Research* reveals there’s “a gap in knowledge and understanding about training could be setting businesses up for a fall”, amid growing concern about dropping productivity and potential rises in job losses.
Following the Great Resignation, businesses have faced a challenging environment for growth- more so with the triple threat of rising interest rates, the cost of living crisis, and wage inflation. A major concern for businesses in 2024 will be the impact of these challenges on their ability to sustainably operate and grow – with talent a key vulnerability and potential Achilles heel.
imc is issuing a stark warning to businesses that managers must take a proactive approach to learning and development, as they reveal that 42% of managers are not consistently looking at ways to develop and train their teams – a sure sign that the full potential of employees is not being harnessed. 43% of employees expressed in imc research they want to develop in their current role – and 92% expressing that this directly impacts their loyalty to their role.
The ONS revealed in their Q1 2023 Productivity Overview that output per hour in Q1 decreased by 0.6% year-on-year, the weakest annual growth in a decade (excluding the pandemic). Despite this, average labour compensation per hour increased by 1.7% year-on-year. While productivity is falling, the cost of labour is increasing, meaning that if businesses don’t take active steps to improve productivity and encourage employees to want to develop in their roles, they are actively eating into profits.
In 2024, imc is now warning businesses that fail to properly train, develop and track the progression of their employees, may become vulnerable to rising redundancy, or even insolvency. While redundancy intentions remain low, the CIPD recently revealed they have continued their gradual rise since 2021 – likely driven in part by stagnant inflation and rising interest rates. 19% of private sector employers are planning to make redundancies this quarter, while 20% of public sector employers are planning redundancies – up from 12% last quarter.
Paired with this outlook, last month’s Insolvency Service’s data reveals that while insolvencies are slowing, there were 2,308 in August 2023, 19% higher than in the same month in the previous year, showing that there is still a significant risk to jobs and businesses must take proactive steps to safeguard job roles and boost productivity. Research by imc revealed earlier this summer that there is a direct link between employee engagement and training, but 28% of managers don’t know how to or don’t measure the success of training, while 56% of managers are failing to meet regulation, sustainability, or legal compliance requirements with their training.
The gap in knowledge in managers’ understanding around training, how to develop L&D pathways, and how to implement KPIs could come from attitudes towards development of senior team members – with 22% of managers surveyed reporting that they don’t get enough training, despite 81% of managers having seen an impact on their team’s performance after training.
Claire Raistrick, Senior Global HR Business Partner for imc Learning, says:
“At imc, we work with businesses every day to help bridge the gap between employee engagement and role maximisation. The challenges that come with the cost-of-living crisis, labour shortages, and wage inflation, mean that many businesses may struggle to keep up costs in 2024. With recruitment harder than ever, it is more important now than ever to ensure that business leaders maximise productivity for each of the members of their team and fulfil their potential.
“A gap in knowledge and understanding about training could be setting businesses up for a fall. Implementing training pathways can help educate managers on the long-term benefits of training, and developing these in partnership with a training specialist can tailor the KPIs and training pathways can optimise the potential of each team member.
“We recommend that all business leaders review how training is used in their business to see where the strengths and weaknesses are. If you aren’t developing your team, you could be leaving it vulnerable to poor retention, disengagement or even redundancies. Take steps now before it’s too late.”
Research from imc Learning (imc)
