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Why Training Should be the Last Thing You Cut

Why training should be the last thing you cut ~ August, 2010

An organization I’m familiar with anticipated doubling its size within a year and, in order to manage the change that growth would bring, put in a new layer of management. Five vice presidents were installed, all of them promoted from within. Rather than effective planning, this turned out to be disastrous for the organization. Morale disintegrated. Turf issues and tempers began to flare in the formerly supportive environment. And productivity plummeted. Why? None of the VPs had ever had management training.

The practice of promoting people with the strongest technical skills, the most tenure, or the most outgoing personality is unfair to the team alienated by poor management, and to the person who is promoted and loses all self confidence—not to mention the costs of increased turnover and lost productivity. Underfunding, reducing or cutting your training and development budget, in either good times or bad, can put your business at risk.

After all, if people are your most important asset, why wouldn’t you continually make investments in their value? As Jack Welch puts it, “An organization’s ability to learn and translate that learning into action rapidly, is the ultimate competitive advantage.”

Employees stay and leave for the same reasons

The opportunity for career growth and advancement is consistently one of the top three reasons people stay at companies. The lack of it is a primary reason for leaving. (Surprisingly, 89 percent of employers mistakenly believe employees leave for more money, according to author Leigh Branham, when the reality is that about 12 percent do.) In addition to saving the costs of replacing people—estimated to be 150 percent or more of total annual compensation—there are many benefits to establishing and maintaining a robust training program. And they all lead to better performance.

Depending on the focus, training and development:

  • Ensures that people can do their jobs effectively
  • Increases employee motivation
  • Increases efficiencies in processes and systems
  • Inspires innovation in strategies and products
  • Cross-trains between departments and across regions (a safety net when you lose staff)
  • Lowers risk management (in areas like sexual harassment and diversity)
  • Increases productivity
  • Improves customer relationships
  • Helps maintain a competitive advantage

And there’s more. Training and development is at the heart of succession planning. At its essence, succession planning is a systematic process where you identify, assess and develop your staff to make certain they are ready to assume key roles in the organization. These “high potentials” represent the future of your company. Top talent never stays with the status quo; they demand the opportunity to learn, grow and progress. And they are the people you can least afford to lose.

Training fits any budget

There must be as many reasons for training as there are ways to make it affordable. You train as part of orientation; when a performance appraisal indicates the need; to benchmark performance improvement; develop leaders; educate about specific topics . . . the list of training and development needs is long.

Training does not necessarily mean sending people across the country to attend seminars and conferences, although sometimes that’s appropriate. Training can be as simple as a well-defined and executed mentoring program. By offering first-hand experience and personal knowledge, your senior people can be some of the most effective trainers in your company. (And some of them will need training on how to mentor effectively.)

Training and development does not have to lead to an immediate move up the ladder. People can be challenged by developing additional skills and taking on challenging new responsibilities in their current positions. Online courses and internal workshops presented by knowledgeable in-house specialists or local subject experts can satisfy the need for education, motivate, and stimulate thinking and innovation for very little cost.

All it takes is creativity and a commitment to learning that reflects your organization’s strategic objectives and goals.

Far from luxury

Training and development is often viewed as a luxury or nice-to-have benefit. That is a fallacy. It’s a necessity in the minds of your employees, and especially the talented employees you want most to keep. Employees create your products, deliver your services and make your organization run. If they perform poorly, how well can your organization perform?

You can actually save money and improve your bottom line by investing in continuous training and development, no matter what the economic environment is like. Reallocate your resources and adapt the delivery of training to your current economic circumstances, but don’t slash your training and development budget away—ever! You’ll create a more sustainable long-term business by giving your people one of the things they most value—and demonstrating in a tangible way how much you value them.

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