Slow Czech HR development

IE Focus

1 December 2004

A study of how the Czech Republic’s small and medium-sized enterprises (SMEs) approach to human-resources development reveals the national state-of-the-art as well as principal barriers to implementing HR development in its SMEs.

The survey of 900 organizations nationwide was led by the National Observatory of Employment and Training in 2002. Focusing on HR training, its findings revealed considerable differences between SMEs and other firms – in particular in terms of investment in training, coherence of processes applied, and availability of skilled labor.

This gap appears to widen as the company’s size decreases. In addition, the report found better results in HR development, on average, in companies with favorable performance and qualitative indicators, such as growing productivity, involvement in research and development, and exports. Firms with foreign capital also showed a better approach to human resources, the findings indicated.

Only a small number of Czech SMEs view the quality of their human resources as a key factor of their economic performance and competitiveness. A mere 8.9 percent ranked the quality of their employees among the major sources of competitive advantage, showing a somewhat short-term approach to staff development.

Low figures

The survey also found that 42.7 percent of SMEs do not organize any training or development activities at all. Over one-fourth (27.4 percent) considered training an investment that does not lead to adequate returns, while nearly half (48.4 percent) see training as a private matter for each employee.

Over the last three years in the country, the scope of training has jumped in less than half of these companies (41.7 percent). Only 31 percent of firms polled said they expected to augment their investment in training as a proportion of their total labor costs after the country joins the EU.

Where training is organized, short, internal on-the-job courses predominate. The study found only limited training that aims at enhancing flexibility of SME staff. Only 34.7 percent of companies surveyed train their employees for two and more jobs (multiskilling), while a mere 14.4 percent have organized retraining courses.

A less-than-active approach to addressing problems seems endemic to the nation’s SMEs. Though they often face difficulties in the recruitment and turnover of workers with appropriate skills, only 8.5 percent reported that they increased their training activities to address skills shortages. A slim 9 percent said they established links with schools, while 5.8 percent stated that they looked for prospective employees and trained them.

A database (in Czech) has been set up to provide an overview of company approaches, measures and projects across Europe (www.nvf.cz/oversvatory/cz/dokumenty/rlz_smes.pdf). The intention is to raise awareness among Czech SMEs and motivate them to invest more in staff development.

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