Downsizing and slashing funds for training and development can help executives boost the bottom line during a recession, but they know it’s bound to have an impact somewhere down the road.
The day of reckoning has finally arrived as companies face a shortage of managerial talent and bench depth, which may keep them from capitalizing on the rebounding economy.
In the Silicon Valley, the annual turnover rate eclipses 25 percent and tech giants have reignited the bidding war for elite technical talent. But companies don’t need to spend a fortune to reinvigorate in-house training programs or author new curriculums, when they can achieve the same results at a fraction of the cost by partnering with their local university.
“The talent shortage has reached the critical stage, especially in the Bay Area,” says Brian Cook, executive director of Continuing and International Education at California State University, East Bay. “The situation will only get worse, unless employers recommit themselves to developing and retaining valuable employees.”
Smart Business spoke with Cook about developing talent and building bench depth by tapping the expertise of your local university.
Why is there a critical talent shortage?
Retiring baby boomers, fewer workers entering the labor force and a series of recessions have created a nationwide shortage of employees with critical skills, but studies of employee preferences suggest the worst is yet to come. Gen X and Gen Y value training and professional development and they’re even willing to change companies to have a chance to build their careers in a learning environment. Given today’s business landscape, employers can’t afford to churn staff and continuously compete for scarce employees on the open market. One important way to stay competitive is by growing your own talent.
How can local universities assist employers with professional development?
Historically, local universities focused on the needs of full-time students who were pursuing undergraduate and graduate degrees. But today, most students are working professionals, so local universities have taken on an expanded role, which includes supporting the local business community and fulfilling the need for lifelong professional education. Most universities now offer flexible curriculums that cover everything from intensive MBAs to leadership development, corporate training, professional certifications and even functional expertise in areas like supply chain management and human resources.
Many university educators are working professionals and frequently work in the private sector or own consulting firms. Because instructors are of the business world, they understand modern challenges and bring real-world experience to the classroom.
Why are outsourced programs more cost-effective?
Instead of developing curriculums in-house, it’s possible to leverage the talent at taxpayer-assisted universities and offset some training costs by tapping government funds that are earmarked for work force development and tuition assistance. Annually, the federal government allocates $1 billion to alleviate critical skill shortages, especially in the tech industry, and even small businesses may qualify for the funds. In situations where the labor market demands are aligned to business needs, companies can partner with local universities to develop training programs utilizing work force investment funds. If companies find that leveraging internal staff is preferable or more cost-effective, the university can develop the program and train a staff member to teach the program (train the trainer).
