TRAINING AND WORKFORCE DEVELOPMENT IN SME S MYTH AND REALITY


 TRAINING
AND
WORKFORCE
DEVELOPMENT
IN
SME’S
–
MYTH
AND
REALITY
 
 Many
feel
that
SME’s
have
a
minimal
role
in
the
training
and
development
of
the
wo...
Author: Lester Bennett
4 downloads 0 Views 41KB Size

 TRAINING
AND
WORKFORCE
DEVELOPMENT
IN
SME’S
–
MYTH
AND
REALITY
 
 Many
feel
that
SME’s
have
a
minimal
role
in
the
training
and
development
of
the
workforce,
however,
I
 would
 like
 to
 challenge
 that
 conventional
 wisdom
 by
 highlighting
 that
 their
 contribution
 is
 more
 significant
than
perhaps
currently
believed.
 
 I
will
explore
the
significance
of
SMEs
to
the
skills
policy
agenda,
pointing
out
the
relative
importance
of
 SMEs
as
employers
and
as
potential
sources
of
increased
productivity,
innovation
and
competitiveness.

 The
relationship
between
skills
and
qualifications
may
be
problematic
with
the
potential
for
mismatch
 between
public
policy
aspirations
and
the
priorities
of
SME
owner/managers,
however,
raising
skills
and
 productivity
to
enable
Oman
to
compete
in
a
global
economy
is
a
significant
challenge
that
we
should
 face
head
on.
 
 There
are
ways
in
which
many
SMEs
can
improve
their
practices
in
relation
to
workforce
development
in
 ways
 that
 will
 enhance
 their
 own
 business
 performance,
 the
 prospects
 of
 their
 employees
 and
 the
 competitiveness
 of
 the
 global
 economy,
 but
 should
 the
 government
 be
 providing
 more
 structured
 support?
 
 The
availability
of
the
skills
that
are
needed
by
SMEs
is
crucial
and
there
is
a
need
to
get
a
lot
of
people
 currently
 in
 the
 workforce
 trained
 to
 higher
 levels.
 
 
 
 When
 considering
 training
 and
 development
 in
 SMEs
 it
 is
 important
 to
 recognize
 that
 the
 concept
 of
 skills
 is
 multi
 dimensional
 and
 means
 different
 things
 to
 different
 people.
 
 More
 generally
 skills
 can
 be
 seen
 in
 terms
 of
 social
 attributes,
 general
 education,
training,
qualifications
and
technical
skills.

The
relationship
between
skills
and
qualifications
 is
particularly
relevant
in
the
case
of
government
policy
as
qualifications
are
seen
as
the
most
common
 measure
of
skills
in
the
economy,
however,
it
cannot
be
taken
for
granted
that
someone
who
possesses
 a
 skill
 has
 a
 certified
 qualification,
 neither
 can
 it
 be
 taken
 for
 granted
 that
 someone
 who
 has
 a
 qualification
has
the
necessary
skill
to
work
in
a
particular
industry,
occupation
or
job.

Within
the
SME
 context,
 it
 is
 the
 ability
 to
 do
 the
 job
 that
 takes
 precedence
 and
 whilst
 qualifications
 may
 play
 an
 influential
 role
 in
 the
 recruitment
 and
 selection
 process,
 there
 is
 little
 evidence
 that
 the
 qualifications
 play
a
material
role
in
terms
of
actual
delivery
within
the
job.
 
 There
remain
many
employers
where
the
systems
to
support
skills
development
are
less
structured
or
 almost
non‐existent.

SMEs,
particularly
the
smallest,
are
notoriously
informal
and
unstructured
in
terms


of
 human
 resource
 management
 and
 investment
 in
 training
 and
 development.
 
 They
 may
 not
 have
 a
 Human
Resource
professional
in
the
business
to
champion
training
or
to
develop
and
manage
systems
 and
processes
to
encourage
skills
acquisition.
 
