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.

“You only drive productivity through people,” says Harold C. Taber Jr., director, MBA Mentor Program, Crowell School of Business, Biola University. “The people are the greatest asset, and they help companies compete in the marketplace. To compete as robustly as possible, you must offer benefits. There are no laws that say companies have to provide health care coverage. It is a benefit, and the same goes for education, but education will help the company grow and evolve. There’s always a good ROI on education because the employee will come back with better ideas and ways to do things.”

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.

“Companies should focus on continuing education activities that will help their employees to do their job or the additional responsibilities better,” says Karla Wiseman Bright, executive director, office of executive education, University of Southern California, Marshall School of Business. “For some employees, this might be technical skill training, but for other employees, this might be more soft skills, such as leading in tough times, building effective teams or communicating the tough message.”

Considering who will be receiving the training is an important step. Being wise about your budget means training those who are in a position to benefit the company most instead of offering a la carte training to whoever is willing to trade a few hours of work for classroom duty.

“During tough economic times, a lot of companies are turning to smaller or shorter programs,” Wiseman Bright says. “They should choose the most important objective they need to accomplish and develop or work with a partner college or university to develop a program that will meet that objective. Most importantly, it needs to be something that people can use immediately.”

Considering the type of education you need has equal importance to the way the education is delivered. While some companies find online courses give employers the best return on investment while saving on travel and driving time, others find in-house courses or a classroom setting to be the best delivery method for employees.

Choosing a trainer

Your company’s goals help determine what institution you’ll use to provide employee training. Look at local colleges and universities first, as these organizations have flexibility in training formats and delivery.

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.

“You can pick and choose where you can get the best education for your employees,” Taber says. “Right now, you may be thinking about laying off employees and not have a lot of concern for retention, but that isn’t a best business practice. Look around at your local colleges and focus on the ones that can meet your needs in the most cost-effective way — looking at the education acquired and not just a university’s name and make sure you are using an accredited program.”

Don’t think of continued education as a perk to employees, but think of it as a way to keep the business growing.

A common error employers make is accepting a program where the employee misses a significant amount of work to go to school. Options exist that allow you to dictate within reason, how, when and where your employees are educated.

“Keeping training programs is a tough issue when companies are laying off people and taking salary cuts, but cutting training altogether sends an even more dire message,” Wiseman Bright says. “Companies need to figure out how to do continuing education with smaller expenditure. Online learning is available at lower costs, internal resources are excellent for a ‘lunch and learn’ as well as some partners, like community colleges, will help a company figure out how to create a small program allowing a company to demonstrate its commitment to employee development on a smaller scale.”

After you select a program and a university, your strategy must carry over into measuring tactics. Make sure you have a way to calculate the benefits of training and the reason you have selected the specific program.

Measuring results

Before an employee begins training, testing the skills that will be built upon is important. Testing will help determine where the employees’ skills are today and where they need to be after training. Making sure the employee, trainer and you are on the same page with expectations will help eliminate any miscommunication about future performance expectations.

“Make sure you are selecting the most promising group of employees to educate and ones that demonstrate a desire to stay with your company,” Taber says. “You may even want to make an agreement with employees to stay with the company one year for every year of college you pay for. In a tough economy, you may even boost that agreement to two years per year of covered tuition.”

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 true impact on the enhanced 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.

“Finding a way to keep education in the budget will be the solution to alleviating future budget concerns, because your business will be a place where you don’t have to eliminate beneficial business practices to stay afloat,” Taber says.