The Value of Training: An Investment, Not A Cost

09/02/08 • -1 min

Veris Associates, Inc. - Corporate Learning and Training

David A. Zimmer
Practice Manager
Corporate Learning & Training
Veris Associates, Inc.

What is the value of employee training?

For most companies, training is seen as an expense and one of the first items to be chopped during the budgeting process. Yet, training, whether in technical skills or critical business people skills, has one of the highest paybacks of any investment.

Pat Muccigrosso, Project Management Officer at NetPlus Marketing, Inc. put it this way, “Training isn’t bodies in chairs being lectured; it is an investment in each person’s life and in the livelihood of the business that pays the bill.”

Sharpen The Saw

Stephen Covey, well-known author of Seven Habits of Highly Effective People, uses a phrase “sharpening the saw.” We need to take time to sharpen our saws – our skills – to meet the demands of today’s competition.

We would never dream of sending our teenagers out to drive a car without training. We wouldn’t dare go to a doctor to treat our critical ailment unless the doctor was trained in the latest information for that condition. The cost of going to a doctor not trained certainly costs us more in the long run and could cost us our life.

So intrinsically, we know the value of training.

Yet we continually require our employees to work with outdated skills because of cost-cutting measures.

Let’s run some simple numbers to see training as an investment.

We know the costs of training. There are the direct expenses of the seminar and the travel costs. Of course, we fold in the cost of the employee while being trained. The hourly rate of an employee making $50,000 per year is $25 per hour. For the purpose of this exercise, we won’t consider the overhead (benefits, etc.).

The cost of a two day, $995 seminar plus $200 traveling expenses (hotel, food, mileage) and the employee’s wages equals $1595.

From that training, the employee learns a better method of working saving five hours per week in labor equaling $125 per week or $6250 for a 50-week calendar year.

If we compare the cost of training ($1595) versus the return ($6250), we increased our investment value by almost 400%. If this efficiency saves as little as 1.3 hours per week, we recoup our total investment.

Key Factors Toward Gaining the Most Value From Training

What key determining factors exist in getting the most value from employee training?

After years of training thousands of people and seeing the effect it has in their daily work lives, I’ve come to the same two conclusions that others have found and documented: management support for training and empowerment to use the newly-learned knowledge.

The number one key factor is management commitment to training. Without active management support, the value of training diminishes. Those who attend a session are constantly interrupted, distracted by emails, phone calls and other “emergencies.” Rather than focusing on sharpening their saw, they continue cutting down trees with dull blades. When asked to prove the value of training, it amounts to a few wasted days.

Employees empowered to use the newly-found knowledge is the second key factor to valuable training. The purpose of training is to improve work methods, not continuing with the old. If we persist with the outdated methods, learning a better way only frustrates people.

Sergio Radossi, an Engineering Manager stated it this way, “In our case, training was a key component of a strategy to integra...

David A. Zimmer
Practice Manager
Corporate Learning & Training
Veris Associates, Inc.

Previous Episode

Our Digital Creation: Generation Y’s Monstrous Leap into the Workplace

Cheryl Croce
Sr. Consultant
Veris Associates, Inc.

“…my candle was nearly burnt out, when, by the glimmer of the half-extinguished light, I saw the dull yellow eye of the creature open…”[1]

With all of the recent news around the Millennials – Generation Y -- and their impact on the workplace, you would think they were creatures from another universe. Who are these kids, with their iPods and their Social Networks and their – gasp! – flip-flops? Why do they think everything can be solved with the click of a mouse? They think they’re heroes because they showed up and mentioned something about working ‘green?’

When I think of how seasoned professionals will ‘deal’ with Generation Y’s own theories of how work will be done and their contributions, I think of Mary Shelley’s Frankenstein. The story is about the construction of a creature from borrowed parts, and the subsequent events when it becomes part of the Doctor’s world -- whether he wants it to or not. Ultimately, the novel resonates with philosophical and moral ramifications: themes of nurture versus nature…and ambition versus social responsibility dominate readers' attention and provoke thoughtful consideration of the most sensitive issues of our time.[2]

Imagine that – all that influence from a book authored by a nineteen year old.

