Situation: The opportunity to upgrade your knowledge and skills, especially when funded by your employer, is a huge plus. An employee increases their human capital expecting that it will bring wage growth and career bonuses. There are also advantages for the employer: after these courses, the employee usually works more efficiently. However, this is not the whole story.
In fact: There is a significant psychological effect of continuing professional development programmes, i.e. people feel more confident in solving problems. After training, employees note that they cope better with tasks both at work and home.
Researchers from HSE Institute of Education Natalia Karmaeva and Andrey Zakharov have shown that continuing professional development (CPD) has a positive effect on the subjective control of employees. They feel more confident controlling significant events in life and solving various tasks. The article covering this research was published in the HSE journal "Economic Sociology".
Continuing education is not only a necessity, but a given. As long as you work, you also study, or rather develop your skills and acquire new ones. This is relevant not only for newly qualified university graduates or new employees who are still adapting to the workplace. The company’s ‘old-timers’ also study from time to time. Technologies change, requirements for employees are growing, and it is necessary to develop flexibility, acquire new skills and maintain high productivity, especially if you want to develop your career.
Employers also benefit from staff training: employees become more productive, which means that they increase the company’s economic results. As a result, there are corporate universities, training sessions, courses and other forms of continuing professional development (CPD). It is also important for the economy as a whole, due to the emergence of new technologies and a shortage of qualified specialists, which, according to employers, is as much as 25%.
The study focuses on the short-term training of employees funded by the organization to improve their skills.
In this situation, CPD might seem to be absolutely necessary, but it isn’t. According to the data for 2017, no more than 12% of employees among all those employed attended training programmes. At the same time, the majority of companies (50-60%, according to various estimates) declare that they organize training. It seems likely they are talking about the induction of new employees (they are offered courses or the guidance of experienced colleagues), but not about upgrading the skills of those who have been working there for a long time.
Courses and trainings provided by the employer often help employees to obtain specific skills. This kind of narrow focus can sometimes be demotivating (especially if the work itself does not meet the employee’s expectations). With very specific human capital, an employee has fewer advantages in the labor market.
More often, staff training is organized by innovative companies, and less often by employers from the "mass" sectors (metalworking, heat and electricity; food, textile industry and catering; construction; transport) Thus, according to the research data, in 2016, more than half of the surveyed innovative companies invested in employee training. This is more than one and a half times more than the ‘mass’ sectors. Employers explain the introduction of training through the emergence of new technologies.
An unwillingness to introduce CPD practices can be explained by several reasons. First, there are difficulties with retaining staff after training. Secondly, production technologies are not modernized quickly enough, which reduces the demand for upgrading skills. In other words, it happens due to the low innovative activity of companies. Thirdly, many organizations are focused on the domestic market which has limited competition. In general, companies are not always concerned about improving the skills of their employees.
There is one more important point related to the integration of CPD into the employee incentive system. According to foreign studies, about 60% of corporate training forms the total human capital, which means that the company may need to deliberately retain a trained employee who has become more mobile in the labor market. Therefore, employers often accompany training with additional benefits for employees — promotion, bonuses, and promising tasks. All of these measures should have a positive impact on the employee's satisfaction in terms of salary and career.
An important criterion that employers should consider is the correlation between participation in CPD and job satisfaction. This is determined not only by the nature of training (the formation of general or specific human capital), but also by how professional development is integrated into the wider system of employee incentives.
The results of previous studies on this topic are ambiguous. A large study based on data from 13 European countries showed that on-the-job training is associated with a higher level of job satisfaction.
The conclusions of British, American and German studies are similar. At the same time, other research shows that the staff will not be particularly satisfied with the job if the company does not provide them with economic returns from CPD.
In general, Russian workers are not overly satisfied with their jobs. First, there is a high proportion of low productivity jobs in Russia that involve hard work, in harmful environments, with small salaries. Secondly, the labor market is not balanced in terms of the structure of supply and demand. Thirdly, there is little demand for specific human capital on the market, which results in employees having shorter work records at an enterprise compared to developed countries. As a result, the level of job satisfaction in Russia is lower when compared to the countries of Central and Western Europe.
We might assume that CPD could increase this level. This hypothesis was proposed by HSE researchers. Another hypothesis concerns the connection between advanced training and subjective control among employees.
Natalia Karmaeva and Andrey Zakharov used data from the longitudinal study, ‘Russian Longitudinal Monitoring Survey – HSE’. Dependent variables, such as subjective control and satisfaction with salary and career, were taken from the 20th wave of the monitoring, while information on participation in CPD programmes and control variables (from sociodemographic variables including gender, age, marital status, to workplace characteristics) were taken from the 19th wave. During this year, the respondents were able to assess the impact of their recent training. The sample included about 5,000 respondents aged 18-65 years who were participants of the study of both waves.
