How Much Does Training Cost?

Most employees need training after they are hired, particularly at the entry level.  If you read here regularly, you know that I’m a big proponent of using validated selection tools when hiring and promoting.  It’s just more cost effective.

Recently, I was reading this entry by Paul Downs in the small business blog on the NY Times website.  To summarize, Mr. Downs has a cabinet making shop and he was computing the cost of bringing up one of his floor guys to do some light engineering work (note that his original numbers were off and he updated his calculations here).  The point he makes is that training can be expensive, particularly for a small business with limited working capital.  He also makes some good points on how to keep this investment from going out the door and the pros/cons of outsourcing the work.

What he doesn’t consider is how much less expensive the training would be if he used assessment to select one of his floor guys.  His presumption is that none of his guys have the computer skills, particularly on the software he uses.  This leads to a lot of additional projected training costs.  But, what if he’s wrong?  Maybe there is someone who is interested in the position that has experience with the software (or something similar).  Or, perhaps one of the workers has a very high aptitude for computers (which would lead to less training time than he anticipates).  The cost of determining who has the skills and aptitude for the job is a tiny percentage of the cost of training.

As I wrote last week regarding leadership, it’s not an effective HR practice to wait for skills to suddenly appear in your workforce.  Rather, you need to look for them in your employees and applicants doing so when hiring/promoting will not only make these talents available to your organization, but may also trim your training costs.

This is my last entry for 2012.  I appreciate you taking the time to read these posts.  Enjoy the holidays and I’ll be back in 2013.

For more information on ROI and talent management, please contact Warren at 310 670-4175 or warren@allaboutperformance.biz.

If You Want to Lead, Please Raise Your Hand

I was at an event for healthcare executives last week and one of the panel discussions was on which leadership skills are needed for the future in the industry.  Afterwards, I spoke to some on the panel and a few other attendees and asked them, “How do you identify future leaders?”  The answers were varied, but they really boiled down to two things:

1)   Strongly consider those who asked for more leadership training or responsibilities.

2)   Look for those who are thinking about issues outside of their own silo.

After listening to a panel on leadership talk about how good leaders need to be more proactive, my (small) sample of executives had a very passive approach to identifying who their next leaders are going to be.  This begs the question of whether the best leaders identify themselves.  My sense is that they probably tend to as they move through their careers, but that those with leadership potential earlier in their careers may not.  While wanting to lead is a necessary component to being a leader, just because I want to be a leader does not mean that I’ll make a good one.  If you wait for people to self identify as a leader you will miss good leadership talent.  But, if you make a big deal out of developing those who self identify you will develop a culture that encourages it.

The response about thinking outside of their silos also interested me.  The executives who shared this opinion were saying that those who think broadly about the business are likely to be the best leaders.  Without getting into a big discussion about the difference between management and leadership, this struck me as more of a management skill.  Yes, someone who can see the whole business (or at least more than one piece of it) is going to be a more effective decision maker, but that doesn’t necessarily mean they’ll be able to lead others to implement their decisions.

Organizations that are proactive in looking for leaders are more likely to find and develop them.  Also, they won’t miss out on potential leaders who choose, or don’t know that they are supposed to, self-identify.  How do you find these leaders?

1)   Using specific criteria for HR and directors/VPs to identify potential leaders.  These could include the two listed above, but should account for other factors as well.  Does this person have a wide network in the workplace?  Is he seen as an influencer?  Does she master new tasks quickly?

2)   Have those identified participate in an in-depth leadership assessment.  I’m not just talking about taking a test or 360 and getting feedback.  Rather, use a process like an assessment center where they have the opportunity to show their leadership skills.  Such a process gives everyone the same opportunities to lead so you can compare them.  You may be surprised by the results.

3)   Use the results from the assessment to guide their development process.  This can include everything from feedback to classroom training to rotating assignments.

4)   Continue measuring the outcomes of their leadership as they progress in the organization.  Do they keep employees engaged?  Are they achieving measurable results?

By being proactive in identifying leaders and systematic in developing them, you can create bench strength and have a pipeline of leaders.  Doing so also creates a culture that shows that leadership is valued and that employees can earn leadership positions.  This will do wonders for your engagement and recruiting.

We generally don’t manage our businesses on a reactive basis.  Rather, we seek opportunities, evaluate them with careful research and discussion, and then we act on them.  The same due diligence should be taken when identifying your future leaders as they are the ones who will be making those business decisions.

For more information on  leadership, skills assessment, and talent management, please contact Warren at 310 670-4175 or warren@allaboutperformance.biz.

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