The shortcut costing us more in the long run

Dear friends,

Ever been running late and tried to take a shortcut that ended up taking even longer? If you’ve ever switched lines at the checkout only to regret the decision you’ll know what we mean. It’s an everyday example of something that is happening at scale within organisations across the country.

The latest report from Committee for Economic Development of Australia (CEDA) reveals a steady drop in work-related training in almost every sector - by 14 percent in the past 10 to 15 years.?

The number one reason for this, according to CEDA, is time - or rather, the lack of it. Three quarters of respondents to a CEDA survey cited time and workload as key reasons for taking training off the priorities list. This short-term, time-saver however, comes at a cost.?

A joint RMIT-Deloitte study this year found that for each dollar cut from the training budget, $3.40 worth of skills is lost. This ‘skills cost’ is estimated to amount to some $2 billion this year, with the study forecasting 1 in 8 companies were planning to spend less on training in 2024.

There are opportunity costs too. Research routinely shows training and development boosts productivity and is critical to helping businesses adapt to rapidly changing technology and workforce issues. Jobs and Skills Australia says it’s “vitally important” to solving our national skills shortage, which is sitting at 33 percent - that is, one-third of all occupations don’t have enough workers.

Workplace training is critical for staff retention too, with employees more likely to stay with an organisation that invests in their career. Plus, professional development is especially important for businesses looking to close their gender pay gap, as it’s a key factor in helping women move through the promotional pipeline into higher paid roles. The Workplace Gender Equality Agency (WGEA) cites “developing rising women” as part of its 10-point plan “for getting more women into leadership”.?

Whichever way you look at it, workplace training is time (and money) well spent. It’s why CEDA is calling for employers to frame professional development as an investment and not simply a cost. The challenge is to remember this when deadlines and deliverables are looming large and that short-cut starts to look like a good idea.

FW