Managing Director Heroz Arena
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What if we do not train them and they stay?

30th Apr 2021
Managing Director Heroz Arena
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Napoleon Hill conducted an extensive study of the 500 richest people in America to determine what made their companies highly profitable and consequently made them very rich; he made three discoveries. First, he found that each of these top people had certain skills, qualities and abilities in common. Second, he found that none of them started off with these skills, and third he found that they were all learnable skills.

He found that top performers are largely made and not born. The rule is that you cannot expect people to perform at high levels unless they have been thoroughly trained to perform at those levels, just like an athlete. This positive correlation between performance and training is widely established in both the academic literature and the practitioner literature about business and management. The highest profit companies spend the largest amount of money on training while marginal companies spend little or nothing on training, usually with the mindset “We don't train our people we just hire good people and expect them to do a good job”.  The lack of measuring the effectiveness of training programmes is also a contributing factor to marginal companies not investing in training.

Some years ago, Xerox conducted a study on the effectiveness of their training programmes. They found that they were getting £16 back to the bottom line for every pound they invested in training their people, especially their salespeople. IBM found that they were getting £19 back to the bottom line for every pound they invested in training, and Motorola when it was at the top of its game found that they were getting £24 back for every pound they invested in training their people and helping them perform at higher levels.

According to the American Society for Training and Development, the top 20% of companies in America spend 3% or more of their gross revenues on training the people who are expected to generate and process those revenues. The Sales and Marketing Management Magazine estimated that the top 20% of profitable companies invest an average of £4,300 per year per person. How do these numbers compare with the amounts that you spend in your company?

These numbers might seem high for some companies and executives would sometimes say “what if we train them and they leave?” but the right question to ask is “what if we don't train them and they stay?” The next question, or mindset shift rather, is to view and treat training as an investment, not an expense. An investment that would enable the company’s teams to learn and apply new ideas faster than their competitors and sustain a competitive advantage over them.

Shifting the mindset about training from an “expense” to an “investment” requires some cultural and operational changes but as a starting point for such an important organisational change why not reflect on the saying of Derek Bok, president of Harvard University: “If you think education is expensive, try ignorance”.

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