Training – Is it really worth it?
Can you eat with a knife and fork without embarrassing yourself? Probably (hopefully!)…and more than likely your parents taught you how to do that. That was you being trained to become competent with a key skill at an early age – training works, we know that and education is rightfully a top priority for us all. But is training always worth it?
First of all we have to decide what we mean by “worth it”. Is it worth learning Japanese ready for a two week holiday that is likely to be your one and only visit to the country? Well, it’s one of the hardest languages on earth to learn and, whilst your holiday would probably be the better for speaking the language, the answer is probably not for most of us. Is it worth learning Spanish if you’ve decided to buy a villa in Marbella and retire in the sunshine? It would seem a wise investment of your time and effort with payback in spades – besides which, learning Spanish is a lot easier than learning Japanese!
As adults we all make judgements about what is worth learning and what is not. That’s not to say we make the same judgements but we do make them and the trade-off is between effort (learning) and reward (what that learning allows us to achieve). Ask almost any undergraduate why they decided to go to University and many of them will tell you that they believe they will have a more rewarding career both financially and emotionally. Ask most MBA students why they are investing three years of their life juggling work, family and study and more than likely they will talk to you about enhanced career prospects and earning power. It’s a trade-off and it’s an individual judgement.
When it comes to companies the balance is slightly different. The questions for companies to answer are two-fold:
- If I invest in training my employees will they be better at their job tomorrow than they are today?...
- …and if they are is that improvement going to deliver a good return on the investment against the cost of the training?
Companies have to be certain that training and development can make people better at their jobs, even if it happens indirectly. But even if that is the case, the question of “worth” can only be determined if that training can demonstrably deliver a return on investment. So how do you do it?
First, calculate the total cost of training – this includes the cost of that training (say course fees for example) but also remember to add on the cost of the employees time, any expenses and the opportunity cost of what they could be doing instead. Then examine the benefits. For example, an Account Manager responsible for a portfolio of £1m of business attending a Negotiation Skills course might reasonably expect to improve average margins on those accounts by, conservatively, 2% = £20,000 (and that’s every year too). The training may have cost, typically, £1,000 for the sales person and so it would clearly seem to be worth it.
Similar calculations are possible for all forms of training, including those less ‘tangible’ such as management and leadership development and the learning experts at Maguire Training can talk you through exactly how to do this. Indeed if you are interested in looking at ways to identify training and development needs for your team, or areas to coach then these are two excellent modules of learning:
http://www.maguiretraining.co.uk/e-learning/modules/identifying-development-training-for-your-team/
http://www.maguiretraining.co.uk/e-learning/modules/identifying-areas-to-coach/
A final thought…
A finance Director says to the CEO: “the cost of training our staff is simply not justified as they might just go to our competitors for a better salary”. The CEO replies “can you quantify for me the cost of not training our staff to be outstanding at their jobs?”
Whilst training might be expensive, a lack of it will be far more costly but it is vital to have highly targeted training interventions with a crystal clear understanding of the return on investment.
