Human Resources managers and academics know that developing our people is one of the best ways to achieve company objectives and to create a competitive advantage. Globally, companies realise that the effort one puts into people development leads to better engagement, better productivity, commitment and higher levels of staff retention.
Despite this, development is often one of the first things to be cut during tough times. Development is all too often seen as a corporate “extra”. Just when companies need the best skills and the sharpest minds, some tend to cut back on the things most likely to help them trade through the challenging conditions.
And despite this being a pressing topic, relatively little is known about HR development practices in New Zealand. To find out more, the Institute of Management New Zealand (IMNZ) commissioned MPOWER to study corporate education focusing on three key staff groups: executive/senior managers, middle managers and ‘high potentials’ (those likely to assume a leadership role). Working with local and international partners (such as Henley Business School in the UK which has results from 47 countries) MPOWER compiled information from respondents in New Zealand and Australia.
Sample profile and some key findings
The NZ and wider Australasian respondents hailed from a wide range of positions, with Executive/Senior leaders best represented at 29.8% and 30.3% respectively. Organisations of all sizes and a wide array of sectors were represented. Women formed a slight majority of the NZ respondents while the opposite was so for the combined dataset. However, females were under-represented in each of the key staff groups, particularly among Executives/Senior Managers and High Potentials, with key HR implications (e.g. for gender-aware succession planning).
Organisational and development priorities
- Major challenges facing NZ and Australasian organisations concern: addressing technological advances (almost half the respondents mentioned this); the speed of change; cost management; major re-organisations; and succession planning. Organisational size had some bearing on the priority of challenges.
- Linked to this, the most commonly-cited people development objectives for NZ and Australasian organisations in 2016 were: talent retention; maintaining and building employee engagement; equipping leaders to deliver change. The same objectives re-appeared for 2017.
- In NZ and the region, the top development priorities varied by and reflected the role emphasis of key staff groups (Figure 1 overleaf).
- At least two-fifths of each staff group in NZ and Australasian workplaces were considered ‘very likely’ to be included in people development plans.
L&D activities and trends
- In NZ, respondents indicated that a considerable array of learning and development (L&D) methods was expected to be used this year, particularly: individual coaching, peer-to-peer activities; team coaching; blended learning; and individual online learning. The pattern was similar for the combined dataset but at more conservative levels.
- It was perceived that Executive/Senior Managers in NZ and the region would most prefer coaching, experiential L&D and blended learning formats. For middle managers, coaching was again the most favoured approach but this time followed by blended learning and classroom-based L&D. Coaching was also most favoured for High Potentials, followed by blended learning and experiential L&D.
- NZ respondents were generally positive towards online L&D though just under half strongly agreed or agreed that it was not possible to replicate classroom dynamics in an online environment. More than half (56.3%) agreed or strongly agreed that their organisation was comfortable about increasing the ratio of online to face-to-face learning, though 70.8% felt that it was suitable for many but not all aspects of leadership development. Two-thirds concurred that online learning was more cost effective than other development methods. The results for Australasia were similar.
- Following executive development programmes, respondents from both datasets reported that the following were most regularly used in their workplace: formal feedback from the participating executive; a review of the executive’s KPIs; and a review of the KPIs for the executive’s team.
- Some new areas addressed by the NZ and Australian surveys related to organisational objectives and performance. The vast majority of NZ respondents (85.8%) felt that executive education has at least some impact or relevance for attaining organisational objectives (22.9% felt that its impact was significant). Those most convinced of its impact stressed how it developed thinking, skills and behavioral approaches with which to respond to new situations; encouraged a cultural shift; sustained organisational performance; and kept the organisation ‘ahead’. Some felt that, without HR development, organisations ‘withered’. In Australasia, sceptics of executive education’s impact commented on the mediating effect of their organisation’s existing skill base (e.g. “Our management team is well established and small … see little value in investing in their training”).
- Most respondents, particularly in Australasia, perceived a positive link between executive education and organisational productivity (Figure 2 overleaf). Comments centred on its capacity to provide focus, purpose, motivation and innovation; handle change management well; and increase competitiveness and capabilities. Several added the caveat that the level of impact depended on executive education being accompanied by effective application support in the workplace. However, the significant minority of respondents who were unsure of a connection felt that it was difficult to gauge this without measurements or had only experienced limited use of formal executive education.
L&D spending and providers
- For NZ organisations, L&D (external) expenditure was somewhat clustered at lower levels; the concentration was even higher for organisations in Australia (Figure 3). Figure 4 indicates that over 80% of NZ respondents anticipate spending stability or growth. As might be expected, L&D expenditure was higher in larger organisations.
- A wide range of L&D providers were expected for key staff groups but their emphasis varied. For Executives/Senior Managers in NZ and Australasia, the most cited were: a training provider; an external coach; and a consulting company. For Middle Managers, they were: a training provider; an internal trainer; and an internal coach. For High Potentials, as with Middle Managers, there was a strong emphasis on internal provision: an internal coach; an internal trainer; and a training provider. Some variation in expected L&D provider use and staff group was also found in relation to organisational size (and thus, likely resources available for L&D).
- Just under half of organisation’s L&D investment went to individual consultants/coaches and training providers. Smaller firms were expected to invest most in 2017 in individual consultants/coaches and ‘boutique’ consulting companies. Larger organisations were likely to invest most in training providers (classroom-based) and individual consultants/coaches.
- When considering using a business school, the most important considerations were: quality of teaching and learning resources; leading practice, methods and knowledge; and access to learning and networking from other sectors/organisations. With training providers, the key factors were: leading practice, methods and knowledge; quality of teaching and learning resources; a tailored approach; and learning delivered efficiently with minimal disruption. For Australasia, the top factor was value for money. For a consulting company, key concerns were: leading practice, methods and knowledge; and attention to implementation and follow-up.
The survey results provide an inaugural yet in-depth picture of recent, current and projected L&D trends in NZ and Australasia. With their focus on three key staff groups, they reveal shared and more specific preferences around different L&D formats for Executives/Senior Managers, Middle Managers and High Potentials in the two settings. As well as stressing the need for tailored L&D initiatives, organisational size was found to matter, with larger entities having greater capacity to invest in formal HRD. However, executive/management education is widely regarded as having some impact or relevance for attaining organisational objectives, and as linked to higher organisational productivity. This makes HRD a critical plank of strategy development in organisations of all sizes. With many managers concerned about their companies’ ability to deal with technological disruption and to cope with the speed of a changing workplace, a key people development objective is to equip leaders to respond to, develop and manage the challenges that this brings.
This foray into management education could be usefully followed by subsequent surveys so as to develop a national dataset for trend analysis and application. It also highlights areas for investigation. In line with advocates of multiple L&D organisational initiatives, these include an examination of the most effective combinations of different L&D formats, and a focus on the development needs of worker groups who are currently under-represented in management.
To view the 2017 Executive Education Study report: New Zealand and Australasia, please visit: http://www.massey.ac.nz/massey/learning/colleges/college-business/research/mpower/research-and-expertise.cfm
by Professor Jane Parker, Dr Nazim Taskin and Ms Emma Griffiths and Ms Alison Brook (MPOWER)