FEATURE/Profitable growth companies share greater commitment to employee training, Mercer Management consulting reports

Business Wire, July 10, 1996

BOSTON--(BUSINESS WIRE FEATURES)--July 10, 1996--Companies experiencing profitable growth over the past decade demonstrate a greater commitment to employee training and organizational learning, a Mercer Management Consulting survey reveals. In fact, almost nine in ten (88 percent) of the growth companies surveyed report steadily increasing investments in employee training. Among companies that did not achieve profitable growth during the same period, only 36 percent increased their training activities and an equal proportion actually cut back.

The international consulting firm surveyed senior executive at U.S.-based manufacturing and service corporations, attempting to understand the role of employee training and management development on a company's growth performance.

"The growth companies are committing more top management time, as well as dollars, to training," says David Gaylin, a Mercer vice president specializing in executive development. For example, Mercer's survey findings indicate that senior managers at growth companies are more likely to play an active role in conducting training sessions than are those at "non-growth" companies.

The more successful companies also tend to emphasize different training topics and approaches. While four out of five companies in both groups offer generic training in interpersonal skills (such as communications and listening), for example, the growth companies also put emphasis on tailored, job-specific topics such as product and customer knowledge. Similarly, while firms in both groups are likely to use formal classroom training and computer-based self-study, the profitable growers stress on-the-job training as well. They also give greater attention to developing their senior and middle managers, through leadership training, regular management conferences, and other interactive forums.

"The growth companies seem to take a broader, learning-oriented definition of training and development," says Gaylin. "It can happen in a class, in meetings, on the job, and on your own, and it can add value to all levels of the company, including senior management."

For example, more than four out of five companies surveyed by Mercer say they incorporate customer-focused objectives in their employee training. Managers at growth companies, however, are more likely to build on this training to gain new insights on customers. According to the survey results, 83 percent of the profitable growers create forums for senior executives to hear from frontline employees on customer issues, vs. 57 percent of the less successful companies. "Creating a two-way feedback loop like this leverages the training investment into an ongoing learning process for the entire organization," Gaylin says, noting that the survey shows attention to frontline employee feedback on customers has grown sharply in recent years.

Informal communications can be another learning vehicle. While over 90 percent of all companies surveyed make use of formal communications to convey vision, values and performance expectations, the more successful companies make significantly greater use of informal communications (written and oral) as well.

"The lesson is that employee training and development can make a big contribution to sustained, profitable growth," Gaylin says. "Continuous learning as a way of life is the essence of a learning organization, and the more successful performers in our survey are clearly headed there. But you need to start with the right types of training activities and the full commitment of senior management."

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Mercer Management Consulting conducted telephone interviews earlier this year with senior executives (Chief Financial Officer, Vice President of Human Resources, Strategic Planning Director) at 86 U.S.-based Fortune 500 manufacturing and service companies. Mercer is one of the world's leading management consulting firms, with a staff of more than 1,100 in 13 offices providing clients with counsel in such areas as growth strategy, organization development, and operations enhancement.

CONTACT: Mercer Management Consulting,

Patrick Pollino, 617/674-3828

David Gaylin, 617/674-3251