'Invest in training your employees, especially now’
The corona crisis has affected many companies worldwide. One of the measures companies are considering taking to recover financially is to reduce training budgets for employees. However, that is not a wise move, argues Prof. dr. Andries De Grip.
In addition to being a Professor of Economics at Maastricht University’s School of Business and Economics (SBE), Andries de Grip is the Director of the Research Centre for Education and the Labour Market (ROA). Throughout his career, he has conducted a great deal of research on the effectiveness of training professionals. ‘I can understand it in a way that some companies are considering reducing their employee training budget as a result of this crisis’, says De Grip. ‘If your company is in deep water, then everything is extremely short-term oriented. But it is, of course, a very weak strategy to keep your company afloat in the longer term.’
Two reasons to invest now
De Grip believes that right now, in the middle of this corona crisis, companies should invest in training their employees. ‘Simply because many studies show that training employees can have a very high return. In 2012, Jan Sauermann and I published a study in The Economic Journal that found that one week of targeted training can lead to a 10% increase in employee productivity. These particular trainings focused on the so-called skill gaps of the employees, which means they had a direct need for that training in their daily work. The study also showed that targeted training increased informal learning among employees. After the training, they had a sharper eye on what they were doing and therefore got more out of their work. Another very interesting outcome was that their direct colleagues' productivity appeared to have increased because they received all kinds of tips from their trained colleagues. Of course, the impact was less important than for those employees that received the training.’
De Grip adds: ‘A second important reason for investing in training right now is the positive signal that you send as an employer to your employees. You show them that they work for a good employer that has confidence in its own future. You indicate that you want to keep your employees on board, which prevents them from job shopping.’
Publication McKinsey & Company
Andries de Grip's opinion is also supported by a recent publication by consultancy firm McKinsey & Company, titled “To emerge stronger from the COVID-19 crisis, companies should start reskilling their workforces now”. It states that even before the current crisis, changing technologies and new ways of working were disrupting jobs, and employees need other skills to do them. The coronavirus has made this need more urgent. McKinsey & Company even advises companies to increase their training budget during this time of crisis in order to cope with the changes. They must then ‘craft a talent strategy that develops employees’ critical digital and cognitive capabilities, their social and emotional skills, and their adaptability and resilience’, states the publication.
De Grip agrees with the advice from McKinsey. ‘As with other crises, you can see that the corona crisis reinforces certain trends. We have been conducting research within the metal and electrical engineering sector for years, and it shows among other things that a number of skills are becoming increasingly important for technically trained people. We expect that this will also apply to other professions. These skills, which we call PROFI skills, largely correspond to the skills mentioned in the McKinsey publication. In Dutch, PROFI stands for Problem-solving ability, Relationships with customers, Dealing with change, Flexibility and Initiative. The corona crisis makes the importance of these five competencies even greater. Dealing with change is currently a very valuable competence, but problem-solving ability stands above the rest. It is not without reason that this is part of many programmes and courses offered by Maastricht University. During a crisis like this, we see that the new ways of working from home and the search for a renewed revenue model for the one-and-a-half-metre-society are increasing the need for problem-solving ability and the other PROFI skills.’
Andries de Grip is Director of the Research Centre for Education and the Labour Market (ROA), Professor of Economics at the School of Business and Economics (SBE), Maastricht University and Associate Dean Strategy and Collaboration of SBE.
This article is part of 'We're Open', a series of stories about the UM community’s many activities during the coronavirus pandemic.