When times turn tough, your colleagues in the C-suite have two things on their mind. The first is creating top-line revenue. The second is driving down costs.
by Site Staff
May 5, 2008
When times turn tough, your colleagues in the C-suite have two things on their mind. The first is creating top-line revenue. The second is driving down costs. Everything else is tertiary. Unfortunately, that’s where they typically lump training.
An economic downturn, however, can be a golden opportunity for strengthening your training department. Here are five ways to make training a more integral part in your organization’s survival, so your team does not get the axe during a budget crunch.
1. Right-size right now
Don’t wait for a recession (or its official announcement ) to do a thorough review of your training organization. Perform an objective review, evaluating whether every individual is pulling their weight and adding value.
This question is not always easy to answer. Many of your trainers and course developers may be working long, hard hours. What’s crucial is determining whether their efforts are making a direct impact on the company’s top or bottom line. Is every class that they teach or develop helping to produce revenue? Are they instrumental in driving down costs?
Of course, letting capable team members go is painful. But it’s better to lay them off earlier rather than later, so they have plenty of time to search for another position. Also, if you’re already lean, you win respect from other groups, and you’re less likely to be targeted when the right-sizers search for fat. Be proactive now, and the budget folks will notice.
2. Deliver high-quality programs, on time, that align with business objectives
The first thing to go during corporate belt-tightening is anything perceived as “fluff.” Take a good hard look at the programs you offer. How well do they align with the two universal goals mentioned earlier, increasing revenue and cutting costs? Clearly, any training that improves employees’ critical skill sets will be a must-have. So will compliance programs and other mandated training initiatives, since they allow you to stay in business.
Other programs may require revisiting. Do sales numbers actually go up when you do a company-wide sales conference? Do you have a product launch that’s two months late because the training isn’t ready? Inspect your organization for indications that training quality is slipping, and fix issues fast. In many cases, Pulitzer-quality text or sophisticated graphics are less important than timely delivery, which lets the organization start realizing value immediately. A perception of being slow and unresponsive will doom your group, even if there are really good reasons for delays or changes.
You probably already have a tool in place for checking quality, timeliness and alignment to business objectives, namely your post-training evaluations. Read each and every one of them, taking suggestions seriously. The evaluations are your windows into the classroom, showing how well respected your group is throughout the corporation.
3. Demonstrate your ROI
Speaking of aligning with corporate objectives, just saying that you’re delivering a great training product won’t cut it these days. Neither will reams of great recommendations. You’ve got to be able to prove your value to the company in hard, cold dollars, demonstrating an uncontestable return on investment for every penny in your budget.
How do you do this? With metrics carefully engineered into each training session you offer.
Within your LMS, metrics aren’t that difficult, once you know how to set them up. If you are using an outsourced online provider, they ought to incorporate metrics like these as a standard feature in their modules.
When setting up metrics to measure ROI, make key indicators relate to specific business issues. For instance, analyze the percentage drop in technical service calls after a customer education session is provided. Compare sales results for months on both ends of your training. Also, ask trainees to document improvements based on new skills acquired. Often a single efficiency concept practiced diligently across departments can justify many months of a training budget.
Once you have improvement statistics, do not be shy about broadcasting the results. You might put an article in the employee newsletter announcing new levels of customers using your learning program, including feedback from participants, with calculations showing direct dollars saved from a new initiative. Or write a memo to senior management communicating the volume of channel partners who passed your online curriculum. Most executives are surprised to learn what a huge value-add the company gets from relatively small investments in training.
4. Outsource when it makes sense
Like anything else, outsourced training has its pros and its cons. On the pro side, bringing in contract training resources saves headcount and related fixed costs, and often allows you the flexibility of offering training programs that would not possible with just your in-house staff. On the other hand, outsiders often lack the industry- or company-specific knowledge necessary for effective training in your particular market niche.
A good solution is maintaining a small core of trainers to manage internal coordination and provide subject matter expertise. This lets you achieve economies of scale. It may be much more cost-effective to hire trainers who do Excel all day long, rather than asking your internal staff to develop a course. You leverage the consultants’ years of experience for the price of a one-off class. On the other hand, outsiders would find it difficult to teach your corporate culture, competitive positioning or specific industry practices and requirements.
The astronomical rise of online learning offers another example of beneficial outsourcing. E-learning saves the costs of travel and time away from work normally associated with face-to-face learning environments. But creating a good e-class is complicated. Curriculum developers and programmers face a steep learning curve to deliver even a bare-bones e-class. This is another area where it makes a lot of sense to outsource. A good online course provider has templates to streamline development time, and highly trained curriculum specialists to help ensure that your online package is interesting, affordable and effective.
5. Choose the right training modality
Studies show that training effectiveness is heavily dependent on the way material is presented. Some topics, like diversity awareness or interpersonal communications, are best taught in a traditional instructor-led classroom setting. Others, like introducing new product features or regulatory compliance, can often be covered faster and more easily with an e-course. For other topics that require discussion in addition to content, such as an overview of an issue with a question-and-answer period following, a Webinar works well.
Selecting the best modality for your various training offerings demonstrates to senior management that you are a good steward of tight dollars. By explaining why one delivery method is superior to others, you substantiate your role as a leader, and prove your personal value to the company. You might point out, for example, that switching your new-hire training from an instructor-led to an online format trimmed orientation time by an entire day, at a savings of $1,000 per person. Once again, this underscores the need for credible metrics and a value-driven approach to training.
When push comes to shove, we all know that every company’s training organization will be under scrutiny in a recession. The goal, then, is to prove beyond a shadow of a doubt that training is essential for competitive survival. A stagnant workforce without ever-sharpened skills quickly becomes obsolete. So does an employee base whose morale sags. As head of a training organization, you serve your company best when you champion learning dollars for your department – and then prove that you’re using them wisely to boost profitability.