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Justifying the Need, Focus and ROI for Training and Personnel Development

Today, organizations face training budget constraints, and have to work hard if they’re to keep their workforce performing at the highest level.  But the answer does not always lie in classroom training.  While that is very important, in our experience, the most successful companies typically do many things to improve employee performance – here are five of the most important that large companies can learn from smaller ones:

1: Don't train unnecessarily

In a ten person company, training is done only when necessary. People who are already competent aren't given training for the sake of it - it's done when there's a clear business need. It’s not hard to see why this is the case: if you’re managing a team of four, you’ll know exactly where each of your staff could improve, and you’d be unlikely to send any of them for training that isn’t designed to help them in that area.
Big firms on the other hand often adopt a 'sheep dip' approach, training entire teams on a given subject, often without any need. They waste millions in the process.
Why does this happen? It’s based on a false concept of economizing.  Companies think that it’s cheaper to pull out 3,000 employees and train them indiscriminately, rather than to identify 437 who genuinely need the assistance and provide specific training to them. Happily, it’s not: several companies – including us – provide software that makes this very easy, and potentially cuts millions off the budget.

2: Encourage mentorship

If you’re head of HR for a large organization, there’s a good chance that you’re sitting on some incredible talent. The top five per cent of your employees are likely to be extremely skilful and adept at what they do, and they’ll probably be outperforming the remaining 95 per cent many times over depending on what measurement you’re using.
Small teams probably readily share knowledge and – crucially – it’s probably easy to work out who the top performers are. The whole team will be able to see who’s doing a good job and emulate that person in order to be as successful as he or she is.
Contrast that with a large organization – you’ll have thousands of employees in isolated cubicles or lined up in open spaces, often spread across multiple offices and each one having very little idea of what the other is doing.  That’s a problem, because it wastes a very valuable asset: your staff should be learning from the top performers, essentially getting free, highly-targeted training while they’re on the job!
Of all the advice listed, this is probably the hardest for a large company to implement, and it’s too complex to do full justice to here. However, what companies should think about is how they can draw attention to excellence, and how they can encourage employees to emulate it.
Stakhanovism might have fallen out of favor since the fall of the Berlin wall, but there is value in highlighting best practice and encouraging employees to help each other!

3: Minimize downtime

Small companies are very good at ensuring that, when a member of staff is away on training, he or she is covered. Small business owners know first hand that if one of their employees is away, there will be serious problems if this isn’t managed – work piles up, deadlines are missed or customers leave unsatisfied.
Companies with ten thousand employees find this harder, and yet it's even more important, with more at stake.
However, dealing with a team of thousands is much more difficult than dealing with a team of five, and so schedulers face an almost impossible task, with many resorting to enormous spreadsheets to work out when the best time for training is, and when key people can be pulled out.
Again, this is where software comes in – with the right program (we make one), you can schedule this with relative ease. You can also schedule follow up assessments, ongoing monitoring and anything else you might need to maximize effectiveness.

4: Understand what skills are important and how and why they link to positive outcomes

This is a big one. A good line manager in a small company knows what she needs from employees, and can also identify what skills are important. In a sales role, for example, she might see that charisma and a positive attitude are more important than detailed product knowledge, and train staff accordingly. In a big company though, heads of HR are often detached from their employees, and don’t have this kind of intuitive knowledge about them.
For this reason, it’s important for those in charge of training to make up for this by gathering as much intelligence - on skills and how these affect performance – as they possibly can.

5: Budget effectively

Don’t allocate a training budget and then work out what you’ll be doing based on that. Unless, by some miracle, you’ve budgeted precisely the right amount, one of two things will happen. Either you’ll have budgeted too little and you simply won’t be able to offer enough training to meet your business objectives, or you’ll allocate too much and costs will inevitably swell to fit your budget, leading to waste.
This is all too common in large companies with budgets decided by committee, but HR managers in should take heed from the smaller companies and apply for an appropriate budget, based on trends and likely important investment areas (and individuals) and be prepared to make a case for it. The days of ‘finger in the air approach to budgeting’ are over… there is software available that not only tells you what training your people need, but that can prove the ROI of training, thereby helping you to target your spend on the things that deliver the biggest returns.

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