Matthew LaWell

By the time financial markets around the globe started to tumble in October 2008, much of the manufacturing industry was already deep in a recession that had stretched across the better part of a decade. Millions of workers had been sent home, their labor and their experience no longer needed because of more efficient machines and the rise of globalization. Thousands of factories had been shuttered. Whole companies just disappeared. None of it was coming back. It was all gone for good.

Manufacturing was not, of course, the only industry hit hard prior to the start of the larger recession. Publishing and newspapers had been on the decline for years, and the domestic automotive industry, technically under the umbrella of general manufacturing, had been in a slide for a generation. But perhaps no industry was affected more since the turn of the millennium than manufacturing. About a quarter of a million manufacturing jobs were lost over the course of a decade, the large majority of them prior to 2008. As the recession spread from one industry to another, millions of workers were laid off from the collective work force, but manufacturers often still let go of the most employees.

The cycle was vicious, and it continued, month after month.

How is it possible, then, that less than two years after the economy turned, manufacturing is on the rise again? Manufacturing activity increased again in May, according to the Supply Management’s index, the 10th straight month of growth. And even though that growth has started to slow a bit, growth is still growth. Were the 2008 levels just so low that any growth is significant? Or is the sustained increase in manufacturing a sign for the rest of the economy? Nothing is certain, not yet, but all of the indicators do point up, however modest, rather than down.

“We have seen a pretty nice uptick in the automotive industry, and a lot of manufacturing industries are showing a bit of an uptick,” says Fred Rozelle, assurance managing partner, BDO USA LLP, Detroit. “But the cautious reality is that — using the auto industry as an example — we cut so deep in the recession and inventory levels were driven to an all-time low, so probably a little bit of the recovery is building inventories back up to a level that will be adequate for customer demands. That’s the real question mark.

“If we can stay out of a double-dip recession here, there will be some positive results shown in the manufacturing industry. But everyone is very cautious to make that investment. Now, it’s going to take a strong economy to continue any sustained growth in the manufacturing industry.”

Prepare for more change

What was normal two years ago will almost certainly not be normal during the second half of 2010 or even during the first months of 2011. What was normal then, in fact, might never be normal again. Even though it might be a cliché, change really is the new normal in manufacturing — and plenty of other industries, too.

Among those changes are the new gaps in the supply chains of some larger original equipment manufacturers, the result of smaller companies closing during the last couple of years, which might cause delays and problems in receiving supplies in a timely manner. A number of industry experts say the availability of credit will also likely change, with banks starting to somewhat relax their requirements for the first time in two years. But the biggest change might be the addition of manufacturing jobs.

“Manufacturing is now the only business sector that has been adding jobs for five months,” says Emily Stover DeRocco, president, The Manufacturing Institute. “Manufacturers have added 126,000 new jobs.

“But the focus is going to continue to be more on what we call mass customization, as opposed to mass commoditization. This reflects, again, the industry’s response to globalization, which is that U.S. manufacturers, in order to maintain their global leadership, have had to move to a higher quality and a higher value product.”

And that higher quality product will almost certainly lead to more changes in the way manufacturers and so many other companies plan and do business. It is the ripple effect across industries.

For example, if you have not already reassessed your vision and your plan for your company — especially in terms of using innovation and technology to your advantage — that should move to the top of your priority list.

“I’ve visited plants in China, and the things I see are that our workers are better trained and our process are much better,” Rozelle says. “That’s what we need to leverage going forward. When you go to plants in China, you see more manual labor, the technology isn’t there yet. They’re looking to eventually go that way, but there is so much manpower available there at such a cheap rate, that they can produce pretty efficiently overall.

“The advantage we have is the technology that’s developed in the U.S. manufacturers need to continue to be at the front of the curve in technology. We have to have that skilled and more educated work force that is more process-oriented and has the ability to use the technology that’s given to them. That’s where we can compete and be the most productive.”

It can also help you better position yourself and your company for the continuing changes and the eventual uptick in the economy and the industry.

Keep the long term in perspective

Two years ago, few manufacturers — few companies at all, really — were prepared for the recession. But you can prepare for the ascension, however slow and modest it might be, by being smart during these coming months and years.

