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Trainer’s Tip: The Investment Centre


This week's tip comes from Andrew Mayo writing in response to a question about runing a training department as either a cost or profit centre. Click here to read the question and other responses.

There is an alternative title (to running a training department as a cost or profit centre) - "investment centre"! This is really what training should be about - investing in the capability of the organisation.

From my own experience, I believe it is not helpful to have a department that should be strategically supporting the organisation as a profit centre. It focuses the mind of the department on the wrong things. Everyone likes to proudly display how much profit they are making - but the way to do this will be at the expense of learning. You will go for maximum "bums on seats", trainer utilisation, popular programmes etc - and may get a long way from what the business actually needs.

But then there is the question of charging. I believe that anything that is strategic and crosses department boundaries (such as culture change, understanding strategy, new processes, HP assessments - things which would not be derived from the business goals of any particular unit - these should be funded centrally and be "free" to participants.
Whereas all training that benefits individuals or teams in a unit should be paid for. My suggestion here is to position the fee at a market rate (so they know the value they are getting) and then "discount" for internal purposes that brings the price to a break-even level for the department. You can use different levels of discount - with eg emerging country operations getting benefit.

If of course you also are selling training externally you will want to make a profit. But don't mix them in one department. If you do, the profit motive will take over as dominant and internal learning will suffer.


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