“More Bang for Your Training Dollars”

By Susan Fee

What business investment can cost you thousands of dollars to make - and thousands more if you don’t?  You guessed it:  training. 

Training can be a double-edge sword.  It’s expensive in both time and money.  But, not offering sufficient training and on-going education can be just as costly, resulting in poor product quality and unhappy employees. 

No matter what you do, there’s always the risk people will end up leaving anyway; so where’s the balance?  Many small business owners waste money on training that is provided too late, offered to the wrong employees for the wrong reasons, and used as a Band-Aid with no lasting value.  All of this can be avoided with five simple guidelines. 

1.  Determine The Real Issue 

            The most common training mistake businesses make is doing it for the wrong reasons.  When issues surface such as sagging sales, employee turnovers, or customer complaints, don’t be too quick in assuming your problems are due to people.  More than likely you have a process problem; the people are just reacting to the underlying current. 

            To pinpoint your real need, analyze patterns and ask yourself at least five “why” questions.  Here’s an example of the question exercise from one a booming mail-order business.           

            Problem:  Increased customer complaints over the last two months.

            Why?  “Customer orders are incorrect.”

            Why?  “The data entry staff keeps making mistakes.”

            Why?  “They work too fast and don’t care.”

            Why?  “All they care about is getting more money.”

            Why?  “They receive bonuses if they process a certain number of orders.”

            Now we are closer to the truth.  The thorn is the reward system, not poor service.    Some issues are obvious and others will take more digging.  By forcing yourself to justify at least five “why” questions, you’ll be a lot closer to the real issue. 

            If you discover it’s people who need training, be clear on your expectations.  Pat Galagan of the American Society of Training and Development (ASTD) says you have to name it before you can train it.  “We only recommend training for clear performance behavior problems,” she says.  In other words, it’s too vague to claim that one of your employees is “not a good communicator.”  Specific behavior must be requested such as listening without interruption, or repeating back instructions. 

2.  Train The Trainer 

            “The most effective way to spend your dollars is to train yourself first,” says Greg Edwards, owner of Big Bear, Inc., an embroidery manufacturer in Buffalo, NY.  If you are personally lacking skills, it won’t be long before your weaknesses are exposed. 

            One year into his business, Edwards enrolled in a 10-month course offered by the University of Buffalo’s Center For Entrepreneurial Leadership.  For $2,500, he met once a week with 24 other small business owners who were each matched with a mentor.  “By far that was the most valuable thing I did,” he says. “Now I have an instant network of 24 resources I can go to for help.”  In fact, Edwards later called on one of his fellow classmates to help consult with him on work flow through his shop.

3.  Create A Constant Learning Environment 

            Once you’ve set an example of learning yourself, set the same expectation for your staff.  It begins from the moment you hire someone. 

            “We were doing cross-training before we knew it was called cross-training,” laughs Danny O’Neill of The Roasterie, Inc, a wholesale coffee company in Kansas City, MO.  O’Neill’s passion for coffee is evident and he looks for the same commitment from all his 17 employees.  He believes strongly in everyone understanding the entire business and mentoring each other. 

            An example is the training process O’Neill put his new sales rep through.  “He spent two days serving coffee in one of my customer’s shops, then he was on the road helping with deliveries, and he’ll also work in packaging and production.” 

            Product knowledge is expected of every employee and is encouraged through daily tastings and one pound of free coffee to take home each week.  Books and pictures of the roasting process are prominently displayed.  The final step in integrating responsibility for learning is incorporating it into employee performance reviews which O’Neill delivers every six months.

4.  Know That Employees Will Leave

            “There is a movement afoot we call, ‘free-agent learning,’ says ASTD’s Galagan, “which means you take responsibility for your own learning to benefit yourself.”  If you translate “free-agent” into taking the training and running, your concerns are valid.  Investing time, energy, and money into an employee only to see him leave is a reality of business today.  “There is no way to guard against people leaving.  But it’s short-sighted not to train people because of that,” she says.

            David Riley, Jr. is vice president of National Business Systems in Kent, WA.  His company is a systems integrator of point-of-purchase merchandise such as the touch screens used for ordering in restaurants.  All his training dollars are invested in teaching technical skills.  

            After getting hit with several employees leaving right after they received valuable computer training, he came up with a solution, “We consulted our attorney and now all our new hires sign a non-compete clause specific to our industry, and a training clause.”  The training clause states that if National Business Systems spends up to $499 on outside training and the employee leaves within six months, he or she is obligated to reimburse the company on a prorated basis.  If the amount spent is $500 or more, the employee obligation jumps up to a year with the same payback agreement. 

            “We’re not trying to hold anyone hostage,” Riley explains, “but, this way I get my investment back either way.”  Riley has had five new hires since incorporating the two clauses six months ago, and he says no one has balked.     