Generation Y, similar to Frankenstein’s monster, is our generation’s creation; and the generation before us; and the generation before them. They are the product of years of revolution and evolution. We have a choice – and a responsibility – on how we integrate our creation into the workforce. We can either fear and loathe them as they enter the workforce, or we can harness their strengths and help them through their weaknesses. In the end, the Millennials will add value to our workplace, and teach us things we didn’t know we needed to learn.

Borrowed Parts: The Genesis of Generation Y

“Every thing must have a beginning ... and that beginning must be linked to something that went before.”[3]

From Baby Boomers to Generation Y, while our music, dress and political tastes may be different, we share a lot in common. Like each passing generation, Generation Y’s genesis is embedded in the social, political and environmental elements of previous generations.

For people of the Depression Era, it was very simple: If you didn’t work, you didn’t eat. Many turned to manufacturing and government relief work programs, as jobs in farming and mining were devastated by the collapse of the economy. People, young and old, had to make due with what they had, and children grew up quickly in order to survive. There were no computers to automate any of the work done at jobs or in homes.

While the Stock Market crash of 1929 defined the Depression-era workforce, World War II defined the Baby Boomer generation. A sense of patriotism and necessity drove ingenuity, resourcefulness and mass production…in many respects. The Baby Boomers are roughly 80 million strong; with a work ethic set firmly in the belief that if you work hard now, you can do the things you really want to do when you retire. While the Baby Boomers did just fine without the use of computers, one technological advancement shaped their world: Television. Just in time for this wealthy generation came a magic box that showed them exactly what they could buy, where they could travel, and what dreams they could accomplish, all in a wholesome package that cheerfully emitted the benefits of the good life.

Life wasn’t perceived to be as ‘perfect’ for Generation Jones, otherwise known as the Shadow Boomers, who were influenced ...

Next Episode

Getting to Win: 3 Negotiation Tactics for Better Agreements

David A. Zimmer
Practice Manager
Corporate Learning & Training
Veris Associates, Inc.

Mention the word “Negotiation” and watch the reactions. Some shrink in fear, others start to salivate, some run for cover, and others sport a worn, plaid sports jacket. It is a word that means many things to many people. For the majority, it is a negative term. For those who “got one over,” images of fond memories come to mind. Why is that? Why can a word have so many meanings and evoke such variety of emotions?

Know The Basics

It boils down to the fact that most people are not taught the basics of negotiation, and yet each day, they negotiate some agreement. Granted, many agreements don’t have dire circumstances like a hostage crisis or millions of dollars saved by getting a lower price by just one penny.

Most negotiations happen without people knowing they are negotiating. For example, ask someone for a pen to sign your name and you’ve just “negotiated.” Disagree about a particular method of work and come to a consensus of a better way is negotiation. Speaking with your manager about the priority of work creates a negotiation session. And so forth.

As a project management specialist and managing many projects, I’ve had the opportunity to negotiate – some pleasant situations and some not so sweet. As project managers, typically we have responsibility for certain work being accomplished but no authority to make it happen. As a result, everything we do could be considered negotiation. Those who learn tips and techniques to gain the desired outcome do much better than those who bulldog their way through life. Ignorance in this case is costly.

Negotiation: Art not War

Let’s understand negotiation is not the art of war. Depending on the situation, we might need to strategize and map a course for our negotiation. Regardless of the circumstances, we must realize the art of negotiation is really the art of cooperation. While in the middle of it, it may not appear or feel like cooperation, but if neither side cooperates, no agreement will be struck. Cooperation from both sides is critical to successful negotiation.
Negotiation Definition

Negotiation is defined as:

to deal or bargain with others

to manage, transact, or conduct

to move through, around, or over in a satisfactory manner.

All the definitions bear on negotiations between people. Therefore, three tactics help you become a better negotiator and arrive at better agreements.

Tactic 1: Know Your Opponent

Many people approach negotiation in a defensive manner. They clinch their teeth, steel their gut, and prepare for war. They know what they want from the deal and never stop to consider the other side’s viewpoint. Good negotiators understand their opponent.

Here are the areas to know:

Background. What is their background – culture, economics, social status, educational level, company position, etc. Are they putting on a front or air that facts don’t support? What are their goals? How will they benefit from the deal?
Needs. What does the opponent need from this agreement? What are the minimal requirements for them to feel satisfied? What desires would create a very satisfied opponent? Are they important to you? What is their motivation for the agreement?
Win. What would they consider a “win?” Can you give it to them without compromising or jeopardizing your position...