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Businesses are flush with cash, but aren’t putting it into training

By | February 13, 2013, 8:11 PM PST

Many businesses today have an embarrassment of riches — “they can’t get rid of cash fast enough,” according to a report by USA Today’s Matt Krantz. “After a fourth year of higher profit, companies’ piles of cash are approaching yet another all-time high. They’re on pace to have $1.06 trillion in cash, based on estimates from S&P Dow Jones Indices…. Cash is piling up despite companies’ efforts to dispense of it by buying back stock, increasing dividends and investing in capital and equipment.”

One place all that the cash isn’t going is worker training or retraining. In fact, a new Accenture report finds, half of all workers fear they do not have the adequate skills to perform their current jobs — and say their employers aren’t doing anything to help. Only 38 percent reported that their employer looks at all of their talents and capabilities when deciding how to best utilize them. In addition, only 53 percent of workers report that their organization documents their skills. Only 49 percent of workers believe their employers help them develop in-demand skills to ensure they remain marketable and highly effective.

The report, written by Diego S. De León, Katherine LaVelle, and Susan M. Cantrell, all with Accenture, warns that organizations need to start getting more proactive about dealing with looming talent shortages. It’s paradoxical, the researchers note — “even though millions of people are unemployed, organizations are hard-pressed to find the skills they need.” Worldwide, as much as 34 percent of employers are having difficulty filling open positions; the situation is worse in the United States (52 percent), Brazil (57 percent), India (67 percent) and Japan (80 percent).

Accenture recommends that employers do a better job of planning and reaching out for the skills they will need to support growth in the years ahead. some recommendations:

Make skills development part of everyday work. “Help current employees make learning new skills a component of their everyday work. Activities like peer-to-peer learning through social media can be far more helpful in this effort than slower-moving educational institutions or traditional training departments. Only 21 percent of respondents from an Accenture survey said they acquire new skills from company-provided formal training; this trend is likely to accelerate as new forms of learning take hold and pressure to develop new skills keeps mounting.”

Create “frictionless” internal talent markets. The path needs to be cleared for employees to move to where their skills are needed inside the organization. “Accenture survey results reveal that only 34 percent of workers find it easy to shift to another job in their company where their skills would make the biggest difference.”

Use data-driven talent sourcing. Organizations can’t sit back and wait for talented applicants to find them. Instead, they need to “proactively seek out the talent they need and use analytics to quickly identify and attract the best individuals. To do so, they will gather and analyze a rich array of data on criteria such as candidates’ previous job performance, current skills, motivation, cultural fit, work interests, work competition results, samples of actual work, social media contributions, and geographic preferences and restrictions. Currently, 60 percent of respondents to an Accenture survey said that they would be willing to make such information about themselves available to potential employers, as long as it was done in a confidential and controlled manner.” Traditional resumes listing a candidate’s work experience and education “won’t cut it anymore,” the report adds.

Go global in talent searches. “Organizations are increasingly finding the skills they need in locations other than where those skills are needed. To surmount this challenge, HR professionals will need to know how to locate, source and manage talent on a global basis. They will also need to adopt virtual work policies and lobby for government policies that enable skills to flow to where they’re most in demand.”

(Photo credit: U.S. Bureau of Labor Statistics, Occupational Outlook Handbook.)

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Joe McKendrick

About Joe McKendrick

Joe McKendrick is a contributing editor for SmartPlanet.

Joe McKendrick

Joe McKendrick

Contributing Editor

Joe McKendrick is an independent analyst who tracks the impact of information technology on management and markets. He is the author of the SOA Manifesto and has written for Forbes, ZDNet and Database Trends & Applications. He holds a degree from Temple University. He is based in Pennsylvania.

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Joe McKendrick

Joe McKendrick

Joe McKendrick is an independent consultant and editor. Joe has performed project work for the following companies in the IT marketspace: IBM, Systinet/HP, Teradata. He has performed project work for the following organizations in partnership with Unisphere Research (Unisphere Media): IBM, Oracle Corp., International Oracle Users Group, Oracle Applications Users Group, Professional Association for SQL Server, International DB2 Users Group, International Sybase Users Group.

He writes for SmartPlanet and is not an employee of CBS.

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+2 Votes
+ -
What we are seeing, we should not be paying for training to fix.
Many job applicants lack basic math and verbal skills. We have people with high school diplomas who cannot read at an 8th grade level. We have people with college degrees who can hardly write at a report at a high school level.

Basic education is deeply flawed in the US. Instead of bashing companies to pay for more training, how about you pressure our government to do a better job with public education.

