midst of the current economic crisis, many of the world’s top economies, like the UK and US, have decreased their investment in knowledge development.
In fact, says the report, in 2008, more companies reported a decline rather than an increase in staff development in these industrialised countries.
This is not the case in many developing markets, such as Asia. The study revealed that fewer Asian firms are planning to decrease their investment in staff and training – instead they have chosen to reduce budgets elsewhere.
These results suggest that emerging market countries are putting themselves in a viable position to surpass industrialised countries when the economy recovers by investing in employee knowledge development.
Companies everywhere should take note of this, whether they are part of a well established industrialised nation or are new to the global market, they should continue to target their staff investment where it delivers the best return now and in the future.
Whilst these findings may be shedding new light on the importance of companies’ investment in their knowledge base, employers still need to work out how to accomplish this. One effective solution is to implement customised knowledge training and development programmes.
Often, these programmes are centred on regularly administered employee assessments, which are designed to measure knowledge and competence, in conjunction with confidence. The additional measurement of confidence is critical because it provides a more complete view of the employee.
If employees lack complete confidence in a certain job area, they are less likely to perform to their highest potential. Conversely, if they have total confidence in incorrect knowledge, they are more likely to pose a risk to the organisation.
Such assessments give managers, often for the first time, complete visibility of the skills, knowledge levels and competence of their entire workforce, enabling them to make informed and accurate decisions on how best to use them; when to promote individuals.
And if they are faced with a redundancy situation, it ensures they have the insight and information needed to make the right decisions.
Delivering regular customised employee assessments can also help companies tackle employee misunderstanding which can be incredibly costly not only in terms of time and money, but also customer relations and business reputation.
Last year, a report from the industry analyst firm IDC, entitled `Counting the Cost of Employee Misunderstanding,’ revealed that one in four employees do not understand certain aspects of their job role and that major knowledge gaps remain unaddressed in many organisations.
A misunderstanding can range from misinterpreting a policy, process or job function, to a combination of all three.
These kinds of misunderstandings are inevitable, but they can also be incredibly expensive – the report estimates that UK and US. Businesses lose 18.7 billion pounds a year as a result of employee misunderstandings.
Assessment programmes also help identify `knowledge custodians’, the `go-to’ people that have mastered the ins and outs of the business and are a consistent and reliable knowledge resource for other employees.
The discovery of these knowledgeable employees is vital for employers, especially when companies are faced with difficult lay-off decisions, as this critical information provides additional selection criteria when determining which employees have the most knowledge about the business and should be retained.
Vital industry knowledge, experience and understanding can then be transferred to new employees when the company starts hiring again.
Whilst the economic downturn continues, employee assessments can be used to identify those employees with transferable skills. Managers can use the information provided by assessments to redistribute individuals into other job roles confident in the knowledge that they provide the `best fit’ for the new positions.
They also provide valuable insight for employers to administer other forms of intervention, such as redeployment, coaching, mentoring, and training for certain employees.
And with today’s rocky economic climate, it is critical for executives to have a clear view of their workforce so they know how best to utilise their staff.
Similarly, such assessments offer insight for employees and are something staff members should be requesting of their employer so that they can be assured that they are up-to-date on company policies and industry standards.
They also help employees know that they are doing their job accurately and reaching their full potential – something everyone would like to be assured of during such unstable times.
Being able to improve and build on existing training programmes is another benefit of assessment-based knowledge development programmes.
Because they demonstrate what employees have learned and what areas need more attention, executives can shape their training programmes to be more specific and effective in the future.
This kind of information will help better prepare future employees for their roles and could save companies the time and money that would otherwise be lost in misplaced and ineffective training programmes.
Rather than put employee development and training on hold in a recession, investing in knowledge now will deliver a competitive advantage in the long term.
Delivering regular employee assessments provides managers with critical insight into their employee base, enabling them to make intelligent and accurate decisions about how to best use their staff to maximise business performance.
What’s more, they highlight the company’s vulnerabilities so they can be addressed immediately. Individual performance can also be improved through training specifically targeted at enhancing their skills, which in turn, will impact the company’s business performance.
With fast emerging Asian companies placing an increased emphasis on knowledge development and investment in training, this is not the time for companies in the industrialised world to put their employee development on the back burner; that would be a risk too great to take.
Mary Clarke, CEO, Cognisco can be contacted via www.cognisco.com
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