Very few executives would argue against the importance of developing the skills and abilities of their employees. When companies invest in employee development they can expect to see gains in performance, organizational commitment, and innovation. Beyond the skills imparted to the employee, training programs indicate that the employer is willing to “invest in its human capital that both builds employee capabilities and increases their degree of job satisfaction.” (Read more here) Ultimately, employee development is essential if companies hope to adapt and develop within a constantly changing business environment.
Typically employee development takes place through some type of formalized training. Much of the training has to do with “hard skills” such as process and procedure. An example of this may be how to properly wrap cheese in the dairy factory. On the other had, “soft skills” have to do with abilities that are essential for employees to know and understand but can be difficult to measure. Some examples may be teamwork, problem-solving, public speaking, networking, negotiating, etc.
If you’d like to check out your own skill level when it comes to ‘soft skills’ you can take a little quiz here.
1. The Cost of Employee Training
Given the importance soft skills play in creating competitive advantage (remember, these are all intangible resources), many businesses invest in providing some type of training to increase the abilities of their employees in these areas.
But training isn’t cheap.
The Society for Human Resource Management reported in 2006, that the cost of employee training averaged out to $995 per employee. More recently, Bersin and Associates estimated that the average spending per employee in a training program in 2010 was $1202. Interestingly, the largest single area of expense (21%) is in leadership development and management training – soft skill stuff.
2. The Training Potential of Employee Volunteering Programs
Employee Volunteering programs offer companies a unique opportunity to act as good Corporate Citizens while enabling their workforce to acquire relevant work-related skills. By creating opportunities for employees to volunteer in the community, companies are able to leverage one of their most valuable assets towards addressing social and environmental concerns. In the process, the employees gain experience and understandings that make them more effective in their roles with the company. Usually, employees acquire soft skills such as communication, management, and leadership. Beyond individual skills, employees become better at working in teams. Barclay’s Bank discovered that of the employees who volunteered in the community, 61% increased their team-work skills. Probably more impressive, 58% of Barclay’s managers reported a visible improvement among their staff’s attitudes towards each other following a volunteer experience.
A number of other examples are available thanks to the recent report “Global Companies Volunteering Globally” produced by the Global Corporate Volunteer Council (GCVC) of the International Association for Volunteer Effort (IAVE). Here are some examples, but click here to view the entire list:
Timberland: All service projects are led by employees who learn new skills and gain valuable project management and leadership experience to forward their professional development.
Marriott: Volunteer activities bring a new dimension to the meetings and strengthen teams both within and across functions.
Samsung: Volunteering with NGOs complements in-house training programs to enhance professional competencies, especially negotiation and communications skills with external audiences.
Telefónica: contracts with universities (in four countries) to provide training for employees on how to develop projects and make presentations.
3. Conflicted about Developmental Goals
But not all volunteering is created equal. Much of the perceived gains in employee development through corporate volunteering programs are only available via skills-based volunteering. Specific skill developments such as project management, problem-solving, risk management and so are only available through volunteering when the activities demand that application of those processes. Your team may feel more connected after building a new playground, but nobody will be a better public speaker because of it.
Barclay’s managers certainly reflected that reality in that only 9% viewed employee volunteering as an effective method of formal training, while 36% judged it to be not very effective.
Realizing this, many companies are beginning to structure their employee volunteer programs more intentionally. It seems simple enough – identify the development goals for the employee and find volunteer opportunity that will enable them to acquire those skills. Yet “there is a fine line between actively encouraging involvement in employee volunteering and making it compulsory, either by formal inclusion in personal development plans (PDPs) or through managers asking staff to get involved.” By looking to extract the value of employee development from a corporate volunteering program, there is a risk of over-formalizing the programs thereby destroying the very heart of the program: volunteerism.
Bea Boccolandro, an international authority in the field, suggests that the answer may be to just admit that employee volunteering isn’t really about volunteering. Boccolandro believes it is impossible to reconcile the strategic intent of corporate volunteering programs with the altruistic aspects of volunteering. Instead, she suggests viewing employee volunteering as a corporate citizenship strategy that utilizes employees as an investment in the community. In return, companies should look to these types of programs as primarily employee development programs that create a ‘Shared Value’ with the community.
