In a crowded insurance market, where competition is fierce and margins are always under pressure, spending any of the proceeds of running the business is always going to be a carefully considered decision. Re-investing money back into the business might be the right thing to do, but reassurance will be sought that the end result will be good for the business.

After all, how can any company justify spending hard-earned money on anything which does not guarantee a return on the investment? And even where a return is made, what happens if that return is difficult to calculate? How do you know if that investment might have been better kept back for a rainy day?

There is a growing awareness in many companies that training and staff development need to be seen as essential to the future of the business. Communication strategy too fits into the equation. It is no coincidence that the assessment for Investors In People changed this year to concentrate on looking at the impact of the standard on the business itself.

The process of training has traditionally started with a set of business projections, that leads to the setting of budgets and eventually to training. Choice of trainers might

be based on past experience, or simply a tendering exercise designed to ensure the maximum training is delivered for the budget allowed.

Once the training has been delivered, the only remaining questions then are whether the training was effective and cost-efficient. Did it do what it said it would? What did the trainees think? Was it delivered within the budget? Was it delivered during the time period allocated?

Delegate feedback forms are gathered in, costs are calculated and the money accrued by managers is compared against the annual expenditure of running the business. Some calculation should be made of the effective impact on the business. Calculations will certainly be made by the operational areas of the business on the impact of having staff removed!

So what is wrong with this process? Why change it? After all, it generally works well. How else could it be done? What else could training and development of staff provide for the business? And how would you know whether it had provided this or not?

Let's go back to the beginning. The insurance market is competitive. Companies that thrive are likely to be those who plan their strategies well and have the whole workforce dedicated to achieving those strategies. These might include growth and profitability. Easy to say, harder to do. And what has training got to do with this?

Training can make an effective contribution to a business strategy in a number of ways. Investment in technology is vital but, once this has happened, the main difference is people. Your people.

A business plan might highlight staff skills needed to achieve the result. This can then be followed up with a skills analysis to “spot the gaps” and then training “plugged in” to ensure that the people can fulfil what is required of them.

The whole picture

And what about other aspects of business success? As we all know, technical and product knowledge is essential, but not the whole story. What about attitude and aptitude? It is one thing for people to know what is required, but can they deliver it? For example, cross-selling products can be highly effective, but only if staff have the ability to do it.

If a business plan highlights the need for a certain skill, and the training is delivered for that skill, but many of the individuals are just not suited to that work, then the plan will fail and the money spent on training will be wasted. This means that the initial assessment of skills required needs to go further.

Fortunately, there are methods of achieving this which will not only help business planning, but should also save money by avoiding wasted spend on training that is bound to be ineffective. By thinking ahead at the early stages of business development, time and money can be saved later.

The key is to make the training practical and relevant. That is why in-house academies work so well. In addition, development centres are one way of getting under the surface of how effective training is likely to be. Having staff involved in a day of exercises and activities which will bring out underlying attributes should pay back later when that information is used.

For example, are there persuasion skills that can be used for business development?

Is there a budding team leader around who might save you recruiting one later?

Focus groups can be powerful in helping to identify business opportunities just as much as agreeing how to implement a new business process. These ideas can be fed into the business planning process early on. At the very least, it will motivate staff who will have had the chance to have some input to the decision process. And motivation is often the difference between success and failure.

There will always be benefits in having a impartial view of the perceived needs of the staff. And if cost is a factor here, ask your training provider what they are prepared to provide free of charge in exchange for the opportunity to work with you.

Sharing the cost of local academies is something that can happen if companies work together. Programmes targeted on practical knowledge, technical and otherwise, should pay back in terms of cost-saving and increased business effectiveness. Regional centres, focusing solely on the insurance industry, could then provide regular follow-up training which a smaller company could not afford to provide on its own.

The benefits of these academies are well documented. They can even form part of an induction process that enables new starters to the insurance industry to “hit the ground running”. This, in turn, saves money on recruitment due to the ability to avoid entering the competition to attract people trained elsewhere.

These people are becoming more and more expensive, especially where skill shortages are evident, such as claims handling. This cost has to be carried by the employer which effectively gets nothing in return for the extra spend. Each individual company is paying for industry shortfalls. Sharing the cost of eliminating skill shortages should pay back for those taking part.

Allowing professional training and development providers to contribute in a wider sense just might make the difference for your business. At the very least, it should give better value for money than selling “off the shelf”. At best, it might just add a dimension to the thought process which would be hard to source anywhere else. In these competitive times, it might be the difference between growth and contraction.

  • From November, Insurance Times will be teaming up with Searchlight Solutions to provide a month by month analysis of the training development of a variety of companies in the insurance sector.

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