Spending Your Training Budget Wiser
The end of the financial year is approaching, and many of our clients ask how they can deliver quality training from budgets that have suffered an average cut of 40-50%. Reactions to budget cuts are varied, and some of them are not really wise. Some companies freeze training altogether. Others try to deliver everything internally, often dumping the job on HR personnel who are already under a heavy workload, often unwilling, and sometimes unqualified to deliver real value in the training room.
Our answer to most of the clients is that they can deliver almost the same value from a significantly reduced budget. Why? Because at times when budgets were more generous, so much of the money spent on training has been wasted. Here are a few ways that companies burn cash allocated to training, based on a presentation delivered by CBC GM Gabor Holch, and the following discussion at the Shanghai Chapter of the European Chamber of Commerce today. It helps to discover some of the pitfalls that you have fallen into in 2008. It helps even more to learn how to avoid them.
Cash-Burning Tip #1: Provide training they don’t need.
Ignoring the needs and expectations of your trainees is a general pitfall. You may send a well-trained group of top managers on a skills-based programme, only to find out they actually needed a laid-back session where they could brainstorm their experiences and share best practices. Or the other way round, mid-managers or frontline people hungry for guidance and problem-solving tools may complain about the lack of substance. The solution is to define desired trainig outcomes and delivery methods through the cooperation of top management, HR and the training provider.
Cash-Burning Tip #2: Ignore staff turnover in your training plan.
HR Forum, EU Chamber Shanghai
We often find that although HR has a clear idea of staff turnover in different departments and on different levels, a few months after the training it comes as a surprise that 10, 20 or 30% of the staff trained has left the company. In other words, you have spent money on training for your competition. You can solve this problem by carefully planning how the skills delivered enter your organizational chart and how they are shared within the company. If turnover on lower levels is high, train the supervisors, who can share the skills and tools with their teams in a trickle-down manner. Of course, you have to keep supervisors accountable for using the skills learned.
Cash-Burning Tip #3: Create contradicting training messages.
This often happens when individual training programmes are delivered without being customized to the vision, mission and strategy of your company. Let’s say, you deliver Six Sigma, Project Management and Leadership Skills training this year. All of these courses address quality issues, but they approach them from different angles. However, if different trainers use different standards to define and manage quality, your staff will not use the training content in decision-making and daily tasks. Make sure that each programme delivered follows the same values and guidelines, which are usually well-defined in your company’s mission statement or strategy.
Cash-Burning Tip #4: Leave paid services unused.
Companies are often impressed by the added value that training providers deliver, such as cutting edge assessment and evaluation tools, refresher sessions and feedback collection, or support tools like online learning. However, many of these added services are never used: refresher sessions are forgotten or postponed indefinitely, participants do not log into their online learning accounts, feedback results are not used for decisions about further training or promotions. The best approach is to plan realistically and keep participants, training providers and yourself (HR) accountable. Ask yourself the essential questions. Is it realistic that your busy top managers will log on twice a week and spend 2 hours learning online? If it is, create incentives so that they really do. If you spend hours collecting and analyzing feedback, how will you use the data?
To avoid burning your training budget away in any of the above ways, you need a reliable training plan and reliable training providers. You can start with either. If you have a well-engineered plan, all you have to do is find the provider who can deliver the qulaity, values and services you need. If your plan is not clear-cut yet, use the provider’s expertise to make it better. Ultimately, training has to support the strategy your company follows, and the provider must be able to support your HR to deliver value for the hard-earned money you spend on training courses.
Tags: Chamber of Commerce, China, HR, Shanghai, training budget, training plan, training provider