Monday Mornings with Madison

Prepared to Do the Job

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To Train or Not to Train, That is the Question

Is staff training necessary?  The short answer is yes.  Training is necessary, in part, because every company does things a little differently.  It is not enough for a new employee to have the skills for a job.  They must also know how to apply those skills to a particular job at a particular company.  A business might hire a person with a degree in accounting, but that person would still need to learn not only how to apply those accounting skills to that position (such as accounting for an eCommerce company vs. accounting for a university), but also how that particular company wants things to be done using their systems and processes.  For most new hires, that type of onboarding training is necessary.  If it is done poorly, employees fumble and stumble making the learning curve longer and more painful.  It can even contribute to turnover in cases where new hires never quite find their footing.

Also, training is needed because technology is constantly evolving.  The best tools available for most tasks is changing at an accelerated pace.   There are updates for existing software and new programs hitting the marketplace daily.   From medicine to manufacturing, machines and robotics are continually changing how work gets done.  For employees to keep up with those advances requires either formal or informal training.  The more a company relies on employees to “figure it out for themselves,” the longer it takes employees to get up to speed.  That affects both productivity and quality.

Last, but not least, training is valuable because most employees want to learn and expand their skills in order to grow as professionals.  Part of the responsibility and cost for that falls squarely on the employees.  Still, when employees spend 40-50 hours a week at work plus the time it takes to commute to and from work, finding the time to learn new skills can be a challenge.  Even if the staff is willing to take online courses, read books and watch videos to acquire new skills, applying it to the work place often requires buy-in and involvement from the company.

Clearly, training is a growing part of today’s knowledge-driven economy.  Yet, employee onboarding, job training and skill development are three areas of management that most small and mid-sized companies struggle to do well, if at all.  Why is that?

In part, it is due to the debate that happens at organizations everywhere.  It sounds like this:  “Our employees need training.  But, what happens if we train them and they leave?  And, what happens if we don’t train them and they stay?”  It is the classic ‘training debate.’  To train, or not to train, that is the question.

To Train

On the one hand, companies that refuse to do any training quickly gain a reputation (both internally and externally) for not caring about or meeting the needs of employees.  That is a serious problem.  Given the exceedingly low unemployment rate in the U.S. at every level of education (see chart below), a paycheck is not enough to keep employees from changing jobs.  A company’s reluctance to invest in employee development will push top talent to go work for organizations where training is a priority.

U.S. unemployment rates by educational attainment, 2017, U.S. Department of Labor Statistics[1]

U.S. educational attainment Unemployment rate (%)
Doctoral degree 1.5
Professional degree 1.5
Master’s degree 2.2
Bachelor’s degree 2.5
Associate’s degree 3.4
Some college, no degree 4.0
High school diploma 4.6
Less than high school diploma 6.5

 

In fact, smart companies use training programs as a carrot to lure talent away from competitors that don’t offer development opportunities.  According to the American Management Association’s 1999 “Retention:  Challenges and Solutions” survey, skill-enhancement issues were shown to be the key retention strategies in use. Of the top 10 strategies used by businesses to retain employees, seven were training related, including the top four.[2] Almost two decades later, a 2017 Forbes article showed that training and development continues to be one of top ways to attract and retain talent. [3] “To attract the caliber of employee that will take your company to the next level, create opportunities for impact. Development opportunities must span beyond formal classroom training and performance plans.”  Companies that refuse to train, then, are easy prey for talent poaching.

Not to Train

On the other hand, no company wants to invest thousands of hours and tens of thousands of dollars to train staff only to watch a steady stream of them leave the company as they reach the point of competence and skill that allows them to move on to bigger companies with better salaries, benefits and perks.  And yet the current turnover rate of Millennials, which is on average about 18 months, shows that loyalty is at an all-time low, and employees leave on their own even from companies that offer training.

This sounds like a lose-lose debate… the kind most commonly had by the leadership of small and mid-sized businesses.  Ironically, it is precisely in the small and mid-sized businesses with limited resources where the wrong decision regarding training can have the greatest impact!  The good news is that it should not be a debate at all because it does not need to be an either/or situation.  Investing in the growth and development of employees can generate a return on investment (ROI) that makes the time and money spent worthwhile… even if (or when ) employees leave.

