This is the third and final article written for the Institute of Directors way back in August 1991. I have not updated the stats for authenticity purposes. I hope you agree that it is as relevant today as it was in 1991.
Are you worth your asking price?
So far in this series of articles, we’ve established that continuous learning is vital and thinking has to be taught, if learning is to be taken effectively into the workplace. But what about the attending costs and benefits of this line of thinking?
Current statistics show that there is continued growth in the small to medium-sized company sector. Figures from the Institute of Directors show that of some 2.7 million companies in the UK, only 8,900 have more than 250 employees and around 50 per cent of the working population are in organisations that have less than 100 people. These companies, typically, are those without any specialist human resource facility – or certainly without anyone dedicated to people development.
There are external consultancies available to fill the gap – and in many ways it makes sense to outsource this valuable service.
But knowing you have people available to provide development does not help you decide whether to invest in people development in the first place. First you have to decide who shoulders the cost of development, and whose responsibility it is to identify the type of development.
The cost of development has often been viewed as an average cost per head. This seems to work in a large organisation where I allocate, say, £500 per head, assuming 30 per cent of the potential users don’t “use” their share. In smaller companies however, a smaller headcount reduces the overall pot and you lose the economies of scale.
As a result companies often choose not to invest as much in development because this saves money. Long term, I believe this to be a seriously false economy for all concerned. (The key word in that sentence is “all”, since everyone involved is affected by lack of development.) So how can everyone get involved?
Companies, particularly smaller ones, must understand they can disappear overnight if they do not invest in people. Just keeping pace with your competitors means, at least, standing still. You must be in front of your competitors – and you will not do this with average people.
The government could also support people development in smaller firms. It should, in some – preferably uncomplicated – way, encourage employers to invest in people. For example, it could allocate tax relief to money spent on training.
Finally, you could ask the employers themselves to contribute or pay for their own development. Which brings me nicely onto the question of whose responsibility it is to develop people?
I believe the employee has a huge role in this area. Let me set the scene: imagine everyone who works for someone else is actually self-employed. Their employer is only their client. Their pay packet each month is, in effect, the employer’s way of paying a bill for services rendered.
So here I am, self-employed, but with only one client (a situation not too far removed from the real situation many small businesses find themselves in). A major concern has to be “How do I keep my client?”
To pursue this further, let’s reverse it. Why would my client not want me? It could be that the service is no longer required; the product is outdated; the product is too expensive.
Panic. What should I do now?
The service is no longer required. As a provider I should see this coming, otherwise I am not keeping an eye on the marketplace. If I spot trouble on the horizon, I need to find a new service to offer.
The product (me) is outdated. This will be because I have not kept up to date with current trends, technology, etc. My solution is to continuously develop the product (me), in order to stay ahead of the competition.
The product (me) is too expensive. Here my options are simple: convince my client they are wrong and couldn’t get better value elsewhere; accept less for my product (me); or find another client who is prepared to pay my price.
A light-hearted look at a serious subject, but I believe it illustrates the point that I must take ownership of my own development. I cannot expect my client (boss) to plan it for me, even if they do pay for it. What I need to do to develop myself as a product will be different from what others need to develop themselves.
This approach can help target development needs effectively. A salesman saying, “I need a course on finance for the non-financial manager” is a nonsense and misses the mark quite considerably.
The first and last step is to genuinely accept the old clichés; it is firmly based in the truth but has become devalued. The truth is if we have no people, we have no company; and if we have poor people, we have a poor company. If we have good people, we’re lucky. Or are we? Perhaps it is more a case that, as with other areas of life, we make our own luck through the efforts we put in.