EU Skills reports ROI from soft skills development

by | Aug 10, 2009 | Articles

Research by EU skills in their sector demonstrates that soft skills training improves productivity and performance and provides an investment return within 12 months.

Background
In 2006, Energy and Utility skills (EU Skills) completed research into the skills need in their sector.  Some initial research on productivity proved that the output per employee in the power, gas and water industries is five times more productive than the UK economic average and more productive than the comparable US counterparts.  Following this research EU Skills secured European Social Funding to undertake additional research into productivity and skills.  The research was completed within the Wales and West Utilities business, specifically their gas distribution business. The research was conducted by Roy Leach who carried out the work on behalf of EU Skills. (Roy can be contacted at [email protected] if you want to more about the research).

Why some individuals are more productive than others
The research found that although many hundreds of individuals doing similar jobs have virtually identical technical skills their individual levels of performance and productivity varied significantly.  What differentiates high performers were is personal management competence, individual personal leadership, behavioural and emotional competences.  Although technical competency gets individuals to the basic level of performance in this industry the winners excel in their management and emotional skills.  The full report, available on the EU Skills web site makes fascinating reading and provides clear business justification for soft skills training in similar work areas.
Organisations that plan to learn from this research and take steps to improve non-technical skills across their workforce need to understand that there is no “quick fix”.  The report clearly states there is no ‘simple panacea’ to achieve and sustain significant improvements in performance, practice and productivity.  What is needed is for the whole organisation to adopt the culture, norms, processes and systems of an organisation that encourages non-technical skill development.  Needless to say technical skills have to be the pre-requisite prior to soft skills development.

Findings from the research pilot
Wales and West Utilities are a widespread organisation covering most of Wales and the southwest of England with a turnover of £284 million and 2,000 directly and indirectly employed people.  This is a major business with some geographic management challenges; much of the workforce works remotely.  The study defined and measured productivity and compared this with the technical, personal management and behavioural and personal leadership of employees in the company.

The basic method of measuring productivity was to multiply the target time of work tasks as a percentage of the total hours worked.  This gave a productivity percentage for individuals. The organisation invested in both productivity measurement and soft skills development in a pilot group.  All the 17 managers in the pilot group improved productivity within their team areas, from 44% to the goal of 60%.  This study into productivity improvement concluded that whilst technical skills and competences are fundamentally important to enable the work to be of the right quality and safe, it is not the technical skills that differentiate the above-average performers.

Development Areas

The differentiation comes from:
1. Personal management skills; the generic personal management competences, i.e. the ability to plan for high performance; personal organisational skills to organise themselves and others; monitoring personal performance throughout the task; reviewing the continuous improvement in performance and finding time to reflect.

2. Emotional and behavioural competences, e.g. self-awareness, self-management, team working and collaboration.

Above average performers demonstrate that they have robust competences and that the soft skills described above are the most important differentiator for high performers and high productivity.

How to put lessons learnt into practice
The report lists three key phases and 20 best practice steps that can be used to improve productivity.  These provide a useful methodology as to how other organisations can take advantage of this research.

Briefly the phases are those of planning and leadership, implementation and review.

Planning and Leadership
Senior executives need to participate visibly and proactively.  They must ‘walk the talk’; do what they say you would do.  Align all actions to the strategic objectives of the organisation, have the right people involved and be clear about the skills and competency development programme required.  Measure what needs to be done.  Be clear about the development needs of both individuals and the organisation.

Implementation 
Set goals for perfection but recognise that pragmatic steps along the way are needed.  In the case of Wales and West utilities they set a performance measure of 60%.  Individuals need to know what they need to understand, what they need to do, how they can contribute and when.  A whole organisational culture of learning and development is required, particularly for the soft skills improvements needed.  A key issue with all forms of learning implementation is to encourage the active use of new competences back in the workplace.  This was encouraged by performance monitoring reporting a 13-week rolling average.  This type of change is needed throughout the organisation at all levels including the support functions such as IT and HR.

Review 
Reviewing progress throughout a change initiative ensures that management focus remains on the critically important as well as on the day-to-day urgent delivery of performance.  It assists managers to differentiate the urgent from the important and to act accordingly.

Relevance of Technology

Although this study is based on traditional training delivery the Chartered Management Institute commissioned a study on the use of blended learning for management skills. Read a summary of the main findings here and an update of the research in a Towards Maturity article Online Learning and leadership development – CMI research October 2007.

Conclusion
The report describes these steps in much greater detail and emphasises the necessity for full commitment from the leadership of organisations.  What is clear is that an investment in the soft skills of self-management and emotional stability deliver improved productivity and financial performance.

The research included an assessment of return on investment and over the six-month period of change estimated that the pilot team delivered in excess of £500K in ‘bottom line’ savings.  The conclusion is that investment in skills development is self-financing with a payback of less than a year. The lesson from both the CMI and Coke-Cola is that this can be on-line.

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