There are a number of ways a business can reduce training costs and increase the effectiveness of training.
Getting the Most Out of Your Training Budget
Most businesses spend a great deal of money on training, but do they get the best return on their investment?
I don’t know of any business that does not spend money on training. It is expensive yet essential, but are ways that you can get a better return on your training investment.
How? By completing a realistic analysis of training costs, separate the need-to-know from nice-to-know, cutting out non-productive expenditure, evaluating delivery mechanisms and ensuring knowledge retention. Here are some steps to help guide you through this process. LA Intronet can assist you with increasing your return on investment in all sorts of ways. Drop me a line if you want to know how.
1. Assess what training is a must.
a. Conduct an assessment of your existing training and separate need-to-know from nice-to-know topics. Which training topics are mandatory and must be scheduled? This would be industry legislation or annual training specified by an external organisation, for example, annual safety or governing body training.
b. Which of your current programs are essential to operational competencies employees need to carry out duties and deliver on performance expectations? Which of your current programs drive business results? These high-impact programs develop your employees’ business critical competencies and are proven to assist in increasing business results through an evaluative process following the training itself. For example, do you offer a sales training program after which sales results go up? Or a business simulation program where senior managers use actual company situations and work out innovative solutions to problems, or come up with new ideas that enhance business results? These programs should continue to be offered.
c. Nice-to-know training is the kind of training that assists in the development of employee personal competencies, but is not critical to delivering on individual performance expectations or driving business results. An example of this type of training might be business writing or team building. Ask yourself the tough question, If you eliminated these training topics from your calendar, would employees still be able to deliver on position responsibilities? If the answer is yes, these may be topics that you should postpone until better times return.
2. Evaluate the Worth of High-Cost Training
a. Training that only a few individuals are able to take advantage of, but which consume a large percentage of your training budget needs to be evaluated. This includes external education, conference attendance, training involving travel expenses, and even external seminars that only a few people attend. How much is essential to drive the business? What competencies are brought back to your organisation through attending these training events? Once you’ve examined whether historical attendance has been driven either by operational needs or by delivering on business results, you will be able to determine the percentage of past attendance that has been need-to-know.
b. Determine what percentage of your training budget has been spent on total expenditures in this area and match the percentage of employees attending to the percentage of training budget spent, i.e., cost per employee. These percentages and their link to delivering on business results may provide sufficient justification to limit attendance at nice-to-know training. You may even begin to build understanding of the need to translate attendance at these types of events/education to the expectation that employees must build competencies that deliver on business results. This could limit future expenditures, and instead, allow you to apply the same spend to provide training to a higher proportion of your employee base.
3. Evaluate Your Training Design
a. Consider ideas for reducing training design costs, making the session content more applicable to competency needs, and decreasing time spent in the classroom without sacrificing learning.
b. Can you decrease the content covered within your need-to-know training topics and decrease the time spent in training sessions? Remember that training delivery costs are not only what is included in your training budget, but also the additional cost of pulling employees from everyday work to participate in training. This analysis involves reviewing the content of each training session and evaluating what is critical to cover. The additional content can remain within the course materials and be included as pre-reading and still tested within the course content.
c. If you are offering the training in a classroom setting, can you alternatively offer this training through online learning? This can greatly reduce travel costs and assist in reducing operational concerns such as bringing a number of employees together at the same time for a classroom session, especially when employee numbers have been cut. It also offers you the advantage of being able to repeat the training by recording the session and offering it on an ongoing basis without having to reschedule a formal classroom session. A number of your need-to-know training sessions could even be translated into this format as an ongoing delivery method.
d. Consider contracting a training expert to design and customise existing training to your work environment, and deliver training. This individual could provide train-the-trainer sessions to your internal experts and set the stage for future in-house delivery.
e. It is often more cost-effective to purchase an existing program and just customize the content But be sure that the license or copyright on the materials allows you to do so. Seek a supplier that allows you to print the materials in-house.
f. Consider whether similar organisations could benefit from the training you will design for your employees, and invite them to participate at the front end of designing the content. You must be careful when doing this, as a partner could impact the content’s applicability. Do this only when you are sure that your needs will not be sacrificed and true cost savings will be achieved over the long-term delivery of the training.
