Lecture 4 – Developing skills and people

TODAY’S LECTURE
 The importance of skills

 Defining skills

 Employer skill demands

 Training strategies and systems

 Learning and knowledge work

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 THE RELEVANCE OF SKILLS AND TRAINING
 Skill levels shape the productivity of individual
workers, of firms and of the wider economy
 Skill levels often underpin wage structures

 Shapes job prospects and career progression - graduates

earn 10k more per year
 Adaptability and flexibility – able to navigate changing
organisational and economic landscape
 Training and development is a core element of
strategic HRM bundle
 Trainingoften focuses on addressing gaps and deficits
 Development is more focused on preparing for the future
 Underpins other HRM practices – e.g. reward systems,
performance management
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 BEST PRACTICE TRAINING AND
Theory
DEVELOPMENT
 Employees are valued assets and a source of competitive
advantage (Harvard model)
 Invest in stocks of human capital (Wilkinson et al, 2013)
Evidence
 Strengthening the link between HRM and performance
(Purcell and Hutchinson, 2007)
 “Competitive advantage is secured when organisations have
skills and capabilities that are unique and difficult to
replicate and imitate by competitors” (Rainbird 1995)
 Companies that train are more profitable than those that do
not (Munoz Castellanos & Salinero Martin, 2011)
 Organisations with skills gaps report difficulties with
customer service, developing new products and losing
business to competitors (Grugulis, 2017)
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 THINKING ABOUT SKILLS (NOON, 2007)
Dimension of How measured/captured? HRM implications
skill
Individual attributes acquired - Importance of recruitment
through:
Skill in the - Education processes
person - Training
- Provision of formal
- Experience training/qualifications

Task requirements - Job design

Skill in the - Complexity of the tasks - Level of supervision
job - Discretion - Internal hierarchies
Developed over time: - Relationships with workers
- Social relations
Skill in the - Political networks
- Awareness of social and cultural
setting - Constructed by different norms
- Job evaluation processes
interest groups

Is the value of a job determined by the person, the demands of the

role, or social norms? 5
Interaction between these dimensions is critical
 WHAT EMPLOYERS SAY

 Creating a learning culture – flexibility and adaptability, a

process not an endpoint
 Higher level skills – graduates/post graduates, digital,
creativity, problem solving, critical thinking
 Shift towards soft skills – attitude, personality, drive (e.g.
Cappelli 1995)
 91% of organisations report skills shortages at a cost of
£6.3 billion per year (OU)
 Increasing salaries on offer: £2.16 billion
 Training for those hired at a lower level: £1.45 billion
 Temporary staffing: £1.49 billion
 Additional recruitment costs: £1.23 billion

 Concerns about basic skills of school leavers

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http://www.open.ac.uk/business/apprenticeships/blog/uk-skills-shortage-costing-organisations-%C2%A363-billion
 WHAT EMPLOYERS DO

WERS 2011
 20% of workplaces offered no off-the-job training for their

experienced employees
 16% of workplaces reduced training expenditure in recession

 High levels of training in public sector (56%) and unionised

workplaces (54%)
 Only 53% of all employees very satisfied or satisfied with

opportunities for them to develop their skills in the job.

2017 Skills and Employment Survey (SES)
 Constant share of jobs (25%) that require no qualifications, and
training provision within jobs has decreased
 Significant decrease in task discretion and increase in work
intensity
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 APPROACHES TO TRAINING AND DEVELOPMENT
(ADAPTED FROM GRUGULIS, 2017)

Expansive
 Strategic appointments
 Internal labour market
 Broad definition of expertise
 Rotation of jobs
 Formal and external training
 Knowledge-based
qualifications
 Opportunities for
collaboration
Restrictive
• Reactive appointments
• External labour market
• Narrow definition of
expertise
• Limited job rotation
• Limited formal training
• Limited external study
• Weak social networks and
limited opportunities for
collaboration

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 WHAT KIND OF TRAINING?

