Relevance of Education and Training to SME Success Factors

An inquiry into the value perceived by SME’s and their managers of education and training

Author: Eric Allgood CMgr CAHRI MAITD

Without engagement, SME owner-managers tend to make excuses to avoid engaging in training. However, when training is perceived to be relevant and business success factors can be attributed to its use engagement increases and SME owner-managers are more likely to utilise this training for either themselves or their staff. Most of the current research would indicate that across numerous industries the SME owner-manager perceives many deficiencies in the relevance of the training provided in relation to their business needs.

Furthermore, there is evidence of education and training having positive effects on enterprise success, yet there appears to be confusion surrounding exactly how SME owner-managers define success which creates difficulties in curriculum design aligning learning outcomes to industry success factors.

Therefore, I shall investigate further, the expectations regarding training outcomes and relevance from industry, investigating what industry considers the most relevant outcomes and principles of training which would increase its engagement in and use of educational resources.

What is success?

Success, by pure definition is subjective and it is doubtful that anyone would truly accept any objective version put forward, the outcomes of investigating how SME’s define success, supports this statement.

Service-sector SME owner/managers were surveyed in an attempt to define success with the outcomes illustrating distinct differences, making an all-encompassing definition problematic.

To define success, the context in which you are measuring it must first be defined and, within the frames of reference of this article, success has three frames of reference, that of the learner, the SME owner (or manager) and, that of the training entity (for the purposes here, this shall be limited to officially recognised qualifications).

From the learners’ point of view, successful education or training is that which engages them and enables them to completely satisfy the requirements of their position once they either return to work or gain employment.

Industry considers training successful when it creates more efficient and effective personnel, and the educators consider success to be when industry is engaged in the training provided, learners are gaining employment and they can show the learners have moved from a lower level of understanding and knowledge to a higher level.

For example; a UK study of 150 recent Veterinary graduates investigated their non-clinical business skills which are required to run a successful practice, furthermore they surveyed 150 new graduate employers (not necessarily the same ones). The study covered all UK regions and found that the confidence of the students in their abilities and the feedback from the employers showed a considerable void.

In this one study it can be shown that from the perspective of all but the employers, the education was successful, but in real terms, this just was not the case. A similar study by Jones and English (2004) was held in the manufacturing sector in Australia.

This study was in much more depth than previous studies as it covered 871 SME’s within the industry, but the results were similar, the ideal of success regarding training was not held. Relevance, workload and time were some of the factors noted.

It is interesting to note that both the learners and educators would have considered the learning successful at graduation. The learners would have only seen the flaws in their education when attempting to practice what they studied for, but the educators would most likely argue that they achieved a successful outcome if animals were being treated effectively and without harm. This leads to consideration regarding alignment of the curriculum design, that is; are the intentions of the education in alignment with that which is enacted and finally experienced.

There has been much research into the positive effects training and education has on industry, and it should be noted; this is not in question here, in fact, the opposite is true. Simple arithmetic shows that if you train or educate someone to become 10 percent more efficient in their role then, based on a ten-day working fortnight, every two weeks you have gained an extra day’s work than previously being obtained.

Over the period of a 48-week (four weeks holidays assumed) year, you have gained 24 days extra productivity, equating to almost five working weeks of extra productivity. However, if the education or training isn’t relevant, or seen to be relevant to the work, engagement is low.

Later, consideration shall also be given to the quantity over quality of the learning and touch upon if the current Australian Vocational Education and Training (VET) guidelines and standards stifle innovative and engaging education through its apparent focus on assessment quantity.

Industry Engagement

In 2004 Harry Matlay evaluated the impact of six training initiatives across 6,000 SME’s which illustrated incongruity between the services on offer and the requirements of industry and highlighted issues surrounding industry’s knowledge regarding what learning was available. Given the economic importance of SME’s to the British (and Australian) economy, where (at the time) it was estimated that small business contributed to over 98 percent of the country’s industrial activity, over 40 percent of gross domestic product (GDP), and almost 70 percent of the total workforce, their engagement in the training available to improve their workers, and the importance of said training to be relevant to industry cannot be understated.

The Jones and English (2004) study stated that the education should be engaging and truly reflect what the learner will experience in real-terms throughout their working life. Is this not true for any skills or knowledge, for example surely a Barista needs to be taught how to make a coffee in a manner in which their customers will enjoy it, but also need to learn how to effectively communicate with their customers.

The same can be said for a Barrister, where having the legal knowledge to know WHAT to argue is no more important that learning the skill on HOW to argue effectively. If a university is producing brilliant legal graduates with no idea on HOW to perform their duties, are they indeed, producing brilliant graduates?

SME owner/managers have been proven to be disengaged with training citing reasons as they are too busy, the training is not relevant enough, there is too much burden on their time to complete the training. This disengagement illustrates the need for educators to review not only what they are training, but how they are training and assessing.

Are we teaching the wrong things… or the right things the wrong way

The studies referred to here are from both Australia and the UK, in both areas and across many industries they have concluded that relevance is one of the major issues within training. The UK study also illustrated that this is not just limited to VET training, but higher education suffers the same fate.

The weak links appear to exist between education and employment for learners in occupations where licensing and/or strong regulations are not factors, employment outcomes do increase from certificate I to certificate III, although (depending upon the field of education).

At first glance, it should be easier to repair what is broken within the VET sector, given the construct of training within this sector is under guidance from Industry Training and Advisory Boards (ITABs). However, this guidance can only be effective with respect to content of learning, and it is argued that this has already been done; the content of learning has already been approved through the various ITABs.

So where could the problem truly sit? Within the VET sector could it be a lack of educational strategy (pedagogical) and methodology (taxonomy) knowledge amongst the trainers and instructional designers? Within the education sector, could it be argued that those educating have lost touch with the industry for which they educate? The VET sector requires that their trainers can show currency within the industry for which they are teaching, this is not the case in higher education.

As mentioned earlier SMEs have a large impact on the economy and therefore society, so there is a shared interest from employers, learners, industry and the government in ensuring that the training provided produces skill sets that are relevant within the labour market, despite differing perspectives.

Is it all in the design?

Alignment, alignment, alignment; education and training’s version of location. It doesn’t matter if you are creating an onboarding induction program to your organisation or designing a qualification; there needs to be alignment between the intended goals, the process of delivery (enactment), and the results and outcomes (experience).

This concept is not a new one; the three accepted conceptions of curriculum are; intended, enacted, and experienced. Curriculum; derived from the Latin currere, which means “to run the course”, has been the topic of much discussion within educational frameworks for centuries.

The learning outcomes achieved directly affect the capabilities within industry, and the engagement of the learners assists in determining their commitment to the learning, therefore, alignment from the intentions outlined through to the results obtained is crucial to ongoing industry growth.

So where to from here?

It is the finding of this research that there is serious cause for concern, whilst in both the VET and the Education sectors, specifically in the VET sector. Many studies have shown that training has a positive effect on the ongoing outcomes in SMEs; however, there appears to be a discrepancy in what is being taught and what is required to actually perform the work. Furthermore, there is also a lack of clarity, at this point, as to what may be the cause of this disparity.

It is this exact issue that led to the initiation of my Small Business online courses (insert link), the purpose was to take the theories taught in higher education, mix them with the practical knowledge requirements of the VET sector and the real-world experience of 20 years management consulting experience, and create contextualised, relevant knowledge in bite-sized doses, to enable SME owners/managers to be engaged and gain the knowledge they need.