September, 2003

Time to Train Your Workforce?

To pump productivity, fill the training gap between what is and should be.

By Deborah Hayden

Are you satisfied with the work habits of your employees? Do your employees have the necessary skills to maintain a market-competitive edge? How do you improve employee productivity? How do you determine profit preventers? How do you determine training ROI?

Dealers are constantly analyzing inventory turns, margins, and delivery costs. So what should a dealer do differently? How about analyzing employee productivity? A well-trained, motivated staff can make the difference between success and failure.

Identifying Productivity Issues

A review of management literature and consultant suggestions indicates that training programs are often prescribed as the drug of choice to solve problem situations in companies. How often have you heard, "We've got a training problem" or "They're not doing it the way they're supposed to"? Often these statements are only symptoms of a problem. Until it's understood in greater detail, proposing a solution or an intervention can be a costly and fruitless endeavor. Often overlooked as the first step in the productivity improvement process is a needs assessment. A need is not a want or desire. It is a gap between "what is" and "what ought to be."

Let's take a look at some of the issues dealers are facing today that reduce employee productivity and how to determine if you are affected.

Training Triggers

List what is happening in your company that might be a trigger to indicate a training need, including new products, new employees, and new customers. Are there any negative indicators that might trigger training needs such as customer complaints, accident records, high turnover, or loss of customers? What external influences might be training triggers, like new legislation, customer requirements, competitor activity, and supplier activity?

Are there links between the triggers? For example, an increase in turnover of experienced employees could be having an effect on loss of customers. Add the addition of new employees is likely to increase pressure on managers. Perhaps this is affecting how they manage.

Now what do you do with this information? The easiest way to analyze problem areas identified is to use a Productivity Assessment Matrix. An assessment matrix is similar to a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis; simply replace the categories with the ones illustrated. Group the Training Triggers you listed under the appropriate category and identify training needs that are important to your company to achieve a productive workforce.

This assessment can also be used for each of the following issues by changing the assessment subject-i.e. from Training Triggers to Profit Preventers-to analyze the information you gathered to determine if there is a need in your company.

Training Triggers Assessment Matrix

Corporate Culture

The items management pays attention to and rewards are often the strongest indicators of a company's culture. This is often quite different from the mission, vision and values it verbalizes or the business objectives it strives to meet.

1. Does management encourage or discourage innovation and risk taking?
2. Do you reward employees for coming up with ideas and challenging old ways of doing things or punish those who challenge established norms and practices?
3. Does your company truly value excellence, or is the mentality simply "just deliver it"?
4. Does management pay attention to the well-being of its employees, or is it completely focused on task performance and profits?
5. Does a high level of employee participation characterize the culture, or does top management make most of the decisions?

As you can probably see from your responses, this kind of inquiry can give insight into the real culture of a company and some of its underlying values. It may not even resemble the culture you think you've created. You may find that you're not practicing what you preach!

What is your company's mission? What is your company's vision? What are your company's values? Do the answers to these questions describe and/or support your company culture?

An organization's culture is not the list of values developed at an offsite retreat by the management team and framed on the wall in the lobby. These are ideals. What you strive to be as an organization and what values you hope to endorse may be different from the values, beliefs and norms expressed in actual practices and behavior.

One dealer was really surprised when he reviewed how employees answered these questions:

1. What five words would you use to describe your company?
2. Around here what is really important is?
3. Around here who gets promoted?
4. Around here what behaviors get rewarded?
5. Around here who fits in and who doesn't?

Profit Preventers

Employees actually do what gets done in your company. They make hundreds of decisions and perform hundreds of tasks in a day. These decisions and actions encourage profit, discourage profit, or have no effect on profit. So I'm sure that every dealer requires a profit-awareness training program that motivates employees to increase productivity and profitability as a prerequisite for all employed. No? Well, why not?

A Profit Awareness training program I recently developed for a dealer revealed some interesting information. The first thing we did was ask his management staff to make a list of what prevents profit in his company:

1. Habit
2. Complacency
3. Low employee productivity
4. Sloppy inventory control
5. Lack of team effort - sales
6. SPORD margins
7. Lack of motivation of sales group
8. Increase in competition

A last response really brought home to the owner why he should provide profit-awareness training: Why should employees be concerned with making a profit? After all, "the owner just puts the money in his back pocket. You don't see employees driving a BMW to work!"

Profit Awareness training immediately found its place under the High Importance-High Need for Training category in his Needs Assessment Matrix.

Employee Turnover

Is employee turnover affecting your productivity? Find out your employee turnover rate with this easy calculation. Employee turnover is the rate at which employees leave, including voluntary and involuntary separations. If your rate is over 25 percent, you need to do some work on employee retention.

Employee Turnover Cost

The cost of employee turnover is typically a hidden cost and oftentimes overlooked. A study by the American Management Association states that employee turnover can cost you up to 30 percent of their salary. Find out how much your employee turnover is costing with this quick and easy calculation. The result will speak for itself.

