Maintaining your most valuable resource 

As a business owner, people are your most important asset, but they are often the most neglected. If you aren’t developing their potential, you may as well stop changing the oil in your trucks and paying the utility bills for your office. Your employees know that longevity and loyalty don’t provide job security. They are under continuous pressure to update credentials, upgrade skills and retool their attitudes.

Keeping up with technology is difficult, and filtering information is nearly impossible. A greeting card containing a musical chip has more computing power than existed in the entire world prior to 1950. One edition of the New York Times contains more information than the average Englishman learned during his lifetime 400 years ago. More information has been produced in the last 30 years than in the previous 5,000, and the supply of available information doubles every five years.

So why don’t more electrical contractors increase training budgets or even have training programs? A study of contractor training programs by Roger W. Liska of Clemson University cites lack of money and time as the most common reasons why contractors don’t train. Others include lack of knowledge, turnover, ineffectiveness of prior training and lack of employee interest.

Liska’s findings parallel those of other researchers: Specialty contractors invest a mere 3 percent of payroll, regardless of size, which is more than the level spent by general contractors but lags far behind other industries. Training reduces turnover by an average of 18 percent, and conservative estimates of the return on investment range from 2:1 to 3:1, with no evidence of any company showing a loss.

Leading construction industry associations, research organizations and educational institutions agree that the most successful contractors invest in training. The Business Roundtable, in its renowned Construction Industry Cost Effectiveness Project, cited training as “one key to superior performance,” and reports benefits such as increased productivity, reductions in supervisor workload, improved safety records, improved morale, organizational stability and flexibility.

Journey-level craftspeople who considered their education complete are obsolete. Support staff must learn new computer programs. Supervisors need polished presentation skills. Managers must improve their decision making and strategic thinking. Everyone must learn safety procedures and acquire basic clerical knowledge, such as keyboarding and e-mail etiquette.

Employers won’t lose highly trained workers to competitors. In fact, employers who invest in developing their people experience improved rates of retention. Many studies list the opportunity for continuing education and training as one of the two most important keys to retention, which are rated higher than compensation. If you think you are too small or too busy to have a training program, think again.

The first step in developing a training curriculum is performing a needs analysis. The goal of most training is either to solve existing problems or introduce new technology or skills. Survey all of your employees, asking for their perceptions of existing problems that could be solved through additional training. Bring employees together in groups of 10 or fewer for an hour to develop lists of training topics.

Appoint a key person or small task group to administer this process, combining survey results and suggestions into a prioritized list of recommendations. You may use an outside facilitator to help with this process. Management should be involved in prioritizing evaluation criteria, such as the economic impact of existing problems or the benefits of leadership development. Limit the initial list to problem-solving considerations if you have no existing program and no historical method for evaluating the return on your investment.

The total cost of any training program depends on the size of your staff and on whether you use internal or external resources. Direct costs include research and decision time, instructor expenses, materials and equipment, facilities, recordkeeping, and administration. A significant indirect cost is lost productive time, which is when the training is performed during regular work hours. Preparation time can be difficult to predict, and using in-house personnel as instructors can be risky since they may have excellent content knowledge but be unable to translate it into effective instruction. Some studies show that in-house training costs nearly 75 percent more than outsourced training.

Using external sources can be advantageous since fee agreements usually include all relevant expenses. Research potential sources such as industry associations, educational institutions and private corporations. Many training suppliers will adapt topics for individual companies, but you will need to provide accurate and complete information to the vendor to ensure that the programs will meet your needs and be appropriate to the learning styles of the participants. To get the most effective results, provide demographic information on participants and brief providers on your corporate culture and processes as well as your goals and objectives

You can also make a quick estimate of the value of training specific employees by comparing their current compensation with the amount you would have to pay new employees with the desired additional skills and knowledge for which you are training them. If you are training to solve ongoing problems, make sure you estimate the cost of doing nothing, and compare it to the cost of training with some consideration for intangibles such as the effect of inaction on morale. If you are just starting a training program, you will not know your exact costs until you have completed the training, and benefits may not be apparent for several years.

