Innovation in Skills Development Leading to Return on Investment (ROI). Gizelle Mc Intyre The Institute of People Development
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1 Innovation in Skills Development Leading to Return on Investment (ROI). Gizelle Mc Intyre The Institute of People Development
2 Introduction Innovation in Skills development can lead to ROI People Management impacts on the holistic performance of organisations.
3 Skills Development Process Assessment (Performance Management) Skills Needed to fulfil strategy Do needs analysis/skills Audits of current staff Company Strategy/Vision Workplace Application Implement Solutions (Training/Coaching/Mentoring) Design Solutions
4 Skills Development=Investment Long term and short term benefits Audit, plan and invest in skills for your people now and save by ensuring your competitive edge Investing in Skills Development may seem expensive upfront but the cost of unskilled labour far outweighs this! "An investment in knowledge pays the best interest." - Benjamin Franklin
5 Example Joe is an operator who makes on average 10 mistakes a day costing the company per month A skills audit (costing 3 hours of a SDF's in consultation with a supervisor observing for ) finds that the mistakes Joe is making is because of a step he was not taught in the correct sequence. Joe is allocated 3 hours time with a workplace coach costing 3 hours of the coach s salary ( ) during his regular operation of the machine Joe now makes an average of 1 mistake a day (due to other reasons) costing the company per month The initial investment of is saved within the first month of Joe making less mistakes This is a rudimentary example of how to work out the ROI of training.
6 Research According to a Business Day report in May 2013: CEOs are willing to improve their investment in skills 61% plan to increase investment in their workforce over the next three years. Companies doing genuine skills development could be in line for a more than 50% reimbursement now.
7 Skills Development is People People management relies on skilled managers! Foster a skills-hungry environment! (Learning culture) Engage employees in out of the box thinking about what skills are needed and why This will help them embrace new ideas, which could ultimately lead to new business aspects and new ways to make money. (ROI) Recognise achievement with more training/skills! Happiness comes when we test our skills towards some meaningful purpose. John Stossel
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9 Continuous Skills Development Stop being specialists, rather specialise! Apply Skills Development to all aspects of the company Upgrade your skills as much/as often as you upgrade products and services. Keep an atmosphere of Continuous learning and Professional Development in the company. Succession planning is strategically covered in skills development Learning is a lifetime process, but there comes a time when we must stop adding and start updating. Robert Brault
10 Skills Development=Efficiency Skills Development Audits allow for investigation into the organisation as a whole and gives valuable information about performance. Skills development requires you to rethink the inner organizational structure of your company and management, which increases efficiency. This factor alone can lead to enormous savings. (ROI) Managers who know the skills their staff have and require well, are more likely to avoid costly mistakes and errors in strategy.
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12 What is Competence? Reflexive Practical Foundational
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14 ROI formula The calculation of EVA (a SAB Miller model), the amount of money made over and above the cost of money invested in the business, including the cost of training. The formula would obviously have to first isolate the other dependent variables that may have led to the reduction of production costs, but can, very simplistically, be characterised as follows: If operating profit before training = R73 million and After training operating profit = R74 million, Then increase in operating profit = R1 million. If training costs = R , Then production costs have been reduced by R as a result of training.
15 Strategy=Skills Development Strategy should ALWAYS lead to Skills Development. This means you save money because it keeps you constantly coming up with better products/performance/strategies (and the skills you need to deliver these) than your competitors. (ROI) A business with skilled people and high performance margins is constantly growing and able to compete in even the toughest of economies. REMEMBER: If your competitors have all the skilled people, you will be left behind! "Businesses are struggling with a widening mismatch between the skills of their workforce and the skills they need to achieve strong growth. There needs to be a joint approach to addressing the problem, with businesses and governments working together to plug the skills gap," PwC human resource services director Gerald Seegers.
16 Research A global survey of more than 1,300 CEOs points to the availability of key skills as the second-biggest threat to business growth, just after the increasing tax burden (63%). This comes as South Africa s government cuts mandatory grants, or reimbursements, that are paid back to companies who engage in sector education training, from 50% of the 1% payroll levy to 20%. (Business Day Report May 2013)
17 Skills Development=Creativity Creativity is key for innovative success in Skills Development. Thinking outside the box allows businesses to come up with unique ideas. Designing new ideas instead of just coming up with them allows for an entirely new playing field in the world of Skills Development. Creativity is just connecting things. When you ask creative people how they did something, they feel a little guilty because they didn t really do it, they just saw something. It seemed obvious to them after a while. That s because they were able to connect experiences they ve had and synthesize new things. Steve Jobs
18 Skills Development=Competitive Edge Stay on top of the game with continuous improvement! Skills Development allows companies to be creative and stay engaged with their people and ultimately reach their goals. Skills Development is a key strategy for success in any organization. By engaging in new people management strategies, companies can save money and compete in this rocky, constantly changing economy. Do you really want to be the only company on your block without the skills you need to run effectively? An organization's ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage. Jack Welch
19 Benefits of Skills Development Promotes commitment and responsibility Builds the individual s confidence, morale and motivation Increases your people management efficiency Builds overall performance of your organisation Reduces staff turnover Enhances the working environment and makes it more productive, efficient and effective You are ultimately skilling the Nation for the Nation!
20 Benefits of Skills Development Improves communication between all levels within the organisation Leads to a safer and healthier work environment, and Proves that a knowledgeable workforce make better decisions, are more innovative and have a better understanding of the objectives of the company within which they work.
21 Thank you! Man often becomes what he believes himself to be. If I keep on saying to myself that I cannot do a certain thing, it is possible that I may end by really becoming incapable of doing it. On the contrary, if I have the belief that I can do it, I shall surely acquire the capacity to do it even if I may not have it at the beginning. Mahatma Gandhi
22 Contact Details Institute of People Development
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