Customer Service Questions

Ask your employees and managers to answer these questions concerning customer service quality:

1. In describing our overall level of customer service, I would say…
2. Our customers would describe our service to them as…
3. When dealing with problems, customers would say we are…
4. In responding to customers' specific needs, we are…
5. Customers would say our reliability is…

If you are not measuring customer service, you are not managing it. Companies everywhere talk about the importance of providing excellent customer service. They go on and on about how this or that has increased competition between companies vying for the same customers. Often the only thing that separates one business from its competitors is the level of service provided.

Most companies measure success by their sales numbers. If sales continue to increase, then business must be growing.

But one small detail is overlooked: the customer. How does your customer feel about doing business with you?

Think of the last time you bought a product or service where, after doing business with that company, you got a call or a survey card to find out what you, the customer, thought about the buying experience. Here are some very important questions you should be asking if you truly want to understand your customer:

1. How do you know your customers are experiencing extraordinary customer service when they purchase from you?
2. If they are new customers, will they be repeat customers?
3. Do your customers tell other people about you?
4. Are you meeting or exceeding your customers' expectations?
5. Are your customers buying products or services from the competition because you neglected them?

If you can answer these questions, you're already way ahead of the rest of the pack!

Training Return on Investment (ROI)

Your completed Needs Assessments no doubt will indicate a need for training. But have you ever wondered, like I have, if it is really possible to measure training results? Today companies are increasingly asking training departments to justify training with hard data. Because of the pressure for most companies to cut costs and do more with less, this trend is likely to continue.

One way to determine training ROI is to measure it at the results level. Identify 1) the results you want and 2) the way you will obtain data to determine cost and benefit. Determine results by talking with managers of the people to be trained. To track results, choose indicators that are credible to management. This is an important point. Management must agree that the indicators you will track will prove ROI.

Indicators to Consider

For supervisory and management training track:
Increased output
Reduced absenteeism and tardiness
Reduced cost of new hires
Reduced turnover
Increased number of employee suggestions
Climate survey data (morale and attitudes)

For sales training track:
Sales volume
Average sale size
Close-to-call ratio
Ratio of new accounts to old accounts
Amount of repeat business
Product penetration

For customer relations training track:
Accuracy of orders and deliveries
Number of transactions per day
Adherence to credit procedures
Number of new/lost customers
Amount of repeat business
Number of customer referrals
Number of complements/complaints

To calculate Training ROI, use the following formula: ROI = (Benefits - Costs/Costs) x 100. For example, if you determine the benefits of a training program are $20,000 and the costs of the program were $5,000, the formula would work like this:

ROI = (20,000 - 5,000) = 15,000/5,000 = 3 x 100 = 300% Return on Investment

One of the most difficult aspects of tying training to the bottom line is verifying that the skills and knowledge taught in training are actually linked to the operational results being measured. The key question you must answer is: Did the training actually cause the results, or were the results due to some other factors that had nothing to do with the training?

Sometimes it's easy to show that training caused the results. A course teaching employees to repair a machine should cause less downtime. Proving that interpersonal skills training caused an increase in production can be more difficult.

Motivate Your Trainees so They Want to Learn

Once you've completed the Assessment Matrixes, it's time to train. Who says dull material has to be dull? If you are dealing with material labeled dry or boring, ask yourself, "Why is it boring? Is it the content? Is it the way it's presented? Is it both?" The answers to these questions can help you identify the problems you have to solve to make your training motivating.

Some ideas to make even the most dull topic motivating:

1. Help trainees see the relevance of the material; show them how it relates to their real world
2. Help trainees see a personal payoff; relate training to their concerns and construct it to solve their immediate problems
3. Have trainees develop their own case studies and simulations so they can apply the content to real work stuff
4. Use "expert" input from someone they respect
5. Use interactivity as much as possible, paired discussions, small-group and team activities- anything that gets them up and moving
6. Change delivery methods often; don't lecture for more than 15 minutes at a time; mix in other techniques frequently and keep changing the pace
7. Use real-life stories and examples to make points; use demonstrations to dramatize key points and make them memorable
8. Become an interesting presenter, calling on lots of voice inflection, pauses, facial expressions and enthusiasm
9. Stop often to solicit trainees' concerns and questions; invite them to challenge points you've made to generate discussion about "will it work?"
10. Keep things moving! Training must be fast-paced, interactive, and even fun!

People have remote controls in their heads! If you don't catch their interest, they just click you off. Participants in training programs and meetings have been conditioned by television: fast action, ultra-fast cuts between scenes, color, motion and music. If your audience can't sit still for more than a few minutes, how do you reach them in a training session? It's a far tougher audience today. People tune out quicker than ever because they have so much going on. Their attitude is, "Give it to me now, give it to me quick, and let me get out of here." Being so pressed for time, people demand that training be concise, timely, relevant and immediately useful to them. They don't have patience for anything else.

So, just as you cultivate your carrots during the growing season to increase your harvest, cultivate your employees in today's growing markets to increase your company's productivity. Transfer poor-performing habits into results-driven habits. Proper habits grow from obtaining knowledge, skills and attitude. We are what we repeatedly do! Excellence then becomes not an act but a habit.