How much do you value your employees?

March 8, 2016

 

Peter JohnsonYears ago someone much smarter than I taught me that if you want to understand what is really important to an organization look at how it spends its time and money.

Every day I work with people who tell me, “Our people are critical to our success” or “Without our people we would be nothing.” Often there is a disconnect in organizations that say they value their employees and maintaining and developing each employee every year. It seems that while some organizations regularly change the oil on their company’s vehicles and upgrade their computers and software, but they spend very little to develop the most critical resource to their business.

Don’t lump all training together. Every two years I sit through two very painful hours online for my sexual harassment training: read a sentence and hit a button. Of course, this is timed so the 20 minutes it should actually take me requires two hours. This training is mandated by law and is supposed to reduce risk in our organizations (although I have my doubts about the effectiveness of this training).

That type of training is necessary but probably won’t help your employee reach their full potential. Instead, identify specific gaps in their skills and the appropriate training that would enable them to be successful in their position. If only it were as easy as plugging an employee into a computer and downloading an update.

People are much more complicated. If you have an employee who is a poor communicator, the challenge could be much greater than just their communication skills. It could be a challenge with what they are communicating (technical information) or the audience with whom they are communicating (a younger generation like millennials).

When working with people you have to look below the surface and try to understand their deeper issues, not just the things that may show up as symptoms. In the end, it could be that they need improvements to their understanding of financial information or to learn better ways to communicate with people.

One of the biggest problems I regularly see is employees who are promoted because of technical skills into a management position that requires a completely different set of skills. Some employees may naturally have an aptitude for management, but most do not.

Each year the American Society of Training and Development does a study of industry and the direction training is going. Here are some highlights of the ASTD 2015 State of the Industry Report:

  • In 2014, organizations on average spent $1,229 per employee on learning.
  • The average number of learning hours used per employee is 32.4 hours in 2014.
  • Over 40 percent of training is delivered through technology.
  • Mandatory, compliance, process, procedures and business practice trainings accounted for over 20 percent of training.
  • Managerial and supervisory training represented 13 percent of all training.
  • As a percent of payroll, direct expenditure on learning increased from 3.2 to 3.6 percent.
  • Employees in companies rated as “Best Companies to Work For” had substantially higher amounts of training, averaging almost 60 hours per employee.

Looking at the ASTD report, it is interesting that companies provide more time for employees to miss work (traditionally around 80 hours of sick time) than they do to train them. Also, companies spend much more money on mandatory and company policy training than leadership and management training.

Every organization needs to ask “what type of organization do we want to build?” By the way, if you don’t know how you compare to this national data you have identified your first problem.

I remember talking with a seasoned business owner many years ago. After I suggested that his organization would greatly benefit from some employee training he asked me, “What happens if I spend all this money to train them and they leave?” I responded with, “What happens if you save the money and they stay?”

The irony is that managers will put up with poor employees that cost the company tens of thousands of dollars (or more) per year but won’t spend a small percentage of that to help employees reach their full potential.

So how do you spend your time and money? Are you striving to be a top notch organization that spends on employee development because you realize it’s an investment that will pay enormous dividends to your business? Or is your strategy more of “we are going to save our way to success”?

Peter Johnson is the Director of the Westgate Center for Leadership Development and the Institute for Family Business in the Eberhardt School of Business at the University of the Pacific. He welcomes your feedback at peterjohnson@pacific.edu

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