There is a way to turn training from a lose-lose proposition to one that is a win-win.  Here are the three key factors to keep in mind when offering employee training.

1. Make it Timely and Relevant – The training should provide the knowledge and skills employees can put to use immediately and will have a bottom line impact.  New skills learned at work must generate a tangible ROI in the workplace as soon as the training ends.  So that training must be provided just in time to be put to use right away.  Consider it “results-driven training.”

DON’T: Pay for a salesperson to go to school to earn a Bachelor’s degree in forensic accounting if the employer has no major accounting positions where the employee’s skills will be useful in the future.

DO: Pay for a salesperson to learn how to use a new CRM system so she can immediately use the system to nurture more contacts and convert more leads to sales.

2.  Maximize Applicability – The training should specifically include the practical elements that are relevant to the business and can be applied in current, real-world ways at the company.  The course content should be highly aligned to how it applies to the business.

DON’T: Pay for the Receptionist to improve her writing skills in a course on “Creative Writing” at the local college.  There is little real-world application of creative writing in that job.

DO: Pay for the Business Development Manager to take a Business Writing course to improve his ability to write business reports and emails.   Or better yet, incentivize the Business Development Manager to take some of the free 130 LinkedIn online courses that teach how to write business reports, emails, research projects, and speeches by offering a bonus gift cards for completed courses.  The cost of the training is tied to course completion for skills that are directly applicable to the employee’s job.

By providing right training to address a need or problem at the company, the business gets live consultancy and immediate payback from the training.  If the assessment mechanism allows the student to be graded on what was learned and how it can be applied in a practical and useful way that generates a real return, then the employee’s growth and the benefit to the business become synonymous.

3.  Negotiate a Long-Term Commitment – Many companies agree to pay for formal education in exchange for a commitment to stay with the company for a certain period of time after completing the degree.  For example, it is common for hospitals to offer nursing scholarships in exchange for work commitments from nursing students.  The U.S. military also offers training in exchange for an enlistment commitment.  The Navy, for instance, offers new recruits full training as an Air Traffic Controller in exchange for a six-year enlistment.  And cities such as Washington, D.C. offer to pay for  teachers who want to earn a Bachelor’s degree in Education in exchange for working at an inner city school for three years after graduation.  There is no reason why small and mid-sized businesses cannot do the same.  A mid-sized software development company that cannot afford to recruit top tier talent could offer scholarships for programming students at the local university in exchange for a three-year employment contract.   The scholarship could include internships and mentoring at the company during the program.  If the employee fails to work for the company for the agreed time, they would be liable to pay back the scholarship plus a penalty.

In the end, some employees may take their new skills and move on.  That cannot be completely avoided.  But it is only a problem if they do it before the company was able to get back its ROI.   But, if no attempt is made to improve the skills of the company’s workforce, the company will not be able to keep up with the fast pace of change and the even faster pace of turnover.  And the stagnant employees who stay with the company will not be qualified to take the company where it could potentially go.

Quote of the Week

“Employers who recognize the importance of investing in their workforce have a more productive workforce, a more efficient workforce, a more loyal workforce, less turnover, and, in the private sector, a more profitable workforce.” Valerie Jarrett

 


[1] March 27, 2018, Current Population Survey, Employment Projections, U.S. Department of Labor, U.S. Bureau of Labor Statistics, U.S. Department of Labor, https://www.bls.gov/emp/tables/unemployment-earnings-education.htm

[2] July 18, 2000, Karen Canger, Using Training to Attract and Retain Talent, Tech Republic, https://www.techrepublic.com/article/use-training-to-attract-and-retain-talent/

[3] June 7, 2017, Forbes Coaches Council, Top 14 Ways to Better Attract the Top Talent You Need, Forbes,  https://www.forbes.com/sites/forbescoachescouncil/2017/06/07/14-ways-to-better-attract-the-top-talent-you-need/#5d4a7f873d60

© 2019, Written by Keren Peters-Atkinson, CMO, Madison Commercial Real Estate Services. All rights reserved.

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