People development audit: assessing effectiveness

Most companies cut their training budgets first in times of crisis. This behaviour stems from uncertainty. Management does not know what training and development work really brings the company.

When money is tight, companies therefore first drop the measures they consider less important. This happens even though it is generally accepted that employees’ qualifications are an important success factor.

For many managers, training and development are a black box that is hard to grasp and shows no measurable results on the bottom line. In good economic times, training measures are therefore tolerated. Under economic pressure, that tolerance ends and is replaced by hard budget cuts.

People developers, training managers, organisational developers and coaches are therefore asked by senior management to demonstrate a return on investment for their activities and programmes. They are expected to prove that their measures pay off and do not degenerate into occupational therapy.

Decision-makers look for key figures and empirical values that enable successful strategic people development. To obtain an objective picture of the benefit of people development measures, internal qualification work can be put to the test with a people development audit.

Many of those responsible for people development, particularly in mid-sized companies (Mittelstand), lack the tools to prove the value of their measures and to communicate the resulting benefit to management. As a result, they are more or less at the mercy of top management’s discretion.

In addition, many people development departments in most cases monitor themselves. They identify the qualification needs, set the learning objectives, develop the programmes, carry out the qualification measures and also take on the evaluation of success.

This form of self-monitoring and self-assessment often leads to results being glossed over and no objective measurement of results taking place. Daily practice shows that senior management questions the results of people development because of this self-monitoring.

In addition, the image and credibility of the people involved suffer, even though they do their work in the company to the best of their knowledge and belief.

All this happens even though recognised and proven systems are available to demonstrate the benefit of strategic people development work. These include the four-level model by Donald L. Kirkpatrick, the ROI model by Jack Phillips and the concept of Value on Investment, VOI for short, by Herbert Kellner.

A people development audit can establish to what extent these elaborate concepts are already being used in people development work and what opportunities for optimisation exist.

The result can be presented as a success factor profile of people development. For each success factor, the results of the analysis are compared with the benchmark standards on a scale. This shows at a glance where people development meets the standard and where gaps exist.

Professional people development work is characterised by aligning people development objectives with corporate objectives and corporate strategy. It must be ensured that objectively measurable results are achieved and that transfer to the workplace takes place.

Key figures are available as a basis for decisions in order to demonstrate the benefit of people development measures. The activities are tailored to the objectives and the starting situation so that they fulfil their purpose. A target-group-oriented and selective approach continuously optimises effort and benefit.

Those responsible ensure that the competencies of consultants and trainers are adapted to current requirements. The didactics of programmes and measures are aligned with scientifically recognised standards. All interventions aim to build competence.

Competence profiles are available for measuring competence development. The benefit of people development measures is demonstrated through ROI, VOI or both. A regular people development review is used to continuously improve the performance of people development.

The people development audit is a diagnostic instrument that provides a clear picture of an organisation’s people development work. The aim of the analysis is to take a close look at the systems, methods, structures, strategies and competencies used in people development work. The results of the success factor analysis show to what extent people development work meets international best-practice standards.

By success factors, transformis means validated quality criteria for people development that are based on generally defined standards. These quality criteria are discussed in a carefully prepared audit in dialogue with those responsible for people development. Consultants and people developers work out the degree of fulfilment together.

The survey aims to establish to what extent people development work meets the generally recognised quality criteria. The questions in the success factor analysis are designed so that those responsible can easily back up a positive answer with corresponding material.

So the audit does not just work through questions. The quality of people development work is put to the test on site. In the analysis phase, which usually takes two days, the representatives of people development and the consultant jointly produce documentation on the current state of people development work. It refers to internationally recognised quality criteria.

On the basis of the audit, concrete measures for optimising people development work can be derived. The aim is a demonstrable contribution to achieving the company’s strategic objectives.

The people development audit assesses ten success factors. Each has a guiding question.

The first success factor is needs assessment. The guiding question is: which systems are used to identify people development needs, taking the strategic objectives into account? The second is the definition of objectives. Here the question is how well the development objectives for people development measures and programmes are defined.

The third success factor is the people development strategy. It examines to what extent people development measures correlate with the company’s overall strategy. The fourth is the selection of measures, with the question of whether people development measures are used selectively for the different target groups.

The fifth success factor is programme development. The question is which competence model is used and to what extent it can be demonstrated that the measures carried out achieve measurable increases in competence.

The sixth success factor is implementation. This concerns which resources are available, quantitatively and qualitatively, to achieve the strategic people development objectives.

The seventh success factor is transfer assurance. The guiding question is: which systems are used to secure the transfer from the measure to the workplace? The eighth is benefit calculation. The question is which systems are used to capture the benefit of the people development measures carried out.

The ninth success factor is the support system. It examines which systems ensure that new competencies and behaviours are further consolidated in the workplace.

The tenth success factor is updating. The guiding question is: how is it ensured that existing programmes and standards are promptly adapted to changed circumstances?

The path from audit to improvement involves three steps: the analysis of the success factors, the analysis of trainer and consultant competencies, and the evaluation and presentation.

The first step is the analysis of the success factors. As preparation, a project team is put together in people development. The success factor analysis is carried out with standardised questionnaires and checklists. Positive answers are verified against corresponding material in people development. The survey is then evaluated, by success factor and as a gap analysis.

The result is documentation of the existing success factors of people development and of possible development opportunities. This step is designed as a two-day audit.

The second step is the analysis of trainer and consultant competencies. First, the trainers and consultants and the events to be evaluated are selected. The trainers and consultants assess their own competencies. Structured competence interviews are conducted with them. In addition, events are accompanied in order to carry out behavioural observations.

The result is a precise, realistic competence profile of each trainer and consultant. The effort is one day per trainer or consultant.

The third step is the evaluation and presentation. A team of experts prepares a detailed final report. It contains the results of the success factor analysis, the competence profiles of the trainers and consultants and concrete optimisation proposals.

The results are presented to senior management, and measures for optimisation are agreed. Half a day is planned for this. The outcome is an awareness of the quality of people development and an increase in its performance.

A people development audit brings considerable benefit to senior management and to those responsible for people development alike.

For those responsible for people development, the transparency created about their own work secures their legitimacy in the company. It supports the transformation from people development to performance improvement and reveals the existing opportunities for improvement in their own area of responsibility. In addition, the audit can be used as a management instrument for units that do not report directly and as an internal benchmarking instrument.

For senior management as the client, the performance of people development work becomes measurable, and therefore comparable, on the basis of an internationally recognised standard. The performance of people development becomes transparent, based on a shared understanding of qualitative and quantitative standards.

If people development work takes place at different locations, in different divisions or business units, the audit can be used as an internal benchmark. In addition, the need for optimisation is specified together with those responsible for people development.

In summary, with a regular audit, people development work is increasingly oriented towards corporate objectives and corporate strategy. The effects become measurable, and the resources provided are used in a targeted way.

Thanks to the transparency created, qualification, an important success factor, retains its right to exist even in economically difficult times. At the same time, priorities can be set in a targeted way.