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Success through funding: Economic success and investment in further training often go hand in hand
Photo: Anton Vierietin / iStockphoto / Getty Images
SPIEGEL:
Mr. Kirchherr, further training and retraining cost companies a lot of money.
You are now saying: Promoting employees pays off for companies.
How did you do it?
Kirchherr:
For the "Performance through People" study, we examined 1,800 listed companies around the world for more than six months: How successful was the company economically and how satisfied were the employees over the past twelve years?
Less than every tenth company manages to be top in both areas.
However, these companies, which keep a close eye on their figures as well as the well-being and, above all, the further development of the workforce, are one and a half times as likely as the others to remain successful.
And more chances to keep good people permanently.
SPIEGEL:
There are also efforts in politics to promote further training - Minister of Labor Hubertus Heil wants to introduce an education period at state expense based on the Austrian model, but was recently thwarted by the Ministry of Finance.
Kirchherr:
Regardless of government subsidies, it is worthwhile for companies to take the money into their own hands.
The companies that we call »People and Performance Winners« have invested an average of around 74 hours per employee in further education per year - in the companies that only focus on economic success, it was only 19 hours.
That costs a lot of money, of course.
But our study shows that it also pays off financially in the long term.
And that's not a perceived truth - we were able to back it up with valid numbers.
SPIEGEL:
How, what and who is best promoted?
Kirchherr:
First and foremost, you need strategic personnel planning.
Only half of the large companies in Germany do this.
You have to think: Who do I have in the company today – and which employees will I need in three, four, five years?
Then I have to decide: recruit, deploy employees in new areas - or upskilling or reskilling.
SPIEGEL:
You have to explain that.
Kirchherr:
Upskilling is when everyone educates themselves a bit, learning something about project management here and agile working there.
That's definitely not wrong.
But it gets really interesting when you retrain your people for completely different roles – that's reskilling.
This is a huge topic, for example in the automotive industry or in the energy industry.
People who have worked on the combustion engine, classic engineers, will in future work in vehicle software or electromobility.
This can not be done overnight.
You sometimes have to invest a year or maybe a year and a half - it's almost like a second degree.
But it keeps employees in the company and gives the company the skills it needs to be successful.
SPIEGEL:
It sounds like a lot of work to train non-specialists in completely new areas.
Why not bring in specialists who can't start in a year and a half?
Kirchherr:
The current job market doesn't have what companies need.
There is no alternative to retraining.
SPIEGEL:
And then, after a year and a half, the people are specialists who are in demand and the world is open to them.
And the company must fear that they will go elsewhere.
Kirchherr:
That's always the big concern, of course.
If, for example, an engineer who has previously worked on the combustion engine retrains on vehicle software, it will certainly take a year and a half or longer.
Even a supposedly simple retraining can quickly add up to 20,000 euros in training costs.
Added to this is the loss of at least 20 hours of work per week, in which he cannot do his job and has to learn.
Typically, in Germany, an attempt is then made to contractually bind that person to the company for a certain period of time.
But we also see that people in whom a company invests tend to remain loyal to it.
That creates loyalty: Man, you have now invested in me, and now I want to give that back a bit.
SPIEGEL:
Not all training tools work.
Example educational leave: Almost all employees are entitled to it, but only 2 percent use it.
Kirchherr:
It is an open question whether educational leave, as currently offered in Germany, really helps people and companies.
That's only one week a year.
If someone who worked on the assembly line at a car company for 15 years is now retrained for office work, you have to invest more time.
Offers such as yoga or language courses, which many take as educational leave, are great for people's personal development, but what the economy needs are much more intensive concepts.
Unfortunately, many countries in Europe are not very far there.
We could learn a lot from countries like Singapore - or from the USA, where there is less public funding, but many companies are tackling the problem far more courageously.
SPIEGEL:
Do you have an example?
Kirchherr:
I know a US insurance company where a very strong digitization program has completely eliminated many activities.
Within a year and a half, they retrained a third of the workforce for other jobs.
Something like this is far too rare in Germany.
We have industries here that are particularly hard hit by the change, automotive suppliers, energy companies - their business models are currently turning 180 degrees.
They're just getting started.
SPIEGEL:
Would that also be a political task?
Kirchherr:
I don't think it will do us much good if the state now expands educational leave or even offers some learning programs itself.
A possible idea that is currently being discussed in some European countries is to set up a kind of matching system.
If, for example, a company wants to retrain its employees in future fields, the state covers part of the costs – but the company can decide which program it wants to use.
SPIEGEL:
Your study also focuses on how the best companies are managed.
Apparently it's not a bad idea economically either to make the company a friendly place.
Kirchherr:
If a company wants to catch up with the top tenth, good leadership is an essential building block.
This means that the executives see themselves more as supportive than as commanding.
Employees can rest assured that they can do the job how they see fit, when they see fit, where they see fit.
And if there are problems, the manager is always there to solve them together with you.
In too many companies, however, this is anything but lived reality.
It's often said: I tell you exactly what you do, by when you do it, how and where you do it.
SPIEGEL:
And that generates less success?
Kirchherr:
That is a somewhat sad finding from our study: the majority of companies are actually mediocre.
Neither particularly well developed financially nor particularly good in human dealings.
You'd rather not work there.
SPIEGEL:
With some, you shouldn't even be.
A lot of staff will be cut.
Kirchherr:
It's a worldwide trend.
But it can be observed particularly aggressively in the tech scene.
Our study proves that for the medium and long-term performance of a company, it is usually a bad idea to lay off a lot of staff.
The people who are leaving now will have to be laboriously and expensively recruited again in a few years.
And if the management is also lousy, you shouldn't be surprised if the specialist you're looking for is gone again after six months.
