Training of employees increases the value of the company

Posted by June 7, 2020

Training of employees increases the value of the company

Modern business does not stand still – the market situation is changing rapidly, the company has to be flexible and in time to adapt to the new rules of the game. In such cases, it is often found that the specialists of the enterprise lack additional knowledge to achieve the goals of the organization. That is why there is such a demand now for the services of firms that can provide corporate training for employees. There are many such products. For example, a special training program may allow financiers to more effectively increase the shareholder value of the organization. Evgeny Kalyuzhny, partner of Deloitte & Touche, head of Deloitte Academy in CIS, told about the peculiarities of corporate training to the Consultant.

  • Yevgeny Gennadyevich, what are the corporate training programs?
  • As a rule, any company has short-term and long-term goals: to develop or improve the efficiency of the enterprise, to recruit new personnel and to smoothly integrate them into the work of the firm, to create a completely new organization or to restructure the existing one. All these specific tasks, which each individual company faces, can be solved through corporate programs. Before deciding which one to choose, it is necessary to make a competent diagnosis of the situation at the enterprise. After all, even a doctor cannot write a prescription to a patient without making a diagnosis. However, just as in medicine there are medicines without prescription – general tonic, as in the market of business education, in addition to corporate training programs, there are many different courses that allow employees to improve their knowledge. Thus, it is possible to draw a clear line between corporate training and other professional education. Corporate training in its purest form is designed primarily to solve business problems, rather than specific people working in the organization. Often enterprises use a mixed version of employee education. For example, when it is necessary to improve the skills of many employees at the same time. At the same time, the firm orders a program of a rather standard format, which is not directly related to the goals of the company itself.
  • It is obvious that there are many firms on the market that provide such services. Tell us about them.
  • Let us start with the fact that enterprises often turn to consulting companies to provide corporate training to their employees. Why exactly to them? It is quite natural that organizations that implement new systems can advise and teach how to use them. Almost all consulting companies provide services of an accompanying nature. For example, they can share the information received at carrying out of own examination. Sometimes the situation develops so that without corporate training of employees of the company-client the consulting project cannot be realized at all. Suppose the consultants have developed a certain system for the enterprise. In order to successfully implement it, it is necessary not only to explain what they have created, but also to prepare employees to use the new product. In this regard, the consulting companies have developments in the format of educational programs. Often they use corporate training services as a promotion of their basic services. Thus, for example, in society it is usually assumed that the person who teaches knows the subject well. Therefore, consultants who provide corporate training services to the client’s employees acquire a reputation of experts. In this way, they increase the demand for their basic services and increase the trust of clients. The latter, in turn, are always pleased when they are given the opportunity to train their employees. Therefore, such a relationship can be called mutually beneficial. After all, the corporate training service is one way of finding common ground with consultants. The client can better understand the project they propose to implement.
  • Such a product is developed individually for each specific customer company – taking into account its specificity, structure and capabilities? Or do organizations providing such services already have certain developments, algorithms that are designed for specific industries and activities?
  • If we talk about programs relating to financial disciplines, there is little room for creativity in this area, because the requirements for financial reporting are the same for everyone. Indeed, there are various options for more effective financial management, but nevertheless, they are generally known to everyone. Therefore, a training program is usually made as a mosaic – from some modules, developments, but for each company you get an individual picture. The uniqueness depends not on the structure of the company itself or a separate industry, but on those people who need to be trained. For example, the level of their initial knowledge will play an important role. Before embarking on the implementation of corporate education, it is important to assess what work these people are doing now and what they will have to do after training. Over time, the education system in a company may change. This will happen, for example, if new employees are added to the firm’s staff.

Of course, there are certain signs that are characteristic of enterprises in different fields. For example, in a manufacturing company, corporate training should focus on fixed assets, while in a mining company, the focus should be on reserves. But even so, the ‘mosaic’ of the training program will be based on a general principle, and only those elements that have no relation to the industry in question will be changed or removed. Usually all companies consider themselves unique. However, each business tends to have the same problems and there are limited ways to solve them. Therefore, uniqueness manifests itself at the level of personalities in a particular company.

  • Let’s talk a little about organizational issues. How does the training process go?
  • I would like to highlight the three most common scenarios. The first one is usually used when a large project is implemented inside a company. As a rule, such scenario is initiated by consultants who help the company, or the company itself comes to the conclusion that it will not be possible to carry out the reorganization on its own. In this case, the management of the company decides to use the services of consultants for corporate training of employees to help them rebuild and better understand the structure being created. Moreover, the diagnosis of the situation in the company will not have to be carried out from scratch, because the main task is already clear, the goal to be reached is defined. That is why experts who provide corporate training most often manage to “get to the goal” and create the most appropriate education program. The most unpleasant thing for a teacher of any course is to “get the wrong door”, i.e. to make a wrong opinion about who is present at the program and why. At the same time, a participant in the programme suffers because his or her expectations are not met.

