Ask the Expert: Training Allowances

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As organisations wake up to the pulling power of staff development for recruitment and retention, our experts assess the pros and cons of offering new starters a training allowance.

Question: Have you heard of companies offering a training allowance to new recruits. For example a sum of money may be offered to allow a new employee to upgrade a degree for example.

Adrian Snook replies: The most common situation where new recruits would be offered training to achieve a qualification is in relation to apprenticeship. Over 240,000 apprentices are currently being trained by companies like BP plc, BT Retail, Tesco plc, Compass Group plc, BAE Systems plc, Ford Motor Company and Carillion plc. The majority will be new starters. Whilst most apprentices are fully employed and will be paid a salary that reflects their skills, experience age and ability, a few will actually be on work placement with the business and will get paid a training allowance by the Learning and Skills Council.

However I don't think this is the type of situation you have in mind.

Employers are increasingly looking to give people greater choice about the way they are rewarded. It's an important step in today's workplace, where people are no longer content with a basic salary. In a true flexible benefit (or cafeteria benefit) arrangement, employees are given a benefit allowance and choose their selection and level of benefits. There is certainly a strong argument for including the option of a discretionary training allowance for personal development as part of your organisation's overall Flexible Benefits package. This has been proven to be a powerful way of fostering employee engagement as well as forming a strong motivator for effective recruitment and retention.

Graham O'Connell replies: I have not heard of organisations offering such an allowance specifically to new recruits, so I don't think it is widespread practice. However, I can see some merits in such a policy if carefully managed. It would allow each new recruit a say in their own development and, if sufficiently funded, would enable them to target the learning they most need to acquire.

My concerns would be around whether new recruits are well placed to buy the sort of development they most need, which, when you are new, is often about company specific issues. I have heard of organisations providing further and higher educational funding for all staff. These initiatives were popular in the car industry back in the 90s and were much publicised. But they have been quietly going on in the Civil Service for decades. Although policies vary from organisation to organisation it is common to have to make a business case to get the funding - so learning about marketing is more likely to get support than basket weaving.

Some advocate small scale funding but for many people. This is partly to get staff back into education and used to learning, and partly about helping retention by demonstrably supporting and rewarding staff. Others are more willing to invest larger sums in a few people to help them gain meaningful higher level qualifications. In these instances there is often a payback clause which is applied if people leave the organisation shortly after qualifying.

The key is for the organisation to be really clear what they are trying to achieve and what this means in practice, which is not just about funding. Qualifications can be a useful part of a workforce development strategy, but they are not a substitute for training, which usually has different benefits. It is also important to make sure that any expectations that are set can be met. I know of one organisation that told staff that they would support anyone who wanted to upgrade their qualifications. They were inundated with requests and ended up disappointing most people. The result was motivating for a few but damaged relationships with far more.

One final observation, government research has shown that those with an existing qualification are far more likely to seek a second or higher qualification than those with no qualifications seeking a first qualification. This may be partly due to confidence and partly to the type of work they are involved in. So do monitor how your policy is working out in practice, not just for reasons of equality of access but also that it is getting the right learning to the right people to the best effect.

Our experts:
Adrian Snook is deputy chief executive of the Training Foundation. With a degree in Communication and Media, Adrian worked as a branch manager for a subsidiary of Hambro’s Bank before launching the corporate training video production business Dragonfly Communication in 1992, which he sold in 1996. He stayed in e-learning until 2001 when he joined The Training Foundation as director of Corporate Development in 2001. Adrian is a Fellow of the British Institute for Learning & Development (BILD) and became a director of the BILD in 2007.

Graham O'Connell MA Chartered FCIPD FITOL FInstCPD ACIM: Graham is head of organisational learning and standards at the National School for Government. He has particular responsibility for developing and promoting best practices in learning and development. A regular feature writer for professional magazines, he has had numerous articles published on topics such as organisational learning, training strategy, coaching and facilitation. You have probably seen Graham presenting at conferences too.

As a consultant Graham has 25 years experience in technical, management, trainer training and as an adviser to organisations on the strategic aspects of L&D. He has extensive overseas experience including working in countries as diverse as Russia and Bermuda, China and Kosovo. Graham still does some occasional tutoring on CIPD and University of Cambridge qualification programmes and runs occasional Masterclasses. He also runs a number of networks including the Strategic L&D Network (for Heads of L&D in the Civil Service), the Henley Public Sector Knowledge Management Forum and the Leadership Alliance Exchange.

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