The Purlin scale was used to measure subjective control. This allows the researchers to determine the overall level of perceived control in terms of the ability to control important life events in the future. To analyze satisfaction with salary and career options, the authors used the respondents' answers to the relevant questions, recoding the scales into dichotomous ones ("satisfied–unsatisfied").
During the first stage, the correlation between training and subjective control or job satisfaction was evaluated without control of other characteristics of the respondents (the basic model). At the second stage, sociodemographic parameters were taken into account. At the third stage, the index of socio-professional status (International Socio-Economic Index of Occupational Status — ISEI), created in accordance with the International Standard Classification of Occupations (2008 version, ISCO 08), was monitored. Then certain features of work were added (work experience, sector, number of subordinates, etc.).
The study showed a positive relationship between CPD and subjective control. In the basic model, those who studied had a higher control score (by 0.27 of standard deviation) than those who did not take the course. When adding other variables, the effect decreased to 0.13, but the relationship remained statistically significant. At the same time, the control of sociodemographic data has almost no effect on the correlation between learning and self-confidence. The effect decreases primarily when adding a socio-professional status.
The relation between CPD and job satisfaction also showed some interesting results. The programme participants (in the basic model) are 34% more likely to be satisfied with their salary after a year (compared to those who did not attend the courses). Moreover, sociodemographic parameters affect the results insignificantly. Adding the socio-professional status index to the analysis weakens the effect by up to 14%, making it statistically insignificant.
The correlation between training and career satisfaction in the basic model, taking into account sociodemographic characteristics, is even stronger than in the salary situation. After the courses, employees are 62% more likely to be satisfied with career options (without taking into account other variables). However, taking into account socio-professional parameters again greatly reduces the effect by up to 25% — and again makes it insignificant.
Thus, confidence in their ability to cope with tasks is noticeably more expressed among employees who have participated in CPD programmes. This corresponds to the results of previous studies. "Continuing education develops non-cognitive skills, in particular, the ability to solve problems, and increases self-confidence," explain Karmayeva and Zakharov.
However, there are nuances. Previous studies conducted in post-Soviet countries show that for employees with a low level of education and skills, participation in CPD programmes is significantly correlated with an increase in self-esteem of their competencies, and the positive effect is higher than that of highly qualified colleagues. In Russia, the situation is the opposite. Job satisfaction was higher for more "privileged" employees (with high qualifications and salary). The inverse correlation is also possible: more productive employees evaluate their labor efforts as more useful, they are interested in career growth, and therefore they are willing to study.
Features of accumulation and use of human capital in different segments of the labor market should also be taken into account. For example, in high-performance workplaces, the employer will strive to retain employees after the courses, and the bonuses which are offered can increase job satisfaction. However, for low productivity jobs, the career and salary expectations which emerge after training are difficult to implement. This is due to the fact that employees with low socio-professional status often hold positions with very limited career ladders and can easily be replaced. In Russia, such jobs are often concentrated in the state, as well as in the service sector.
Third, there are many employees with excessive or insufficient skills (this phenomenon is known as the ‘skills mismatch’) on the Russian labor market. They are usually less satisfied with their work. And participation in CPD programmes may fail to smooth out the negative effects of this mismatch.
There is no doubt that continuing professional development is important. Access to CPD is an essential feature of a quality workplace. However, employers should pay more attention to ordinary employees — and encourage them to improve their skills. This can be an effective way to motivate employees. And even the opportunity to take part in such training can be perceived as a bonus.
Furthermore, even if training does not bring great economic returns "here and now", it nevertheless provides advantages over competitors. And it certainly has a psychological effect, with employees experiencing an increase in the feelings of their self-efficacy, which is important in any business.
‘In the future, it will be interesting to track the dynamics of the growth of costs for training and adaptation of employees,’ says Natalia Karmaeva. ‘Mass sectors feature high staff turnover and low wages. Nevertheless, training in these sectors is also necessary.’
The authors of the study expect that over time, employers will seek to shift the growing costs of training on to the employees themselves. For example, deducting the cost of training from the salary or not paying compensation for the training period. ‘This is already happening in the segment of platform employment, for example, on online platforms for tutoring services,’ explains the researcher. ‘Employees act as subcontractors, and their “continuing education” is actually expanded beyond the employment contract.’ There are also new questions about whether companies should motivate such employees, and how exactly it should be done,’ says Natalia Karmayeva.