You might think about diversifying your product lines into other markets, so you aren’t as dependent on single-source customers, and, more generally, diversifying your portfolio. You might also research how to best tap in to loans, grants or tax credits that are available from various levels and departments of federal, state and local government to help increase business during challenging times. And you will likely want to consider your risks, especially over the long term.

“The significant factor that’s holding manufacturers back from their ability to really meet customer demand is that they got squeezed hard in the liquidity crisis, and what’s happening now is the manufacturing industry and clients are going back to their banks and saying they can’t meet customer demand because they can’t hire people or order raw materials because they don’t have the necessary lines of credit,” Rozelle says. “They need the banks to work with them through these growth stages.

“We are seeing some deals get closed and the banks working with the manufacturing companies. That’s a positive sign. We’ve seen the environment really change.”

Technology and education, as would be expected, can also play a role in increasing your business. Several experts discussed how the advantage of companies that are owned and operated in the United States is the technology that is developed in the United States. Domestic manufacturers continue to be at the forefront when it comes to utilizing technology in their processes, a trend that will only continue. To ensure that the technology is operated correctly and efficiently, workers should be more educated than they were 40, 20, even 10 years ago, and with so many quality workers still unemployed, there is a deep talent pool from which to hire.

How you handle all of that now might be the difference between a quicker return to profitability and increased production, and the far less appealing option of a long struggle back to respectability and some small sense of comfort in the market.

Most important, though, is to do everything with the long term — and that refers to years and decades, not just months and quarters — in mind.

“It is going to be a tough balance in order to be competitive and efficient, but the whole culture in the manufacturing industry has changed,” Rozelle says. “When there’s a crisis, companies tend to overreact and cut too deep into the muscle of the company. Now, the leadership of these manufacturing companies really have to set a culture. We’re competing globally.”

Ask questions

As you prepare for the last months of 2010 and the first months of 2011, it will be important to keep any number of questions in mind. Write them down. Type them and print them out. Keep a copy on your desk. Distribute copies to your executive team, perhaps even all of your employees. Just keep them in mind. No matter how well you know your business and your industry, that list of questions will be as important now as it has ever been.

And just what questions should make the list? Well, a lot will depend on your industry, your goals and your financial standing at the moment, but there are some questions that all businesses need to be asking right now. And those are: What is happening in your industry? Is it expanding or contracting? Is your company expanding or contracting? Where do you see your company in 2015? In 2020? Is your company in the right market? Is it in the right position in the market? What are the strengths and expertise that your company has that could be adapted to another market or product line? Where can you turn to think through your situation? Will your company be able to receive a large enough line of credit during the next year? Will you be able to fund your growth? How sustainable are the current demands? And, the great unknown, how will global events affect your company?

“Consumer demands will ultimately drive the manufacturing industry to whatever its capacity is,” Rozelle says. “The manufacturers have to continue to negotiate if they’re unionized and make sure their labor force and benefits are competitive with the rest of the world.”

With all of that in mind, you will also need to consider whether your supply chain will be able to respond to the innovative approaches required for future growth and success, which means supply chain capabilities and locations become more important. The demographics of your work force are also important, especially with a generation of baby boomers still on the brink of retirement. And innovation is important, too. How will you move ideas from the collective mind of your company to the drawing board to the marketplace? Live in the present but remain focused on the future.

“Eyes on the future, but remember the volatility of this market,” DeRocco says. “There’s a constant threat to every business sector and there are some very large factors in play right now that will determine manufacturers’ cost structure for continued operations, so they’re keeping an eye on all of those — public policy, the global impacts around the world, certainly the European financial crisis.

“Every one of those issues has an impact and creates new challenges for manufacturers operating in that environment.”

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.

“Training is always important but even more so in times like

this,” says Pat Galagan, executive editor, ASTD. “This is when you really have

to come out of the gate running. It’s a big mistake to cut your training budget

when times are tough because it leaves you unprepared for better times.”

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.

“Typically, businesses start by looking at their goals and

their objectives for a period of time, usually the coming year,” Galagan says.

“Some companies will do what’s called a skills audit to see if they have the

skills to support the direction. Then if they don’t, they will try to train to

fill any gaps that they find.

