How are McKinsey's internal training courses

Investment in training: wasted too often

Digitization and automation are turning the world of work inside out. The effects of these megatrends can already be felt in everyday working life: Those who work in marketing today not only have to be familiar with focus groups - they also have to know how to collect and analyze customer data using "web harvesting". And those who work in the HR department not only have to prepare questions for the next round of applicants - they also have to feed them into artificial intelligence systems in such a way that robots can independently conduct their first selection interviews.

Completely new requirement profiles through digitization

Without question: requirement profiles are emerging that nobody could have imagined ten years ago. And change continues to accelerate. According to a study by the McKinsey Global Institute (MGI), 30 percent of the jobs people will do in 2030 will not exist today.

Investments in further training are increasing

It is often said of German companies that they are not reacting adequately to digitization and automation. But the numbers speak a different language. If you want to remain competitive, you have to make your employees fit for the world of work of the future with targeted training measures. And that is exactly what German companies do, as a study by the Federal Statistical Office shows: While 15 years ago German companies invested an average of only 366 euros per employee in further training, in 2018 it was around 607 euros. That is less than in some neighboring countries - in France companies spend 1,222 euros per capita, in Belgium it is even around 1,517 euros. But the trend is clear: by 2023, according to our estimates, spending on further training in this country will rise to around 820 euros per employee - an annual growth of over six percent.

Further training is important to employees

The strong increase in funds is also due to demands from employees. According to a recently published survey by the Federal Institute for Vocational Education and Training, 80 percent of employees in Germany want to continue their education and training. Younger people place even more importance on continuing education, as shown by a recent survey by the scholarship network and McKinsey among more than 7,000 high potentials, including students and young professionals.

For 84 percent of high potentials, training is very important or important (see graphic above). Personal trainings are the most popular. They are rated as very attractive or attractive by 82 percent of those surveyed, followed by "learning on the job" (74 percent) and conferences and other industry events (52 percent, see graphic below).

Is it worth investing in further training?

The willingness for further and advanced training is therefore high. However, it often remains unclear to what extent companies spend on further training worthwhile. Too often the effectiveness of operational measures is not evaluated or only participant satisfaction is queried. Whether the participant liked a course or a seminar usually says little about the learning effect.

The few studies available on the subject are cause for concern. According to our estimates, at least 50 percent of the funds are not being used effectively. That means: Employees hardly build up any relevant skills, if at all, through the completed measures. In a market for in-company training, which, according to our McKinsey estimates, is around eleven billion euros, 5.5 billion euros are largely ineffective.

In a market for in-company training, which according to McKinsey estimates is around eleven billion euros, 5.5 billion euros remain largely ineffective. # Investment in training

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Above all, the important "learning by doing" is often neglected. According to a study by the Federal Institute for Vocational Education and Training, 75 percent of the companies continue to rely on the classic seminar for further training, mostly as an external course. Online media are only used in 27 percent of all offers used.

Practice shows: The flipped classroom method is particularly effective

In our consulting work, we got to know dozens of corporate training programs. The programs with the greatest effectiveness, i.e. the measurable development of relevant skills, are not those that take place in beautiful surroundings in a nice hotel, but those that systematically integrate further training into everyday work.

At one of our clients, for example, employees are first familiarized with important future skills such as agile working via online seminars. The employees are then called upon to apply what they have learned directly in small-scale projects in everyday work. Half-day coaching sessions take place every two weeks to clarify content-related questions, exchange practical experience and discuss the next steps. Online input and offline discussion, i.e. the flipped classroom method, coupled with the direct application of what has been learned, have proven to be a particularly effective program approach.

Alternatives to the seminar: job rotation, job shadowing, project takeover

Sometimes, however, further education and training don't even need a fixed program. If the manager entrusts the employee with a particularly demanding project that may even demand more than his current skills, then this is often much more instructive than any further training program, no matter how lovingly and elaborately designed. Regular job rotation also ensures that employees keep building up new skills. Another effective measure can be "job shadowing" - an employee accompanies a colleague who has a different set of skills for a few days or weeks.

Personal development takes precedence over the acquisition of specialist knowledge

The high-potential survey also shows: As important as further training is for talents, the ideas are less clear when it comes to the content of the training. 55 percent of those surveyed would register for training on technical topics, 45 percent for soft skills training, 30 percent for leadership. Personal development and responding to individual needs and requirements that arise from day-to-day work seem to be more important than the content.

Better examine the use of the training investments

The expenditures for further education and training are currently growing rapidly. Companies should examine their program approach and clarify whether the funds used are having a sustainable effect. If the billions are used correctly, Germany as a business location can further strengthen its competitiveness even in times of digitization and automation.

About the authors: Julian Kirchherr is project manager at McKinsey & Company, Julia Klier is a partner. Both are also active in science. Julian Kirchherr heads a research group at the University of Utrecht, Julia Klier is a professor at the University of Regensburg.

Also read:

Financing advanced training for digital change

Digital change: New funding for further training from 2019

Upskilling - the answer to digital change (Personalmagazin, issue 04/2019)