The second scenario is as follows. Suppose a specialist of the financial and economic service sees the need to improve the quality of work of its employees. This may be caused by different reasons: there are a lot of new employees, or just at the moment there is an opportunity to train employees. The manager invites specialists to carry out diagnostics of the situation and work out a plan of personnel professional development. In this case, he does not mean one-time events, but a complete training system. Experts offer methods to assess the work of employees, identify gaps in the performance of their duties and ways to address them. The system then operates on an ongoing basis, and only once every six months or six months does a professional development assessment of employees take place. Based on its results, a special program of training activities is developed for staff at different levels of training. This option of corporate education also clearly defines the goal for which it is necessary.

The third scenario is the most common and does not depend on the company’s size or type of activity. Rather, the use of such variant of corporate training is caused not by a reasonable necessity, but by a general stereotype of management that employees need to be trained from time to time. Often such a course is used by firms as a way to motivate employees. That is why it is quite difficult to determine the true purpose of training with such an approach. As a result, it may be difficult to assess the need for corporate education within the company’s strategy.

It is unprofitable not only for clients, but also for the consultants themselves. If, in the end, the company’s management realizes that the money for employee training was not spent, it will logically draw a conclusion about the low level of professionalism of teachers. Therefore, serious consulting companies are trying to refuse such types of orders. Usually they are taken over by firms that are engaged in training as the marketing of their basic services. In this case, the client company gets a relatively inexpensive education for its employees, but does not get the expected effect.

  • Can you tell us briefly about the content of the course, which allows increasing the shareholder value of the company? For example, on what factors it depends and how to determine it correctly, when, what and under what circumstances should be changed in the work of the company to increase the value.
  • It all starts with a proper understanding of how this value is formed in principle. There are several models through which the creation of shareholder value in an enterprise can be described. One of them is a schema. Its elements are separate processes in the activities of the organization.

Let us consider one of them on the example of a large oil company. The first block includes everything that concerns the growth and revenue of the enterprise. In our case, it consists of two sub-blocks – the volume of production of the product and its price. It is also possible to determine which of these elements is actually affected. It is hardly possible to vary the price, as it is regulated by the market and the state through excises, taxes, etc. So you can immediately focus on the volume. By identifying in the scheme on the same principle all the elements that can be influenced in one way or another, it will be much easier for a financier to conduct an ongoing analysis of decisions affecting the shareholder value of the company.

Training of employees increases the value of the company
  • So how do you properly increase the value of the company? It is difficult to imagine how this training program can help the CFO. After all, he can read all the information in the relevant literature. Or such a product contains special methods, practical examples of their implementation and allows you to acquire certain skills in this area?
  • Indeed, the methods of increasing shareholder value are known to every experienced financier. However, the training program, in addition to filling knowledge gaps in some narrow areas, teaches the financier to look at each situation from different angles. The company’s operating system is presented in the form of a diagram, where the whole picture is broken down into separate elements. At the same time, the manager constantly reviews it on the principle of “from the general – to the details” and analyzes it. This seriously changes the decision making process itself. The latter can be broken down into stages: the collection of information, its analysis and the direct development of decisions. With the first two, as a rule, no problems arise – these procedures are well established in domestic companies. But with the development of solutions are often difficult because the head is not always able to intelligently understand what to do next with all the information available to him. The main effect of the educational program manifests itself in the fact that it allows the head to change the way he thinks and get out of the long-established framework. After all, they often prevent him from “looking around”. As a rule, during the course of the training, experts invite participants to learn from the experience of a major international corporation. To which they often react inadequately, believing that the problems of the organization in question have nothing to do with their business. However, when people are fully trained, they realize that what they are doing is not exceptional, but the course of thought should be non-standard. It is important to learn how to apply some new principle of one system to another and make unconventional business decisions.

Among other things, I would like to note that the very fact of corporate training can also increase the value of the company. Since market participants will draw the following conclusion: the company trains its employees, it means that it is focused on long-term development and will implement new projects. Such reputation allows the company to attract more serious partners, investors and clients.

  • And lastly, it is not superfluous to touch upon the issue of the cost of such a product. What does it depend on?
  • The question of money is more of a limiting than a decisive factor. Corporate training usually costs much less than a radical consulting project. The price of a product first of all depends not on the content of the educational program, but on the size of the client company, the number of employees to be trained and the level of their initial knowledge.

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