 Much
 skills
 acquisition
 occurs
 naturally
 as
 part
 of
 everyday
 operations
 and
 is
 informal
 or
 incidental
 however
there
is
a
need
to
formalize
this
for
the
smaller
organizations.

Since
skill
levels
are
linked
to
 national
performance,
the
under
provision
of
training
in
small
firms
perhaps
needs
to
be
addressed
by
 public
intervention
to
raise
training
provision
in
small
firms.
 
 There
is
evidence
that
shows
that
training
and
development
is
associated
with
lower
rates
of
business
 closures
 and
 that
 less
 new
 business
 start
 ups
 will
 fail.
 
 It
 may
 be
 the
 case
 that
 many
 SME
 owner/managers
are
not
convinced
by
the
business
case
for
training
and
development.


 
 One
difficulty
to
address
is
that
the
SME
sector
is
shorthand
for
a
highly
diverse
group
of
organizations
 which
happen
to
share
one
key
characteristic
–
they
employ
relatively
few
people.

Beyond
this
number,
 there
 is
 far
 more
 variation
 than
 there
 is
 commonality.
 
 Some
 compete
 in
 very
 local
 markets,
 others
 operate
 on
 a
 global
 stage.
 
 Some
 use
 very
 simple
 technology,
 others
 operate
 at
 the
 cutting
 edge
 of
 innovation
and
technical
change.

Some
have
dramatic
growth
aspirations
and
plans
whilst
others
seek
 stability
 and
 consolidation.
 
 Sector
 is
 of
 course
 a
 further
 key
 factor
 that
 influences
 the
 propensity
 of
 SMEs
to
undertake
training.
 
 Furthermore,
 the
 size,
 scope
 and
 nature
 of
 SMEs
 changes
 on
 an
 almost
 daily
 basis.
 
 New
 firms
 are
 created,
 others
 cease
 to
 trade,
 some
 remain
 unchanged
 for
 many
 years,
 whereas
 others
 are
 growing
 and
changing
rapidly.

 
 SMEs,
 particularly
 those
 at
 the
 smaller
 end
 of
 the
 spectrum,
 are
 not
 scaled
 down
 versions
 of
 large
 enterprises.

Evidence
suggests
that
the
amount
SMEs
spend
on
off
the
job
training
increases
with
firm
 size
and
that
larger
SMEs
have
more
formalized
training
practices.

Sometimes
SMEs
undertake
training
 because
 of
 their
 relationship
 with
 customers
 who
 may
 insist
 on
 various
 types
 of
 training.
 
 Evidence,
 however,
 shows
 that
 staff
 turnover
 in
 organizations
 that
 offer
 training
 and
 development
 to
 their
 employees
is
less
than
in
those
that
don’t.

Consider
the
investment
in
training
against
the
expense
of
 identifying,
recruiting
and
settling
in
a
new
employee.

Not
undertaking
training
is
a
false
economy.
 Unless
 there
 is
 a
 specialist
 or
 experienced
 person
 within
 the
 SME,
 there
 appears
 to
 be
 little
 focus
 on
 formal
 training
 but
 this
 does
 not
 mean
 that
 training
 does
 not
 happen.
 
 Very
 often
 the
 approach
 to


training
 is
 informal
 within
 SMEs
 and
 there
 is
 considerable
 evidence
 to
 support
 the
 view
 that
 such
 approaches
are
the
most
appropriate
to
ensure
that
the
employee
has
sufficient
skills
to
meet
current
 requirements
and
business
objectives.

The
usually
close
relationship
between
the
owner/managers
and
 their
 employees
 means
 that
 they
 can
 normally
 satisfy
 themselves
 of
 the
 competence
 of
 individual
 employees
 without
 recourse
 to
 external
 assessors
 or
 examining
 bodies.
 
