The theme of this month's column is the importance of training and development. How does training and development relate to our regular Merger & Acquisition topics?
In fact it is very directly related. Training and development is an important factor in ensuring your businesses on-going performance and ultimately the potential appeal of your business to a buyer. This is just as much an issue related to good management as having effective reporting systems in place.
Recruitment businesses are of course, very people-based. As we all know the capabilities of the people within the business has a lot to do with the company’s results. Neglecting the genuine development needs of staff will impact directly on your businesses profitability over time.
Training and development programs are not just for staff members. It is equally important that owner- managers don’t neglect their own development needs. Having the resources, cash and drive to start a business can be a side-show compared to your ability to get the best from the people around you and of course yourself.
Recruitment companies considering acquisitions will of course carefully scrutinise the financial results of a business under consideration. But they will also want to know that the business they may be about to buy has the people with the skills to make next year’s profit look as good or better than what has happened in the past. Having well trained staff simply makes good business sense.
Many business owners under invest in training. It seems that the primary reason training is considered optional is because it's viewed more as an expense than an investment. This is completely understandable when you realise that in many companies, training and development aren't focused on producing a targeted result for the business. As a result, business owners frequently send their people to training courses that seem right and sound good without knowing what to expect in return. But without measurable results, it's almost impossible to view training as anything more than an expense.
As an owner before determining what training is appropriate you may ask yourself "as a result of this training what is going to change in my business or in the performance or behaviour of my staff (or myself) that’s going to help my company?" This is the starting point to analysing your training needs and in considering training as a capital investment in which you can gain an acceptable rate of return on your investment.
The steps and process of preparing a training needs analysis may be read about in more detailed articles written by professionals in this field. Our point in raising this issue is simply to highlight the importance of the issue. Well targeted and implemented training has a positive impact on the performance of the business and can and should be measured. This increased performance should be translated to "bottom line" results which then mean, among other things, increasing the value in your business.
Owners who are an integral part of the business on a day to day basis may find it hard to include their own needs when they plan for training, but they must avoid neglecting themselves in this issue. The entrepreneurial ability they possess doesn’t necessarily mean they know how to be good managers, motivators or leaders in a team environment. Many people reading this article will know of good examples of exactly the opposite!
The Recruitment sector can be demanding and intense with little time to stop and think unless you as the owner-manager make the time. It doesn’t happen without your action and effort.
We encounter many businesses in the industry that are excellent models for other sectors in terms of the measured and effective approach to people development. We also meet with companies whose people have had little exposure to new ideas and ways of doing things. Often a fear of interaction with competitors means that owners don’t send their staff on relevant courses or seminars. This type of narrow term approach is only ultimately going to hurt performance.
In the economy of 2006, if your business isn't learning, then you're going to fall behind. And a business learns as its people learn. Your employees are the ones that deliver, refine, protect, and manage your services every day. With the rapid pace and reach of the 21st century market, continual learning and development is critical to your business's continued success.
The likelihood of selling your business successfully will depend on some key criteria, not least of which are the capabilities and skills of your people. Investing in effective training and development will help make your business the best it can be!
Originally published in Recruitment Extra March 2006.