Chapter Corner

The Value of Training in Good Times and Bad

Posted in: Features, April 2014

training.pngThe construction industry is beginning to see the light of day. Companies are no longer struggling with layoffs and are beginning to hire again. The anxiety of paying the bills is being replaced with thoughts of growth and expansion - or at least getting companies that survived back to what they once were.

However, as the pendulum swings, there appears to be a completely new set of issues. The once bountiful supply of construction workers and craftsmen has dwindled to a select pool, as the "30-somethings" had to look for jobs in different career fields, having been let go from the industry during the economic downturn.

The gap in the current construction workforce mimics an hourglass, with a high percentage of seasoned and skilled workers with visions of retirement at one end and a crop of the fresh, yet unskilled and inexperienced employees filling out the other. There is a narrow and limited group that sits between - those who would be described as experienced and skilled but also in the prime of their career. These are the current and future leaders and are key to taking the knowledge and skills that can be learned by working alongside journeymen and tradesmen and passing that knowledge down to the newest to the industry. These are truly the few and the coveted.

There is a clear understanding and acknowledgement in the construction industry of the need to get those new to construction ramped up quickly and that doing so will require training. However, having difficulty justifying concrete return on investment (ROI) for training initiatives, many companies either downsized or disbanded their internal training organizations or reduced their external training budgets in order to actively address new and rigid budget constraints during troubled economic times. In the last recession, for example, some companies reduced training, others restricted training events or the number classes offered, and yet others deleted the budget line from the spreadsheet altogether. Recouping budget by decreasing or discontinuing training may have seemed a necessary - almost sensible - way to save costs, but ultimately the costs of limiting training when things were bad may have created a current and future dilemma.

The industry training challenge may seem to be as simple as getting new hires up to speed, but the reality is that depleted training departments, the lack of structured training plans, and reduced budgets can be the real obstacles to successful training initiatives. Couple that with the likelihood that few people left in the organization understand how to launch new training initiatives or create a plan, and your efforts to get well-trained employees on your sites can be delayed by weeks and even months as you reorganize your efforts.

The Hidden Costs of Not Training

When we refer to training in any organization, it is rarely limited to just new-hire training or new skill learning. More often, the word "training" is used when referencing professional development, organizational updates, communicating regulatory changes, succession planning, leadership development, and essentially any changes in what or how we do something that needs to be communicated. We often see training as an organized conduit for information sharing. Sit in any meeting, in any industry, where someone sees a deficit of some kind or a need to communicate information, and you will hear some call to action that includes the word “training.”

It makes sense that when we reduce our structure or capacity for training in any way, those benefits that are associated with training will suffer. An operations executive in a large electrical engineering company was getting his training initiatives back on track. He noted some regulatory updates that his company had resorted to sending out as e-mail updates and through manager communications. The result was a number of electrical workers with inconsistent information that was required to execute the job. His desire to integrate needed updates in the professional growth plans for his current employees reflected an indirect cost due to reduced training and communication.

Other hidden costs include hiring experienced employees with the assumption that they know what they are doing, and if not, they will figure it out on the job. What’s the problem anyway? We are only hiring a few key positions or just a limited number of workers anyway — can’t they learn on the job? The answer is, “Sure they can learn on the job…and they may even get the job done.” Over time though, the look of your workforce resembles that of a group of entrepreneurs that are just doing it “their way.” Best practices, efficiency strategies, and just plain execution consistency can — and will — erode quickly in any size organization over time if there is no attention to training.

Managing and Sustaining Training During Difficult Times

Whether it is a recession, planned growth, or other transitional event, there will be times when cash is tight and budgets will need to be pared or adjusted. Rather than deleting the training line item from the budget, consider managing training through the difficult times using the following strategies:

1. Create and maintain a companywide yearly training plan.

A comprehensive organizational training plan reflects the knowledge and skill gaps in the organization and the subsequent training initiatives to address those by department or employee group. A good plan aligns directly with attaining company goals and is used as a measurement for success. Because of this dynamic plan, informed decisions can be made on the areas to potentially reduce or cut and the effect on the organization those cuts or reductions could have. Having a training plan, even if your plan is to reduce training, maintains the integrity of an ongoing training program.

2. Link your training initiatives directly to your ROI.

With a good training plan, there are ways to monitor and measure your training initiatives with ROI in mind. Training for certain behaviors on the jobsite can have a direct effect on the revenue realized on that job. Initial assessment and clear understanding of the “current state” is required and may take a little time to set up, but the return on your training dollars can be exponential.

3. Understand and invest in training needs required just to maintain.

The all-or-nothing approach to training never works. Often training requests are declined merely because they have a dollar amount associated with them, without evaluation of the benefit to the organization. Even during times when budgets are limited, investing in some level of information transfer and professional development as part of an organized and planned training program will always be worth the money.

4. Do not fire the owners.

Or more specifically, do not let go of your people on staff who have education and experience in creating and executing training initiatives. In most organizations, there are people that either have a background in training and development or are interested in it to the point where they will do self-study. Having a person in the organization who understands the value of training and can support putting together effective training plans — even if it is not his or her primary position — will help during the lean times. It is important that someone in the organization owns the need and desire for training.

The construction industry currently is experiencing an upswing. The future looks bright and there are dollars for new initiatives, for growth, and for those areas that do not always clearly affect our bottom line. This might be time for a paradigm shift. What might be the value of integrating our training program into the framework of our organization instead of regarding it as an appendage?

Reprinted with permission from FMI Corporation, (919) 787-8400. For more information, visit www.fminet.com or call Sarah Avallone at (919) 785-9221.

Shirley Ramos is a training consultant with FMI Corporation. She can be reached at (303) 398-7213 or e-mail sramos@fminet.com.