Multiple choice Featured

8:00pm EDT June 25, 2009

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.

“A mistake that is frequently made by companies is to assume that during an economic downturn, investment in employee development is less important — an expense that can be easily cut with few ramifications,” says D. Brent Smith, associate dean of executive education at Rice University. “However, if you take a long-term view, a sustained investment in continuing education maintains employee commitment and engagement and can have a measurable impact on a company’s bottom line. We know that employees are much more likely to stay engaged when they have opportunities for growth, which turns out to be one of the primary drivers of motivation for employees across all industries.”

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.

Goal setting

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.

“Develop and implement an effective training program, which creates an environment for employee development that contributes to the success of a person in their job,” says Brenda Lang Hellyer, chancellor, San Jacinto College. “Develop a realistic formal plan including a timeline for rollout. Compare training options, then choose the best college that fits your training needs. There are benefits from partnering with a community college, such as the offering of affordable opportunities from businesses.”

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.

“Determine the skills and abilities required for success in a specific role; since roles are changing for many employees, this process can uncover any deficiencies,” Hellyer says. “An employee assessment of these individuals is a good start.”

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.

“Companies face a lot of choices with training,” says William Theodore Cummings, dean of the School of Business and Public Administration at the University of Houston-Clear Lake. “Businesses should take a look at local universities, which are often overlooked. The talent in your own backyard is the best to take advantage of because they are part of the community and want to help your business through their programs. Your success means their success, and that often comes at a lower cost to you, too.”

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.

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.

“Determine the most appropriate delivery method — online, instructor-led or a combination of both,” Hellyer says. “Colleges employ business development managers who focus on helping define clients’ training needs and objectives, then translating those needs into training solutions.”

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.

Measuring results

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.

“A pre- and post-test should be included in all training initiatives,” Hellyer says. “You will be able to find out what skills the employee gained. Keeping track of training each employee has completed will create order to any regulatory required training and let you focus on training necessary for company growth. A university will be able to provide a listing of your employees training upon request.”

Prior to training, discuss the reason for the education and the way the training will be measured with the employee. Managers should tie the training into performance evaluations to determine its true impact on the enhanced ability to perform.

“The ROI is a key question asked by companies contemplating continuing education,” Smith says. “Colleges can help companies realize the value of training by including action learning projects in its programs. This component allows participants to learn business principles relevant to the organization and then apply that knowledge to a defined company project that can have an impact on a company’s bottom line. You can configure ROI with the outcome of the project. Usually, it more than covers the costs of continuing education.”

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.

“The best thing companies can do is avoid costly mistakes by investing wisely,” Smith says. “Focus on programs that are tailored to fit your needs. One size doesn’t fit all.”