If you are toiling over what to do about training, you’re not alone.
Tuition reimbursement and continuing education look good on paper and are great recruitment and retention tools, but, as businesses are finding out, in today’s economy, those types of programs could also look more like a dispensable employee perk than a business necessity.
While academics will tell you it’s a mistake to cut training from the budget, those closest to financial reality will suggest trimming the fat and adopting a leaner training strategy that ties education to the company’s immediate needs. For most businesses, this means doing away with the nice-to-have training and focusing on the must-haves that affect the bottom line today.
“Most companies aren’t following my advice because they haven’t asked me,” says Vincent S. Daniels, executive director, executive education, H. Wayne Huizenga School of Business and Entrepreneurship, Nova Southeastern University. “Companies are cutting back and not necessarily consulting with anyone before they do it. Businesses that had training up to three times a month have gone down to almost zero. Businesses often don’t understand that when you’re putting money into an employee, you’re making an investment in the company. Those that keep education going through the down economy will get the market advantage when the economy comes back.”
Keep in mind that the usefulness of what is learned today doesn’t last as long as it once did. Technology’s rapid evolution makes knowledge obsolete when it isn’t built on. Still, the average number of formal training hours has dropped from 25 hours per learner in 2007 to 17.2 hours in 2008, according to Bersin & Associates’ 2009 Corporate Learning Factbook. The report reflects an 11 percent reduction in corporate training spending and claims a trend shift in the types of education that businesses are pursuing.
Training that educates employees on ways to increase revenue or decrease expenses or that improves relationships with customers is a business necessity and has a place in your training regimen.
Determine what your company needs to work on and what areas you need to continue to grow in as well as the basics to keep up with the competition.
“What we are seeing now is a strong uptick in fundamental training that leads to specific certifications, while employer-funded MBA programs are decreasing,” Daniels says. “There isn’t one answer for all companies, but I can say that if you paid for this type of degree in the past and you stop, the employees close to getting their degrees will lose motivation.”
Considering who will be receiving the training is an important step. Being wise about your budget means training those who are in a position to benefit the company most instead of offering a la carte training to whoever is willing to trade a few hours of work for classroom duty.
“You may initiate a higher hurdle to earn the benefit of tuition reimbursement and other training, but you need to keep it for your business’s benefit,” says Barbara E. Kahn, dean, University of Miami School of Business Administration. “Investing in shorter, more customized programs gives more value when you are worrying about every education dollar. These types of programs give you training that is right to your needs.”
Considering the type of education you need has equal importance to the way the education is delivered. While some companies find online courses give employers the best return on investment while saving on travel and driving time, others find in-house courses or a classroom setting to be the best delivery method for employees.
Choosing a trainer
Your company’s goals help determine what institution you’ll use to provide employee training. Look at local colleges and universities first, as these organizations have flexibility in training formats and delivery.
Universities are often willing to consult with businesses to determine what the immediate training needs are. Community colleges, business schools and specific work force training centers can also provide tailored programs as opposed to off-the-shelf training that serves as a one-size-fits-all education.
“Colleges are willing to spend a lot of time with businesses to develop a program tailored to their needs,” Kahn says. “Universities can create programs that last just one week or longer depending on what is necessary to meet the business’s needs. The colleges willing to diversify what they offer are the ones that will keep their programs going in a down economy — and businesses should seek out those academics.”
Don’t think of continued education as a perk to employees, but think of it as a way to keep the business growing.
A common error employers make is accepting a program where the employee misses a significant amount of work to go to school. Options exist that allow you to dictate within reason, how, when and where your employees are educated.
“Training via community colleges that are attuned to local work force needs can be the most cost-efficient decision companies make,” says Eduardo J. Padrón, president, Miami Dade College. “If you identify and prioritize your needs in relation to the company’s growth, you can collaborate with a local partner to establish a program that will be long-standing and efficient.”
After you select a program and a university, your strategy must carry over into measuring tactics. Make sure you have a way to calculate the benefits of training and the reason you have selected the specific program.
Before an employee begins training, testing the skills that will be built upon is important. Testing will help determine where the employees’ skills are today and where they need to be after training. Making sure the employee, trainer and you are on the same page with expectations will help eliminate any miscommunication about future performance expectations.
“You can’t put your finger on the return on investment immediately with education,” Daniels says. “It’s not as tangible as an investment in a new computer. If it’s functional education, such as finance or marketing, you may be able to see a direct result sooner, and therefore have the ability to show their value easily. The return on soft skill programs aren’t as easily shown, but over the long term, [they] are just as valuable or perhaps more valuable. You should be continuing training with upper-level management, training for new management, functional areas of business and certification programs.”
Prior to training, discuss the reason for the education and the way the training will be measured with the employee. Tell the employee how the new knowledge directly impacts his or her daily responsibilities. Managers should tie the training into performance evaluations to determine its true impact on the enhanced ability to perform.
Even after trimming the education budget, some companies say the cost is too much to handle right now. If you still believe in education, but can’t afford it, reassess it in nine months. In the meantime, use in-house training and coaching capabilities.
“It’s critical to stand back, reassess overall operations and think strategically,” Padrón says. “You cannot afford to be lulled into thinking that good or bad times will persist forever. The world is moving too quickly to set aside training needs. The use of technology alone demands c ontinuing education attention.”