Understanding the Value of Workforce Training and Development In his book, Intellectual Capital: The New Wealth of Organizations, Thomas Stewart points out that in the information age of today, “knowledge has become the preeminent economic resource—more important than raw material; even more important, often, than money.” What he is referring to is the concept of intellectual property. Intellectual property is primarily the patents and work processes that an organization develops. When you add up the market value of a company like Google, for example, you will find that the total value of its stock far exceeds the worth of its physical properties. You could say the same for Microsoft or many, if not most, of the Fortune 500 companies. Not long ago, a prominent Venture Capitalist, a man who began funding technology development back in the early days of the dot com era and provided some of the initial working capital for companies such as Apple Computers and Netscape (the first browser using graphical formats) explained that physical property, unlike intellectual property, is a burden to commercial organizations: It’s difficult to move from place to place, likely has only limited use and is an ongoing cost as it continues to depreciate. Intellectual property has none of these drawbacks. In fact, intellectual property is considered the major source of competitive advantage to organizations. There are a variety of other
intangible elements that create value for an organization, aside from
the patents it holds or the work processes it has developed. An organization
builds relationships with customers…called goodwill. That’s
an asset that can actually be valued on the books. An organization creates
relationships with its suppliers and develops its own supply chain. That
is an intangible that likely cannot be duplicated and so it clearly adds
to the value of an organization. Very importantly, training
has a strong relationship with employee retention.
Some organizations actually view training as an investment. Increased
skill and knowledge can make many jobs more manageable; jobs that are
more manageable have less stress and less stress tends to reduce employee
turnover. |
| Training Resources & Blogs: |
|