“It’s a very comprehensive process of looking at the skills

that employees have in key areas and matching that against the skills you feel

you need.”

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.

“Some of the things that we’re finding demand for and that

make sense are strategy and leadership programs, especially managing in

turbulent times, managing through transition,” says Barbara Kahn, dean of the

School of Business Administration, University of Miami. “There’s also a lot of

emphasis on innovation. How companies can try to innovate to stay competitive

and survive.”

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.

“That’s an average, not a recommendation,” Galagan says. “In

that pool of companies, some are large, some are small, some are government,

some are private.”

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.

“Some of the trends that we’ve seen are that companies have

been opting for more customized programs rather than sending employees to open

programs, which are more generic,” Kahn says. “When budgets are tight, you see

an emphasis on more customized programs that are tailored to the specific needs

of the company.”

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.

“It’s really important as you go into these programs that

you set specific goals at the beginning of the program and then monitor it say

every three months, every six months,” Kahn says. “Make sure things are still

on target and whether there’s a need to go back and reinforce certain points.”

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.

“One of the things that’s very, very important for a company

to achieve in a competitive world is make sure they have a strong employee base

that’s constantly changing with the changing times,” Kahn says. “You want to

have ways for employees to develop their skills and move up.

“If you don’t invest in continuous learning and continuous

innovation, obviously employees are going to stagnate.”

Monday, 05 July 2010 20:00

3 Questions

Frank Tinus is the dean of corporate services and continuing education at Stark State College, where he has taught since 1993. Prior to his move to higher education, he worked for more than 20 years for several Fortune 100 companies, including Procter & Gamble Co. and PepsiCo Inc., and smaller firms in a variety of roles.

Q. Are there any particular areas or skills businesses are focusing on in regard to training?

There is the whole area of maintenance. We’re about to get into a real tough bind, where all the true artisans of maintenance are about to retire. Skills like reading blueprints, taking measurements, understanding what troubleshooting is, being able to repair a system that has mechanical difficulty, electrical difficulty, electronic or hydraulic difficulty. That’s the kind of training we see people coming back for, because they understand they’ve invested a lot in machines, and they know the machine system isn’t doing as much for them as it can do.

Q. How can companies monitor training results?

We don’t trust positive feedback on the smile sheets employees fill out at the end of training. We look at things like scrap rates, what is called in the maintenance world the operating time between shutdowns. These are some of the measurements of the hard skill training. In soft skill training, you look for things like turnover going down, grievance reports, numbers of coaching and counseling sessions that take place. If we can reduce those, we consider the training to be successful. And the best way to judge training is to talk with their supervisors three to six months later and ask if it worked.

Q. Why should a business turn to a college or university to provide training for employees?

Colleges and universities really are in two separate businesses. They’re in the business of the pursuit and the granting of degrees that involves general knowledge and research. But they’re also in the business of instant, immediate response to short-term challenges — training. Some people wonder if that’s really the business of a college or a university. It absolutely is. Colleges and universities don’t have to be one or the other, and they can serve different sets of valid customers with different needs.

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.

“Even in the hardest times, those companies that have kept spending money on employee training, those companies have been the most successful companies and have come out of those hard times with a more engaged and satisfied work force,” says Tom McGuire, program director, Business & Management, UC Berkley Extension.

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.

“A lot of companies don’t really look at their own needs,” says Robert Tanner, founder and president, Business Consulting Solutions LLC. “Just saying they need IT or people training, without doing some type of a needs assessment, is not the best use of dollars.

“There’s a four-step process to best evaluate how to best utilize the company budget. The first step is to assess what the training needs are for the organization. The second step is to prepare a skills inventory of the existing employees and see how they rate. Do they have what the company needs? There will be a gap, and you want to train to the gap to address those needs. Third, some companies take that a step further and you can group skills by competencies. And fourth, you add competencies.”

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.

“If you look at companies that are trying to get in a better position, the first emphasis should be on ensuring that their staff has their profession- or industry-specific training content addressed,” Tanner says.

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.

“In the old days, I could quote a company the sky, and they would just say bring it on,” McGuire says. “Now they want to find a way to lower these costs. There’s a whole sense of belt-tightening and concern, but they realize that, as employers, they are expected to devote resources to job-specific training programs.”

