Corporate training positions your company for future growth Featured

8:00pm EDT June 25, 2010

The training was a failure. All of that time, all of that effort, all of that money, just gone, just out the window and gone. What other explanation was there, after all, for drop after drop in the hard numbers from a talented sales team in the wake of a training and development session?

It could have happened at any business, but for the purposes of this story, it happened at a large technology company with headquarters in the Midwest. The top executives, frantic for answers, called a corporate training firm. “Our sales are down,” the executives said. “We need training.”

That technology company was part of a large percentage of businesses that continued to invest in corporate training, education and development during the last couple of years. Thousands and thousands of others turned away from training, unable or unwilling to spend more money during the recession.

But a panel of more than 30 industry experts and academic professionals agreed that it would have been far better for businesses to continue to spend on training during those tough times — to invest in their employees and to show the extent of that investment, to improve the business and keep it up to date, to be in a better position when the economy ultimately turns around — than to tighten the budget. The same rule applies now, too.

“Executive and corporate education is a real growth market,” says Jerry Hoag, associate dean, executive education, University of Texas at Dallas. “Companies increasingly are seeing the value of using programs to help their people adapt to an ever-changing environment and technology. The traditional secondary higher education system is not educating enough people or providing a sufficient education for them to come into the work force without further education and training.

“Companies are recognizing that this is critical to their long-term viability and sustainability.”

Make a plan

Members of the corporate training firm arrived the next day and talked with as many employees as possible at the technology company, from executives to engineers to those slumping sales representatives and everyone else in between. They prodded and probed and asked questions. They were curious about what, exactly, had happened.

They wanted to know, before they embarked on another training session, whether another training session was actually necessary.

This is what you should do when you’re in the process of determining whether to invest in training and development for your employees. You should prod and probe and plan, because just as you shouldn’t approach a new business venture without a model and a solid idea of what you want to accomplish, neither should you approach training without thoughts of what you need to tackle.

“The most important thing for a company to do is to first do a careful analysis of the competency and development needs of your people,” Hoag says. “Too many training programs are managed mindlessly, without a real understanding of what is wanted from the training program in terms of specific objectives and deliverables.”

And even though those needs will vary from business to business, from industry to industry, there are a number of common training areas on which almost all businesses should focus. Leadership development, project management and team building are all increasingly important because of the changing demographics and economy and because general communication and technology skills are as important now as always.

“All employees, in order to be successful in the new workplace, will have to have the ability to adapt and to learn,” says Paula Yoder, director of the Tandy Center for Executive Leadership at the Neeley School of Business at TCU, referencing a recent paper by Sandy Dutkowsky, “Trends in Training and Development — The New Economy, Training in U.S. Companies, Who Does the Training in Corporations?”

“This is part of a developmental organization. Those who have ‘learned to learn’ will become most valuable in the new economy. The role of education and training is becoming more important in the workplace. Employees are recognizing the need to improve and broaden their skills to remain employable.”

Open your wallet

Those members of the corporate training firm remained in the offices for a couple of days. They wanted to follow every lead and turn over every stone. They wanted to find out what had happened to the sales team after that apparently disastrous training and development session. And the technology company executives had no problem paying to keep them around. They wanted to find out what happened, too.

Do you want to keep your top employees after the job market opens again? Do you want all of your employees to be happy and to enjoy their work right now? Investing in training and education is an important part of helping you do just that. The average business spends about $1,060 on training and education per employee per year, according to research by ASTD.

There are also effective ways to spend a little less, if your revenue is still down or if you opt to not invest as much in training. Turning toward local colleges and universities to design a custom program for your employees is often less expensive than sending them to open enrollment courses, as are distance learning and online courses. Some businesses opt to look within for employees who are experts in a specific area and can train the rest of the staff.

“We cannot forget about our internal subject matter experts,” Yoder says. “Companies that leverage the expertise of those internal leaders, even if those leaders need polishing or extended training, are truly honoring their resources.”

Keep an eye on results

At last, an answer for our corporate training firm and our technology company in the Midwest. That previous training session, as it turned out, was not to blame for lower sales numbers. No, the culprit was instead the fact that the technology company executives had recently installed a drastic restructure of the compensation program. That program encouraged the sales team to try and sell only one of their many products, and that is what changed everything.

The training had not been the problem at all.

In fact, without that recent training session, the technology business might have planted itself in more trouble because of the new structure of the compensation program. The best money spent might well have been the money spent on the training — and the worst might have been the money that was about to have been spent unnecessarily correcting that training.

“The expectation is that outside training programs will transform their management and their leadership behavior and capabilities,” Hoag says. “The studies are not very pretty. That’s because changing behavior is tough. You cannot underestimate that. There needs to be follow-up, six, 12, 18 months later.”

The only way to know where you are is to know where you were. In order to receive a more relevant return on your investment, watch the progress from the planning stages through the training itself, then during the months, even years, beyond.

“It is imperative that leaders ask their employees about the benefits and outcomes of training,” Yoder says. “There is no excuse for a company to not know the return on investment for training. Even at the most basic level of understanding without using any assessment tools, you can at least ask, ‘What did you get out of it? How did it impact what you do on a daily basis? How does this impact your effectiveness in your job?’”