Monday, 22 December 2008

Pay rises consigned to Room 101 – how about training?

By William Franklin, Director, Maven Training

The current economic climate is making many people worry, with food and fuel prices rising and house prices falling, circumstances are getting difficult. At Maven Training our mission is to help our clients achieve optimum performance, be they SME’s or large organisations, even though this can be challenging when their employees find it difficult to meet the commitments of both family and working life.

Clients are coming to us and saying “I’ve got to spend my limited resources on either developing the best staff or give them a salary increase.” In fact this request by beleaguered line managers is not confined to periods of economic stress. Even during the good times, line managers are often under pressure to pay their staff more to keep them doing the same job.

Salary vs. Development

It’s easy to think that paying staff more money will result in them becoming re-energised, re-engaged and recommitted to the business. However, over 90% of employees are on a fixed salary which means they know what they will earn each year. They also know roughly what their colleagues earn and how much a similar job would pay elsewhere. Managers therefore have to determine whether an inflation busting pay rise for a few key staff will make any difference let alone ‘the’ difference.

Let’s do the maths:

As we can see, a 5% increase in basic salary would result in a net monthly benefit to staff of between £46 and £148 per month. Even with an extraordinary 10% increase in basic salary, the maximum benefit to a high wage earner would be less than £300 a month and management have to ask themselves the question; “will this be sufficient to ensure their commitment to the organisation?”

Assuming the same job will continue to be undertaken by the employee following the pay rise, the only certain outcome for the company is a higher fixed cost base and lower operating margins, as higher salary does not necessarily translate into higher productivity.

So what else can organisations do to make sure their staff feels valued such that their commitment and enthusiasm remain with the business?

This is where Maslow's hierarchy of needs comes in. Written by Abraham Maslow in the 1940s, it defines the 4 key levels of an individual's physiological needs leading to the final psychological stage of Self Esteem. While many managers will recognize this model, applying it to the area of job security within an economic slow down is a new approach.

What we see is that job security, the ability to pay the mortgage and feed our families, sits towards the bottom of this hierarchy. It is this aspect we at Maven Training find particularly interesting - as companies start reviewing the staffing levels, how do you maintain job security among your staff?

In a survey conducted by the Institute for Employment Studies over 10,000 employees were asked, what contributed most to their level of job satisfaction. The answers in descending order were:

1. Training, development and career
2. Immediate management
3. Performance and appraisal
4. Communication
5. Equal opportunities & fair treatment
6. Pay and benefits
7. Health & safety
8. Cooperation
9. Family friendliness
10. Job satisfaction

It is interesting that Pay and Job Satisfaction, two areas that organizations would expect to rank much higher, actually came in at 6th and 10th respectively whilst Training, Development and Career Management took the top spot. What is even more interesting is that the original survey was carried out in 2003 and in each subsequent year Training and Development has remained the number one driver of job satisfaction.

So if management is to accept the idea that staff training and development has a significant impact on employee engagement, what are the costs likely to be?

An on-line health & safety course could cost £50. A chief executive coaching programme may run to £2500 per day whilst a mid-level five day could be about £1500.

When you compare your return on investment for training and development against a straight forward salary increase, the financial benefits are immediately clear. After a relevant and worthwhile training course, the employee returns to work feeling inspired, re-energised and valued with a new level of knowledge and understanding which they can apply to their job and working environment.

The tangible benefits of a salary increase are less clear.

So why should an individual ask for more training?

- Training is a direct investment in the business and as such is more likely to be approved than a salary increase
- Time out of the office to develop new ideas and re-energise
- Learn new skills that enhance your career

…and why should a company offer its staff more training?

- Training is a direct investment in the business, a salary increase is a cost
- It will increase individual, team and company performance
- The individual will feel valued and more likely to fully engage with the business

Even though the uncertain economic climate looks like it’s going to be with us for a while, we can take measures to ensure employees feel motivated and secure. There is also the added benefit that when the economy does turn round, the individuals and companies who follow this strategy will not only have faired better during the downturn, they will also be better placed to take advantage of all the opportunities we know will arise as confidence returns to the market.

