Tips & Tricks
Investing in Training in a Down Economy
Many executives and members of management alike will tell you that training is critical to the success of their business. Training is used to build and refresh employees’ skills when it comes to being able to do the jobs they were hired to do. Training is a continuous exercise since job processes are constantly changing to meet the business and customer needs and demands. Training is used to cope with these changes both in technology or in business practice.
So with training being such an ongoing and never-ending expense, it can seem daunting to make the investment when everywhere people are trying to cut corners and save money wherever they can. In an economy encouraging cost savings, it’s important to remember to NOT skimp on training. In the end, it could cost you a lot more than the initial training investment would have.
Why is Training Important?
Training is essential when it comes to:
- Teaching new people “the ropes.”
- Reducing on-the-job errors and increasing performance/productivity.
- Sustaining organizational culture and values.
- Reducing customer turnover. Ever heard the old adage, “happy employees equals happy customers”? This isn’t a foreign concept to many employers yet so often goes unaddressed.
- Increasing job satisfaction, employee morale and motivation, and thus reducing employee turnover which is probably the most costly. Employees who do not feel their company is investing in them lose the previously mentioned 3 traits and can much more easily be poached by another organization.
The average cost of employee turnover is about 150% of their annual salary which includes the following:
- The vacancy of the job and others needing to fill-in until a replacement is hired
- The investments the company has made in the person who is leaving: training and certifications, as well as knowledge and skills
- Lost productivity
- Recruitment efforts
- Training costs for the new employee
With regard to employee turnover: considering the average salary of an employee is $50K, for the mid-sized company of 1,000 employees who has a 10% annual rate of turnover, the annual cost of turnover is $7.5 million. The pre-existing worry: “I cannot afford training for my team” now becomes “I cannot afford to NOT train my team.”
Keeping in mind that with a new year and new budget your company may not have deep pockets ready for training, there are some cost-effective ways to train out there. We have successfully implemented some of these methods at Thrive and plan to use even more in 2011:
- Create a culture of self-learning – set aside time for employees to learn on their own by conducting independant research and giving them a chance to practice their new skill whenever possible
- Cross training with peers – set up time for peer-to-peer learning/mentoring to happen either within the same department or across job function
- Create a way for employees to share ideas and learn from one another internally – Thrive’s Director of Network Operations, Michael Gray, can show you “How to Start a Wiki at Your Company”. Give your team time to actually read and update articles themselves
- Find free training – it’s out there!
- Online tutorials
- Free white pages
- Free sample certification exams
- Free webinars
- Take advantage of outsourced training vendors who are feeling the pinch of the economy – this allows you to wheel and deal for training that would normally be fairly costly
- Look locally for outsourced training at a lower cost – check with local colleges and universities instead of international providers for deals on similar learning
- Do “lunch and learns” with your team to conduct shared learning on topics such as:
- Soft skills/customer service techniques
- Product training
- Professional development: a peer can share information in an area where they are proficient
- Use leaders in the company to deliver training to other employees – it’s free and also helps provide an excellent opportunity for leadership development in the organization
However you decide to address your learning needs, you need to make sure that there is value in the learning otherwise employees won’t buy into it or use it. Some things to be thinking about when building your own internal trainings like the ones mentioned above:
- Make sure your employees are engaged – ensure engagement by allowing participants to design the learning (content and format)
- Keep it regular: consistent and ongoing
- Set expectations clearly by building an agenda
- Make the in-house trainings brief and effective
- Stay off the soap-box – if you are running the show and are also the subject-matter-expert, create ways to involve your audience like side-bar conversations/brainstorming, or exercises/activities that allow the audience to test out the topic they have learned from you
Employees perceive learning and development as one of the most important factors in career advancement. Don’t ignore this fact and start in with some cost-effective training for your company today!