Training for Business pt4

Before we discuss the time frame for measuring ROI, let's consider what training means to a business.

One of the most difficult decisions in an economic downturn is whether to keep staff or let them go. 

In small and home based business, there may really be no decision: there just isn't money to pay the staff. A business that loses staff loses resources. Commonly, the staff going is only a little ahead of the customers going - and the business closing won't be far behind.

A wiser decision would be to retain the staff. It might mean cutting back hours. How can a small business make up the difference to their personnel economically. - The answer is training. 

Training accomplishes the goals of the business and the staff.

Costs of Training

If you think you can't afford the time and expense of training, think again and consider this: 

• Untrained users take up to six times longer to perform the same tasks. 
• Training enhances employee retention. A Louis Harris and Associate Poll says that among employees who say their company offers poor or no training, 41% plan to leave within a year. Of those that say their company offers excellent training, only 12% say they plan to leave. 
• Studies show that in-house training costs 73% more than outsourced training. 
• A four-year study by the American Society of Training and Development shows that firms who invest $1500 per employee in training compared to those that spend $125, experience on average: 24% higher gross profit margins and 218% higher income per employee! 
• Just a 2% increase in productivity has been shown to net a 100% return on investment in outsourced, instructor-lead training
 (Shane Warren,  Director at International Resilience Institute Sydney citing Training ROI. Avatech Solutions.)

Good Business

When staff or staff time has to be reduced, the business will need the staff to be ever more productive. Generally, remaining staff lose motivation because they "see the handwriting on the wall", and begin looking for other employment. 

A business can reverse that attitude and increase productivity of the remaining staff and working time by training staff. It's only good business.

Having calculated the direct financial value of the performance enhancements, it is also necessary, wherever possible, to estimate the value of the more “intangible benefits”, such as:

• Increased job satisfaction, and the benefits of increased staff retention and reduced recruitment costs
  
• Increased organisational commitment
  
• Improved teamwork
  
• Improved customer service
  
• Reduced problems and complaints
  
• Reduced conflicts
  (from Summary ROI on Training for CEdMA Europe)

Riding out an economic downturn is tough. Businesses that rely on backward-looking planning will fail. Those that look at the downturn as a opportunity to add value to their business have a better chance of being there when its over.

(more to come...)

Mine the pockets of the middle class the pollies are told. They can bloody well keep their minding to their own business!

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