A Review of the Conducted Research on Enterprise Training Needs
Motivated by the OECD recommendations from the SBA Implementation Report – Small Business Act for Bosnia and Herzegovina for Dimension 8a (Enterprise Skills), Eda conducted research on enterprise training needs at the end of last year, as part of the “SBA in BiH2EU” project. The research covered 122 enterprises from key industrial sectors in BiH: metal, wood, food, plastics, and IT industries.
The study is available here in the local language, and in this blog, we aim to reflect on the research findings. Some of them surprised us (which is a particular value of the research), while others were quite expected. More on that in the following lines…
Findings We Expected
When designing the research, we assumed that the highest interest/need would be for sector-specific training (e.g., welding for metal processing, CNC operators for wood and metal processing, HACCP and similar standards for the food industry, etc.). The results largely confirmed these assumptions:
- Metal industry primarily seeks training for CNC operators (48%), machine maintenance (45%), welding, CAD/CAM software, and CNC programming (43% each), as well as foremen (40%) and locksmiths (38%).
- Wood industry prioritizes production technologies (61%), quality management, and CNC operators (56% each), while training for carpenters (50%) and CNC programmers (44%) is slightly less in demand.
- Food industry focuses on good hygiene and manufacturing practices (59%), food standards (56%), and production control (41%), with lower priority given to product development (30%) and preventive equipment maintenance (26%).
- Plastics industry emphasizes training in human resources, machine maintenance, and polymer production technology (63%), while digital literacy (50%) and innovative materials (38%) are also important.
- IT sector has the highest demand for sales training (56%) and cybersecurity (52%), while Agile, Scrum (30%), and machine learning (33%) are of medium priority.
All industries show strong interest in digitalization, energy management, and artificial intelligence (AI), with the metal, wood, and food industries leading in digitalization, while the IT sector prioritizes AI.
However, the willingness to (co-)finance key training is relatively low. More than half of the enterprises surveyed (in all sectors) believe that essential training should be free or are only willing to co-finance up to 30% of the cost. This may partly stem from a “production-oriented” mindset that prioritizes tangible investments (machines, equipment, etc.), as well as the fact that many training programs in recent years have been free for enterprises, funded by various international projects.
Findings That Surprised Us
Given that enterprise representatives often highlight the relatively low quality of the workforce, we were surprised by their assessment of the current knowledge and skill level of employees. These ratings were relatively high. On a scale from 1 (poor) to 5 (very good), about half of the companies in the metal, IT, food, and wood industries rated their employees’ knowledge and skills as good (score of 4). The lowest rating was in the plastics industry, where half of the companies considered their employees’ knowledge and skills sufficient (score of 3).
Another major surprise was the response to which training would be desirable for company owners/managers. In all observed industries, the most important training for managers was related to human resource management (HRM) and related topics (attracting and retaining employees, emotional management and leadership, adapting to new generations of employees, finding and developing skilled labor).
These two findings are somewhat contradictory: on one hand, high ratings for employee knowledge and skills, and on the other, the acknowledgment that HRM is an underdeveloped function, i. e. that the most needed training for owners/managers is HRM. The reasons for this contradiction can only be speculated.
An explanation might be found in the fact that we are dealing with different people (employees and owners/managers) and different types of knowledge – employees who (should) have professional, specialized, and often operational knowledge, and owners/managers who (should) have managerial and organizational knowledge along with strong communication and leadership skills. Based on the respondents’ answers, it could be concluded that appropriate knowledge and skills are more needed by business owners/managers than by their employees. If we consider that a significant number of owners/managers of manufacturing SMEs have a technical backgrounds (e.g., engineers), the need for knowledge and skills they lack (such as motivation, leadership, and HRM) becomes even more emphasized. Additionally, it can be assumed that a considerable number of questionnaires were completed by employees who were lenient toward themselves, rating themselves and their colleagues (their knowledge and skills) quite favorably while being critical of the company leadership and their HRM practices – likely for good reason, as senior managers are predominantly preoccupied with operations and achieving business (mainly financial) results. It should also be noted that the available professional support in the field of HRM is far from commendable, to put it mildly. Therefore, launching such training initiatives and finding ways to engage managers in them should be approached cautiously and thoughtfully, as accepting the lessons from such training implies changes in managers’ habits and priorities.
Overall, although there have been indications that things are changing in this regard (especially in medium-sized and relatively large enterprises), it is notable that there is a growing need for systemic support in this area to establish and strengthen the HRM function in companies. Since the competitiveness of many enterprises in BiH is based on low costs (including labor costs), while skilled labor is becoming an increasingly scarce resource, business models should evolve towards creating greater added value – achievable through employees with extensive knowledge, experience, and motivation. In this transition, HRM will become increasingly important. Companies that recognize and adapt to this trend will have better prospects for survival and growth in the future.