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.

“People are turning to people inside their organizations to conduct training, which is one way they can really control costs,” McGuire says. “These in-house trainers are subject matter experts in their functional areas. They might not be professional trainers, but they’re able to pass along knowledge in certain areas.”

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 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.

“Companies now have to use their resources a lot more effectively and have great processes, but they also have to have great people who are operating at the top of their game,” Tanner says. “One of the key skills people need is the ability to adapt to change. Change is constant. Those organizations that are waiting for stability, it’s not coming. The reason training is so important is it allows organizations to develop highly skilled work forces who can adapt to change quickly.”

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.

“The question is not, ‘Where should I be training?’ but, ‘Where should I be spending my dollars on people in the organization?’” says Alec R. Levenson, research scientist, Center for Effective Organizations, Marshall School of Business, University of Southern California. “In terms of the choices you have, you can choose to pay people more, you can choose to train them, you can choose to increase benefits.

“What is the return to you of increasing the ability or abilities of the people you have?”

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.

“Typically, businesses start by looking at their goals and their objectives for a period of time, usually the coming year,” says Pat Galagan, executive editor, ASTD. “Some companies will do what’s called a skills audit to see if they have the skills to support the direction. Then if they don’t, they will try to train to fill any gaps that they find.

“It’s a very comprehensive process of looking at the skills that employees have in key areas and matching that against the skills you feel you need.”

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.

“Maybe the employees have the capabilities they need, the compensation system is fairly spread out, but maybe the organization around them is stifling their ability to produce and give the performance that they need,” Levenson says. “That may be because their supervisors aren’t trained well. There may be problems in how people communicate across different divisions in the organization.”

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.

“That’s an average, not a recommendation,” Galagan says. “In that pool of companies, some are large, some are small, some are government, some are private.”

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.

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.

“You want a system in place where employees understand how their skills contribute,” Levenson says. “The idea is to give you higher profits, greater cash flow, which you can turn around and give back to the employees later on in the form of bonuses and raises in the future.”

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.

“The larger macroeconomic trends are both in favor of and against training, paradoxically,” Levenson says. “The argument against is that, when you have such high unemployment, it should be easier to reach outside the organization and buy the capabilities you need in the external markets. The argument in favor is that it almost doesn’t matter what happens in the external market, that by investing in training, you’re showing them you are investing in them, that this is a shared destiny for the organization and the individual.”

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.

“It has to start with the company’s strategy for winning in this economy,” says Melanie Weaver Barnett, chief executive of executive education, Stephen M. Ross School of Business, University of Michigan. “Then there has to be a thoughtful approach to determining the organizational capabilities necessary to realize this strategy, and then an honest assessment of the current reality with regard to those organizational capabilities. What emerges are the gaps in capabilities.”

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.

“This is the key question, and the answer is ... it depends on the company, their strategic and business objectives, their culture, their current capabilities, their revenue projections,” says Sandi Nielsen, director, Professional Education Center, College of Business, Eastern Michigan University. “Where one company may be focused on new product research and development and need innovation training for employees, another company may be strategically focused on customer service and satisfaction and require relationship building and interpersonal skills training for staff.”

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.

“The work force demographics are changing and more young, bright employees are moving into management and leadership roles without the training or experience needed to be effective,” Nielsen says. “Having the technical knowledge and experience is one aspect of leadership but not the most important. In order to lead effectively and achieve performance objectives, they need to be able to lead, motivate, build working relationships, define vision, mission and goals, inspire, coach, develop, monitor performance, and provide feedback to others.”

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.

“What we’re seeing from the smartest and best-performing companies is there still is this strong demand for the face-to-face learning experience but also that there is some development that can be done with different technologies,” Barnett says. “We’re seeing learning initiatives that are very integrated with the company strategy and with the real work of the company.”

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.

“You have to look at several things,” Barnett says. “One is, ‘What is the cost of not doing this? If we don’t develop our people, what are the likely consequences and how costly will that be?’”

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.

“This time of slowed productivity and action is perfect to spend building the skills, knowledge and behaviors that will be needed and critical to the company and the work force when the economy and business picks up again,” Nielsen says. “Building the capacity of leaders to lead and drive organizational change is critical. And building company cultures focused on building relationships — with customers, vendors, suppliers and employees — and on innovation today will drive business in the future.”