 Significant variation in frequency, duration and quality of

training in UK (Felstead et al, 2012)
 Much training is short duration, generic and does not lead to a
qualification
 Induction and orientation training
 Health and safety

 Diversity training

 The outcomes of training are often not evaluated so the

effects are unclear (Wright and Geroy, 2001)
Management training
 It is not the proportion of managers who are trained but how
much time they are trained and, especially, the amount of
resources the firm invests in training (Barba Aragon and Sanz
Valle, 2013)
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 RHETORIC AND REALITY AT G4S
 “Learning and development is something that needs to be properly
embedded in the company’s culture. We need to look at how we
can be better, quicker and slicker on the development side. The
development of better qualifications for the industry, providing
skills for life, was ‘a good business proposition there in terms of
credibility’” (HR director, January 2008, cited in Gold et al, 2010:30)

 "The screener has the most important and complex role. This is
one of the jobs I am supposed to be doing at the Games and I am
being given only 20 minutes' practice. That's it. I have between four
to six seconds to quickly assess each bag and determine if there are
any potential threat objects. It is easy to miss something and I did.
Afterwards we opened up the suspect bag. Inside there was a
homemade bomb – or in this case, a VHS cassette stuffed with fake
red plastic explosives and a detonator.

https://www.theguardian.com/business/2012/jul/23/g4s-trainee-x-ray-exam
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 CHOICES AND CONSTRAINTS
(E.G. KOCH AND MCGRATH 1996)
 Weigh up cost of training against potential productivity
gains and costs of replacement from external market
 External labour markets – availability and cost of skills,
ease of screening, use of wage signals
 Internal labour markets – requirement to develop firm
specific skills, culture of promotion from within

 Product market and competitive pressures

 Size of organisation, work and job design

 Legal requirements for staff to meet minimum standards

 Tradition of vocational training and the role of the state

in providing skills/qualifications
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 TRAINING OR LEARNING? (GRUGULIS, 2013,
2017)

 Skill is developed through formal training and

qualifications as well as on the job experience
 Repeatedpractice
 Broadened range of tasks and responsibility
 Shadowing and observation

 Craft system (e.g. German bakery workers)

 Multi-skilledand autonomous workers that require limited
management and supervision
 Apprentice – semi skilled worker – skilled worker
 Pay increases in line with number of years served

 Importance of tacit knowledge – managers seek to

extract it and workers seek to protect it
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 HRM AND THE KNOWLEDGE WORKER
(HISLOP, 2013)
 Knowledge economy – automation of low skill/routine
jobs leaves more fulfilling work for all
 Elite professions with high levels of status, skill,
autonomy, and creativity
 E.g. lawyer, doctor, software developer
 Sophisticated HR bundle needed
 Recruitment and selection – headhunting, assessment centres,
screening and profiling
 Culture – knowledge sharing, trust
 Job design – rewarding, challenging and fulfilling work
 Training – appropriate and high quality
 Rewards and performance management – linking pay to
achievements, development
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 TRAINING AND LEARNING IN THE UK

 Prospect of long-term economic decline because of lack of

skills at all levels (Leitch, 2006)
 UK trapped in ‘low skill/ low wage equilibrium’ with
limited returns to training
 2m workers at NMW
 20% adults below 11yr reading age
 Emphasis on supply-side upskilling (e.g. individual
responsibility for human capital development)
 Responsive to market demands
 Tendency towards ‘poaching’ rather than training
 Limited employer commitments to vocational training
systems (contrast with Germany)
 Apprenticeships used as a source of cheap labour

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 SUMMARY
 In theory developing skills and people should aid
competitive advantage…
BUT
 Complexities around defining skills
 Changing skill demands but expectation that individuals
will develop own human capital
 Varied approaches to training and development
 Makeor buy, expansive vs. restrictive, quantity vs. quality,
management training
 Contextual factors – choices and constraints
 Knowledge work requires resources and planning – may
not be feasible for all

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ADDITIONAL REFERENCES
 Aragon, I. B., & Valle, R. S. (2013). Does training
managers pay off?. The International Journal of Human
Resource Management, 24(8), 1671-1684.
 Felstead, A., Green, F., & Jewson, N. (2012). An analysis of
the impact of the 2008–9 recession on the provision of
training in the UK. Work, Employment and Society, 26(6),
968-986.
 Hislop, D. – (chapter 18) in Wilkinson et al. (2013)
‘Knowledge management and human resource
management’.
 Koch, M.J., and McGrath, R.G. (1996), ‘Improving Labor
Productivity: Human Resource Management Policies do 17
Matter,’ Strategic Management Journal, 17, 335–354