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Spring 2003 Edition- April 2003 Volume 1

The Ironclad Case For More Learning
Ken Keis: The Most Profitable Companies Provide The Most Training

When you omit learning and training from your business practices, you put a slow leak in your bank account. It's easy to think you are saving money by cutting "training" in your organization. But when you delete training, you join the ranks of customers who don't service their vehicles.

In 2000, the American Society of Training and Development (ASTD), of which we are members, conducted a research study that involved more than 3,500 organizations in multiple industries — including automotive. After the information was calculated, it was clear that organizations not committed to continuous learning/ training were, on average, the least profitable.

The most profitable organizations invested double the average investment — 240% or more — into training and learning for their people. Here are the results of the learning vs. non-learning companies:

Training provided, per eligible employee, per year:

  • Average organizations: 26.3 hrs.
  • Learning organizations: 62.5 hrs.

Investment for learning initiatives, per employee per year:

  • Average organizations: $1,040
  • Learning organizations: $2,600 — 260% more per person

Investment for learning initiatives, converted into percentages of payroll:

  • Average organizations: 1.8% of payroll
  • Learning organizations: an amazing 3.6% of payroll

The delivery preferences of the Learning organizations and the average organizations were very similar.

  • Instructor-led: 80%
  • Technology-delivered: 8.4%
  • Self-paced or distance-learning: 8%
  • Various other methods: 3.6%

One of the main reasons for the poor showing of technology-delivered learning was participants' frustration with "not right the first time" launches of e-learning programs — such as CDROMs that crash, slow Internet service, and email learning that lacks interactivity. The study also documented that once a learner has a negative experience with e-learning, he or she is significantly less likely to take future e-learning courses.

Projections show a doubling of technology-delivered learning over the next 18 months. By 2003, close to 20% of learning will be technology- based.

Who conducted training for the Learning organizations?

  • 96.6% used outside learning firms
  • 89.7% used colleges and universities
  • 86.2% used product suppliers
  • 86.2% used independent contractors

How did they grade their employees, to ensure the company maximized their return on investment?

  • 98% conducted an annual performance review.
  • 92% documented individual development plans.
  • 83% documented each individual's competencies or skill sets.
  • 78% produced skill-certification programs.
  • 64% conducted peer reviews or 360° Feedback Assessments.

How did the top businesses operate, to achieve higher profitability, compared to their peers?

  • 97% had problem-solving teams or quality-circle teams.
  • 92% included job-rotation or cross-training as part of their process.
  • 78% of the Learning Leaders involved their employees in the management of business decisions.

The bottom line?
Training generates the highest business profits! Many businesses across the country are seeing firsthand what learning/training can do — both for their employees and for the organization as a whole. Although there is still a significant gap between the Learning Leaders and the "average" organizations, the developing trend is toward more learning and training — two factors critical to an organization's profitability.

Ken Keis, MBA, CPC, is President and CEO of Consulting Resource Group (www.crgleader.com), a Vancouver-based firm that consults, trains, and publishes HR assessments for organizations interested in improving productivity and performance. He can be reached at kenkeis@crgleader.com.

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As this online newsletter is published monthly, we need articles, questions and answers, People on the Move announcements and other material of interest to our fellow members. If you can contribute, please contact Kate Moore, RPR, Members Quarterly, kmoore@olgc.ca


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