In a previous article on employee loyalty, we talked about training as a means to increase profits while keeping your employees from seeking positions elsewhere. We even gave readers a training freebie that many thanked us for and we’re offering again.
In this article, I’ll to show you, in more detail, how to increase your return on investment for your training initiative.
Every company has a training initiative whether it’s formal or informal, talked about or not. The questions are:
- Does your training make you money or cost you money?
- If it costs you money, how do you turn it around?
- If it makes you money, how do you increase that?
While the questions are simply put, the answers aren’t as easy as there are many factors that come into play. How many people need training? What do they need training on? How readily available is the training? What’s the cost of that training. Can the training be done all online or does some of it have to be done in the real world?
Some companies aren’t even sure about the answer to the first question: Is training making them money or costing them money? That one can be a bit easier to sort out than the other two, so let’s address that one in this article. I’ll cover the other two in a follow-up article.
Finding out how much money is currently being spent on training, takes a couple of steps. First, take a look at the actual hard costs associated with training. You may not have all of these, so just add up the ones you do have: Learning Management System, paid course subscriptions, external training events, trainers and training centers. If you have other ones, simply add those to the list. These are your “hard costs”.
There is also the cost of time spent training your people. Estimate the number of hours training occurs in your organization (online, classroom and on-the-job, external events) and multiply that by the average salary of everyone involved in that kind of training. Remember to add in whoever is doing the training (like a manager) if they weren’t added in the first step.
Add those two numbers together (the hard costs and the cost of time spent on training) and you have at least an estimate of what you’re paying for training.
Those are the more easily observable costs. Perhaps harder to evaluate are the costs of training gaps, training that’s not following current best practices or untracked safety and compliance training that can’t be included in an audit because it was never tracked.
There are literally hundreds of examples of training gaps. On the horrific side, training gaps can result in property damage, personal injury or even loss of life. But let’s take one that’s easier to see the actual costs. Let’s say that in your organization there are just 10 people who aren’t that competent with Microsoft Word and Excel and lose about an hour of productivity a week. If they’re making $20 per hour, these 10 employees are costing you about $10,000 every year. Did you know that we can show you how to train over 150 of your employees on a range of topics for less than that?
Keeping Up with Best Practices and Regulations
Training gaps occur when skill requirements aren’t correctly identified when the correct training isn’t available and when there isn’t a way to ensure that people are being properly trained on the right information. Not only can we help you with ensuring that you have the correct training and a way to deliver and track the training, but we can also help you create a skills requirement assessment database that can be used throughout your company.
There are advances in every industry from sales (think Social Media) to IT security to warehouse safety and more. For instance, winters in the north are hard on roads. Freezing temperatures can cause “frost heaves” and potholes. In the past, roads would simply be resurfaced and potholes filled in a never-ending, costly construction cycle. However, new technology in road construction and repair can greatly extend the life of roads and prevent frost heaving and potholes. While the initial cost may be more expensive, the long-term cost savings to a transportation department can be staggering.
While not every trend needs to be followed, not following current regulations and using best practices could be exposing your company to risk, increasing your expenses and costing you both sales and lost productivity that far outweigh the cost of a proper training system and up-to-date training content.
Untracked Safety and Compliance Training
Every year, OSHA hands out safety violation citations totaling millions of dollars in fines. These fines typically range from thousands to hundreds of thousands of dollars. Even if your company is following the correct safety procedures, if you can’t document the training in an OSHA audit, you still risk getting fined and the resulting bad publicity for your organization.
Tracking safety and compliance training can be tricky. A good portion of safety training simply isn’t done online or in a classroom. Training that takes place on the job, in the field or at an impromptu training event also need to be documented and tracked. Even something like a safety memorandum could be included as part of an OSHA audit if you can document who reviewed and signed-off on the safety memo.
While properly tracking the training is crucial, probably even more important is ensuring that your people are getting the right, up-to-date training and that they understand it and can apply it. Having no violations or accidents is far better than being able to show that training was done. We can help with that as well.
We’re Passionate About Saving Your Company Money
Whether you need access to an LMS that will meet your current needs and grow with you or want courses from award-winning content vendors at an affordable cost, we’re here to help. We invite you to see why our LMS technology and elearning content is the best-valued package available. Contact us today at (800) 868-8039 and we’ll show you how you can improve your company’s bottom line and strengthen your training initiative.
PS: Your Training Freebie
For a limited time, we’ll give you a free 10-day trial for up to 25 of your employees to test-drive our courses. Simply contact us today at (800) 868-8039 and let’s see what we can do together.