Wednesday, January 22, 2003

Help people move up or they will move out

When budgets get cut, employee training is usually the first thing out the door. "I can't afford to train my employees," they say. "We can't afford to train our employees." Worse, they may be reluctant to invest in training because they believe employees with more skills will demand more money.

"I'll keep them ignorant and not pay them more" pretty much sums up this attitude.

These organizations are ignoring the fact that the more they invest in their people, the more productivity and loyalty they get in return.

But all organizations that are serious about productivity and retention should consider investing resources back into employee training and development.

Satisfying this desire with training accomplishes personal and organizational goals. Trained employees are more capable and willing to assume more control over their jobs. They need less supervision, which frees management for other tasks.

Employees are more capable to answer the questions of customers, which builds better customer loyalty. Employees who understand the business complain less, are more satisfied, and are more motivated. All this leads to better management-employee relationships.

Do employees value training opportunities? A survey my organization conducted this year shows some interesting facts. As expected, half the organizations surveyed cut back on training. The most striking information came from the employees themselves. We asked them, "Would you quit your job to take another job with the SAME pay and benefits if they provided better training and development opportunities?"

The answer--55 percent would LEAVE their present employer for better education and training opportunities.

An American Management Association (AMA) survey of 352 HR executives also confirmed that skill enhancement issues were of top importance to employees. "Investing in employees' future is more important than immediate compensation," said Eric Rolfe Greenberg, AMA's director of management studies. "Programs that improve work skills and future career development are seen as particularly effective."

The AMA survey identified the following skill enhancement techniques and the percentage of organizations employing them as a retention strategy:

Skill Enhancement Issue Used in Organizations

External conferences/seminars-78.1 percent.

Tuition reimbursement-67.3 percent.

Managerial training- 66.8 percent.

Company support for degree-62.2 percent.

Interpersonal skills training-56.8 percent.

Technical training-54.5 percent.

Employability training-35.2 percent.

Organizations that continue to increase spending on training are more likely to meet the technological requirements of their business.

In a study of more than 3,100 U.S. workplaces, the National Center on the Educational Quality of the Workforce (EQW) found that on average, a 10 percent increase in workforce education level led to an 8.6 percent gain in total productivity. But a 10 percent increase in the value of equipment increased productivity just 3.4 percent.

The ASTD study showed that "leading-edge" organizations trained 86 percent of employees while "average" organizations trained only 74 percent. Leading edge organizations also spent twice as much per employee.

In addition to retention and productivity, organizations that care about employee development make a lasting impression and earn lasting loyalty.

Years ago when I was in the military, I took the time to coach one of my soldiers on getting a college education. We would sit down regularly to discuss his plans for the future. When we were transferred to different organizations, we lost track of each other until years later, when Sgt. White called me.

Sgt. White had taken my advice and gone to college. Now the Army was promoting him, and my interest in his future had made such an impact on him that he wanted me to come to Ft. Bragg, North Carolina to pin on his new rank. This was a great honor. I've never forgotten what he told me: "Sir, you were the only officer who took the time to help.

Greg Smith is a nationally recognized speaker, author, and business performance consultant. He has written numerous books including his latest, "Here Today, Here Tomorrow: Transforming Your Workforce from High Turnover to High Retention." He has been featured on television programs such as Bloomberg News, PBS television, and in publications including Business Week, USA Today, Kiplinger's, President and CEO, and the Christian Science Monitor. He is the President and "Captain of the Ship" of a management-consulting firm, Chart Your Course International, located in Atlanta, Georgia. Phone him at 770-860-9464.

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