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Trimming the training budget?

Training is seen as low hanging fruit ripe for cutting, but doing so will have longer term consequences.

July 5, 2015   by PLANT STAFF

Training subsidies are available through Canada Alberta Job Grants. PHOTO: THINKSTOCK

Training subsidies are available through Canada Alberta Job Grants. PHOTO: THINKSTOCK

There may not be a shortage of skilled workers nationally, according to a federal government labour assessment released last year, but there’s certainly one in the West, especially in certain sectors.

A 2014 survey on the skills shortage conducted by the Canadian Council of Chief Executives among its membership reported 40% of western companies cited skills as a major concern for their industries, and Alberta as most prone to shortages.

Areas of major or moderate concern on the industrial side include energy, utilities, mining, construction and manufacturing.
Which fields are of greatest concern? Engineering, technologists and technicians, information technology (including web stuff and cyber security) and journey people with Red Seal credentials (which respondents expect will be even more troublesome over the next five years).

But another issue has come to light. A new report by the Canada West Foundation, a nonprofit that conducts public policy research, finds that missing job skills across the board are sapping western Canada’s productivity.

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The study, which uses data from the Organisation for Economic Co-operation and Development (OECD) and a Statistics Canada analysis from 2011, shows essential skills such as math, reading and writing are lacking among 40% of employees across occupations and job types in all sectors.

The report says shortages are evident among: half the people who didn’t finish high school; nearly one-third of 16- to 25-year-olds; 30% of university graduates; Aboriginals on or off reserves; and immigrants.

Why are employees missing the essentials? Education systems haven’t kept up with an increased demand for skills; and employees who aren’t using them are losing them.

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Employers can help boost the quality of these skills, which do matter: higher essential skills mean higher employee retention rates, lower absenteeism, better health and safety records, increased customer satisfaction, reduced need for supervision, increased production quality and increased productivity.

Canada West cites one recent study that found a 23% rate of return on a training investment of $2,500 per employee in the first year.

Yet training and development is often seen by employers as low hanging fruit ripe for cutting, and they may be running up their costs by doing so.

This is especially true when skilled employees leave.

A report by the Human Resources Institute of Alberta (HRIA) in Calgary notes employee turnover costs range from $13,000 to $20,000 per staff member, depending on the size of the organization. Hiring and training costs average $16,090.

HRIA emphasizes the importance of retaining skilled employees in the right jobs, and SAIT Polytechnic in Calgary reports employers are increasing applied management training.

Indeed, Rod Miller, associate vice-president of corporate training solutions at SAIT, says there has been a 163% increase over the past five years. “The fluctuating economy means … companies are looking to be more efficient and effective and their business and training plays an important role in that.”

SAIT identifies Enbridge Inc., the Calgary-based energy company, as a believer in training and development. Employees have access to a range of training options through Enbridge University with a focus on practical skills such as project management, leadership, and communications that have a direct impact on productivity.

Make the most of your training budgets by doing the following:

  • Focusing on essential industry skills and leadership development.
  • Explore different training methods, such as online learning.
  • Look for new funding options from sources such as Canada Alberta Job Grants .

The Global Human Capital Trends survey by Deloitte University, the consulting company’s learning centre in Westlake Tex., found 85% of corporate respondents cited learning as “important” or “very important.” That’s up 21% from last year, but there’s an enormous capability gap between the importance of the issue and the ability to respond.

Companies can close the gap by looking into new approaches such as MOOCs (massive open online courses), digital learning tools, video offerings and new cloud-based training systems.

This article appears in the May/June 2015 issue of PLANT West.