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Pre Hire Training…Investment or Cost

Article first published in Hindu Business Line across all editions

An economic growth engine is well-oiled only if it has a steady supply of skilled resources.If India has to sustain the current pace of growth in its knowledge economy or meet the many ambitions of its private enterprise then a complete overhaul of its many institutes that impart vocational skills is needed.

While nearly 5 million students graduate every year from a thousand colleges and universities, nearly half of them are not employment-ready due to insufficient English language and cognitive skills, according to a recent report.

What is severely lacking in mainstream education is the absence of industry-specific skills and domain knowledge. Often, the skills taught in our technical institutions are not tailored to meet the needs of the industry, resulting in a higher unemployment rate among fresh graduates.

The oft-cited Nasscom-McKinsey study revealed that only 25% of the engineering graduates are employable. The number of unemployed educated youth between the ages of 15-29 has been growing in urban India and stands at 10 percent for males and 23 percent for females.For urban India, graduate unemployment is 8.2 percent while unemployment among post-graduates is slightly lower, at 7.7 percent.

The employability gap is not limited to India alone. According to the U.S. Bureau of Labor statistics, unemployment rates for those with bachelor’s degrees or higher are still much better — at 3.8 percent — than those with only a high school diploma, which was 7.4 percent in May. Clearly, unemployability is a huge problem globally since candidates are not work-place ready.

So what does this mean?

A new recruit is considered work-place ready, if he/she can contribute to the company’s growth by efficiently handling the day-to-day tasks. However, the first-day-first-hour ready workforce is a myth. Typically, IT companies allocate 3-4 months of training at an average cost of Rs. 200,000 per employee to make the freshly-inducted employee productive.
In non-technical domains, the training varies between 2-4 weeks. Is it any wonder that companies these days are considering pre-hire training as part of the standard induction process?

Pre-employment programs are generally short courses, comprising skill sets identified by industry as essential for entry into the industry or occupation. It could be soft skills such as interpersonal skills, collaborating with stakeholders in multiple functions and geographies, cross-cultural interactions, multi-tasking, project management and cognitive skills.

While earlier, individuals aspiring to hone or upgrade skills opted for pre-hire training, nowadays, corporates are beginning to include pre-hire training as part of the recruitment process.

Pre-hire training: An investment or cost

Consider this: For every employee who falls short of expectations, an organization will have to bear costs equivalent to two and a half times of an individual’s salary. An unproductive new hire may weigh on the company’s efficiency rate and costs as the company ends up spending a lot on training and mentoring.

Training costs make up nearly 2-3 per cent of total staffing budget. Organizations realize that training is not a luxury but a necessity. Besides streamlining existing training programs for new hires to include mobile training and self-paced learning programs, what if there is a more time-tested way to harness new talent.

Pre-hire training enables you to do just this. Small and medium-sized businesses especially in non-IT related sectors find it easier to hire and do their own training. Starting on a blank slate allows a company to instruct the employee more easily about the company’s protocols and processes. It is easier to estimate training time to bring the recruit to speed.

Even though pre-hire training may be more expensive on a per employee basis the company will save a lot more in the longer run. Companies can train employees in skillsets relevant to their industry. A pre-hire training program can be the gateway to an organization’s growth if the industry works with the academia to mobilize and train resources in relevant skill sets. Through pre-hire training selected candidates can be trained on IT skills, practical use of machines, project management, communications and team work practices. They can be given practical knowledge and significant on-the-job training to bring their skill levels on par with regular employees.

Developing skilled workers enhances their efficiency and flexibility; skills bottlenecks are reduced and skilled workers are able to contribute to the company’s growth and help in economy building. Educational institutions are starting to give vocational training its due especially in a gloomy job market where the IT, BFSI and retail sectors are not hiring at the fast clip they normally would. While the debate is still on whether it should be the corporate sector or the academia that takes on the onus of pre-hire training, it cannot be contested anymore that employable skills are a necessity for graduates and post graduates in a hyper competitive economy.

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Effective Corporate Training: How Companies Can Make the Difference

An organisation’s greatest asset is its skilled human capital. Constant change in technology is making training an integral part of any business. But despite the huge jumps in corporate training, there are gaps in implementation. Tracking the training process, getting optimum feedback, and understanding whether the process has been successful in delivering real-time results is critical.

Effectiveness is gauged on two parameters: one, the degree to which the programme achieved the stated objective and second, the ratio of the cost of the training to the return. There are also different types of training. While product, sales or technical training teach specific skills, workshops on leadership, team effectiveness, attitudes, ethics, integrity and diversity are focused on the intangibles. It is tough to gauge the benefits of the latter as results vary from individual to individual.

In such a backdrop, what can companies and trainers do to ensure effective corporate training?

New imperatives

There is a gradual shift from the general to the specific courses. Certain basic processes such as understanding business drivers for training, knowing delivery and content, assigning subject experts, pre-training assessments, preparing trainees, delivering business-specific customised courses, post-training assessments and follow-up assistance are integral parts of the new requirements of corporate training. There is also the need to increase the value and return on training investment by designing courses which are clearly aligned with corporate strategy. Precise and powerful training framework should be directed to achieve key business goals. Smart companies are also realising that one-time induction training or annual process training programmes are inadequate.

Offering different types of training modules at different stages in an employee’s career programmes can be best tracked if they are customised to suit the needs of individuals based on the specific problem at hand. Sometimes, the results are apparent if it is a one-time module designed to address a specific dilemma.

The key to effective training function is active participation by all stakeholders, including learning managers, HR managers and learners’ managers. Senior leaders should be actively engaged at every stage, right from need identification, and conceptualising the training programmes to conducting sessions. HR managers or the team that assesses training needs in an organisation and designs and manages such programmes must remember that while the main ingredients of a training module may remain constant, the methodology used needs to evolve continuously.

Keeping a constant track

What also sets successful companies apart is their ability to keep a tab on changing aspirations of their people and their ability to adapt their training modules to emerging needs. Good old established companies like Punjab National Bank have also realized the essence of improving customer service through extensive training programmes to bring service at par with private sector global banks and also to upgrade skills of employees. Around 30,000 employees including bank managers and employees at various levels and locations recently underwent customer sensitization programme.

Another important aspect is to track the impact of a particular training procedure. Managers should ensure that the learning is well directed and yields effective results. They must also quantify abstract data such as how are employees responding to the programme and how is it translating into everyday work. Hard data can be used to review if the training is working or requires improvement.

Thanks to the focus on building a sustained learning environment, employee training in India is big business and has grown into approximately Rs 5,000 crore business, with potential to grow further. But unless companies take steps to ensure effectiveness of training, they would be throwing away good money.

 

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