Publication Date：12/12/2008 Section：Issues
By Cindy Sui
Western companies have long understood the equation "well-trained staff equals better performance equals higher revenues." Local firms are increasingly warming up to the concept, particularly during an economic slowdown when good performance may be the key to survival. Taiwan Journal contributor Cindy Sui reports on the development of the training industry in the country.
When Eileen Huang began working at the human resources department of Cerebos International Health Ltd.'s Taiwan branch a few years ago, she was puzzled by how the managers gave all of their subordinates "A" ratings on their annual performance reviews.
"They were afraid of offending the employees so they gave them all A's. The performance reviews were not linked to salary raises, so they knew it didn't matter anyway," said Huang, the branch office's HR manager.
Since then the office, which has about 230 employees and 100 contractors, has embarked on regular and structured training programs--both in-house and subcontracted out to specialized firms. Such policy has helped the company improve its way of doing things in a wide range of areas, including how to properly evaluate its workers' performance.
Cerebos, which sells essence of chicken and other health products, now has an annual training budget of several million New Taiwan dollars.
"We don't wait until problems happen before we train our staff. We decide what kind of employees we need, what kind of leaders we need, and we help them reach our goal through training," Huang said.
An increasing number of firms in Taiwan--both international and local--are beginning to think this way, according to experts in the training industry. As competition intensifies and markets globalize, coaching is increasingly seen as a way for businesses to upgrade staffs' skills and maintain or create a competitive advantage.
The industry is growing by an estimated 5 percent to 7 percent annually, with the market in 2008 expected to reach an estimated US$77 million in sales, according to industry experts. About 20 major firms, including subsidiaries of overseas training companies and local counterparts, are currently operating in Taiwan. Government-funded organizations offering training programs, such as Taiwan External Trade Development Council (TAITRA), are also seeing great demand for their courses and high student enrollment.
Although the current economic downturn may lead some companies to trim their training budget, in the long run, they are expected to steadily boost staff development programs.
Coaching became popular in Taiwan about 30 years ago when foreign firms began setting up operations here and needed to train their staff, said Yvonne Fang, general manager of Pospo Digital Human Resources Services Inc., a Taipei-based coaching firm.
"Training is no longer the specialty of foreign companies," Fang said, explaining that many Taiwanese businesses have been doing very well in recent decades and want to open overseas branches now, so they start by studying foreign firms. "Local managers used to wonder why international companies had an HR department. Now they understand it is because they keep training their personnel," Fang said.
While hard skills training--how to use company equipment and software-- has been common practice in Taiwan for years, workers are now taught "soft skills." They learn, for example, how to ask questions and to better handle customer complaints but also, if they are managers, to motivate their employees. Such skills were overlooked in the past, especially by enterprises in fast-growing Asian economies, experts said.
Like their counterparts in Asia, many Taiwanese businesses have not had the chance to learn from long experience, compared to older firms in the United States and Europe, largely because they have been expanding quickly, according to Roy Magee, Asia regional vice president of AchieveGlobal, an international training firm.
"Managers haven't had time or experience to pick up these things by themselves or they haven't been taught," he said. "It's kind of the blind leading the blind. ... They tell their subordinates 'Do this,' rather than explaining. It gets things done, but then you find you have to keep on saying the same thing over and over again, because they don't understand why they're doing this."
Of all the companies that invest in training in Taiwan, most are multinationals or large local companies, especially those in finance, banking, high-tech, pharmaceuticals, or large-scale manufacturing, whereas the country's many small and medium-sized enterprises make up only a small percentage. Despite this, coaching firms said their business has been growing steadily and expect more SMEs to offer training to their employees. Why?
According to Peter Kuo, president of Excel International Services, Inc., most SMEs are reluctant to invest in training. "Taiwanese companies really need to change," said Kuo, who's been a coach in Taiwan for about 20 years. "It's a matter of mindset. Many business owners still have a 'manufacturing' mindset, so they think, 'How can I produce for others without spending too much?'"
