Have you ever noticed that budgets don’t have a line item for “financial impact of training?” Because people don’t pay attention to the return on investment for improving workplace knowledge and skills, much training is deemed too expensive. However, organizations that place a high priority on training do so because they know their efforts will have a substantial, positive impact on the bottom line.
Thankfully, it’s not just me saying this. A study conducted by the United States Council on Competitiveness found that a 10% increase in employee training impacted productivity more than a 10% increase in work hours or a 10% increase in stock options.
Additionally, research published by the Association for Talent Development showed that firms that invest in training for more than 80% of their workforce are able to attract and retain employees better than competitors of similar size in their industries that don’t invest in training.
Some leaders look at spending money on training and think, “Why should I spend all that money on training? What if I train people and then they leave?” One answer to consider is, “Would you prefer not to train your employees and have them stay?”
Another answer can be found in the Emerging Workforce Study, which discovered that in organizations where training is considered poor, on average, 41% of employees are planning to leave within a year. However, in companies where training is considered good, only 12% are thinking about leaving. Considering the cost of replacing employees, companies with high turnover can probably double their training budget and still end up with a better bottom line.
The problem? Companies rarely consider this solution because there’s no line item in the budget showing the financial benefit of providing good training.
A leader’s impact on training
Perhaps the largest factor in any organization’s attitude toward training is the belief of the leadership team. If leaders think training is a waste of time and money, it’s common for almost everyone around that leader to adopt a similar attitude. Likewise, if a leader does see the value of training, it’s likely those surrounding the leader will, too.
Interestingly, bad attitudes toward training can exist even if the leader is a training advocate.
For example, years ago I had a client whose CEO placed a high value on training, and all of his direct reports did the same, except one. I had a long-term training contract with this company, and although personnel from every other department were eager to learn, those in the detractor’s department adopted his negative attitude. They scoffed at and even mocked the benefit of learning new things.
The reverse can also occur. A supervisor, manager or director can value training even if those at the top do not. Still, if those at the top of a team discount the value of training, negative ripple effects will have an impact.
The idea here is that for training to have maximum benefit, managers and leaders must communicate that training is valuable.
Poor training methods
Another cause of poor training is thinking that “show-and-tell” presentation methods are effective. Show-and-tell is the term I use for the technique of showing someone how to do something while telling that person how to do it, and then believing that is all that’s needed for a successful transfer of knowledge, skills and attitudes. People learn in different ways and at different speeds, and if you’ll allow me to speak like Yoda, the ability to stand up and talk does not a trainer make.
Show-and-tell training leads to a lot of mistakes and companies losing a lot of money.
Additionally, many managers and leaders reduce the impact of training by slashing the time required for it. I’ve seen it a lot. If it takes four hours to learn a new skill, many leaders want to save a few hours of payroll and trim the training down to two hours. I can guarantee those not-quite-fully-trained employees will waste those two extra hours – plus many more – stumbling through bewildered guesses and making costly mistakes. Whatever money was saved by shortening the training will be quickly lost. In fact, much more will be lost.
Foundations for quality training
The first key to success in training is to think like a doctor. A good doctor analyzes a problem before writing a prescription. The better the analysis, the better the odds that the prescription will address the actual problem. Many people have experienced the frustration of dealing with a doctor who doesn’t ask many questions and then misdiagnoses.
Analyzing properly is necessary because throwing training at a problem might not solve the problem. For example, all the customer service training in the world will not fix a situation in which a bad supervisor is micromanaging or otherwise destroying employee morale.
Another part of good analysis is arriving at solid answers for five basic questions that employees may or may not verbalize:
- Why should I learn this?
- What foundational knowledge is needed?
- What are the safety and quality concerns?
- What specific steps create a successful outcome?
- What if unusual or atypical circumstances exist?
In addition to employees understanding how a specific training class will help them in their work, they should also be shown how it contributes to the company achieving its goals. If employees attend a training session and they see how it contributes to the bigger picture, both team cohesion and overall productivity are likely to be enhanced.
Let’s go back to some data presented earlier. When training is considered poor, on average, 41% of employees are thinking about leaving. But if they don’t leave, it’s likely those people are not as engaged as they could be, and lower levels of engagement don’t lend themselves to a healthy bottom line. Also remember that because of employee replacement costs, companies with poor training can usually increase their training budget and still be more profitable.
The evidence is conclusive. Companies that invest in training have both better retention and better productivity. When was the last time you analyzed the impact of your organization’s training?
Daniel Bobinski is author of the best-selling book, “Creating Passion-Driven Teams,” and president of Leadership Development, Inc. He’s been helping organizations of all shapes and sizes since 1989. Reach Daniel with questions at www.eqfactor.net or at 208-649-6400.
