Cost or Investment? – Connect HR Strategy. Atlanta

Cost or Investment?

“People are the basis of business. Develop the people before developing products.”
October 3, 2019
5 Successful Companies That Invest in Their Employees
October 21, 2019

Economic globalization and competitiveness pose continuous challenges for companies to keep market differentiation. In this environment of intense pressure and competition, the organization's success depends on the capacity to develop new competences and strategies, and on their capacity to learn quicker than the competitors, depending on people's continuous learning.

The American Society for Training and Development found that companies who spend an average of $1,575 on each employee for training got 24 percent growth in gross profit and 218 percent increase in revenue compared to those who spent less*. Hard to believe? It’s very common to hear that the training and development of employees is essential, but what are some of the best ways to do so?

In this article, as a follow up to our first on this topic discussing the value of employee training and development, we’ll suggest some ways to get started:

Understanding the Needs of the Organization

The first step is developing a system of standard work to guide the activities of employees in each department. The basis of any improvement in performance and efficiency requires that people perform their work consistently over time and between individuals. Using standard work does not inhibit creativity, it just makes the routine, mundane tasks much more efficient, so employees can focus on the value-added activities. But with standard work, you can more easily determine the skills needed for each job.

Developing a Skills Matrix

A way to guide the training plan for each employee is to create a chart (electronically or even on paper) where you list the key skills for the job on one axis, and each employee performing the job on the other. Then you can see at a glance the gaps for each employee.

Assessing the Abilities of Individual Employees

Of course, to fill out the matrix, each employee must be assessed. If employees have tenure, this should be easy enough based on informal conversations between the supervisor or HR and the employee. With newer employees, it may be necessary to administer some type of assessment tool to assist in identifying at least the technical development needs.

Creating a Customized Roadmap for Development

Now, with the completed skills matrix, and an idea of the training and development budget, you can prioritize which abilities of each employee are the priority for the organization.

You can create a visual roadmap, spreading the expenditures over the budget period. It’s important to look out over time, at least a year, especially for development options that may take the employee away from their job for a week or more, so that the organization has plenty of notice, and backup capabilities from other employees or even temps can be planned for.

Ways to Invest in Employee Development

Today, there are many options to help the employee be well-equipped for the challenges faced in the job:

  • Traditional classroom type training within the company.
  • External training classes offered by universities, private training schools, industry associations, etc.
  • E-learning options abound, including webinars, instructor-led online classes, pre-recorded classes, machine-administered learning and others.

Live, instructor-led classes are typically the best option, because it enables personal interaction with the instructor, collaboration between students, who can bring their own work experiences into the classroom, and the opportunity to participate in hands-on demos and exercises. This is also the most expensive, however. Economic realities typically mean that even an organization that knows the importance of employee development can’t afford to send everyone off for an external class or to bring an instructor in, but most of the on-line and PC-based options are more economical, and if well-done and administered, can be highly effective.

Have we convinced you yet that investing in the development of your teams has a great payback and is essential in order to remain competitive and provide exceptional products and services to your customers? If so, Connect HR Strategy can assist in each phase of the program outlined above. Call us today for a free phone consultation to discuss which steps in the process you may need the most help with.

Danila Palmieri
President
Connect HR Strategy

*Rosenwald, M. (2000). Working class: More companies are creating corporate universities to help employees sharpen skills and learn new ones. Boston Globe, H1.