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Training and the Cost Cutting Dilema during Tough Times

Guest post by: Dr. Rick Johnson

Article Overview: Most company executives decide to spend money on training because it's popular, especially when economic times are good. There is a view that it's “good," and it's also something that responsible leaders are “supposed to do” to prepare for the future. Unfortunately, training becomes the first activity to be cut when times get tough. There is also no objective measure that calculates the business case of return on investment for training. Actually, training, education and coaching should be the absolute last consideration when investigating cost reductions during difficult economic times. However, continued spending of money on training isn’t the only answer. Training alone will not produce the kind of results that training combined with coaching and education can produce.

Training and the Cost Cutting Dilema during Tough Times

Most company executives decide to spend money on training because it's popular, especially when economic times are good. There is a view that it's "good," and it's also something that responsible leaders are "supposed to do" to prepare for the future.

Unfortunately, training becomes the first activity to be cut when times get tough. There is also no objective measure that calculates the business case of return on investment for training.

Actually, training, education and coaching should be the absolute last consideration when investigating cost reductions during difficult economic times. However, continued spending of money on training isn't the only answer. Training alone will not produce the kind of results that training combined with coaching and education can produce. Training can increase specific skill sets, but coaching/mentoring and education are necessary for complete employee development which incorporates leadership into the equation.

"Most sales training is a complete waste of time and money because, at times, the best you can hope for is to turn a moron into an idiot."¾Peter Drucker



I actually don't agree literally with Mr. Drucker's quote. However, I believe the point he is trying to make is that it takes more than sales training alone to improve employee performance.

To maximize the effectiveness of any training, coaching/mentoring the employee must become part of the process. This is especially important when the skill set required is more difficult. Coaching becomes more important as you provide feedback while the employee demonstrates his ability to perform. It's imperative that you feel confident that the employee understands completely and can demonstrate that understanding through performance. This is especially true

when training sales people.

Sales Representative Training



All sales representatives need to be trained on the basics which include the following;

• Targeting
• Goal setting
• Action planning
• Customer profiling
• Independent selling skills including solution selling, building relationship equity, closing skills and time and territory management
• Job- and product-specific issues
• Pricing and margin management

Performance appraisal, changes in incentive or pay practices, changes in work flow processes and information system tools are often necessary to support the coaching process.

How does the proposed training investment fit into the organization's overall sales strategy? Is there even a clear strategy in existence?

Considerations for Training Investments

Things to consider prior to making an investment in training include:

• How did the employee learn how to do his or her job? Was it in a seminar? What role did formal, company-sponsored training play in the development of the best people currently employed?
• What measures exist to identify what people are doing now? How do you know there is a better way? How will you know that behavior has actually changed?
• Have you completed a "skills assessment inventory"?

As Drucker eludes to---- There are many ways to change behavior, and training is one of the least effective. High-impact performance improvement strategies must start with direct manager coaching and mentoring.

Many companies will choose to buy seminars where the main concern is the speaker and audience entertainment-style evaluations (i.e., "This was the best seminar that I ever attended.") While managers get a "feel good," there are other alternatives for those who believe that employee performance is a basis for competitive advantage. Seminars are not designed for behavior modification. They must be supported by follow-up training, coaching and mentoring customized based upon individual employee circumstance.



When Should I Train and When Should I Educate?

Training is designed to improve specific skills; education is designed to teach knowledge. Consequently, it's important to know when to train and when to educate, and timing is important.

Leadership carries a responsibility to release the greatness in others. The ability to recognize potential in others is important in determining the type of support an employee may need. Actually, training is the easy part because most training is job-specific. However, internships are often initiated by progressive companies for high-potential employees. Such internships should include training, education and coaching and mentoring. In fact, training should be given to all employees to improve specific job task performance. But, if you're going to build bench strength and create effective succession planning then the prerequisites for success are training, education and coaching and mentoring.

Training alone can be effective when:

• 1. New skills are required due to job requirement changes.
• 2. Performance levels are not acceptable.
• 3. Task related issues are identified.
• 4. New employees are hired

Education can be effective when:

• 1. Employees seek additional responsibility.
• 2. Employees seek more challenge.
• 3. Employees demonstrate potential for future development.
• 4. Needs for bench strength and leadership voids are identified.

Education and training can always be beneficial under any circumstance. Realistically, every company has a budget. As a result, it's helpful to identify specific needs for training and education in order to maximize the return on investment dollars.



Whether the company is providing training, education or both, the success ratio and return on that investment can be increased exponentially if they are supported by a coaching and mentoring process.

Thought Provoker: A good coach recognizes when something can be learned and ensures that his or her employees gain by learning it. Take advantage of opportunities to train your employees and share best practices with them because one day they may be asked to step up to the plate. Employee development builds bench strength and reduces turnover. It allows for more promotion from within and creates a culture defining employees as the most important asset.

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Article Tags: company executives, contingency, economic times, leadership, tough times



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