In the last three years, we have witnessed a broad new consensus concerning the importance of training and development in the workforce, with concomitant investments and the emergence of new managerial functions to support employee development. For example, in addition to the traditional human resource roles found in many companies, organizations are also adding staff to manage culture, and retaining consultants to help them more effectively leverage human capital.
At the same time, I have witnessed growing frustration concerning the difficulty of measuring and understanding workforce investment returns. For example, one of my colleagues is the Vice President for Workforce Development at a multinational aerospace corporation. In numerous discussions, she has noted frustration trying to understand her firm’s return on workforce investments.
Part of the problem lies in the absence of data. Firms increasingly outsource engagement and other survey data to third-party providers to improve response rates and honesty. Although this approach enables firms to avoid acquiescence and social desirability biases (a good thing), the third-party providers often are unwilling or unable to provide roll-level data. The net effect is that it becomes impossible to track how changes in employees or culture affect downstream metrics.
Furthermore, when organizations do get the employee data they are seeking, there are sometimes agency and quality problems with these data. For example, it is not uncommon for employee metrics to be collected by the same companies that provided the training in the first place. This practice introduces an agency dilemma into the feedback as providers are reluctant to share information that may frame their programs in a negative light. Even when they collect robust data, the measures employed by consultants can be skewed to make their training look good, rather than demonstrate downstream effects on employees and value creation.
Thus, similar to the generally accepted accounting principles (GAAP) employed in auditing, there is a need for an independent assessment of workforce training and development outcomes. This realization was the genesis behind Red Castle HC, and our goal is to provide transparent and rigorous workforce intelligence to help organizations optimize their training and development investments.
Of course, there are caveats to our services. We are not the “training and development police,” and our purpose isn’t to “catch” consultants. Rather, the intent of our audits is to help organizations and consultants optimize their investments and training. Thus, we view ourselves as an important partner in the process of workforce development, providing objective and compelling evidence about workforce investments.
There are four channels where I see Red Castle HC contributing in this domain.
- First, we can work with organizations to track and estimate returns for recently-completed or planned workforce investments. By linking workforce participation and exposure roll-level data to employee metrics, we can help quantify where training and development matters most, and offer insights into improving these investments in the future. We can also identify pockets of employees where workforce investments aren’t paying off, helping organizations mitigate under-performance or change their approaches to fit the unique needs of employees.
- Second, we are prepared to partner with consultants during the proposal or planning stages of work. Our fees are modest, and we can help training and development providers demonstrate that their programming works, and actively moves the needle on important metrics. Our inclusion in your proposal also demonstrates your confidence that consulting clients will receive the quality they are seeking.
- Third, we can work with consultants to pilot-test new programs or program revisions. Using convenience samples or secondary data, we can provide the preliminary evidence needed to understand employee outcomes before you roll out programming with your clients. This approach enables consultants and organizations to mitigate risk.
- Finally, as our client portfolio increases in size and experience, I hope that we will be able to showcase “preferred providers” who have demonstrated sustained excellence in training and development. Beyond recognizing these high-performing consultants, Red Castle HC would be able to highlight their historical performance, helping new clients select the providers they need, and mitigating selection risks in the process.
So, who is going to do all of this work and how?
Our founding team has over 30 years of combined experience in consulting and human capital research, so we are well-positioned to tackle the challenges of estimating returns from training and development. However, we also plan to leverage a network of scholars from around the world with expertise in human capital, industrial psychology, marketing, supply chain and logistics, and safety. In doing so, we will be able to provide timely and accurate workforce intelligence, and rapidly ramp up in capacity, as needed. We are excited to leverage our experience and expertise to help organizations and consultants maximize their workforce potential and “move the needle” to enhance value creation.
