Katherine Jollon Colsher is a Managing Director at Goldman Sachs and the National Director of the Goldman Sachs 10,000 Small Businesses initiative. Goldman Sachs 10,000 Small Businesses is an investment to help entrepreneurs create jobs and economic opportunity by providing access to education, capital and business support services. Led by co-chairs Lloyd Blankfein, Goldman Sachs chairman and CEO; Michael R. Bloomberg, Bloomberg L.P. founder, president and CEO and 108th Mayor of the City of New York; Warren Buffett, Berkshire Hathaway chairman and CEO; and Dr. Michael Porter, Harvard Business School professor and the Initiative for a Competitive Inner City founder and chairman, the program is delivered through a network of more than 100 local and national partners across the country. To date, 10,000 Small Businesses has reached 31 sites across the U.S. and UK and has served over 7,200 small business owners through over 200 education classes. The program has reached business owners from all 50 states, Puerto Rico and Washington, D.C.
The Goldman Sachs Foundation has been a partner of UpSkill America since the 2015 White House UpSkill Summit and they have exceeded – in fact, more than doubled – their UpSkill commitment, having reached over 700 businesses through the program’s national cohort and delivering six classes to date.
Typically UpSkill America focuses on frontline worker training, but before we get to that here, what can you tell us about the importance of business owner training and what type of business owner training you have found stimulates growth and opportunities within companies?
At Goldman Sachs we believe that one of the smartest economic investments we can make to support economic growth is in small businesses and helping entrepreneurs create jobs and broaden opportunity. An important part of strengthening frontline worker training is to train small business owners to manage and sustainably grow their businesses, and to understand the short- and long-term value of investing in workforce development. This is what Goldman Sachs 10,000 Small Businesses is all about – creating jobs and addressing barriers to growth for small businesses. Through one single program, 10,000 Small Businesses provides a linked pipeline of services: a practical business and management education delivered through partnerships with local community colleges and universities, business support services, and tools for accessing capital.
And the business case is clear. Investing resources in America’s workforce, and small businesses in particular, is critical to the economic health of our country. Small businesses really are the backbone of the economy – they comprise the vast majority, 99%, of all U.S. employer firms – but perhaps most significantly, small businesses are the engine of job creation in America, as about two thirds of new private-sector jobs are created by small businesses.
Does your program include training on the importance of employee training, and have you found any correlation to small businesses that provide training and the success of the companies?
Goldman Sachs 10,000 Small Businesses emphasizes employee training and workforce development for small business owners – and leadership and people development is an important part of the business education our participants receive. A portion of the 10,000 Small Businesses curriculum focuses on leadership skills development for business owners as well as on optimizing employee recruiting, hiring, training and retention. More specifically, the “You Are the Leader” module helps business owners identify and hone their personal leadership styles. An important part of the program’s human capital management training includes the “It’s the People” module, which focuses on identifying and growing company culture and utilizing this foundation to create an actionable plan for growth. As one example, national cohort graduate Peter DiStefano, owner of DiStefano Brothers Construction based in Rhode Island shared with participants at a recent orientation that the program highlighted how important hiring the right people and taking care of your employees is to business growth and how he “makes it a priority to treat my employees the way I want them to treat my customers.”
We’ve found that what’s good for employees is good for business. Research and data compiled by our lead academic partner Babson College consistently shows that small business owners who invest in training are more likely to report growing, and more likely to report growing to a greater degree. Nearly three quarters of business owners who provide employee training report increasing revenue at 18 months and more than half create new jobs in that same time period.
What is the biggest problem that small businesses say they have when it comes to hiring?
Finding skilled labor is a small business owner’s number one issue. Based on Babson’s State of Small Business in America research, over 70% of business owners surveyed clearly indicated the need for more qualified workers. Interestingly when asked why, owners share that potential candidates lack the requisite skillsets – over and above other factors, including competition for talent, salary requirements and the provision of benefits.
What types of training do small business owners report providing to their employees and what have you learned about why small businesses don’t provide training?
We’ve also found that small businesses overwhelmingly strive to do the right thing for their employees – this includes providing one-on-one training, benefits, and mentoring. Babson’s study revealed that of the small business owners who provide training, most provide one-on-one, on-site training for employees. Program results show that over 85% of participants provide training to all or most of their employees at 18 months after completing the program. And nearly 60% of graduates offer health insurance to some or all employees. When asked why, small business owners see it as “the right thing to do.” Another notable finding we’ve seen is that program alumni recognize the value of paying it forward by mentoring an average of 8 people 18 months after graduation, a number nearly double that reported by participants at baseline.
When it comes to small businesses that don’t provide training, cost is the top reason cited, followed by a lack of awareness of available training courses and concern for time required to train. Small business owners do face tradeoffs investing limited resources and time in workforce development. Despite working hard to provide training, small businesses could benefit from greater availability, transparency and investment in workforce programs dedicated to their needs.
Are there any areas around education, training and development where you see a lot of opportunity for small businesses?
It’s clear that investing in business owner training pays off – both in terms of business growth and helping to develop a pool of skilled workers who are well-prepared to take on new jobs created. After all, small business owners employ 50% of the U.S. private sector workforce. An important opportunity lies in scaling existing public-private partnerships to better provide information, tools and resources to meet small business needs. Investing in the capacity of community colleges in particular, to further their focus on job training and apprenticeship programs, can help to connect small business owners to workforce training programs, address the skills gap and provide a source of qualified labor to support small business growth.
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