The role of training and education in enhancing organizational competitiveness and employee retention

HR Training

In most firms, people are considered to be one of the most important assets. Key people provide leadership, innovation and the raw talent to move the company forward and guide it towards its objectives. Large firms, especially those with many different operating divisions, need dozens, hundreds or even thousands of such individuals. One of the roles of the human resources department is to facilitate the attraction, retention and development of top talent. One of the tools at their disposal is that development is training and education.

In large corporations, training and education programs serve many different functions. One is that they allow employees to develop skills and competencies that can be applied to their jobs. In this way, the function adds value to an existing resource (the employee). However, there are other benefits as well, with respect to motivation and fulfillment. On the scale of human needs, salaries and benefits fulfill the employee's needs for survival and comfort (food, shelter, etc.) However, the employees' higher order needs are not met. Training and education programs can allow employees to attain higher fulfillment and self-actualization. Thus, not only do training and education programs enhance organizational competitiveness, they also contribute to improved employee morale and retention.

Organizational Competitiveness

In a manufacturing organization, raw materials are purchased and then put through a process to convert them into a finished product. The role of the company, therefore, is to add value to the raw materials. The same is true of human resources. Too often, employees are seen in terms of the skill sets they bring to the company. Instead, they should be viewed in terms of the skill sets they could potentially bring to the company. As with raw materials, a company can add value to its human resources, enhancing the firm's output.

This is especially true in today's society, when most firms are heavily oriented towards producing services rather than producing products. In a service-oriented economy, value is added not through a production process, but by the contributions of the different employees to the process. The companies that add the most value are ultimately the companies that are most competitive.

The contributions of employees are what adds value in most firms. To be competitive, therefore, a firm must have the best employees who can add the most value. The employee arrives at the company with a set of skills and knowledge that has bee acquired, in part at least, from previous training and education. By adding to this more training and education, the firm increases the value of that employee's contribution. Thus, organizational competitiveness is enhanced through the training and education that the firm provides to its employees.

Retention

It is worth noting that organizational competitiveness is only enhanced to the extent that the employee remains with the company. This holds true both for employees that receive additional training and those that do not. In an era when many firms report difficulty attracting and retaining top employees, training and education has become an important tool in retaining the best people. One study found that 37% of workers would switch companies for better training opportunities (Narisi, 2009).

According to Maslow's hierarchy of human needs, workers need to fulfill a wide variety of needs, up to and including self-actualization and esteem needs (NetMBA, 2007). These needs cannot be met with basic pay and benefits programs. Training, however, provides employees with a sense of achievement, a sense that they are making progress in their lives and their careers. In an information-based society, the most valuable workers will also tend to be the ones motivated by higher order needs. Training and education programs satisfy these needs, giving the firm a better chance to retain these key workers (Heathfield, 2009).

Morale

Meeting higher order needs is also critical for employee morale. There are many means to improve employee morale, one of which is continuing education and enhanced training (Hopkins, 1995). Training enhances employee morale in several ways. The first is that employees gain a greater sense of achievement, because they are progressing in their careers and lives. Another is that employees feel as though the company sees them as a valuable asset. Too often companies do not communicate the value they see in an employee. By offering training, the company is taking a vested interest in the employee's future. The absence of that feeling can cause employee dissatisfaction.

Conclusion

Training and education are a critical human resources function in the modern information-based economy. When a firm develops, or adds value to its human resources, it improves employee morale and boosts retention rates. This happens because the company is showing an interest in the employee and appealing to their higher order needs. Moreover, training and education programs contribute to the overall effectiveness of the organization by improving the organization's skill set.

Human resources departments can deliver training either internally or externally. They may set up training programs, or they may merely facilitate employees' using external programs. This can be done through direct payment of fees or through the reimbursement of fees. Each HR department will set the degree of involvement they want to have in the process. They will set limits on training spending for each employee, and can set limits on the types of training and education they wish to make available to the employees. The result should be a training and education program that fulfills the needs and demands of employees, while adding value to the organization by improving the skills and experiences of the workforce.

Works Cited:

Heathfield, Susan M. (2009). Training and Development for Employee Motivation and Retention. About.com. Retrieved March 27, 2009 from http://humanresources.about.com/od/training/a/training_dev.htm

No author. (2007). Maslow's Hierarchy of Needs. NetMBA. Retrieved March 27, 2009 from http://www.netmba.com/mgmt/ob/motivation/maslow/

Hopkins, Hampton. (1995). A challenge to managers: five ways to improve employee morale. Executive Development Vol. 8 No. 7 pp26-28.

Narisi, Sam. (2009) Survey: Employees would change their jobs for a better computer. HR Tech News Retrieved March 27, 2009 from http://www.hrtechnews.com/survey-employees-would-change-jobs-for-a-better-computer/

No author. (2006). Training Delivery. Hewlett-Packard. Retrieved March 27, 2009 from http://h10076.www1.hp.com/education/learning-solutions/ls_training_delivery.htm