A tax cut is a terrible thing to waste. So bravo to those companies who’ve already invested some of their newfound tax savings in employee wages, bonuses and benefits.
We could probably use a bit more of that. The U.S. economy is surging and it’s pushing the global economy along with it. Now, with a permanent tax cut in place, finance chiefs have the resources to invest in their most valuable, long-term asset—their employees.
It’s not just wages and benefits that need attention. According to a recent study published in the Harvard Business Review, investment in staff training and education had gone into freefall even before the Great Recession. The percentage of workers who received employer funded training decreased from 21 percent in 2001 to 15 percent in 2009.
That can’t continue, because it’s an opportunity cost that will be drawn against America’s competitive advantage for a generation. If CFOs want a flexible, well-trained workforce that can adjust to the new normal of constant change, they’re going to have to help build it. Technology is disrupting everything in its path—including the demand for, and demands on, the workforce—and it’s not slowing down.
The rising generation of workers seems to have noticed these trends. A couple of years ago, Gallup took a look at the work habits of American Millennials and found that they “are the least engaged generation in the workplace.” Some 21 percent had switched jobs at least once in the previous year and 60 percent of them were ready, willing and able to leave their current job. That disengagement cost the American economy nearly $31 billion, Gallup concluded.
Shareholders are noticing, too. Millennials are now the largest voting cohort in the U.S. and their sensibilities are already reshaping how companies make their investment decisions. Viewed from that angle, long-term commitments to wages, benefits and continuing education and training aren’t merely line-item expenses: They’re prudent investments in growth and risk mitigation.
Some CFOs have already accepted the challenge. They understand that training isn’t merely ladling content into finance staff. It’s a matter of teaching critical thinking, of what some experts call “lifetime learning”—where the best possible skill is learning how to learn.
There’s an even better reason to invest in workforce development, though. It works.
When the U.S. Army faced a widespread problem with talent retention, it launched its Strategic Broadening Seminars (SBSs). The SBSs introduce junior and midcareer soldiers and officers to the discipline of strategic planning by exposing them to environments which they wouldn’t otherwise experience.
Think, for example, what is was like for 30 Army officers to spend two weeks at UC Berkeley, living across from People’s Park. Or for another group to study national security policy at the U.K. Defence Academy.
The purpose behind the SBSs is two-fold: 1) When you invest in learning opportunities for your people, they are more likely to stay and 2) In order to get people to imagine operating in an uncertain future, you need to expose them to unexpected environments and conditions.
Americans are looking for corporate leaders to show they can continue to be good stewards of the global economy. Now is the time to reward their faith. A shrewd investment in our workforce could pay dividends for years to come.
***To learn how AFP can help you keep your staff performing at the highest level, click here.