Let’s face it, when you’re in a budget crunch you’re looking to slash any line item that doesn’t show an immediate return. In today’s recession, training is becoming that item more and more.
The U.S. corporate training market shrunk from $58.5 billion in 2007 to $56.2 billion in 2008, according to research firm Bersin & Associates. The average training expenditures per employee fell 11 percent from 2007 to 2008, and small and midsize businesses were hit the hardest, averaging 33 percent fewer training hours per employee.
You may think trimming or even axing training is justifiable — training takes time and money and doesn’t usually have an immediate return on investment. But educators say now is a prime time to enhance your employees’ skills, whether it’s taking advantage of slower business to cross train employees or supporting your employees in the additional responsibilities that they took on following company layoffs.
“As we get smaller in our organizations, and we’ve probably heard this for decades, people need to do more with less,” says Joe Shapiro, dean of the College of Extended Studies at San Diego State University. “I like to say we have to work smarter, not necessarily harder. We, in essence, have to increase in our efficiency and increase our effectiveness, and doing that requires some kind of education training. Sometimes it’s through universities, sometimes it’s through online training, but certainly you need to invest in people.”
Eliminating your training or education budget can be detrimental. But there are ways to maintain productivity with fewer dollars, and it starts and ends with efficiency.
Track your spending and its returns
One place to start is looking at the training or education you’ve done in years past. Did you see results that directly improved your bottom line? If not, look closely at what you’ve spent money on. Maybe you’re paying for employees to get advanced degrees that are useless to your company or maybe you lack the resources needed for your staff members to fully implement what they learned in training.
There are multiple ways to track training, the most popular being pretesting and post-testing to grasp the change in employee knowledge. Whether or not you measured your employees’ change in skills, a follow-up assessment to gauge retention and whether more training is needed can provide positive feedback. Questions to think about are: Did they learn something from the training? If they learned something, can they apply it on the job? If they can apply what they learned on the job, did it have a positive financial effect on the company?
“One of the really key elements is to be certain that you solicit input from the people who are going to be trained, before, during and after the training so that they have an investment in making sure it’s successful for them, as well,” Shapiro says about effective training techniques.
If you haven’t seen the results you were hoping for, don’t continue to throw the same training program at the problem and hope for a different outcome. It’s important to remember that training isn’t always the solution and that people learn in different ways. The best thing to do is either sit down with a training provider or internally spend time evaluating the best solutions moving forward.
Find solutions now, while planning for the future
Effective training that gets to the core of the problem starts with an analysis of what the issue is and having a sense of what you want to accomplish through training. A common mistake is assembling training for a particular reason but never defining the why and a quantifiable outcome.
An internal training department can outline the company’s objective, but you can always look to the experts at consulting firms, colleges and universities to do a needs assessment and align an educational plan with the results.
External providers can offer objective advice to what your company’s priorities should be when it comes to training and carryout implementation. And while you may be thinking short term in this economy, a long-term plan is essential to be a step ahead of your competition and execute successful training.
The best ways to assure you’re meeting your company’s needs and spending your money wisely are to link training to your strategic plan and your performance management system — each job description and employee annual review. That guarantees a regular evaluation of your training program and your employees’ skills, and if you’re working with a provider, it keeps them abreast of your company’s future plans, which can lead to identifying problems and solutions earlier and faster.
To form a successful training regimen, you should conduct needs assessments annually and implement training programs that meet employees’ needs based on those assessments, says Teri Safranek, director of work force and community development at Palomar College.
“Look at the company’s five-year plan and determine what skill sets employees will need for the future growth and development of the organization,” she says. “Budget training dollars on a per-employee annual basis and understand that training of any type is never a waste of resources.”
Determine training that suits you and your budget
There’s a plethora of external sources to partner with, whether it be sending administrators to pursue master’s degrees or training employees on communication techniques. Colleges and universities tend to be the best bang for the buck, offering a one-stop shop with consulting, full implementation and a broad range of courses.
When it comes to training, the costs that add up are flying in topic experts, sending employees to out-of-town conferences or even holding training off-site. If you’re hoping to trim your training budget — and it seems many are — then think locally. Look at the office training and online services offered by local community colleges and universities.
Tough times call for creativity. Think about internal and external resources that lend themselves to free training. Check professional associations for round tables and seminars. Survey your employees on their areas of expertise and hold brown-bag lunches on those topics. If you’re bringing training in-house, just make sure you’re using a variety of techniques to meet each employee’s learning styles.
“One of the things that you need to look at as a company is which of these modalities makes some sense to you in terms of your own organization,” Shapiro says. “The size of your organization makes a big difference. Bigger organizations have more opportunities, more resources. Some of them are probably doing their own training in many areas but probably still need some outside consulting in many areas.”
And look for funding sources — federal, state and local organizations offer training grants, whether it’s the U.S. Department of Labor or one of your local economic development corporations.
If you’re thinking about dramatically cutting your budget, first think about why you have training in the first place: to improve your retention, customer satisfaction, corporate culture and the overall growth of the company.
“I think it is important for companies to remember that the economy runs in cycles, and investing in the professional growth and development of their No. 1 asset (their employees) is critical to the success of the company’s future,” Safranek says.