The product you choose for any training module will depend on its place in the total curriculum. Your goal should be to provide the maximum range of training opportunities for the greatest percentage of your staff. Choose CD-ROM programs to enable every employee to learn keyboarding, for example. Online tutorials can be used for upgrading safety training. Interactive classroom instruction works best for strategic thinking, presentation skills or conflict resolution. Beware of the tendency to embrace large-scale online training programs for all needs. Your employees will have different learning styles and preferences, and online learning does not motivate everyone.

Knowing the purpose of each training course will help with this decision. For those who need remedial or basic skills training, one-on-one instruction plus follow-up mentoring may be the best delivery system. Self-starters won’t need the same degree of support. Salespeople may prefer face-to-face sessions. Craftspeople and supervisors might have to travel to attend a manufacturer’s product installation certification program.

An estimated 10 percent of training is actually transferred to job performance. Factors affecting the success of implementation include support from managers and peers as well as barriers imposed by the corporate culture, structure and processes. If your company is inflexible, training materials will gather dust on the shelf. Also, there must be a clear mandate for implementation, opportunities for employees to use their training in their own jobs and a formal connection to performance goals and evaluations.

One way to maximize the learning potential of your training is to carefully select those who are qualified for each type of learning. If employees cannot demonstrate adequate background knowledge, they will not be able to apply what they have learned. Universities have course prerequisites and so should you.

Management support is critical to the success of any training program. This may involve actual attendance at the sessions, mentoring and the provision of necessary resources as well as assistance in reducing barriers to change within the system. Lack of management support is one of the major reasons for the failure to implement the knowledge, skills and attitudes gained from training.

Make sure to establish an assessment plan. For self-study or online courses, participants may simply take a test and receive a grade. Hands-on skills training may require a more time-consuming performance evaluation to allow a supervisor or instructor to observe and inspect the resulting work product. All employees should be able to define what they have learned, implement their new skills and demonstrate improvement in their job performance.

Your eventual goal should be an individual development program for each employee you train. The employee and immediate supervisor should have input into the type and purpose of training courses, performance improvement goals and the intent to incorporate the results into the employee’s evaluation process. The opportunity to earn additional compensation, promotions or perks helps to motivate the employee to continue with the total program.

How will you know whether your training program is successful? The most widely used evaluation model in corporate training organizations is The Kirkpatrick Model, a four-level process developed by Donald Kirkpatrick.

� Level One typically measures participant reaction through attitude questionnaires.

� Level Two uses pre- and post-testing to assess whether people learned the material.

� Level Three is concerned with behavior change, and observation is used to measure whether new skills are used on the job.

� Level Four evaluates the results, or effectiveness, of the program on the organization or community.

Calculating the return on your investment of resources (ROI) is more difficult. A simple “Training Payoff Calculator,” including benefit, cost and value sections, can be used at no charge on the Web site of OneOnOne Training (www.oootraining.com/ooo/support/calculator.html). Another example appears in “Return-on-Investment (ROI) in Training Workers” on the School for Champions site (www.school-for-champions.com/training/roiworkers.htm). Learnativity offers a number of resources (http://learnativity.com/roi-learning.html) and some interesting statistics on the costs and benefits of training. For example, a 2 percent increase in productivity equals a 100 percent ROI on outsourced, instructor-led training. Liska reports that ongoing training produces an average productivity increase of 15 percent.

Financial measurements will include tracking ratios such as training expense per employee and training expense as a percentage of total payroll. In planning, you will want to track the percentage of employees you are training and monitor performance benchmarks such as profitability, productivity and sales revenue. The American Society for Training and Development (www.astd.org) offers a series of Web casts and seminars, including information on assessment, benchmarking, measuring ROI and developing training programs.

Even if your ROI isn’t optimal, training may be imperative. The Construction Industry Institute (www.construction-institute.org) notes that formal education provides only 30 percent of the preparation required for a construction career in its report, “An Assessment of Education and Training Needs Among Construction Personnel.” The remaining 70 percent must be supplied through special training and on-the-job experience, mandating lifelong continuing education. The hard truth is that “if construction will need [to] be increasingly dependent on a less qualified labor force, then special training linked to on-the-job experience becomes even more critical.”

In a perfect world, you would hire fully and permanently trained employees and operate in a stable environment. Given the reality of an unpredictable future and an escalating pace of required educational “retooling,” you will have to provide more training resources to remain successful. To paraphrase Hillel, if not now, when? If not you, who?        EC

The Construction
Industry Institute
www.construction-institute.org