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.

“It really depends on the company and their organizational culture and beliefs,” says Lori K. Long, associate professor, business division, Baldwin-Wallace College. “When times are tough, a lot of companies immediately cut training because they see training as a perk or a benefit or an extra. But some companies have figured out how to really utilize training to increase their organization efficiencies, how to improve employee productivity and have found out that, when times are tough, that’s when training is most needed.”

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.

“There are different ways to approach a needs assessment,” says Barbara Hanniford, dean of continuing education, Cleveland State University. “It could be a full-blown process, even to the point of doing job analyses and task analyses and really sophisticated reviews of performance or something simpler where you’re talking with and surveying managers and employees. You want to find out what competencies are most important for jobs and where the gaps lie between the desired levels of performance and actual performance.”

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.

“Where are they feeling the most pain?” says Cynthia Parish, director, business and management programs, Cleveland State University. “Are they having customer complaints? Are they having quality issues? That’s one place to start, with training to fix their pain.”

“The idea is not to view training in isolation but in terms of overall performance and employee and organizational development,” Hanniford says. “You’re trying to train toward various outcomes.”

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.

Businesses that have the most success tend to spend between 2 and 3 percent of their total payroll cost on training, education and development. The average is in the middle, of course, right around 2.3 percent.

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.

“Looking internally for subject matter experts, in order to provide training internally, is certainly one approach organizations are looking at,” Long says. “An organization might also develop a mentoring program, as opposed to a more formal training program.”

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 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.

“If you want your organization to run more efficiently, you have to provide your employees with the tools and the resources to do that,” Long says. “If you want to cut costs, you have to find more effective ways to do your work — and only through providing guidance and support to your employees, which is usually in the form of training, can you really accomplish that. Those organizations that will be most resilient in troubled economic times are those that are really focused on continual learning.”

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.

“Training is always important but even more so in times like this,” says Pat Galagan, executive editor, ASTD. “This is when you really have to come out of the gate running. It’s a big mistake to cut your training budget when times are tough because it leaves you unprepared for better times.”

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.

“Typically, businesses start by looking at their goals and their objectives for a period of time, usually the coming year,” Galagan says. “Some companies will do what’s called a skills audit to see if they have the skills to support the direction. Then if they don’t, they will try to train to fill any gaps that they find.

“It’s a very comprehensive process of looking at the skills that employees have in key areas and matching that against the skills you feel you need.”

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.

“We recommend organizations first pick a strategic initiative,” says Len Brzozowski, executive director, Xavier Leadership Center. “Then assemble the team of people who have to make it happen, identify the gaps they have around the initiative and train to those.”

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.

Businesses that have the most success tend to spend between 2 and 3 percent of their total payroll cost on training, education and development. The average is in the middle, of course, right around 2.3 percent.

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 know adults learn by actively doing things,” Brzozowski says. “Very few people learn by just reading about it or by sitting in a classroom and watching PowerPoint slides. They have to implement it to really have the learning stick. It’s when you struggle to apply it when you begin to understand whether you really grasped the concepts.”

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.

“When you launch a training initiative, you never begin that without an understanding of what success looks like,” Brzozowski says. “Presumably, you wouldn’t spend the money unless you saw a business value in improving something. How much of the return on investment was made in training, as opposed to just working on business problems, is hard to say.”

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.

“Training is a bold statement on the part of the corporation,” Brzozowski says. “That says to employees, ‘We value you. We think you are worthy of the investment.’ I believe employees who feel valued work smarter, work harder and work better. Some executives I have met believe that as a question of faith. They’re not looking for the ROI calculation — they just know it to be true.”

Wednesday, 26 May 2010 20:00

Creating a wellness program

Imagine an office where employees walk laps during lunch, their pedometers clipped to their waistbands, clicking off each step up and down the stairs and through the halls and around the cubicles. Imagine an office where employees snack on fruits and nuts rather than candy bars, where employees drink water instead of another can of soda, and where employees have managed to kick that pack-a-day habit.

Imagine an office where health and wellness are a priority.

