X-raying benefits of training programmes for SMEs
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- Category: SME toolkit
- Written by with Bridget Olotu
- Hits: 1056
In 2010, the CBN having defined SMEs as businesses with the capital base from N5 million to N500 million and with 11 to 300 employees, it becomes crystal clear that many of our assumptions about SMEs are wrong.
It also strengthens the belief of SME writers and practitioners about the wide acceptance of the notion that SMEs are indeed the drivers of the economy because you find that SMEs always outnumber the few giant corporations we all are used to in every and any economy under consideration. Multinational enterprises, with their corporate might and global presence, cannot boast of the employment opportunities created by SMEs. Now, a one-time CBN Governor, Mr. Joseph Sanusi, was once quoted as saying that the failure of most of the schemes put in place by government to support SME growth and development in Nigeria happened as a result of the twin problems of lack of long-term financing and inadequate management skill and entrepreneurial capacity. While the financing part is what we shall consider for another day, I am very concerned about the lack of or inadequate provision for training and development programmes for workers and managers within SMEs. In a bid to increase their retained earnings and maximise profit made, SME managers and owners tend to gloss over the issue of training and development or at best pay lip service to it with poorly structured, poorly managed and poorly evaluated training outcomes in their various organisations. Only a few SME organisations have a well-articulated training and development agenda for their organisations and make provision for this in their budgets.Take for instance, a recent study was carried out on why microfinancing has failed to succeed in Nigeria because of the recent mass de-licensing and revocation of many registered microfinance banks in the country. According to that brilliant piece by Nweke (2010), “Many are saddened by the crisis, blaming it on fundamental issues in the industry. They said issues such as poor skills, lack of adequate knowledge about microfinancing, the operators running microfinance banks like commercial banks, contributed to the fall of the banks.” The bottom-line of the crisis is that many of the operators lacked the skills, the know-how and adequate knowledge to successfully run their microfinance institutions. Exhibiting flamboyance and extravagance, not imbibing the Gramean concept of micro-credit and the peculiar infrastructural decay and other socio-economic challenges of running businesses in Nigeria were other reasons for the albatross of these institutions. Many of these banks failed to train their staff to imbibe the culture and attitude typical of microfinance banking. As you cannot give what you don’t have, the workers of these banks could not be carried along as the owners and managers of these banks didn’t themselves understand what the microfinance concept was all about.
Training and development develops the very important assets of an organisation, i.e. the employees. Employees and the potential they possess drive an organisation towards achieving its objectives and potentials. As organisations are continuously and rapidly changing today, with organisational change impacting, not only the business but also its employees, organisations have discovered that to catch up with the dynamics in the global and local business environments, investing in their employees’ training and development has become an inevitable necessity. Therefore, human resource managers or departments in many large organisations strive to maximise organisational effectiveness, by managing employees’ potentials and resources such as individuals’ capabilities, time, and talents. HRM today works to ensure that employees are able to meet the organisation’s goals by applying training and development to achieve peak performance for staff members.
The reasons for training and development are many but I’ll mention some. The dynamics in the business environment occasioned by globalisation and rapid technology incursion in the workspace, frequent organisational change, stiff competition in the global business environment, the need for more market share, a well-informed and growing army of consumers and customers, the inadequacy of classroom education, the rapid change in learning and education, the need for new skill-sets to match up with increasing demands for product/service quality, and many others, call for the need for SMEs, as well as other business organisations, to invest in training and development of their staff.
Therefore, SME operators will be doing themselves a disservice by considering training as a cost centre. No matter the argument in some quarters that the benefits of training cannot be measured, it would be akin to living in the Stone Age, when SMEs refuse to plan their budget to accommodate some form of effective training for staff development. The lack of training or inadequacy in training and development programmes may well be one of the chief reasons for the dearth of SMEs everywhere.
What is training and development? “While training focuses on learning the skills, knowledge, and attitudes required to initially perform a job or task or to improve upon the performance of a current job or task, development activities are not job related, but concentrate on broadening the employee’s horizons” (Nadler and Wiggs, 1986, p. 5). Cherrington (1995) shares this view when he postulated that while training focuses on the current job, development concentrates on providing activities to help employees expand their current knowledge and to allow for growth with such development opportunities as mentoring, career counselling, management and supervisory development, and job training. Consequently, to get the best from employees, it is essential that they be provided with appropriate training on all aspects of their work because training and development are an excellent way for employees to learn new skills and knowledge and to reinforce good work practices which can result in a change in workplace behaviour. Thus, training and development help in a variety of ways such as (1) orientating and informing employees, (2) developing desired skills, (3) preventing accidents through safety training, (4) supplying professional and technical education, and (5) providing supervisory training and executive education (Cherrington, 1995).
I will conclude here by saying that a hoard of evidence supports the position that training and development should become an integral part of organisational development and SMEs are not left out. Therefore, SME managers and owners need to go beyond lip service to actually invest in results-oriented, practical, useful, current and developmental training programmes for their employees. After all, like Professor Famous Izedonmi normally says, if you’re not current you won’t be correct. Training and development programmes will make SMEs current and correct.
