Whilst Learning & Development, Risk & Compliance, and HR professionals played a leading role in supporting thousands of tenured and new recruits to meet the demands of remote working during the pandemic, maintaining and improving employee competency levels – whilst adhering to an ever-changing compliance and policy landscape – was a difficult proposition. 

Based on four pandemic studies from leading artificial intelligence provider, Elephants Don’t Forget, CEO – Adrian Harvey – takes a retrospective timeline look at how organisations coped with the enforced changes to maintaining and assessing employee competency, and poses the question: are firms really learning what attaining and assessing true competency means? 

March 2020: ‘The conduct-breach ticking time bomb for regulated financial firms’
As the PM, Boris Johnson, announced the first UK lockdown on 23 March 2020, we hosted a webinar titled: Covid-19 proves to be SM&CR (Senior Managers & Certification Regime) litmus test, on the 28th of May 2020. 

From the 100 attendees participating – the majority of which were senior individuals from regulated financial firms responsible for ensuring that their organisation was adhering to their duty of responsibility in relation to maintaining competency, training, and conduct needs of their employees – were asked: 

“Since Covid-19 emerged and home working soared, has your employer provided employees with specific training to help them adjust to working from home, communicating differently, and adapting to new types of risks presented by different working conditions?” 

47% of the respondents openly stated that their firm had not implemented or provided any new Training & Competence (T&C) provisions to upskill their employees’ knowledge to mitigate competency-related conduct breaches. 

Whilst regulated financial firms were supported by the Financial Conduct Authority (FCA) by allowing them to defer individuals’ Continuing Professional Development (CPD) for 12 months, the expectation for firms to be able to demonstrate that their employees remain competent to carry out their work during the pandemic remined a primary requirement. 

As the FCA states, firms ‘must review employee competency and training needs regularly’ and ‘consider changes in the marketplace, products, regulation and legislation’. They must also look at the ‘skills, expertise, technical knowledge and behaviour of employees in practice’. Ultimately, firms should ‘make sure appropriate training is provided so employees remain competent’ and they will need ‘to monitor and regularly assess the training’s effectiveness to make sure it meets objectives’.1  

Whilst our polls are not indicative of the practices of all firms, in the two-month period since lockdown one was enforced, half the firms in attendance openly stated that they had not revised their T&C schemes to reflect the changes of their employees working from home (WFH). 

Mobilising the workforce to WFH at this stage was to be applauded, but ‘forgetting’ to train employees to deal with the unique confidentiality and security risks that WFH presented at that time undoubtably may have inadvertently facilitated the number of conduct breaches waiting to happen early on. 

December 2020: ‘Lifting and shifting’ training online: was it having a positive outcome on engagement and employee competency?
We then distributed a survey to over 2,000 UK Learning & Development (L&D) professionals across a broad spectrum of industries in December 2020 with the objective of evaluating the sentiment as to their achievements, concerns, and primary issues in relation to working through Covid-19.2  

The responses indicated that: 

• 92% stated their organisations were now including more digital learning content and virtual support in their strategies. 

• 84% stated that they had or were implementing an online knowledge store that employees could access.  
• 65% stated that the volume of their self-selection training materials remained the same or had decreased during the pandemic.  
• 3% stated that they had seen a large uptake in employees engaging with self-selection training materials online. 
• 68% stated that their primary concern was that employee learning would suffer because of a lack of peer-to-peer contact.  
• 94% said they would now prefer to use a combination of face-to-face and digital learning in the future.   

Again, whilst our study is not indictive of the WFH learning methodologies that all organisations deployed during the pandemic, there was a contentious and polarising question raised by the survey feedback. 

Was there an expectation from some businesses that by simply ‘lifting and shifting’ their existing default training materials online – often characterised by one-size-fits-all e-learning, PowerPoint presentations, refresher courses, self-selection documentation, and informal (digital) one-to-ones – that they would maintain (and realistically improve) existing levels of employee competency, KPIs and productivity in the same way as in a work from office (WFO) setting? 

With a lack of peer-to-peer learning, coupled with an expectation for employees to self-elect to training, competency depletion and knowledge fade would have resulted. In a WFH setting, it is also inevitable that – on some occasions – employees would also be far less likely to operate within the documented and trained processes, leading to falling compliance standards, potential misconduct issues, and ultimately, reduced levels of customer satisfaction. 

February 2021: Assessing & evidencing competency remains an ongoing issue for organisations
In February 2021, we then hosted a T&C webinar and polled a cross-section of 200 risk and compliance professionals from financial firms. 

When asked if their approach to T&C had now changed since the beginning of the pandemic, 40% of respondents stated they had still made no updates.  

We also established that 66% of firms were ‘not confident at all’, ‘slightly confident’ or only ‘somewhat confident’ that their Senior Managers could demonstrate a consistent approach and application to T&C, with just 10% of participants stating that they were ‘completely confident’. 

‘Attaining’, ‘maintaining,’ and ‘evidencing’ competency were collectively recorded as the top three ranking primary issues. 

April 2021: Confidence in evidencing genuine competency reveals concerning potential misalignment
In our latest study, we polled 250 participants – the majority of which were senior managers of firms that were authorised by the FCA or planning on going through the process within the next 18 months – in our April 2021 webinar: FCA Authorisations: what firms need to know in 2021. 

On a scale of 1 – 5 (1 being ‘not confident’, 5 being ‘completely confident’) we asked them how confident they would feel in evidencing competency within their firms to the regulator now if required. 

64% stated they would be ‘fairly’ or ‘completely’ confident. 6% of respondents stated that they were ‘not confident’, with 21% noting that they were ‘completely confident’.  

In this study, we wanted to focus our attention on determining any potential disparities that may exist between the ‘Tone from the Top’ and the ‘Tone from Within’ by actively asking members of senior management bodies in attendance how confident they felt in terms of evidencing competency in their respective firms. 

As the previous February 2021 study had indicated that T&C revision and outcomes-based evidence of competency was an ongoing issue, the conflicting responses were surprising and called into question what senior management individuals deem to be appropriate and satisfactory evidence of employee competency. 

In conclusion, our pandemic timeline studies suggest that it is more crucial than ever that organisations are aligned on their competency management schemes and can confidently assert that they know what the competency level of each of their employees are at an individual level.  

Otherwise, how can firms confidently say they are mitigating people-based risk, developing individual in-role skills, and that their employees have objectively demonstrated that they understand what it means to operate within regulated and documented processes? 

It is also relevant to note that we conducted a three-year study (2017–2019) and analysed over 72 million individual employee interactions from some of the world’s best-known brands to establish an average baseline of competency within firms. The study indicated that that the average level of tenured employee competency within organisations (pre-pandemic) stood at 52%.3  

The significance of this study means that employees either only need to know 52% to perform their role optimally or that the additional 48% is lacking and is potentially having a serious detrimental impact on the productivity and governance practices within firms.  

If some businesses are still reliant on traditional competency management methodologies, characterised by annual refresher training and one-size-fits-all e-learning, it is fair to say that it will be almost impossible to objectively evidence true and ongoing competency levels in your organisation; certainly not to any sort of standard that will support genuine employee knowledge development and evidence that they know the business-critical information that you need them to apply day to day.  

If you are thinking of your competency and compliance management program in any other way than with a goal to generate evidence-based information to improve your people and your business, you are ticking a box when it comes to training.  

To gain competitive advantage for the future – especially with a returning workforce to re-train who will have suffered serious knowledge fade – it is time to think critically about how employee competency seriously impacts the bottom line of your entire operation.