Is this anything like your office? Perhaps it will be during the months and years to come.

There is little doubt that health and wellness are, if nothing else, a hot topic across the nation. Just turn on the television and watch a reality show about weight loss or any of what seems like a dozen syndicated talk shows where a photogenic doctor fields questions and concerns. Or pick up a magazine and read the features on wellness recently published in Time and The New York Times Sunday Magazine. Or just turn your eyes to Washington, D.C., where President Barack Obama signed the health care reform legislation in late March.

Our parents are overweight. Our children are overweight. We are overweight. And as we work our way through the recession, our days are packed. We tend to eat poorly and not exercise or even move nearly enough. We are in the dregs of a pandemic. All of our poor decisions are costing not only our bodies and our minds, but also our health care costs and our office productivity. A wellness program just might help to turn the overwhelming tide of fat and frustration.

“A wellness strategy is really a subset of a human capital strategy,” says Paul Martino, vice president, health and wellness solutions, WellPoint Inc. “I think if an employer has a long-term horizon and views human capital in a particular way — that it is valuable, that you want to retain your highly valuable and efficient people — you want to allow people to be at their job and functioning well.”

If you don’t have a program up and running — pun intended — at your business, why should you bother to install one now? Or if you do have a program, why should you aim to improve it as we continue to move through 2010? Well, because plenty of research proves that healthier employees are more productive and actually cost you and your business less in total costs. Oh, and there’s an impressive return on the investment, especially after a year or two.

But you have to plan and install the program first.

Take the first step

Are your employees overweight? Are they obese? Do they smoke? Not long ago, you would have been well within your rights to avoid the answers to any of those questions. If your employees worked hard and produced, who cared about their health? But after years of medical research, those are all important and relevant questions, and if the answer to any is yes, you will want to consider a wellness program.

But why do you want to install a wellness program?

There are no wrong answers, of course, but if there is no why, if there is no vision, the program will flounder.

“Do you want to build benefits? Or, as the management team, is your goal to affect claim costs? Is it a combination of the two?” says Sally L. Stephens, founder and president, Spectrum Health Systems, Indianapolis. “Senior management, or whoever initiates it, needs to ask what they want to accomplish by putting a wellness program in. Too many people think it’s a solution but don’t think through clearly what their goals are.”

And if you and your executives do not support the program from its first breath, neither will your employees, so take the time to work with a private company for you and your employees to take a health risk assessment and a biometric screening.

Those highlight symptoms and conditions that might develop into larger problems in the future, both among individuals and your employee base as a whole. If you work with an outside company, the information will also be anonymous and in compliance with the Health Insurance Portability and Accountability Act.

“Some employees hesitate to give all their personal information to the insurance company,” Stephens says. “They don’t want the insurance companies to know they smoke or any of these other things. Working with a third-party provider ensures 100 percent confidentiality. They manage all the data, they manage the security, and the employer doesn’t have to worry about the data management.”

HRAs are often free, though if performed in person rather than on the Internet, they can cost between $5 and $25 per employee, depending on the quality and depth of the analysis. Biometric screenings typically cost anywhere between $50 and $150 per employee. You might also need to offer your employees an incentive, like a gift card or cash, for them to give their time to take the tests — because anything less than 70 to 80 percent participation leaves the results skewed and of less use for your business.

That cost might seem steep, but the information that is revealed can change your business. Do you want to know the overall health risk for your employees? Their weight and body mass index? Their exercise, nutrition and smoking habits? Even their levels of stress at work and at home? All of those figures are available and can help lay the groundwork for what you need to know to start a wellness program.

Consider an outside company — and your employees

When you have the results of the HRAs and screenings, you’ll want to work with your insurance company to perform an annual claims review. At that point, you’ll be able to plan for the installation of a wellness program.

But you might not want to keep that plan under your own roof.

Because of compliance regulations and the general complexity of HIPAA laws, you might be better off turning to an outside company to ensure that your burgeoning program remains legal. After all, you already work with a law firm to handle your legal matters, an accounting firm to handle your numbers and a bank to keep everything in order, so why not work with professionals when it comes to the literal health of your business?