 A
 common
 approach
 to
 skills
 development
in
SMEs
is
through
direct
supervision
and
corrective
coaching
by
an
experience
manager
 or
 employee.
 
 Unless
 there
 is
 a
 legal
 requirement
 to
 accredit
 such
 training,
 there
 is
 little
 value
 to
 be
 realized
by
the
business
from
doing
so.
 
 A
 further
 factor
 that
 discourages
 many
 SMEs
 from
 pursuing
 formal
 training
 is
 the
 cost
 and
 disruption
 associated
with
employees
needing
to
leave
the
workplace
to
attend
courses.

Of
course
this
is
an
issue
 for
 all
 types
 of
 organizations,
 however,
 if
 an
 organization
 employing
 5
 people
 sends
 one
 on
 a
 training
 course,
 this
 represents
 20%
 of
 the
 workforce.
 
 Training
 costs
 may
 also
 be
 greater
 than
 in
 larger
 firms
 where
 there
 are
 economies
 of
 scale
 and
 discounts
 available
 for
 larger
 numbers
 of
 attendees
 on
 programmes.


Whilst
the
cost
of
training
is
often
clear
to
an
SME
owner/manager
the
returns
are
often
 less
clear
and
this
is
likely
to
influence
the
investment
decision.

Another
fear
is
that
the
employee,
once
 trained,
 will
 leave
 to
 seek
 better
 paid
 employment
 with
 their
 new
 skills
 and
 qualifications.
 
 This
 also
 applies
to
larger
organizations,
but
the
argument
is
that
losing
one
key
employee
could
be
devastating
 for
an
SME
whereas
larger
organizations
expect
a
degree
of
turnover
and
usually
would
build
this
into
 their
manpower
plans.

Surprisingly
evidence
from
Europe
shows
this
not
to
be
the
case.

A
study
which
 tracked
the
progress
of
SMEs
found
little
evidence
of
employees
moving
to
new
employment
as
a
result
 of
training
received
–
quite
the
reverse.


They
felt
more
loyal
and
committed
to
their
employer
for
the
 opportunity
of
personal
development.
 
 The
question
of
whether
there
should
be
government
policy
on
training
which
would
apply
for
SMEs
is
 therefore
a
difficult
one
to
answer.

Easy
access
to
funding
to
be
utilized
as
the
business
requires
would
 be
far
more
beneficial
than
providing
a
training
course
for
SMEs
to
send
employees
on,
as
this
is
unlikely
 to
 be
 the
 right
 course
 at
 the
 right
 time
 for
 their
 employee
 given
 the
 huge
 differences
 already
 mentioned.
 
 Research
does
show
a
positive
relationship
between
training
and
SME
growth
in
terms
of
productivity
 and
turnover
but
also
that
there
are
shortages
of
skills
available
for
the
SME
market.

This
needs
to
be
 addressed
 to
 enable
 economic
 growth.
 
 It
 is
 therefore
 necessary
 for
 the
 government
 to
 adopt
 approaches
 that
 recognize
 the
 reality
 of
 the
 situation
 facing
 most
 SMEs
 and
 to
 help
 to
 facilitate
 solutions
 that
 build
 on
 existing
 good
 practice.
 
 For
 example
 there
 is
 some
 evidence
 that
 suggest
 that
 SMEs
want
bite
sized
accessible
training
but
there
is
little
evidence
that
shows
they
need
a
credit
based
 qualification
system.

SMEs
generally
value
the
application
of
skills
in
the
workplace
as
opposed
to
the
 accreditation
of
such
skills.


What
is
clear
is
that
simply
increasing
the
supply
of
skills
at
a
higher
level
is


unlikely
to
have
a
significant
impact.

It
is
vital
that
education
adapts
to
ensure
that
those
leaving
school
 are
prepared
for
work
within
an
SME
and
that
vocational
training
is
more
readily
available.
 
