We would all probably agree, at least philosophically, that educating ourselves and our employees is rewarding. We probably would not all agree on how much we should invest in training programs or tuition reimbursement benefits.
However valuable we think the training and development of our employees is to our company, formal programs can be expensive. We are the ones held accountable for the bottom line, so we have to be able to answer the question: Are our educational expenditures giving us a reasonable return?
There is evidence to suggest that dedicating resources to employee training and development is not only a good idea but also a sound business practice.
For example, the American Society of Training and Development wanted to know what kind of return companies realized on their investments in employee training and education. The group conducted research between 1996 and 1998, measuring changes in the participating companies’ stock prices, as well as dividends paid in the year subsequent to the study. They found that increasing training expenditures by $680 per employee yielded an average 6 percent improvement in shareholder return.
When you are considering implementing a new training program or revamping an old one, ASTD suggests conducting a standard benefit-cost ratio. When it comes time to conduct your analysis, ask several questions.
First, what does your company need that can be addressed with training and education? You might want to address a particular technical skill with software training. Or you might want to offer more general customer service skills training. Your need might be even broader, such as a need to improve the critical thinking skills of your managers or to develop leadership skills in your junior executive ranks.
Depending on your environment, you may be looking for time savings or improved quality, or both. What are your specific goals for training and developing your staff, and how will you know if the training has been effective? Targeting your needs and objectives will help you figure out the best path to achieve success.
Then there are questions about the cost of a proposed program. How expensive will it be to develop the program, produce the materials and pay a facilitator to conduct it? The more extensive the planned program is, the bigger its price tag and the wider its potential range of outcomes.
If you are designing the program internally, do you have staff already dedicated to the task, or will existing staff be taken away from their primary responsibilities? How much time will your employees spend in the training program and not at their stations? It is necessary to consider all the costs, including the opportunity costs.
Ultimately, when these questions have been answered and you’ve estimated direct and indirect costs, you have to determine if an in-house program is realistic for your company. Is the process of developing and delivering a training program part of your company’s battery of core competencies? If not, how much would it cost your company to outsource? Who would you choose to partner with and how?
Providing tuition reimbursement benefits to your employees is also a viable option to consider when determining how to develop your company’s labor force.
There are many academic programs in the Greater Columbus area designed for business professionals that can help meet your company’s training and development needs. Generally, degree programs of this nature do not take your employees away from their desks or off the line during the day.
Furthermore, these programs can give your employees a broader perspective because they will be collaborating with people who bring in ideas from their experience at other companies in other industries. And most of these programs pay dividends right away, as your employees apply what they learned in class last night to the problem facing them at work today. Eric Ziehlke is associate campus director for the University of Phoenix-Columbus Campus. The University of Phoenix is the nation’s largest private university, with more than 186,000 students at more than 139 campuses in the United States, Canada and Puerto Rico. Reach him at (614) 433-0095 or [email protected]