Have you wasted any money on training lately?

Nov 04 2013 by Dan Bobinski Print This Article

Most companies look at training as an expense. Some even think of it as a complete waste of time. That attitude couldn't be more wrong. In reality, training is a profit center in most circumstances, especially when you consider the full impact of training and how it affects the bottom line.

Consider a large company I worked with recently. Senior management had heard the occasional grumble about lack of quality in the training of new employees, but production numbers were doing okay, so the issue got minimal attention. Then the new HR manager pointed out that poor training was the cause of more than a few accidents. Between hospitalization and equipment damage, it wasn't uncommon for accidents to cost several hundred thousand dollars each. When senior mangers were notified that those accidents were due to poor training, their grumbling about training started to climb up the weekly planning agenda.

After I was brought in to work with the trainers, what I learned shocked me. New employees were being placed in areas of responsibility on production lines with only basic knowledge of safety protocols and little understanding of plant operations. Their mistakes were costing the company hundreds of extra man-hours, and their sense of frustration from not knowing their jobs led to higher-than-normal turnover.

Additionally, supervisors were not allowing people assigned to conduct training to do proper training, instead having them handle emergencies elsewhere while leaving their trainees to fend for themselves.

Thankfully, when I responded to the company's request for proposal, I included a mandatory meeting for managers so I could go over the fundamentals of a good training program and encourage them to reinforce the value of training among all strata of their front line employees.

When I conducted that meeting, some managers and supervisors acknowledged an awareness of insufficient training, but intimated that staffing levels were tight, and production quotas needed to be met. Other managers were totally unaware that such practices were occurring.

Thankfully, senior management openly acknowledged that a problem existed, and pledged their full support to fix the problem. They also discovered that one of their senior middle managers had a strong interest in training, and appointed him to be the company's liaison in working with me to create a comprehensive, cohesive, and strategically aligned training program.

Anyone reading this could easily look at such an endeavor and say "but that obviously cost a lot of money." My response is, "Yes, but was it really a 'cost'? Let's do the math."

A surface analysis of the company's costs for accidents and production mishaps due to poor training over the past five years has averaged well over $1 million annually (That number represents equipment repair, hospitalization, and basic labor costs from mistakes).

Designating one employee in each of the company's 10 main production positions to work as a dedicated trainer adds just approximately $280,000 to the company's annual payroll.

That's a big expense, right? Correct. Except when one considers a solid training program that equips new hires with the correct knowledge, skills, and attitudes for operating their machinery will reduce the number of accidents and production mishaps. In fact, if the number of accidents and production mishaps drops by only one third, the "costs" of implementing a well-structured training program will more than pay for itself.

In fact, after looking the cost of production mishaps alone, I calculated that cost of creating and implementing a comprehensive, strategically aligned training program would be more than covered in the first year. I was so confident, I even guaranteed it in my proposal.

Here are some tips to consider when reviewing your training programs:

  1. "Show and tell" training is ineffective. When learning a skill, a four-step "skill transfer" approach give MUCH better results.
  2. You have probably forgotten more about what you do than your new hires will learn in the first weeks. This is especially true if you've being doing what you do for a long time. Tasks become so second-nature to you, you forget to explain necessary details.
  3. The opposite problem of the one just mentioned can also occur. Instead of giving new hires a mental framework up front of your operations flow, you start getting into details right away. When this happens, new hires don't know where to "hang" all the new information in their mental filing system.

When looking at any training endeavor, it's often more important to consider the cost of NOT conducting the training. If you take the time do a fully loaded cost summary as well as a full monetization of the benefits accrued from training, I think you'll find that much training is really a profit center, not a cost center.

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About The Author

Dan Bobinski
Dan Bobinski

Daniel Bobinski teaches teams and individuals how to use emotional intelligence and how to create high impact training. Heís also a best-selling author, a popular speaker, and he loves helping teams and individuals achieve workplace excellence