By Daniel Bobinski
It happens every time our country has a downturn in the economy. Training budgets get slashed. After more than three decades, I’ve seen it happen every time. The problem is that organizations inflict unseen damage on themselves by making the mistake of slashing training budgets.
Over the past few years, America has seen hiring signs just about everywhere. Businesses of all types are begging for people to come work for them. In my state, nurses are in such short supply that hospital systems are offering starting salaries of more than $100,000. This means that many existing employees are already stretched and strained, and mistakes are being made.
I know this because nurses are telling me this is the case.
Sadly, the trend of training budgets being cut is re-emerging with the latest recession. As just one example, an acquaintance who has been a corporate trainer for decades (let’s call him Thomas) recently called to tell me his Fortune 500 company was making the budget-slashing mistake. His own job is not in danger, but as a trainer, he’s already seeing the negative ripple effects of training cutbacks.
“We developed an excellent onboarding system,” Thomas told me. “When someone got hired, there was a system in place to ramp them up so they could be in the field in less than four weeks. That means they were profitable to the company in relatively short order.”
But with a huge cut in the company’s training budget, dozens of trainers were let go, and the onboarding system was redesigned. “We went from 12 new-hire trainers down to six,” Thomas said, “and new-hire training went from four weeks down to two – with one of those weeks being nothing but job shadowing.”
The result? New hires are being placed in field positions without the knowledge to be effective, and they’re making a lot of mistakes. Thomas also says the budget cut has affected turnover. “People who would normally stay and be productive for us are quitting after just a few weeks because they feel inadequately trained for the job,” he said.
Job shadowing has its place, but many people – even professionals in their field – do not understand the mechanics of transferring knowledge and skills to someone else. Watching someone do something is very different from being able to adequately perform the same skill.
Current employees are also impacted
Cutting a training budget also affects current employees. Training brings confidence to employees who receive it because they know their company is investing in them. In our current economy, that goes a long way.
On the negative side, if employees are being asked to produce high-quality results and do more with less, but are not being trained to do it, they easily feel overwhelmed and even used. This leads to people looking for work elsewhere. As already mentioned, “Now Hiring” signs are fairly ubiquitous these days, so it doesn’t take much for overwhelmed and expensive-to-replace employees to look for work elsewhere. This is what I mean when I say that most companies can double their training budget and actually save money.
How to ensure training is profitable
Measuring return on investment in training is a comprehensive, systematic process that most companies won’t bother to do. However, I can report that from my experience as well as from the data I’ve read on this subject, the overwhelming percentage of training does provide a financial return. In fact, it is not uncommon for some training programs to provide an ROI of more than 900%. The problem is that we never see “Training ROI” as a line item in a budget. Executives rarely see that many training programs are actually quite profitable.
What follows are some tips for helping to ensure your organization’s training programs will provide an ROI.
1. Make sure your training addresses an issue that training can solve. Too many times a company will experience something negative and decide to throw training at the problem, without identifying the real problem. Example: A survey showed that a company’s customer service department was getting bad marks, so they decided the solution should be new customer service training for everyone. Except that the real problem wasn’t poorly trained employees, but rather a rude and stingy manager who believed the customer was always wrong. No amount of customer service training for frontline employees was going to help so long as the rude and belligerent manager stayed in his position.
2. Ensure all training is tied to the company vision and mission. If a company seeks to be the best repair company for widgets, training should focus on helping people repair widgets better. When budgets are tight, training that doesn’t help the organization work together to repair widgets should be set aside.
3. Ensure all training is tied to specific results desired by the company. The three questions that follow will help ensure training focuses on desired results.
a) What results are expected from the training? Do you want repairs to be completed within a certain time frame? Do you want all repair techs able to repair a new product line? Make sure your answer to this question about expected results is specific, and that it aligns with item #2, above. Most importantly, do not answer the next question until this first question is answered.
b) What behaviors will get those results? Your answer to this question clarifies what employees must do so the above expected results can be achieved. Be specific. What must employees do? Again, don’t move forward until this question is answered.
c) What knowledge, skills and attitudes (safety and quality concerns) must employees have to perform the needed behaviors? Your answers to this third question will set the framework for your training, and it’s here where having a training professional is most beneficial.
Slashing the training budget limits a company’s ability to provide focused and purposeful training, and when that happens, unseen damages occur. The problem, as stated, is that these damages do not appear as obvious line items in a budget, so they are not realized until after the damage is done.
Daniel Bobinski, who has a doctorate in theology, is a best-selling author and a popular speaker at conferences and retreats. For more than 30 years he’s been working with teams and individuals (1:1 coaching) to help them achieve excellence. He was also teaching Emotional Intelligence since before it was a thing. Reach him by email at DanielBobinski@protonmail.com or 208-375-7606.