“Running these programs is difficult,” says Michael Nadeau, president and chief executive officer, Viverae Inc., Dallas. “There’s a lot of work that goes into coordinating it and making it all happen. And it’s just as easy to coordinate a program for 1,000 employees as it is for 50 employees. That’s why the spend tends to be a little higher per employee for smaller companies.”

No matter your choice on that matter, your employees do need to feel a sense of inclusion in —and perhaps even some sliver of ownership of — the program, so involve them as early as possible. Tell them about the program as you develop it, and if you build a wellness planning committee, make sure you bring in people from as many departments as possible. And when the program is prepared to launch, make sure you pass along that information well in advance.

The key to increased participation is to offer an incentive, especially now as we continue to recover from recession and every little bonus bears the glint of gold. Perhaps your employees would react to paid time off or reduced premium costs. Both are common incentives, according to a panel of more than two dozen industry experts.

“You need to show someone you’re thinking about their health,” Nadeau says. “This is where you need to provide the right information at the right time and at the right frequency, because you need to have specific programs designed for a specific population.”

Monitor results and look forward

The fruits of an effective wellness program will take some time to devel op and spread throughout your business. Give it a couple of months to notice the first signs of change, a year to really see an improvement and a couple of years to watch as new habits spread from employee to employee.

Those new habits, of course, are part of the return on your investment. There are other intangible returns, too, including employee reports that they feel better and look better and now have a success story to tell their friends and family. But without hard numbers, all of those intangibles are nothing more than what one expert referred to as “warm fuzzies.”

Good thing a wellness program is far more than warm fuzzies. After a couple of months or a year or two, you can measure the collective pounds lost, the drop in body mass index, and the decrease in cholesterol and blood pressure levels. You can also measure the decreased rate of absenteeism because of injury or illness, improved productivity, and perhaps even lower figures for workers’ compensation claims and turnover rate.

“Where all the cost is in the system is for people who are at risk for either a chronic illness or acute episodes,” Martino says. “Those are the people who cost all the money, so if you point programs at them, it’s much easier to get a return on the investment. If you look at people who are your working well, generally about 80 percent of the population, those are the people who, because they aren’t sick and don’t have as high a risk for illness, they naturally have lower costs.”

And there are the dollar figures for the return on your investment. Those are as important as any number on any scale.

Similar to those first trips to the gym and those first months of the program, you should not expect to see any sort of large return during the first year or so. The program might pay for itself during that first year — thanks to employees being able to work more hours and to a possible decrease in health care costs — but you will likely have to wait until the second year, perhaps even early during the third year to see any real positive return.

“Improvements in health can take a little longer,” Stephens says. “But what we say an employer should expect is stabilization of their health care claims within three to five years — meaning their claims will trend below industry average, assuming they don’t have a lot of outliers like cancer or automobile accidents, things that a wellness program isn’t really going to impact.”

When that change starts to filter in, you might be surprised at what you see. Over time, the average wellness program will be worth about $3 toward your bottom line for every $1 you invest. Some experts say you can expect more than that, $5, $6 or even $8 for every $1 you invest. But $3 is a fair figure on which most experts agree.

“If you believe in the value of your human capital and you want to keep the people who are healthy now healthy in the future, then keep them engaged,” Martino says. “Keep them happy at work.”

Wednesday, 26 May 2010 20:00

Creating a wellness program

Imagine an office where employees walk laps during lunch, their pedometers clipped to their waistbands. Imagine an office where employees snack on fruits and nuts rather than candy bars, drink water instead of another can of soda, and have managed to kick that pack-a-day habit.

Imagine an office where health and wellness are a priority.

Is this anything like your office? Perhaps it will be during the months and years to come.

There is little doubt that health and wellness are hot topics. Just turn on the television and watch reality shows about weight loss, or pick up a magazine and read the articles on wellness published recently in Time and The New York Times Sunday Magazine. Or turn your eyes to Washington, D.C., where President Barack Obama signed the health care reform legislation in late March.

Our parents are overweight. Our children are overweight. We are overweight. And as we work our way through the recession, our days are packed. We tend to eat poorly and not exercise, and our poor decisions are costing not only our bodies and our minds but also our health care costs and our office productivity. A wellness program just might help to turn the overwhelming tide of fat and frustration.

