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.

“The reason many of these companies provide education benefits to their workers is because it helps them improve their skills on the job,” says Gonzalo Freixes, associate dean for the fully employed MBA and executive MBA programs, UCLA Anderson School of Management. “This helps companies stay competitive in their industry, and it is really a benefit that is win-win for the employee and employer. It allows people to broaden their skills and bring a competitive edge back to the company.”

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.

“Lay out the type of skill sets you are interested in your employees obtaining,” Freixes says. “Communicate with the colleges to discover the best types of programs that will best suit your needs. Determine the amount of money you are willing to reimburse employees and what amount you are willing to pay for the services based on [the] benefits training will bring the company.”

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.

“Offering programs and classes at regular intervals reminds everyone in the organization the importance of lifelong learning,” says Ilene Smith-Bezjian, dean, School of Business and Management, Azusa Pacific University. “Recognizing the value of a regular knowledge workout will reduce fear, resistance to change and decision-making capabilities. Opportunities to learn from short-term seminars and long-term academic programs keep employees engaged and invested. Individuals working from a more multifaceted sphere of understanding will draw from a greater knowledge base than those who have a singular frame of reference.”

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, 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.

“Partnering with a college will help companies better form learning programs that will meet their needs,” Freixes says. “The college will help businesses change strategies to help deal with new economic challenges through education. Even if companies have reduced the amount of money they feel they can invest in an education program, they still need to keep ahead of the curve and have some training — just make sure it ties into the company’s needs.”

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 how, when and where your employees are educated.

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.

“Pulling funding from educational opportunities would be a great error,” Smith-Bezjian says. “However, continuing to fund nonessential or irrelevant programs and courses (that) fail to support the organizational outcomes would be equally unwise. Making every asset count is imperative. Employees should know what is expected from the educational experience and be prepared to disseminate newly acquired information or skills to co-workers.”

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.

“Training employees to think systematically, to understand the impact green issues, for example, have on the bottom line is essential,” says Nancy Kurland, assistant professor of management, California State University, Northridge. “To think in terms of the triple bottom line of people, planet, profits is a practical and profitable strategy. Measure the company’s revenue before and after this training takes place to determine if this particular training is working for your business.”

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 impact on the 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.

“Eliminating education because of reduced revenue is a short-term solution,” Freixes says. “A down economy can be the best time to retool and get employees the knowledge they need to help the business through tough times and prepare for future challenges. Education is always a wise investment; it just must be done intelligently in all economic climates to reap the biggest benefits. Focus on what challenges your business most.”