Training: Counting the Costs

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Skimping on skills upgrades gets expensive in the long run.

Especially during slow periods when there isn’t a lot of cash coming in, it can be tempting to cut costs by cutting back on training, or hiring employees whose lack of training makes them cheaper. But skimping now will cost you in the long run.

In his book The Great Principle of Management, author Michael LeBoeuf (a former management professor at the University of New Orleans whose eight books have been translated into more than a dozen languages) says, “If you believe training is expensive, it is because you do not know what ignorance costs. Companies that have the loyalty of their employees invest heavily in permanent training programs and promotion systems.”

Cost vs. investment

Rather than viewing training as an expense, you should view it as an investment. The costs of ignorance are myriad, both tangible and less tangible: poorly trained employees have accidents, which drive up the real costs of insurance and liability; they make mistakes that cost in reputation and customer retention, and they lack the knowledge to use resources well, which leads to waste.

One US study of more than 3,100 workplaces found that a 10 percent increase in educational development produced an 8.6 percent gain in productivity. The lack of consistent skills upgrading and training will also lose you valuable employees who prioritize it in an employer, as is the case with 35 percent of millennials, according to a PwC report. And that’s just the tip of a potentially costly iceberg.

“A lack of training often means failing to spot potential problems before they become actual problems,” says Kevin Rohlwing, Sr. Vice-President of Training for the Tire Industry Association. From having to do work over, a waste of labour, to regulatory compliance, to occupational health and safety, “all training is good,” Rohlwing says.

While in the tire business, professional skills training should be the priority, he says soft skills such as conflict resolution, sales and phone training also have value. “Anything you can use to make yourself better than your competition. Any time you take a professional and give them development training, they should be able to improve some aspect of your business. If everyone can improve one thing, it brings everybody up,” he says.

Costly accidents

When it comes to skills training, the investment could actually save your business. “One big accident, whether it happens to an employee or a customer, could be the end,” Rohlwing says. “And you have to be able to defend yourself. It doesn’t matter what government organization you’re covered by, they’re going to require training, and if there’s an accident, that’s going to be the first thing they ask.”

Compliance training can be equally important. “When it comes to occupational health and safety, if there’s a regulation not followed, that’s breaking the law. Now you’re beyond dealing with a civil suit. You’re looking at a whole other set of problems,” he says.

Rohlwing advocates taking it to the next step if possible —while hard numbers are hard to come by, he has seen certification-level training pay off for shop owners, too. “From an operational perspective, people who do it over a long time see big differences in numbers and types of accidents,” he says.

What it costs to properly train your employees can be an easier equation to figure out than what it costs not to. But the short answer is “dearly.”

Categories : Tires


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