Our local applicant pool got so bad about 10 years ago the company I work for got into an work study program with a local private high school. The kids get paid better than minimum wage for their work during the school year and can only keep the job if they stay in school with good grades. These are inner city kids from lower middle class families who are often on scholarships to the private school and want to succeed in life.

After a full orientation where they are treated as adults, often for the first time in their young lives, each student is assigned a mentor who is responsible for teaching the young man or woman about what is expected in a corporate culture. Dress codes, work schedules, behavior (with customers and coworkers) and team work are top of the list for expectations set and skills taught.

Most students get offered part time summer jobs. A few have continued to work summers while in college.

10 + years later more than half our full time company supervisors are graduates of the program.
Posted by Hates Idiots
Updated - 14th Feb
0 Votes
+ -
Perhaps an extra year of pre-school will fix the problem
That's what the President seems to think. It's a 7-1 payoff too.
Posted by JohnMcGrew@...
14th Feb
0 Votes
+ -
Why is it the responsibility of a business to train an employee?
It's a question similar to the other one where one could ask, "why is it the responsibility of an employer to provide healthcare for its employees"?

But, regarding the employee training...

I recall a few companies in which I worked, where they actually paid for training classes and even brought in trainers into the offices, to train people for a new skill set which would benefit the company and employee. Many of those employees, would take the training, and use their skills to assist the company in getting ahead, but, to the employees, the bigger benefit was that, they could take the training and use the new skill set to gain experience within the company, and then, they'd have another great skill to add to their resumes in about a year or two, when they could then go out and apply for a better job or a higher position, simply because, they were made more valuable to themselves and to whatever company got their services after that new training and experience. I saw that very often, and it still happens. Some companies require a commitment of a certain period of time that the employee must remain at the company after the training, but, the expectation was always that, soon after that period of time, that the employee would soon be looking for greener pastures.

Also, and the article failed to mention it, corporations are dealing with very uncertain business environments right now, and investing on employee training is not going to be a big concern for them right now, and they'd rather save the money for the expected tough periods which many of them expect. When government has become so intrusive and so expensive with heavy taxation and heavy regulations and new and expensive social programs (like Obamacare), then, companies are not going to be spending as much as they would during better times.

The article above talks about corporations hoarding cash to the tune of $1.06 trillion, but, there are reports which put that at more than $2-3 trillion. That's and indication of a business sector that is running scared, and with good reason. Everything comes with repercussions, and big government is causing businesses to be very cautious and frugal.
Posted by adornoe
14th Feb
0 Votes
+ -
Not to mention...
...that in the current "buyers market" for employees, there's little need to do so. There are plenty of pre-trained people available for most jobs. In fact, the problem for employers today is filtering out the overqualified. Colleges & universities are currently packed with people killing time getting more education, simply because there currently aren't any worthwhile jobs for them in the working world.

Now, in 1998, the world was a much different place; Companies were happy to pay for training if that is what it took to fill slots. But we won't be in an 1998-like economy for quite some time, if ever.
Posted by JohnMcGrew@...
14th Feb
0 Votes
+ -
On the flip side
1) Companies would keep their people longer if they helped train them up more. Considering as high as unemployment still is, people are not 'that' eager to jump ship in many places

2) Thanks to all the offshoring idiocy, there's a distinct lack of middle skill-level people. So training would be needed, and if they won't do it, they won't get the skills

3) If they have THAT much money... Then PAY THEIR PEOPLE MORE. All too often the hardest workers make the worst pay. Given, as I said before, people are less likely to jump-ship in this economy, but they will if they think they're being treated badly enough (paid poorly enough, etc), so make them want to stay.. pay, better benefits, etc.

4) If they've got that much money, put it in to improving business more. Do an upgrade that will keep things going better for 5-10 or more years.. etc, etc, etc.
Posted by jonrosen
14th Feb
0 Votes
+ -
Again...
...in a "buyers market", why should they?

Companies are hoarding cash because of the uncertainty imposed by Washington. Nobody can or dares impose a business plan more than a few months ahead. If they weren't constantly worrying about having the rug pulled out from underneath them, I'm pretty certain they'd do exactly what you suggest. Until then, it's pretty much like laying ones head on the chopping block on purpose...
Posted by JohnMcGrew@...
14th Feb
0 Votes
+ -
You, again, are not paying attention to the causes that force
corporations into the situations they find themselves in.

When the economic environment is as rotten as it is today, spending money on training an employee, would be wasteful to that company. Offshoring is a way to get around having to train people, and the cost of doing business with big government is what has forced most of that offshoring.

