the impact of training and development on a business

2.1 HRM – Training and Development

1. Purpose and Role of HRM

Human Resource Management (HRM) exists to help an organisation achieve its strategic objectives by obtaining, developing, motivating and retaining the right people. It does this by aligning people‑related policies with business goals, ensuring that the workforce can deliver the required output, quality and innovation.

• Workforce planning
• Recruitment and selection
• Training and development (including induction)
• Performance management
• Employee welfare, morale and motivation
• Redundancy, dismissal and employee relations

2. Workforce Planning

Workforce planning is a systematic process that forecasts the number and type of employees needed in the future.

• Analyse current skills, qualifications and experience.
• Identify skill gaps through a gap analysis.
• Project future demand for skills (growth, new technology, market changes).
• Measure staff turnover (voluntary & involuntary) and consider its impact on staffing levels and training needs.
• Decide whether gaps are best filled by external recruitment or internal training/re‑skilling.

Effective planning ensures that training programmes are targeted at genuine shortages, maximising return on investment.

3. Recruitment and Selection

The recruitment cycle typically includes:

1. Job analysis – defining duties, responsibilities and the person‑specification (knowledge, skills, abilities, experience).
2. Attracting candidates – internal posting, advertising (newspapers, online job boards, social media), recruitment agencies, head‑hunting.
3. Short‑listing and interviewing – structured or competency‑based interviews.
4. Testing and assessment centres – psychometric tests, work‑sample tests, group exercises.
5. Final selection and offer – reference checks, background checks, contract.

Internal vs. external recruitment

Training is linked to recruitment by:

• Internal recruitment: Developing existing staff for higher‑level roles (career pathways, succession planning).
• External recruitment: Providing induction and on‑the‑job training to bring new hires up to speed quickly.

4. Redundancy and Dismissal

Both redundancy and dismissal remove staff from the organisation, but they differ in cause and legal implications.

How training mitigates redundancy and dismissal

• Retraining / re‑skilling – equips employees with new competencies, enabling redeployment to other roles and reducing redundancy.
• Performance‑related training – addresses skill or behaviour gaps that could otherwise lead to dismissal.

5. Morale, Welfare and Inclusion

Training contributes directly to employee well‑being and organisational culture.

• Career‑development opportunities increase job satisfaction and motivation.
• Improved competence reduces stress and boosts confidence.
• Diversity and equality – specific programmes on anti‑discrimination, cultural awareness and inclusive leadership.
• Work‑life balance – flexible e‑learning, blended learning and self‑paced modules allow staff to fit training around personal commitments.
• Health‑and‑safety training improves physical welfare and reduces accident‑related absenteeism.

6. Management‑Workforce Relations

Effective HRM must manage the relationship between management and the workforce.

• Trade unions – represent employee interests, negotiate collective agreements.
• Collective bargaining – process of negotiating wages, working conditions, benefits.
• Co‑operation benefits – joint consultation can improve morale, reduce industrial action and foster a collaborative culture.
• Training for both managers (negotiation, conflict resolution) and employees (industrial relations) supports constructive relations.

7. Training and Development – Key Concepts

• Induction: Initial orientation covering policies, culture, health & safety, and basic duties.
• On‑the‑Job Training (OJT): Learning while performing the role – coaching, mentoring, job rotation, shadowing.
• Off‑the‑Job Training: Classroom courses, seminars, e‑learning, simulations, external workshops.
• Training: Short‑term, role‑specific learning aimed at improving current performance.
• Development: Long‑term activities that prepare employees for future responsibilities and career progression.
• Multi‑skilling: Teaching employees a range of tasks to increase flexibility and reduce reliance on specialist staff.
• Intrapreneurship: Training that encourages employees to act like entrepreneurs within the organisation – idea generation, project management, risk‑taking.

8. How Training and Development Influence Business Performance

1. Increased productivity and efficiency.
2. Improved product and service quality.
3. Higher employee motivation, morale and job satisfaction.
4. Reduced staff turnover and associated recruitment costs.
5. Enhanced innovation, adaptability and competitive advantage.
6. Compliance with legal, health‑and‑safety and industry standards.
7. Greater organisational flexibility through multi‑skilling and intrapreneurial behaviour.

9. Impact Summary Table

10. Evaluating Training Effectiveness – The Kirkpatrick Model

1. Reaction: Learners’ satisfaction and perceived relevance (e.g., post‑course surveys).
2. Learning: Measured increase in knowledge/skills (tests, assessments).
3. Behaviour: Observable change in job performance (manager observations, performance metrics).
4. Results: Impact on organisational outcomes – profit, productivity, quality, turnover, etc.

11. Potential Costs and Risks

• Direct costs: Course fees, trainer salaries, materials, venue hire, external provider charges.
• Indirect costs: Time employees spend away from their duties, lost output, administrative overhead.
• Transfer risk: Training may not be applied on the job if not reinforced through coaching or performance review.
• Retention risk: Trained staff may leave for competitors, taking new skills with them.
• Legal/Compliance risk: Inadequate training can lead to breaches of health‑and‑safety or data‑protection regulations.

12. Suggested Diagram – The Training Cycle

13. Conclusion

Effective training and development create a virtuous cycle: workforce planning identifies skill gaps; targeted training (including multi‑skilling and intrapreneurial programmes) fills those gaps; the resulting improvements in productivity, quality, morale and innovation boost profitability. The additional profit then enables further investment in people, reinforcing HRM as a strategic function rather than a purely administrative one. Mastery of these concepts is essential for success in the Cambridge AS‑Level Business (9609) syllabus.