“A wellness strategy is a subset of a human capital strategy,” says Paul Martino, vice president, health and wellness solutions, WellPoint Inc. “If an employer has a long-term horizon and views human capital in a particular way — that it’s valuable, that you want to retain your highly valuable and efficient people — you want to allow people to be at their job and functioning well.”

If you don’t have a program at your business, why should you install one now? If you do have a program, why should you aim to improve it? Well, plenty of research proves that healthier employees are more productive and actually cost you and your business less in total costs. And there is an impressive return on the investment, especially after a year or two.

But you have to plan and install the program first.

Take the first step

Are your employees overweight? Do they smoke? Not long ago, you would have been well within your rights to avoid the answers to those questions. If your employees worked hard and produced, who cared about their health? But after years of medical research, those are important and relevant questions. If the answer to either question is yes, you’ll want to consider a wellness program.

The question you have to ask yourself, though, is why do you want to install a program?

There are no wrong answers, but if there is no why, the program will flounder.

“A wellness program isn’t like buying a good or a service in the marketplace,” says Dr. Christopher H. Coulter, chief medical officer, Precept Group. “You’re not going to look at three and pick the one with the best price and move on to the next issue. A wellness program really only works where there is a high level of commitment that flows from senior management down.”

If you and your executives don’t support the program from its first breath, neither will your employees. So take the time to work with a private company for you and your employees to take a health risk assessment and a biometric screening.

HRAs, which are often free online or cost between $5 and $25 per employee if performed in person, and biometric screenings, which cost between $50 and $150 per employee, highlight symptoms and conditions that might develop into larger problems in the future, both among individuals and your employee base as a whole. If you work with an outside company, the information will also be anonymous and in compliance with the Health Insurance Portability and Accountability Act.

Consider your employees

Because of the general complexity of HIPAA laws, you might be better off turning to an outside company to ensure that your wellness program remains in compliance.

No matter your choice, your employees do need to feel a sense of inclusion in — and perhaps even some sliver of ownership of — the program, so involve them as early as possible. Tell them about the program as you develop it, and if you build a wellness planning committee, make sure you bring in people from as many departments as possible and allow them to participate.

“You have to create the shared vision,” says Tom Carter, vice president, sales and broker relations, Kaiser Permanente California. “People have to feel like their values and ideas are incorporated. As people feel incorporated, they support it a little more easily.”

A key to increased participation is to offer incentives, especially now as we continue to recover from the recession and every little bonus bears the glint of gold. Perhaps your employees would react to paid time off or reduced premium costs. Both are common incentives, according to a panel of more than two dozen industry experts.

“One of the critical pieces of success is to engage employees,” Coulter says. “And it’s not enough to tell them that you want them to behave better or to have marketing materials. You have to show them what’s in it for them. People follow the money, and a structured incentive program will greatly enhance the participation rates and the success of the program.”

Monitor your results

The fruits of an effective wellness program will take time to develop and spread throughout your business. Give it a couple of months to notice the first signs of change, a year to really see an improvement and a couple of years to watch as the culture changes.

Over time, you can measure the collective pounds lost and the decrease in cholesterol and blood pressure levels. You can also measure the decreased rate of absenteeism because of injury or illness, improved productivity, and perhaps even lower figures for workers’ compensation claims and turnover rate.

The program might also pay for itself during that first year — thanks to employees being able to work more hours and to a possible decrease in health care costs — but you’ll likely have to wait until at least the second year to see any real positive return.

“An employer who could get a wellness program, in a traditional sense, to pay for itself in the first year or two would be a pretty good result,” Martino says.

When that change starts to filter in, you’ll likely see the average wellness program will be worth about $3 for every $1 you invest. Some experts say you can expect more than that — $5, $6 or even $8 for every $1 you invest. But $3 is a fair figure on which most experts agree.

“The thinking that got us into high costs and health care reform and lost productivity is not the same thinking that will get us back to healthier communities and healthier populations and better business outcomes,” Carter says. “You have to rethink the way you’re packaging benefits, the way your culture is set up in the workplace.

“To do nothing is just not going to work. When you take a little more charge of the work force and work site health and safety, you can improve your outcomes and really change the culture, which is good for everybody.”