Corporate training positions your company for future growth Featured

8:00pm EDT June 25, 2010

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.”