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The death of 'Short-termism' in human capital development

November 6, 2017

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Yes you've spent that money...so what?

November 6, 2017

 

The day was 15 September 2008. Investment firm Lehman Brothers collapsed and even those of us who are not investment bankers knew something in the global economy had changed. The domino effect began swiftly. The waves of the global financial crisis hit our shores in the African continent as expected. Corporate life as we know it, could even be described as pre-2008 and post-2008. The South African economy recorded its fastest GDP growth rates since the 1960s between 2004 and and 2008, with real GDP growth averaging 5,2% per annum. South Africa’s quarter on quarter annualised growth in gross domestic product contracted by 1.7 percent in the fourth quarter of 2008, falling to -6.3 and -2.8 percent in the first and second quarters of 2009 respectively. The economy’s real GDP growth rate was -1.5 percent in 2009 and 2.9 per cent in 2010. We were in a recession.

 

Pre-2008, South African organisations were spending, on average 3% of their leviable amount (largely payroll) on skills development. There wasn’t too much pressure to prove return on that investment but 2008 came, the bull was dead and executives wanted answers on whether the amount of money they were investing in the development of their staff was yielding the desired results. Executives don’t really want training, they want performance improvement. Those of us in the learning and development fraternity were suddenly inundated with “so what” questions. So what if we have trained 1200 people, what does it mean? Our skills expenditure has increased. So what? Many of us struggled with these questions, mainly because we treated training as a solution to problems, which did not bother to understand. I argue that we needed to move away from training and learning to human performance improvement.

 

We needed to move from “training is the answer” to “what is the question?” We need to focus more on organisational diagnosis. If the diagnosis is wrong, the quality of the medicine is irrelevant. If you really want to improve things such as employee morale, employee satisfaction and employee engagement, you have to focus on your analysis. If you understand the problem, then you can prescribe the solution. The days of pushing training are gone. The bull is dead. Organisations demand more from human capital development. They want performance improvement. Finish and klaar!

 

 

 

 

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