4. Evaluate Training Delivery Options
a. Can you offer the training in-house instead of sending participants to an external provider? For example, if you are sending supervisors to an external course, can you have this provider deliver the supervisory training in-house? This usually brings the cost down. Another advantage is that you can have the facilitator customize the content to your organisation, and in this way, increase the speed at which the training is integrated into on-job application.
b. If you use consistent external trainers year-over-year, consider booking in advance for the full year and asking for a discount based on the volume of sessions scheduled. Ask if you can duplicate training materials rather than having the facilitator provide the materials. This will usually decrease the cost. But don’t sacrifice quality of materials, as participants will perceive the training to be of less value if the participant materials do not look professional.
c. Can you train your internal experts to deliver training sessions instead of using external consultants? When business is slow, it could be a perfect opportunity to use high-performing individuals to share their knowledge, develop new skills, and enhance their personal engagement with your organisation. To be effective you must train your experts in the competencies required to design and deliver training, but the advantage is that internal trainers have the ability to more effectively link training topics to your workplace.
d. Invite similar organisations to send participants to your scheduled training sessions and share the delivery cost. This may not always be realistic, especially when the content has been customized to your organisation and workplace, but common training topics may offer this opportunity.
e. When employees attend external training sessions, implement a process whereby they must bring back one or two ideas to implement within their individual or department work efforts. You may also wish to have them present their learned knowledge back to their work teams to spread the knowledge to other employees, thus increasing the return on investment.
5. More Training Delivery Cost Cutting Ideas
a. Increase the number of participants in each training session by scheduling fewer sessions. Statistics tell us that training attendance is underutilized, which increases your per-participant cost.
b. Negotiate a flat fee for scheduling sessions with external trainers rather than a per-participant cost.
c. Negotiate discounts for booking employees at external sessions. For example, if the per-participant cost is RX per person, book all employees requiring this training at one session and ask for a discount based on the number you are registering. More registrations will get you the largest discount.
d. When scheduling training sessions at external venues, use the same venue to schedule all sessions for the year and ask for a discount based on the number of sessions scheduled. Again, the more times you book, the higher discount you typically receive. Look for a central location to decrease employee and facilitator travel costs. However, an even better money saver is to move sessions to an internal site. While the internal site may not be as comfortable, the rand savings will quickly add up.
e. Instead of renting audiovisual equipment from external venues, bring your own equipment. This can be difficult, but will save you more rand. Plus, you have the advantage of building your training equipment by using previous rental rand to purchase LCD projectors, flip charts, and laptop computers that can be used when conducting internal training sessions.
f. Cut back or eliminate the food you provide. Many employees come to work bringing their own lunches and typically eat breakfast at home, so why do you have to offer food at training sessions? You can continue this practice in future years.
g. Create a centralized training library where all the books purchased, training manuals, study guides, and other reference material are available for use by all employees.
h. Put as much reference material and individual knowledge as possible online in a centralized internal site where all employees can search for data. This can also ensure that existing knowledge is retained and transferred to future employees rather than being lost when employees leave your organisation.
i. Take advantage of free online resources that offer the following:
i. Design of surveys and paper-based and online tests;
ii. Business or industry videos and presentations on specific topics applicable to your workplace that can be made available to employees in a self-study version or as a pre- or post-training assignment or reference. You could even build a test to confirm employee participation in one of these offerings.
j. Check to see if your industry association can offer training at reduced costs, or if your association membership provides a discount through specific training or education providers.
Getting the most out of your training rand in today’s business climate is not easy. But I hope that the above ideas will provide training some guidelines for taking a business approach to justifying training expenditures and proving a return on investment. LA Intronet can help you reduce your spend on training and increase your ROI in many ways. Please contact me if you would like to know more.