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TRAINING: 5 Ways Training Can Cut Cost and Increase Revenue

mikeharringtonwebsiteFor most, the idea of training is one that revolves around mandates and requirements, or as a solution to a problem one is experiencing.  However, we also know that training is a great way for organizations to build the competencies of their staff, and specifically, can be used to cut cost and increase revenue.   Recently the phrase “return on investment” or ROI has become popular in many circles, and when discussing training or consulting services, it simply comes down to what service will directly impact the bottom line.  It’s typical for us in the consulting industry to see a dip in training requests when money gets tight, because for most, training is still seen as a luxury item. However, I believe if implemented effectively, training can have a profound impact on revenue and overhead.  Read on to see what we believe are five ways that we see training as a “cost saving” technique.

 
1. Implementing In-House Training Teams can be an amazing way for organizations to directly impact the training expense of a company. By creating a team of staff members who are highly committed to the idea of training and teaching others, an organization can save potentially tens of thousands of dollars per year.  There is a trick though: The team must be implemented appropriately. Poorly implemented in-house teams can quickly have the reverse effect on the bottom line, stealing resources and costing money and time. The keys to an effective training team are 1) they’re created with the necessary goals, vision and authority to promote their terminal objective, 2) they must be trained by an expert or model trainer, not just on the subject matter, but on how to effectively ‘teach’ others, and 3) they must meet regularly to assess their work, strategize for upcoming training requests and receive refresher training courses to hone their skills. (View an excerpt from our module)

 
2. When an organization can conduct a comprehensive performance review process that sets clear goals and outlines an employee’s path for success, they achieve two very distinct things. They first have taken a process that is typically seen as burdensome and negative, and framed it in a way that motivates the employee because s/he can begin to see the connection between his/her evaluation and his/her advancement in the organization; helping him/her to achieve his/her personal career goal. Secondly, the organization has created a system that is consistent and dependable and can be relied upon to give an accurate reading of an employee’s skill level, not personality traits. The employee can see that this critique is beneficial for the company and for him/her professionally.

Every HR manager knows that inconsistency is the root of all evil when it comes to performance evaluations. “My manager dinged me on my evaluation because she doesn’t like that my project received so much praise”, or “Fred’s great friends with his supervisor so it doesn’t matter how he performs, he always receives a high rating.” We’ve probably all gone through, or given performance reviews, but I will venture to say that in most instances we, as managers, were probably given the company’s evaluation and told to administer the process. I’ve gone through a number of performance reviews, but only a few have actually used a process and system that accurately collected “usable” data that could not be construed as biased and where the information collected was then used to fulfill the goal of a larger institution mission as well as the individual being evaluated. A quick way to know if you’re in need of revamping your performance review process and training those that administer it: Does your process included a quantifiable evaluation scale that speaks to ability and behavior, not personal perceptions (i.e. Performance Rating Chart)? Does your system provide the evaluator with a list of quantifiable words to use when describing behavior (i.e. Performance Standards)? Do your managers use terms that are subjective and unclear, based on assumption or imply motive when evaluating performance?   

 
3. Did you know that a high performance team is typically 30% more effective than an average team? Imagine the things your team could produce with a third more efficiency. However, it’s not intuitive for a group of high-performers to come together and function with even greater productivity. When a new team is created, it typically jumps right in and begins to tackle the issue at hand, but by evaluating the group from the outside, we as trainers, are able to recognize that the things that hinder the group from reaching high performance are not because of a lack of competency within the group, but actually in the way the team functions. Each team goes through a life cycle or phases, and it must go through the first three phases before it can ever get to the ‘Performing’ stage. Unfortunately ill-equipped teams can sometimes get stuck in phase two or ‘Storming’, never actually making it to the fourth phase. (view team development wheel)

The best place to start is with the creation of a team charter, which should outline the goals, objectives, purpose, authority level, and other critical identity characteristics. And ask yourself, does my team function as 1+1<2, 1+1=2, or 1+1>2? High-performance teams should operate in a “one plus one is greater than the sum” mode.

 
4. Time and time again, the lack of well facilitated meetings is the number one complaint of people in the office environment. With the majority of management’s time being consumed by meetings, the constant struggle remains – “how do I make this meeting worth the time it takes?” Unfortunately it isn’t until we witness a meeting by a trained facilitator that we realize what we’re missing. When the ‘owner’ of a meeting can deliver on the expectations of those attending, we see a highly engaged and committed group that is energized by the fluidity of the meeting and the clear goal that is trying to be obtained. Two parts become evident in a typical meeting structure – content and process; however, it is the process or lack thereof that creates in us that deep-seeded frustration. The fact that there is no clear purpose for each agenda item, or a clearly stated goal trying to be reached, that there’s no one minding the store by holding to a set time schedule and no consideration or respect for others when the meeting goes over time, all cause massive amounts of wasted time.

When we can focus on the ‘process’ of the meeting – the preparation of a detailed agenda with clear items, ‘Desired Outcome’ identified for each item, and time frames and ownership for each, along with facilitating the agenda in an effective way, then we see a drastic improvement in the functionality of our meetings and an increase in team member participation and contribution.

 
5. Research shows that many individuals seek positions that provide continual training or education and see a company’s decision to invest in them as a commitment to their wellbeing. So an organization that can provide meaningful training that can be seen as being necessary for career advancement will, in turn, see a higher level of commitment from its employees, the type of commitment that results in higher employee retention and a greater level of dedication to the training content.

In addition to competency improvement training, many organizations overlook training and coaching as a way to improve a manager’s ability to correct employee behavior. Often we’re quick to say “This person isn’t getting it, get rid of him/her”, without ever trying to employ proper supervisory techniques to correct the situation. In many cases we never equate the decision to terminate someone into monetary investment. On average it cost $7,000 to terminate an employee, especially when you factor in the need to rehire and retrain someone to take his/her place. Now imagine spending only $3,000 to increase the competencies of your managerial staff to better handle problem employees, using proven techniques for correcting problem behavior early on.

There are dozens of ways that training can be used to cut cost and increase revenue, many of which fall outside the specific trainings around marketing and sales.  Begin to look within your organizations and see how training to improve competency and skill, along with process efficiencies can impact the way you do business.  Keep an eye out for my next blog on how to build employee commitment around staff development.
 

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An innovative training and employee development firm located in southern Vermont since 1984, we specialize in helping organizations get the most out of their people by raising the bar, inspiring potential and partnering with organizations to build a people-centered, high-engagement culture.

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