The Importance of Training

By: Collin Quiring

In tough economic times it seems that the first area that receives a budget cut is the training budget.  In some cases, it is cut to nothing at all.  While this is an easy area to save money today, I don’t think that it is wise to cut this budget to zero.  In fact, I think it is the exact opposite!  I think it is precisely the time to increase training.

During tough times, the instinct of some managers is to reduce expenditures – concentrating on the immediate cost.  More specifically, they are thinking about the cost in terms of accounting.  The cost is determined by the amount of money that would be spent on the training and any other estimated expenses.

However, I think that this only causes greater issues and problems later.  I think that while the immediate cost in dollars might be high for some training, the tangible future costs and the current and future intangible costs are often higher.

A lot of individuals, particularly in the area of Information Technology (IT), can have their skills outdated relatively quickly if they don’t have the appropriate training in their areas of expertise.  Let’s make up an example.  If a company has an IT employee that is a developer, and that developer is an expert in a certain type of program and a new version comes out but the individual can’t go to the training they will eventually no longer be an expert.  Depending on the type of version it might be only a slight update or it could be an entire re-write of the program.  Either way, if the developer now knows that there is a newer (and presumably better) way to do their work.

This can lead to intangible costs.  The developer might start looking for companies that offer the ability to be trained in the program that they use.  The developer might leave the company and thereby cause a significant increase in costs for the hiring, internal training and learning curve time for a new hire.  Or, the developer might just stay where they are and become disgruntled with their employer.  This could lead them to be less productive in their daily work, or perhaps even a toxic influence to the rest of the employees.  Of course, some individuals will not worry about it all and stay comfortable where they are today – knowing the program and version that they know.

These are costs not necessarily easy to quantify and won’t be simple to track back to the “no training” decision.  And, there are probably other areas that would affect somebody leaving the organization but not getting training could be the final straw or the first item that starts an employee looking for other work.

There are tangible costs as well though.  When a company has stopped training its individuals, whether for one year or for a longer time, they will eventually suffer the consequences of not having better trained individuals.  In our earlier example of the developer, even if the developer stays content in their work, they will no longer be using the latest and greatest tools available to them.  And, the learning curve to learn those tools may be more expensive now than it would have been if they went to training earlier.  This might be because they may have to “learn on the fly” and use the new tool in a live environment.  Or, they may have to go to training on short notice.

The situation could become even more dire, if, in our IT example, a vendor requires an upgrade to their system that relies on a more updated tool as well.  If our IT developer’s program is upgraded and then a new version of different software comes out that uses the new version of the other program, the developer now has to learn two tools at once.  This also causes the costs to increase!

One other area that training allows a company to have is that of competitive advantage.  If other companies are cutting their training but you don’t cut yours then your staff is better prepared for the future.  And, you might be the company that can attract other people to be employed with you.

While I understand that companies become concerned and then try to find dollars wherever they can I am reminded of the third presidential debate – where each candidate said how they would use a scalpel to remove waste and the other would use a hatchet.  Cutting training entirely, whether for a department, the entire company or just certain people will come back to cost the company more than if the training had been done originally.

Using the scalpel approach is the way to do it if the company is going to cut the training budget.  This method makes it harder on management because they have to pick and choose who gets what training in some cases.  However, in other situations, there are multiple methods of training.  Instead of a three-day training class that includes travel, perhaps there is closer training opportunity.  Or, perhaps there are online training options. 

Keeping the training budget costs less in the long run!

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