Catalyst for change


If it ain’t broke, don’t fix it”. The expression apparently originated in the USA in the 20th century and is often attributed to Thomas Bertram Lance (1931 – 2013), known as Bert Lance, who was a close adviser to Jimmy Carter during his successful 1976 campaign and became director of the Office of Management and the Budget (OMB) in Carter’s government.

So what? Well, I was contemplating whether this seemingly pragmatic attitude encapsulated the City of London’s collective view of employee Training & Competency (T&C).

The default employee T&C model for the UK FinServ sector is characterised by ‘lowest-cost-to-tick-the-box’ behaviour. Typically, a new starter in a firm is inundated with online learning and required to complete this as part of their induction. Once they have done so they are then doubtless subjected to annual refresher training. The precise nature of which varies by firm. Some choose to spread the “pain” throughout the year, others serve it all up in one month.

In any event, the training tends to be of a one-size-fits-all variety and includes a “test” at the end of each module/subject matter, frequently allowing the employee unlimited chances to retake it until they pass. The purpose of the test is apparently to prove the employee has consumed the refresher training and achieved – an often unfeasibly high – pass mark. Box ticked; job done.

However – I’ll say it again – it is broken, and it needs fixing, and the sooner firms start to properly invest in their employees’ workplace education, the sooner they will reap the rewards.

Certainly, some firms have acted of late and reinforced the governance around the process. They do not allow users to fast-forward through the training straight to the test at the end, instead the employee must patiently sit through the training before they take the test!  Also, some firms limit the number of times an employee can re-sit the test, but this is window dressing at best; it doesn’t change the outcome.

I speak with literally hundreds of firms a year and despite these recent refinements undertaken by some, I rarely come across a senior manager prepared to defend this model as delivering against the spirit of the legislation. Certainly, it ticks the box, but what it doesn’t do is ensure individual employees are appropriately knowledgeable and competent in roles relative to the legislation affecting that firm.

We know this for a fact because when we socialise our Artificial Intelligence to profile genuine employee competence, the average employer scores just 54%. Meaning employees know about half of what they are required to know to be compliant in-role.

To date, this fundamental fail hasn’t really caused firms in the sector any trouble. FCA fines totalled 21 across 2020-21, with none of the reasoning behind them directly referencing T&C.1 Ironically, the majority of the reasoning seems to be conduct and competency related, but hey: “if it ain’t broke, don’t fix it.”

The thing is: it is broken, and it does need fixing.

Certainly, some firms are ahead of the curve and acknowledge there is economic and emotional value to be had in ensuring employees are genuinely capable and competent in-role. From harvesting employee performance improvements, attracting and retaining talent, and sleeping easy at night knowing that in the event of some failure that attracts the attention of the regulator, senior management can rely on best-in-class evidence of employee T&C rather than questionable refresher training data.

But most firms will need a bigger catalyst to change because inevitably changing from the lowest possible cost model to one that works is always going to involve additional expenditure. An English equivalent might well be, “if it isn’t broken, let’s not go spending money on changing it.”

However – I’ll say it again – it is broken, and it needs fixing, and the sooner firms start to properly invest in their employees’ workplace education, the sooner they will reap the rewards.

By way of an example as to how ineffective the sector’s current default model is, let’s look at cyber security. Historically, almost all firms took the same approach to cyber security training. They would just lump cyber security training in with the regulatory required learning. It’s another box to tick. But, in this instance, the consequences of this tick box approach are arguably far more serious and present.

The cyber security threat is probably the biggest single non-trading risk that a firm faces today. The single biggest cause of data breaches is employees of the target firm not following procedure or doing what they have been trained to do.

The World Economic Forum’s Global Risks Report 2022 states that ‘95% of cybersecurity issues can be traced to human error, with insider threat (intentional or accidental) representing 43% of all breaches’.

With hard-won brand reputation on the line and the prospect of fines, compensation and ransom payments, cyber security alone is proving to be the catalyst for firms to change their approach.

As a result, many firms are urgently seeking an employee T&C solution that genuinely delivers cyber-security competent employees. Rarely is this about lowest-cost-to-serve, fastest time to complete or ticking a box. Instead, it is about authentic training and support of employees, so they know and retain the required training to be vigilant, mindful, and competent.

Perhaps the combination of the new Consumer Duty – requiring firms to empower rank-and-file-employees so they can deliver the correct help and support to customers – alongside a steady increase in the regulator’s use of sophisticated technology to amplify their reach will prove to be the catalyst that forces many firms to bury the tick box approach and start doing employee T&C properly. And if it doesn’t, perhaps market competition will help?

One study found that 87% of millennials state that learning and development opportunities are a very influential factor when deciding whether to accept a new job.2 Since millennials are set to make up 50% of the workforce by 2025, it is vital that businesses cater to the new majority by providing learning and development opportunities. The same study went on to say that 94% of employees would stay longer at a firm that invested in their career development.

I wonder how many of those millennials look at the default tick-box approach to regulatory training and thank their employer for developing their career!

Employers who find genuine and authentic ways to help their employees be more effective in-role, over time, will outperform those firms who fail to do so. This has nothing to do with ticking a box for the lowest cost, but everything to do with genuine workforce development.

“Saving money” on employee T&C now will almost certainly prove a false economy over the remainder of the decade. I wonder how many executives would be prepared to revisit investment in employee T&C if a sound business case could be provided for economic return?




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Adrian Harvey is CEO at Elephants Don't Forget. Elephants Don’t Forget are world leaders in the use of Artificial Intelligence to augment how each employee learns, retains and evidences in-role knowledge and competency. We support employee competency and compliance training of some the world’s most recognised brands including Microsoft, Vodafone, Experian, Allianz, Old Mutual, Aviva, Eon and Volvo.

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