The fact that more companies realize they have to expand operations to the mainland or compete with low-cost mainland Chinese firms is another incentive for them to have their employees learn new skills.
"They realize [mainland] China today is no longer a low-cost environment. As the cost of doing business goes up, there's more incentive to train employees to offer more high-value products, and work more efficiently and effectively," said Magee.
As Taiwanese companies try to build up their brand name recognition, more will also want to coach their staff on overseas branding. "Businesses want to keep their profitability rising and training is a key," said Kuo. "It's never too late. If you don't do it, it will be more difficult because of globalization."
A majority of the training methods come from overseas companies, but they are applicable in Taiwan because work place issues are similar. In the past 30 years, the island's standards of training have improved because the demand for quality courses has increased. Compared to a decade or two ago, employee development no longer involves just lecturing to them in a classroom setting. Interactive methods, including role-playing, are used to drive home the points. Instructors now have to not only deliver good presentations, but also accurately analyze students' needs.
"Nowadays, they pay attention to the activities, interaction, after-course evaluation and coaching," Fang said. "Bosses really care about getting a return on their investment and whether employees have applied what they learned to their job."
E-learning, another alternative, allows people to learn on their own time, using a computer, web sites, videos, and exercises. It is especially useful for companies that cannot afford to have a lot of people sitting in classrooms, or have small populations and are spread out.
"This is good for knowledge-type learning, transferring a lot of information without having to bring people together and disrupt work schedules or waste time and money, but the disadvantage is you don't necessarily change behavior and there's no feedback," said Magee.
According to instructors, mentoring and on-the-job-training are also equally significant and effective in transferring important knowledge. For Cerebos, training is considered so important that each year it develops a plan based on core competencies it wants its staff to achieve, including teamwork, leadership, commitment to excellence, and standardization of employee behavior.
In addition to courses, the company hires a consulting firm to conduct anonymous surveys every two years to hear what workers think. This approach is considered much more effective than holding a meeting and asking employees to express their opinions and ideas in front of everyone. The consulting firm does not turn over the surveys to the management, but instead summarizes the results and gives suggestions on how to address the staff's concerns and improve employee satisfaction and ultimately company performance. The key, Huang has learned, is to train managers.
"If the manager is good, then he or she can pass professional knowledge downward," said Huang, adding that this method is also more cost-efficient and comprises 70 percent of the company's training budget. Each manager at Cerebos receives about 80 hours of training a year. "If the management's actions and mentality are correct, then employees will follow them," pointed out Huang.
Sometimes Cerebos also relies on its own trained workers to coach the others, although having an employee certified as a professional trainer can cost several hundred thousand New Taiwan dollars, Huang said. However, despite the economic slowdown, the company has not cut its budget because it sees training as a long-term strategy, separate from the ups and downs of the economy.
The reward for Cerebos is having their managers and employees clearly understand their sales goals and strategies each year, and what is expected of them and how their performance will be measured, said Huang, adding that now salary raises are also linked to performance ratings.
"Employees are very clear about their objectives now, so they do very good planning," she explained. "They also understand their performance is measurable. ... There are no questions about why so and so got an A rating just like them, but has been promoted instead of them." Sales and productivity have increased as a result, Huang said.
However, according to Magee, compared to other developed countries, Taiwan's per capita spending on training still lags behind others, especially the United States and Europe.
Also, while international companies tend to do more staff surveys and assessments of their employees' competence before deciding their training plan for the year, Taiwanese firms tend to train more sporadically, and often do not have a specific program, instructors said. "They often decide, 'Oh, let's have a course like this, we haven't had this before,'" said Fang. Still, it's a growing market.
Experts believe Taiwan's many small and medium-sized businesses will increasingly need training. "SMEs one day will become big companies so they'll need internal management coaching," said Konrad Chen, executive director of TAITRA's International Trade Institute.
"The demand will definitely rise because trade will increase. ... Even if they only go to mainland China, they will still need English and other international business skills," Chen added.
Copyright © 2008 by Cindy Sui
Write to Taiwan Journal at tj@mail.gio.gov.tw