Friday, 19 December 2008

Training during the recession

On the 26th October 2008 the UK Commission for Employment and Skills published an open letter to UK employers in The Sunday Times.

This is not the newest piece of news out there, but we thought of sharing it with you anyway – mainly because it states that investing in training is a good idea in recession times, and how could we possibly disagree with it? Jokes aside, this is a very serious article, and we are behind it, more because we believe in what it says than because we are a training company. So here it goes:

“As leaders of major businesses, business organisations and trades unions in the United Kingdom, we are absolutely committed to investing in training.

In an economic downturn, there is always a temptation for businesses – large and small – to cut spending on staff training. When times are tough, it looks a simple way to cut costs.

But it’s a false economy. Research in 2007 confirms that firms that don’t train are 2.5 times more likely to fail than those who do! Now is precisely the time to keep investing in the skills and talents of our people. It is the people we employ who will get us through. When markets are shrinking and order books falling, it is their commitment, productivity and ability to add vale that will keep us competitive.

Investing now in building new skills will put is in the strongest position as the economy recovers. Skills to support the development of new products and services will shape whether we are ready to gain competitive advantage when growth resumes. From our experience in previous downturns, it was the businesses that did invest in their staff which saw the most dynamic recovery.

Even in these difficult times, there are real opportunities we should seize. In many businesses, it will be easier to find the time to release staff for training. Larger businesses could strengthen their supply chains by developing training in partnership with suppliers. For individuals, committing to training is the best way to maximise future employment opportunity. And there is a wide range of training available now for businesses to use from colleges, universities and training providers, many of them publicly funded. Through the work of the UK Commission for Employment and skills, employers are making sure that this training is simple to access, clear and easy to use, and adds real economic value.

The skills of our people are our best guarantee of future prosperity – and the best investment a business can make in challenging times. We must not pay the price of failing to invest in the talent on which our future will be built.”

Letter Signed by

Sir Michael Rake
UK Commission for Employment and Skills
BT Group Plc

Mervyn Davies CBE
Standard Chartered plc

Brendan Barber
General Secretary,
Trades Union Congress

Richard Lambert
Director General,
Confederation of British Industry

Sir Stuart Rose
Business in the Community
Marks and Spencer plc

Wednesday, 10 December 2008


Hi, and welcome to the Maven Training Blog!

We are launching our blog in a time of unprecedented turbulence in the economy. Although we’ve been planning our blog for some time, it seems pertinent that we’re launching it now as there has never been a time where we feel the need to reach out to the people and the organisations we work with. At times like these, we have to do a lot to help each other through, try to remain positive, and keep hoping that things will settle down sooner rather than later.

We’re first-time bloggers, but when we decided to launch this idea, our aims were:

* to open yet another channel of communication with our clients, partners and with anyone who’s somewhat involved in the project and programme management industry;

* to contribute to the intellectual development of our market sector by offering our insights, knowledge and understanding of what is going on in the world of projects and programmes;

* to relay news about the courses that we offer – you know, up-to-the minute information on refreshes, new exams, these things;

* to offer advice about study skills and share our experiences from the classroom;

* and finally, and most importantly, to get closer to you, our delegates and clients – it’s you we care more about, it’s with you we want to share so much and it’s from you that we need most information!

We think it’s important, on this first post, for you to get to know us better – that’s why we’re inviting you to browse through our other four sites – links to which you’ll find at the end of this post, on the pretty colourful boxes at the bottom of this page. Please take your time to understand who we are and, if you want to contact us directly, you can do so by calling us on 0207 403 7100 or sending an email to (quoting ‘blog’).

In time, we want the blog to become a space where you can provide us with your views, and where the Maven Training team can share their experiences with you – from our super helpful sales people to our dream-team of excellent trainers, everyone here will have a chance to share the love, so watch this space for weekly updates, and we look forward to being visited by you!

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