            The way to tackle the issue of people leaving is to train them says Coles Bradley of Impact Training Alliance in Boulder, CO.  “Employees are happy when they clearly understand what their responsibilities are and how to accomplish them; this leads to less turnover, better customer retention, and higher profits.  It’s a positive cycle.” 

5.  Get Creative About Training Resources 

            Yes, it’s tough to train your people when your budget is tight, but it’s still possible. David Riley was able to save more than half of what it might cost to train his staff by turning to his local community college.  “They customize the classes just for us and on our schedule,” he says. 

            Of his 14 employees, Riley currently has four in class for customized Windows training stretched out over seven days at a cost of $540 per student.  “We audited a commercial technical training school and I was not impressed,” he says.  “They wanted $1,200 per person and their class was filled with about 25 people, all at different levels.”

            Price, convenience, and customization are exactly the reasons why many small businesses choose community colleges for all their training.  Betsy Fradd, Business Development Coordinator at Highline Community College where Riley sends his employees, says by far their biggest request is for technical training.  She points to the school’s abundant resources as a strength.  “We have access to a network of skilled professionals and all our instructors are working professionals.”  Fradd adds that businesses are more comfortable using someone in their own backyard who they know will be there for follow up. 

            Like most start-ups, Danny O’Neill had no money for training, so in the beginning he relied on his mentor from SCORE - the Senior Corps of Retired Executives - to facilitate team sessions.  SCORE, a non-profit association comprised of 12,400 volunteer business counselors throughout the country offer their services for no charge.  While most counselors throughout the country offer their services for little or no charge. 

            While most SCORE counselors are called upon to advise on business plans and financial issues, many are qualified in the training field.  In addition, SCORE offers free

e-mail advice, no matter what your questions, using a counselor matched to your needs. 

            Ever the networker, O’Neill also barters his coffee for everything, including training.  “I decided my time could be better spent in other areas rather than teaching how to make espresso, so I traded coffee with a friend of mine who now does it.”  He just wrapped up a training retreat with his staff using an outside trainer he met two years ago at a charity function:  “We got along so well, she agreed to reduce her normal fee by 50 percent.” 

            In fact, everything is negotiable.  Silvana Clark, a Bellingham, WA. trainer specializing in creativity and marketing, says that many trainers will even offer a program for free in order to practice new material - but you have to ask. 

            Another cost-savings strategy is to use books and tapes.  Coles Bradley suggests instituting a learning library where employees can check out material, or providing one book that everyone reads and reports on one chapter at a time.  Audio and videotapes also are excellent ways to offer more generic training like communication skills.  In a “Lunch and Learn” session, you listen to 10-15 minutes of tape, then discuss it.  You can find just about any topic you want in the books-on-tape section of major bookstores, or companies like Nightingale-Conant provide excellent mail-order choices.  Check out ASTD’s Website for information and reviews of leading training resources.  On the same site, you can post a training dilemma and receive responses from professionals.  ASTD also recommends networking with other businesses in your region to split a trainer’s fee, or using your chamber of commerce to coordinate a trainer. 

            You’ll find plenty of public seminars available, ranging in price and topics.  Most are listed in the business section of your newspaper or in your industry trade publications. 

            The field is so competitive that you should expect sharply reduced group discounts and a money-back guarantee if you are not completely satisfied.  These companies do not make a profit on the actual seminar, but rather on training books and tapes that they also sell.  If you attend, expect a sales pitch and an offer to save up to 50 percent off the resource price if you buy the day of the seminar.  Prepare yourself by calling the company ahead of time and asking to preview the material that will be available. 

            The long-term value of any training has just as much to do with what takes place before and after as during.  “Involve your employees in setting their own learning objectives,” says Bradley.  “Any time they receive training they should be expected to share what they learned and how it applies to their situation.” 

            Another bonus for you:  The more you teach others, the more you learn yourself. 

Action File

·        American Society of Training and Development (ASTD)

            A good resource to locate qualified trainers in your area.  If you are serious about becoming a good teacher yourself, consider joining a local chapter.  www.astd.org or call (703) 683-8100.

·        Service Corps of Retired Executives (SCORE)

            A non-profit association, under the wing of the U.S. Small Business Administration (SBA), dedicated to encouraging the success of small businesses through mentoring and counseling in person and via email.  Check your phone book for a local office.  www.score.org.

·        Nightingale-Conant

            Offers audiotapes, videos, and seminars on numerous business and personal development topics. 

·        Coaching, Counseling, and Mentoring:  How To Choose and Use the Right Tool, Florence M. Stone, (AMACOM, 1998).  A good start to creating a learning environment.