Despite these potentially conflicting perspectives, the fact remains that when employees serve in the community as representatives of a company with both the support and resources of that company, there are wonderful opportunities for employee development to occur. What’s more, this approach to achieving competitive advantage is in itself a competitive advantage.
Meaning – it’s quite cost-effective.
4. The Comparative Cost of Employee Volunteering Programs
The recent Points of Light Institute report, Trends Of Excellence In Employee Volunteering Series, estimates that companies that have good employee volunteer programs are spending, on average, about $179 per employee (whether they volunteer or not). That’s a significant increase from just a few years back when we were advising on the Drivers of Effectiveness for Employee Volunteering and Giving Programs produced by the Boston College Center for Corporate Citizenship. That report identified $30 per employee as the hallmark of an excellent program.
Still, once applied to employees who actually volunteer, the cost of a solid corporate volunteering program seems to be around $416 per employee who participates in the program. Compared to an average of $1201 per employee who participates in one training program per year, employee volunteering is a bargain.
It is not, however, a straight one to one comparison. The training is not always specific to a set of skills needed by an individual employee, and if the company only offers volunteering on an episodic basis, there is probably little to no effect realized for the company.
In order to address this potentially limiting reality, the Human Resource department must play an essential role. If a corporate volunteering program is to achieve any amount of success, the HR department must meaningfully participate in the design and coordination of the program. HR departments are able to ensure that the practices, procedures, and policies of the employee volunteering program internalize the learnings gained from the volunteer experience. Aligning HR practices and objectives relating to employee satisfaction, training and engagement with CSR activities in general and corporate volunteering specifically will ensure broad success of the program. A collaborative approach with HR achieves:
- increased levels of employee empowerment
- improved flexibility within the organizational processes facilitating the flow of information and increasing innovation
- the ability to design compensation strategies which further increase employee participation in CSR programs
For more great info about the connection between HR and CSR be sure to check out the book by Elaine Cohen CSR for HR.
5. The Bottom Line
Investing in the development of employees through training programs is without questions a necessary component of a company’s competitive advantage. Employee volunteering, when done correctly, offers an affordable and effective strategy to developing the workforce. Here are some suggestions to getting it right:
- Decide which skills you’re after– Employee volunteering can increase your intangible resources by helping employees develop soft skills but only when placed in the right situation.
- Do it more often– A once a year event isn’t going to be effective on any level – not even for team building. Schedule volunteering events throughout the year and make sure to mix up who attends.
- Call it what it is– If you want to create a development opportunity, do not call it volunteering. Instead, offer a training opportunity with a ‘real world’ experience and go work in the community. (Shared Value employee training.)
- Get the biggest bang for your buck– Don’t expect great results from an employee volunteering program in which there is little to no financial investment. If you’re willing to spend $1200 to help your employees with interpersonal skills through a traditional classroom experience, set a reasonable amount aside for the employee volunteer program as well.
Volunteerism is a difficult concept to monetize because the myriad ways volunteers contribute are not always measurable. But in looking at what is quantifiable, Independent Sector estimates the national value of each volunteer hour is worth $25.43 per hour. Derived from the U.S. Bureau of Labor Statistics’ database of job functions and mean wages, this calculation is a way to assign a monetary value to the time your employees donate. So if 50 of your employees each volunteer 8 hours to a nonprofit throughout the course of a year, instead of reporting that your company volunteered 400 hours, you can share that your company’s volunteerism provided approximately $10,172 worth of volunteer time to that nonprofit. That’s a significant business contribution to the community, and a value your board and other important stakeholders are more likely to comprehend and appreciate.
[…] Research suggests that companies with good volunteering programs spend roughly $179 per employee per year (regardless of whether an employee is volunteering or not). When we compare this with an average of $1201 per year per employee that undergoes a skills-based training program—corporate volunteering schemes are barely a dent in the budget. For the skills and other benefits they can give back, it’s well worth the investment. […]