“Time is money” is a familiar old adage, particularly among those who may own a business or are responsible for the operations of a business. Practically everything in business costs money – time, materials, people, operations, etc. All of these are just a minute sample of the things that are associated with the fixed and variable costs of doing business, including training.
Many organizations will only tally the dollar amounts of training into their costs of doing business. However, in all of the accounting balance sheets, cash flow and income statements, there is never an entry for the cost of not doing training. Why?
In most organizations, the cost of doing business is equated to a bottom line figure of dollars and cents. However, around the conference room tables of annual budget discussions, the topic of “can we afford not to do or spend money” on something is typically relegated into the category of making an investment into the business with an anticipated return on that investment somewhere down the line. After all, in the world of finance and business, it is less relevant what we pay for in an investment, but more relevant in what we get in return.
An Adverse Association
As the financial cost of training is easily quantifiable in a spreadsheet, the true cost of not doing training will rear its ugly-head in the poor performance of a business.
With the given challenges of merely keeping a business viable in a lethargic economy, the intangibles of keeping employees and customers happy, while trying to eke out a profit, have many businesses at the precipice of “now what do we do?” Does a business jeopardize its future with Band-Aid approaches to employee productivity, attracting and retaining business, or does it stay the course of investing into the business at the sake of profits?
It is a conundrum, yes. However, perhaps there are ways to accomplish both.
Two Irrefutable Realities
There are two incontrovertible truths when it comes to an organization’s ability to keep its training and development programs intact while reducing costs. First and foremost, an organization needs to reconstitute its perceptions of training.
In more viable and less competitive times, beyond showing employees the basics of doing the job, training was once considered and option for most organizations. In today’s business world, a workforce continuing to do things the same way it did 10 years ago will make an organization and its people rapidly obsolete. In obsolescence there is stagnation, and customers will soon begin to look elsewhere for their products and services.
Secondly and equally important, is how does an organization get more with less? Organizations with complex methods in accounting for time and expense may be able to quantify this as tangible in dollars and cents, but the intangibles of how it impacts employee satisfaction, customer satisfaction and the bottom line are difficult to quantify.
Jack Welch, the former CEO of General Electric, once described the intangibles of employee satisfaction, customer satisfaction and profits with the analogy of each being a leg of a three-legged stool. Anytime an organization begins lengthening any leg on the stool at the expense of the other two, the three-legged stool falls over.
While many of Welch’s concepts of organizational structuring have, over the years, been viewed with a substantial amount of controversy and disdain, it is difficult to disagree with this analogy. So in the relationship of employee satisfaction, customer satisfaction and profits, where does the cost of training or not training translate into something that’s quantifiable?
Keep the Stool Upright
Training or encouragement through a company-sponsored development program sends a message to employees that they are valued and are important to the organization. Valued employees are more satisfied employees, and they will go the extra mile to ensure the company is successful. Engaged employees are willing to stay up to date on technology, business trends and best practices that will ensure the satisfaction of new and existing customers.
While this stabilizes two legs of the three-legged stool, how does an organization keep employee and customer satisfaction from toppling the stool over at the expense of profits?
There are ways to get more with less so organizations can continue and grow their training and development programs while keeping costs in line. One method is to try a little networking within the business community. Some of the best ideas come from seeing how other organizations accomplish the same objectives as yours. Innovation is the sum of many minds working together to accomplish a common goal.
Another method is to use an organization’s greatest resource – the knowledge, skills and abilities (KSAs) of existing employees to train others. The intellectual capital of an organization is sometimes one of its most overlooked assets.
In addition, using a “train the trainer” concept where a few employees are sent to training with the idea of knowledge sharing the training is another viable method for reducing costs. Employees also can be rotated in attending training so that no favoritism issues occur.
There are also lower cost methods of training versus the time and expense of travel to dedicated training sites or conferences. Community colleges, local professionals, webinars and virtual training can offer cost savings over traditional methods of training without sacrificing content or quality.
Many states also offer job training partnership programs with the expressed purpose of assisting employers in obtaining qualified workers and upgrading the skills of existing employees. These programs are usually of little or no cost to businesses residing within that state’s jurisdictions.
Time is money, but so is a well-trained workforce and satisfied customers. None should ever be sacrificed at the expense of the other.
Paul Ulasien is president and senior partner of Business Training Consultants (www.biztrainingconsult.com). The company provides innovative and effective training strategies based on Social Learning Theory that strives to stimulate individual learning retention and then share what has been learned to individuals throughout the social fabric of the organization. Ulasien has more than 30 years of experience in training consulting and education. He serves on the Advisory Panel of Faulkner Information Services, a provider of IT and communications information services; has been an Adjunct Professor of Graduate Business Studies; and holds dual Masters Degrees in Business Administration and Industrial-Organizational Psychology.