Pay attention to the markets and to the economy in general, and you'll notice that, as government got bigger and bigger, the economy got smaller and smaller, and more and more jobs were lost, and more and more companies shipped their operations overseas. Big government has huge repercussions, and we are witnessing those repercussions everywhere, including the U.S. and all of Europe and in Asia. Blaming corporate America is not what's going to solve the problem, while blaming big and intrusive government might get people to start paying attention and perhaps things will start turning around.
Posted by adornoe
14th Feb
0 Votes
+ -
good for you
Good for your company to take a proactive approach to training. However, any sort of PAID training program is rare these days. Most places are more than happy to use the value of interns without compensation.
I often read articles about the difficultly of finding qualified candidates, poor math skills, the inability of graduates to form complete sentences. So, I take the pre-employment math test: "Oh, we never had anybody get everything correct before!" Was there a job offer? No, because I don't have years of verifiable experience performing the exact same task, on the exact same machine, running the exact same software which they need me to operate, and they can't wait a day for me to get up to speed.
Now, I must return to my never-ending job search.
Posted by captainanalog
14th Feb
+1 Vote
+ -
You missed the core of the program.
The students are going to a good school. A private school.

They have the core math and verbal skills to make it worth teaching them the business skills.

We are NOT teaching them the basics of math and English.

The bottom line still is that public schools are not getting the job done on teaching the basic skills of math and English.

We may have what you consider a progressive training environment, but even we will not pay to train those skills. We should not have too.

Another point. Being paid for business skills training the company mandates is the law in most western countries. If you do 40 hours of mandatory training with a company they have to pay you for it, unless you are signed onto an unpaid internship program. In that case, all bets are off on what the company does and does not pay you for.

For unpaid internships you generally must have above average core skills to even get in the door. The goal of the internship being that you have the opportunity to learn about the business.
Posted by Hates Idiots
14th Feb
0 Votes
+ -
To the point
Here is an example. I worked in the printed-circuit board industry thirty years ago. We were trained in house and produced multi-layer PCBs for the likes of Telex, Hayes, TI, et al.. That industry largely disappeared, going overseas or proprietary.
I learned to solder as a child. I learned to solder properly in electronics school, been doing it for over thirty years.
Both of these industries are slowly returning to domestic production. That should mean that my skills are in demand. There's just that one little thing, IPC certification. Over $1000 to certify that I can do something I've been doing for over 30 years, and the company is not going to pay for that.
For me it's the cycle of the modern economy. Recession hits, go back to school, get more training, graduate, recession hits......

BTW: I am a graduate of public schools and universities. Most of the Vanderbilt kids I know need a calculator to tally their dart scores, so much for private education.
Posted by captainanalog
14th Feb
+1 Vote
+ -
That is a different case.
You are the prefect example of where a good company would ask you to demonstrate your skills before hiring. Once hired they should pay for your certification or offer to reimburse your cenrtification after 1 years employment.

If you are still looking for a job I recommend you try both options as negotiating points.
Posted by Hates Idiots
15th Feb
0 Votes
+ -
Disagree with reimbursement of education, since,
the employee took the training to better himself and get proper compensation in a job that can use that training. The training the employee got for himself, was just so he could qualify for the job that his new employer had.

Then, once the employee quits that one company and goes to a new company, would that new company also have to reimburse the cost of the training that qualified the employee for a similar job at the new company?

Besides, no company, with the current state of the economy, will be eager to reimburse an employee for something which the employee did to better himself, and not necessarily the company.
Posted by adornoe
16th Feb
0 Votes
+ -
Initially...
Schools were set up in the early 1900's to provide well educated fodder for the industrial age. The focus on college education was because, suddenly, we needed a lot of smart, well trained people.
Industry and education worked together to set up curriculums that made sense and provided the basics of a good education that colleges could build on.
Through the 1950's this was the case, The 1960's changed, then the 70's, then all of a sudden, "equality" set in. Everyone got a ribbon, everyone got a trophy, no one got grades or all grades were "A" or "B". No one got left behind.
What a load of crap! Now businesses decry the ability to find anyone qualified. It's simple if you don't build competition into learning, there is no reason to expect schools to excel.
I've been in tech since before the PC. Have we had enough social PC yet?
If you haven't seen "Idiocracy" or read "marching morons" by Cecil Kornbluth. Take a minute and do it.
Time to get people into the education system who understand the end result of education (or de-education).
We became the world's powerhouse because we deserved to be: Education, Innovation, Competition.
Isn't it time to do that again?
Posted by dar1p
24th Mar
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