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.

“I would like to think training could help the company achieve its business objectives,” says Mark Spool, owner and president, Management Development Solutions. “The way you think of that is through the skill set of the employees and the leadership of the company.”

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.

“What we typically suggest is start by performing a needs assessment,” says Waverly Coleman, assistant dean, Division of Business and Technology, and executive director, Corporate Solutions, Community College of Philadelphia. “One easy way to do this is trying to sit back and looking at where the problems are [that] the organization is facing.

“Then, sort of peel away layers of the onion, so to speak, in terms of trying to identify the root causes of these problems. Once we can identify the actual problem, what we look at are the skill levels of the individuals involved.”

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.

“Do questionnaires or do focus groups or interviews, review the employees’ performance appraisals,” Spool says. “It’s certainly understanding the business and therefore business strategies and objectives and looking into the future. What are the implications of the business in the future in regards to the skill set that is needed?”

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,” says Pat Galagan, executive editor, ASTD. “In that pool of companies, some are large, some are small, some are government, some are private.”

Businesses that have the most success tend to spend between 2 and 3 percent of their total payroll cost on training, education and development.

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.

“Companies ought to be focusing more on how their employees can learn from experience,” Spool says. “It’s been proven to be the most effective and it’s got to be the most cost-efficient.

“As long as a company continues to offer stretch assignments and grow employees and links their job with their own personal growth, you’re much more likely to retain them, let alone improve their capabilities.”

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.

“Companies don’t want to send people to training and also pay for the training if they don’t have some level of assurance that training is having a return on investment at that organization,” Coleman says.

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.

“An organization’s employees are really their most valuable resource,” Coleman says. “The investment they make in human capital is really going to pay great dividends down the road for that organization in terms of helping them become even more competitive in a global marketplace.”