Short Circuit; In a Down Cycle, Companies Disconnect Employees From Training

The Chicago Tribune
Sunday, December 2, 2001

By Barbara B. Buchholz

As the economy continues to slump, employee training is among the first programs to get the ax at most companies. The reason, the experts say, is that the top brass thinks it's impossible to measure the success of training programs.

"Particularly in the U.S., most companies cut training because they view it as a luxury. That distinguishes them from companies in Europe and Japan," said Jeffrey Pfeffer, a professor of organizational behavior at Stanford University's Graduate School of Business and co-author of "The Knowing-Doing Gap" (Harvard Press, $27.50).

But in the long run, he says, training is what helps make companies competitive, particularly in a down cycle. That's especially true, Pfeffer says, in the current knowledge economy.

William Rothwell, a professor in the Workforce, Education and Development department at Penn State University and author of "Beyond Training and Development" (Amacon Books, $59.95), says training is an essential part of the solution to problems rather than a fringe benefit.

"It helps get work results, whether orienting new hires to know why they should do something, helping current employees prepare for promotions, and having everyone upgrade skills as technologies and other conditions change. Changes don't go away even in a down economy," he said.

Other experts say that while it's hard to quantify the benefits of training as return on investment, training adds value as a performance enhancement, tied to operating goals. Looked at as an incentive, it may work better than one-time rewards such as sales prizes.

"It can fix skills, knowledge or attitude," said Tim Hatcher, a consultant and associate editor of Human Resource Development Quarterly magazine, and associate professor at the University of Louisville. "Sending someone to class at Hilton Head (S.C.) with golf clubs can work as a reward but not as the best way to gain knowledge and a return on training."

Creative budgets

The training industry has a major stake in all this, of course. According to the American Society for Training & Development, annual spending on training has swelled to $65 billion, as companies -- until the downturn, at least -- had been putting 1.8 percent of payroll costs into training. Given the fact that some cuts are going to be made in training budgets, where's the best place to make them?

First, top talent needs to be retained. "Management training should not be given up, and is particularly useful as a person advances," said Herb Cohen, president of Provant Vertical Market Solutions in Ridgewood, N.J., a unit of Provant Inc.

Second, training needs to be made more efficient by selecting the best vehicle to deliver information. The three major channels are Web- based learning, in-classroom learning, and a combination of the two, Pfeffer said.

Each offers pros and cons. For example, e-learning is often preferred because it can be done on an employee's own schedule from anywhere, says David Smith, a partner with Chicago's Accenture, a human performance service company. Although the initial technological costs may be high, it can eliminate other costs such as travel.

Andersen, another Chicago-based organization, which historically conducted training at several locations and at its Center for Professional Education in St. Charles, is using more technology to reduce travel costs, says Kay Priestly, global managing partner for people.

At other times, classroom or on-site training may be better because of subject matter and the need for live instruction. But costs can still be tweaked. "You put more people in each class and use fewer resources," Pfeffer said. Or fewer classes can be scheduled, or made more regional as Andersen now does. "What you lose is networking with a broader group," said Priestly.

A blended approach can work since certain issues are best delivered with some technology and some classroom instruction. "It all depends on the subject and result desired," said John Panaccione, executive vice president of sales and marketing with Cognitive Arts, an Evanston company which builds custom software and online training courses.

Improved focus

Companies also need to do a better job to determine the content of training and tie it more closely to current objectives, according to Kent Barnett, head of Knowledge Advisors Inc., a Chicago training assessment company that tracks how well employees learn and how well the training companies teach them.

Companies can do so by focusing training on what they do well or like doing well, says consultant and author Andy Birol. For example, a company that prides itself on customer service could audit clients to be sure that its customer service reps are adequately trained. Training them on soft subjects could be temporarily eliminated, he says.

In the case of Northwest Airlines, NETg in Naperville helped it switch to its Precision Skilling training to accelerate learning, says Jim L'Allier, vice president of research and development and chief learning officer.

"You make sure that training is relevant to a person's job and develop those competencies rather than take a shotgun approach that may hit but also miss. What would have taken a year to do manually, we did in an automated way in three days. We found what was needed for the curriculum and found out about some things that weren't tied to needed competencies. We eliminated them and saved money," he says.

How well does it work?

Just as improvement is needed with choosing the training, observers say a better job needs to be done tracking results.

Some steps are just common sense. You can ask a trainee's boss and peers whether they see improved results, Pfeffer says.

In the case of sales training, dollar value of sales can be tracked to provide answers quickly, Cohen said. But much training assessment is more complex and requires knowing what data to track and how to analyze it. Kristin Gabriel's e-com Communications LLC company, a strategic marketing and communications firm in St. Louis and Los Angeles, finds that its customized questionnaires help most if answered and tabulated at the beginning, middle and end of training.

Although it sounds obvious, companies need to let their employees test and use new skills. "Too many fail to do so," Pfeffer said. "If certain staff members aren't doing their jobs well and are sent to a training program, but then aren't given autonomy to make decisions based on what they learned, you've wasted time and money.

"You have to integrate training into the context of how you run the company rather than say, `You'll continue to follow my orders or approach.' "

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