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Putting your people first

Posted by: , Posted on: - Categories: Employer ownership, Skills and training

We’re having a good recession. Having run The Albatross Group for 17 years, I finally crossed the Rubicon and bought it in 2008, a week after the collapse of Lehman Brothers. To say it wasn’t the ideal time for a management buyout is an understatement, and I’d be lying if I didn’t admit to some sleepless nights. But now, in 2012, we’ve paid back most of the management buyout debt and I own a successful group of seven small travel and tourism businesses.

With turnover exceeding £25 million, no bank defaults and a credit rating that would make many eurozone countries green with envy, we’re finding that tough times can be good for business. However, the environment around us certainly isn’t helping, nor is it likely to get better any time soon. For many small businesses, the adage that you’ve got to run ever faster to stay still has never been more accurate. Small businesses are being buffeted from all sides, and while the challenges that we face are no different from those faced by larger organisations, we often have more limited firepower at our disposal with which to respond.

The very nature of smaller organisations means that they tend to have less clout with key partners such as banks, insurers and regulatory bodies. Furthermore, the roles of many people working within smaller businesses are rather generalist. Without scale, you can’t employ the kind of in-house experts that larger organisations take for granted – whether in finance, IT or HR, to name but a few. This, combined with the frequent requirement to fire-fight, leads many small business leaders to keep their heads down and adopt a silo mentality – which only leads to missed opportunities.

Given the constraints upon smaller businesses, the secret to delivering sustainable growth, if there is such a thing, is simple: focus on the people – be they your customers, your suppliers or, possibly most importantly of all, your staff. What smaller organisations lack in the ability to pay big wages is more than matched by the variety, rewards, impact and fun that can be derived from working within them.

It is a truism that your staff are your greatest asset. What is less self-evident, however, is how you should invest in them to get the greatest return and competitive edge.

I believe that supporting your people in their development is probably the single most critical thing a small business can do to flourish in a tough environment.

It may seem obvious, but when you’re considering this, focus first on what your business needs, then find a way of achieving it. Don’t be swayed by the training companies’ glossy brochures. Don’t even be swayed by the lure of ‘free’ training funded by the government as part of its latest well-intentioned initiative. Free isn’t always good value.

In my case, for example, I realised we were spending a lot of money on HR and recruitment advice. The answer was simple – we found someone within the company who wanted to learn more about HR, and paid for her to get her CIPD (Chartered Institute of Personnel and Development) qualifications. The result? We have a highly qualified, highly motivated HR expert within the organisation, who knows every element of our business. She’s happy because she earns more and has a stronger CV; we’re happy because we have a ready supply of expert advice at a comparatively low cost.

For me, taking ownership of your skills issues in this way is part of being a good business person and a good employer, but it is primarily all about hard-headed results.

It is very difficult to grow a business without simultaneously increasing the ability and skills of your key resource, ie your people – and we’re an ambitious organisation!

I’m delighted that the government has committed to helping by routing up to £250 million of college funding directly through businesses. The details of the ‘employer ownership of skills’ project and exactly how it will work will be published soon, but it should enable employers to design and commission the training their businesses really need for growth, rather than simply taking what happens to be on offer at the local college or training provider. But it’s not a hand-out. Employers need to realise that with this freedom to commission training comes responsibility. Part of that responsibility is ensuring that the training commissioned is good value – not just for the business, but for the individual and the taxpayer too. And in the same way as I charge more for a bespoke tour than an off-the-shelf one, employers should expect to contribute more towards high-quality bespoke training.

There is more to business success than just the skills of your people. But research has shown that companies that don’t train their staff are two-and-a-half times more likely to fail than those that do, so it seems a good place to start.

To find out more about the employer ownership pilots, and how you can get involved, email This e-mail address is being protected from spambots. You need JavaScript enabled to view it or visit UKCES (link below).

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