Articles
X-raying benefits of training programmes for SMEs
Category: SME toolkit Written by with Bridget Olotu Hits: 1056
In 2010, the CBN having defined SMEs as businesses with the capital base from N5 million to N500 million and with 11 to 300 employees, it becomes crystal clear that many of our assumptions about SMEs are wrong.
It also strengthens the belief of SME writers and practitioners about the wide acceptance of the notion that SMEs are indeed the drivers of the economy because you find that SMEs always outnumber the few giant corporations we all are used to in every and any economy under consideration. Multinational enterprises, with their corporate might and global presence, cannot boast of the employment opportunities created by SMEs. Now, a one-time CBN Governor, Mr. Joseph Sanusi, was once quoted as saying that the failure of most of the schemes put in place by government to support SME growth and development in Nigeria happened as a result of the twin problems of lack of long-term financing and inadequate management skill and entrepreneurial capacity. While the financing part is what we shall consider for another day, I am very concerned about the lack of or inadequate provision for training and development programmes for workers and managers within SMEs. In a bid to increase their retained earnings and maximise profit made, SME managers and owners tend to gloss over the issue of training and development or at best pay lip service to it with poorly structured, poorly managed and poorly evaluated training outcomes in their various organisations. Only a few SME organisations have a well-articulated training and development agenda for their organisations and make provision for this in their budgets.Take for instance, a recent study was carried out on why microfinancing has failed to succeed in Nigeria because of the recent mass de-licensing and revocation of many registered microfinance banks in the country. According to that brilliant piece by Nweke (2010), “Many are saddened by the crisis, blaming it on fundamental issues in the industry. They said issues such as poor skills, lack of adequate knowledge about microfinancing, the operators running microfinance banks like commercial banks, contributed to the fall of the banks.” The bottom-line of the crisis is that many of the operators lacked the skills, the know-how and adequate knowledge to successfully run their microfinance institutions. Exhibiting flamboyance and extravagance, not imbibing the Gramean concept of micro-credit and the peculiar infrastructural decay and other socio-economic challenges of running businesses in Nigeria were other reasons for the albatross of these institutions. Many of these banks failed to train their staff to imbibe the culture and attitude typical of microfinance banking. As you cannot give what you don’t have, the workers of these banks could not be carried along as the owners and managers of these banks didn’t themselves understand what the microfinance concept was all about.
Training and development develops the very important assets of an organisation, i.e. the employees. Employees and the potential they possess drive an organisation towards achieving its objectives and potentials. As organisations are continuously and rapidly changing today, with organisational change impacting, not only the business but also its employees, organisations have discovered that to catch up with the dynamics in the global and local business environments, investing in their employees’ training and development has become an inevitable necessity. Therefore, human resource managers or departments in many large organisations strive to maximise organisational effectiveness, by managing employees’ potentials and resources such as individuals’ capabilities, time, and talents. HRM today works to ensure that employees are able to meet the organisation’s goals by applying training and development to achieve peak performance for staff members.
The reasons for training and development are many but I’ll mention some. The dynamics in the business environment occasioned by globalisation and rapid technology incursion in the workspace, frequent organisational change, stiff competition in the global business environment, the need for more market share, a well-informed and growing army of consumers and customers, the inadequacy of classroom education, the rapid change in learning and education, the need for new skill-sets to match up with increasing demands for product/service quality, and many others, call for the need for SMEs, as well as other business organisations, to invest in training and development of their staff.
Therefore, SME operators will be doing themselves a disservice by considering training as a cost centre. No matter the argument in some quarters that the benefits of training cannot be measured, it would be akin to living in the Stone Age, when SMEs refuse to plan their budget to accommodate some form of effective training for staff development. The lack of training or inadequacy in training and development programmes may well be one of the chief reasons for the dearth of SMEs everywhere.
What is training and development? “While training focuses on learning the skills, knowledge, and attitudes required to initially perform a job or task or to improve upon the performance of a current job or task, development activities are not job related, but concentrate on broadening the employee’s horizons” (Nadler and Wiggs, 1986, p. 5). Cherrington (1995) shares this view when he postulated that while training focuses on the current job, development concentrates on providing activities to help employees expand their current knowledge and to allow for growth with such development opportunities as mentoring, career counselling, management and supervisory development, and job training. Consequently, to get the best from employees, it is essential that they be provided with appropriate training on all aspects of their work because training and development are an excellent way for employees to learn new skills and knowledge and to reinforce good work practices which can result in a change in workplace behaviour. Thus, training and development help in a variety of ways such as (1) orientating and informing employees, (2) developing desired skills, (3) preventing accidents through safety training, (4) supplying professional and technical education, and (5) providing supervisory training and executive education (Cherrington, 1995).
I will conclude here by saying that a hoard of evidence supports the position that training and development should become an integral part of organisational development and SMEs are not left out. Therefore, SME managers and owners need to go beyond lip service to actually invest in results-oriented, practical, useful, current and developmental training programmes for their employees. After all, like Professor Famous Izedonmi normally says, if you’re not current you won’t be correct. Training and development programmes will make SMEs current and correct.