 It
 is
 clearly
 not
 possible
 to
 generalize
 about
 the
 workforce
 development
 activities
 required
 by
 such
 a
 large,
diverse
and
rapidly
changing
group
of
employing
organizations.

Nor
is
it
appropriate
to
attempt
 to
implement
a
one
size
fits
all
policy
approach
to
helping
or
encouraging
SMEs
to
develop
the
skills
of
 their
 workforces,
 but
 it
 is
 vital
 for
 the
 future
 development
 and
 growth
 of
 Oman
 that
 the
 workforce
 within
SMEs
is
developed
for
the
future.
 
 Given
these
challenges
facing
SMEs,
Competence
HR
work
with
many
SMEs
to
support
the
development
 of
 their
 employees,
 from
 assisting
 the
 SME
 in
 determining
 what
 the
 actual
 training
 and
 development
 requirements
 are,
 to
 sourcing
 or
 delivering
 the
 right
 training
 at
 the
 right
 time
 and
 ensuring
 that
 the
 learning
 continues
 after
 the
 employee
 returns
 to
 the
 work
 place.
 
 Training
 is
 not
 a
 ‘one
 stop
 wonder’
 and
needs
to
be
regularly
re‐enforced
and
refreshed.

Using
‘lock
in’
agreements
ensures
that
the
newly
 trained
employee
does
not
leave
without
paying
back
the
financial
investment
of
the
SME
company.


 
 Some
may
ask
whether
we
can
afford
the
resources
necessary
to
develop
an
improved
understanding
of
 SMEs
needs
but
given
the
contribution
that
SMEs
and
their
employees
make
to
the
economy
and
the
 benefits
to
the
economy
to
be
realized
by
their
growth,
can
we
afford
not
to?

We
are
focusing
in
this
 forum
on
the
economic
growth
and
future
of
Oman
–
it
is
vital
that
we
focus
on
the
growth
and
future
 of
Oman’s
SME
workforce
to
enable
Oman’s
economic
growth
to
continue.
 
 




SOME
INTERESTING
FACTS
REGARDING
SME
/
PRIVATE
SECTOR
 
 According
to
the
Ministry
of
Civil
Service:
 In
 2013,
 1085
 Omanis
 left
 the
 government
 sector.
 50%
 of
 Omanis
 who
 left
 the
 government
 sector
 moved
to
the
private
sector
(others
retired,
passed
away,
left
Oman,
or
resigned
for
health
reasons)

 Of
 these
 45%
 were
 of
 an
 education
 level
 of
 below
 high
 school,
 10%
 passed
 high
 school,
 12%
 were
 diploma
 holders,
 33%
 were
 degree
 holders
 or
 held
 a
 higher
 qualification.
 
 As
 can
 be
 seen
 the
 vast
 majority
are
not
highly
qualified.
 
 
 
 Of
those
leaving
to
join
the
private
sector,
only
10%
were
supervisory/management
showing
that
90%
 were
technical,
professional
or
junior
positions.


 If
 training
 is
 done
 at
 all,
 it
 seems
 to
 be
 focussed
 on
 leadership/management/supervisory
 training
 and
 development
but
what
about
the
other
90%?
 
 
 Current
plans
will
Omanise
106,000
positions
–
the
workforce
needs
to
be
trained
to
undertake
these
 jobs,
 increasing
 private
 sector
 Omanis
 from
 the
 current
 figure
 of
 approximately
 250,000
 to
 over
 350,000.


Training
will
be
vital

 
 177,000
Omanis
are
working
in
the
private
sector,
an
increase
of
19.3%
on
the
previous
year
(figures
as
 at
end
June
2013).
 
 1548
 Omanis
 found
 work
 in
 the
 private
 sector
 in
 the
 second
 week
 of
 March
 according
 to
 Ministry
 of
 Manpower.

These
were
primarily
in
construction,
wholesale,
retail
and
vehicle
maintenance/repairs
–
 primarily
needing
vocational
and
soft
skills
training