Informal HR: Building a Smart Workforce on a Tiny Training Budget

Talent development is critical for growth. Of the top-performing Middle Market companies, 29% emphasize employee training and education compared with 17% of slower-growth firms, according to the NCMM's "Market that Moves America" study. But while companies recognize the importance of developing their employees, close to three-quarters acknowledge difficulty doing so. One problem is cost. The NCMM's Q2 2013 Middle Market Indicator Report shows that only 6% of Middle Market companies would invest an extra dollar in formal training and development programs. In addition, such programs are often too static for firms in dynamic business environments.

Consequently, many Middle Market companies are better served by emphasizing informal learning, which happens automatically in the workplace. People learn when they collaborate with co-workers, ask supervisors or colleagues for help, or simply observe others doing their jobs. As a result, they become agile problem-solvers and decision-makers prepared to cope with non-routine tasks.

However such learning does not always occur optimally. One reason: most employees don't think about what they do every day as learning. Those who recognize that they are increasing their own human capital and value to the organization are more likely to pursue new knowledge, experiences, and relationships that advance them professionally. This is called self-guided development.

Fellows of the National Center for the Middle Market surveyed employees at a mid-sized maker of fashion products about the frequency and nature of their self-guided behaviors and then correlated their responses with individual performance data. They also evaluated the overall training climate, degrees of job autonomy, levels of knowledge sharing, and other factors affecting employee development. Here are their recommendations towards a Self-Educating Workforce:

1. Hire the motivated, the curious, the social and the dedicated.

The most important determinant of whether an employee will autonomously pursue development is a "proactive personality," the study found. Middle Market companies should look for employees who are primed to seize the initiative, eager for fresh projects and new roles, and willing to accept responsibility. In addition, they should look for people, who are naturally curious with a bias toward improvement; who are comfortable seeking out and interacting with other people; and who are committed to their own careers and consequently more likely to seek out new knowledge and skills.

2. Make self-guided development part of the job.

Leaders should explain the concepts of informal learning and self-guided development to employees and make it clear they are a priority. They should also embed the concepts in routine processes. Performance reviews should refer to them. Everyone should be encouraged to give each other feedback. And knowledge sharing should be promoted as the cultural norm.

3. Maximize interaction.

In the study, more than 60% of employees cited interactions with co-workers and supervisors as important to their education and skill development. Managers can promote those interactions by structuring jobs in ways that require employees to converse and coordinate their efforts. Managers can also give teams more autonomy and people more autonomy to create teams. And they can build into the workday more opportunities for in-house networking.

4. Give employees the lead. The key word in self-guided development is "self."

In the study, 55% of employees identified reflecting about how to improve performance as important to their professional development. Leaders should give employees time to take stock of their own strengths and weaknesses, to determine what they need to improve their performances, and to chart a course for obtaining that skill or knowledge. After laying the foundation, leaders should proceed with a light touch, letting employees take responsibility for making the most of their own futures.

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