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When money’s tight, what becomes of the training department?


With the downturn of the economy, not only in the USA, but worldwide, it might be time to rethink "funding." That is, what projects should the training department tackle as money gets tighter and tighter? Some time ago, on the old TRDEV-L discussion list, replaced by TRDEV at there was a discussion about the value of training departments. One comment was that when times are good, training departments grow; but when times are bad, they get down-sized. I believe one of the reasons is that a lot of trainers have only a small amount of "business" experience; therefor their departments are some of the first to feel the axe, primarily because they are spending resources on the wrong projects. Their commitment to providing good training may be in the right place, however, their sense of prioritizing projects during tight money supplies are lacking.

A good training department plays a vital part in keeping a business competitive during hard times by working with management in identifying goals and objectives and then helping the employees to obtain the skills and knowledge needed to achieve those goals; Indeed, a really good training department will help to keep the organization at the "head of the pack" during the worst of times.

Listed below are eight strategies for keeping your department intact during economic slow-downs. Also note that consultants and vendors who assist organizations in implementing these strategies should also benefit:

1. Return On Investment (ROI) - The main measuring yardstick of business is the ROI. It is similar to a gap measurement --subtracting the present performance from the desired performance. However, in an ROI, you subtract expenses (x) from benefits (e), express the difference as net present value (on an after tax basis) and divide this by the initial investment (i). Formula - ((e - x) / i).

The items measured can include soft benefits, such as better communication or employee morale. However, they must produce a quantifiable result based on specific measurements, such as fewer sick days or lower employee turnover rates. Since capturing ROI is not cheap, it is normally used for long term projects such as computer training that is offered on a weekly basis for a couple of years.

Note that ROI can mean several things. Some use it to mean the "Return" (incremental gain) from an action, divided by the cost of that action. For example, an investment that costs $100 and pays back $150 after a short period of time has a 50% ROI. In financial circles, ROI normally means "Return on Invested Capital." When ROI is requested or used, ask or show specifically how it is calculated.

For tools, resources, and a discussion forum, visit ASTD's ROI page at:

Another discussion forum is ROInet:

You will also want to visit "Resources for Calculating ROI" at:

2. Tangible Benefits - The benefits of some performance programs are not measured using ROI for various reasons. For example, if you implement a new computer system, the workers must be trained. There is no valid reason for performing a training ROI (however, hopefully a ROI was performed for the new computer system). Another example is forklift training. It is required by federal law (OSHA), so again there is no need to perform an ROI. However, since it will probably be performed on a continuous basis, then you should perform "process improvement" on the training program to keep it effective and efficient.

Other projects that do not require ROIs are short term, normally 12 months or less, and produce "Tangible Benefits." This includes such
projects as training new processes or improving customer relations. Note that projects which improve customer relations are normally held in high esteem due to the positive impact that they can have on the bottom line. Also, if you can get your project championed by a specific business unit, then so much the better as these business units often have the clout needed to keep a project going.

Creating such programs does not come by chance. To help you, use the Trainer's Toolbox at:

It has a new addition - Analysis Templates:

3. Holy Grails - Some projects are so powerful that they deeply impact the organization positively, such as improving the stock value or providing long term revenues. For example, Knowledge Management projects, which normally take a several years to fully implement, move in one of two directions: 1) their benefits are not fully known, in which case they should be delayed until better economic times (or until you have a better understanding of the benefits); or 2) their potential payoff is so great that they should not be delayed. The key is ensuring that you and your managers know what the pay-off is going to be. However, building programs that get the backings of the CEO and on down are not easy to create. For that, you usually need to do some creative brainstorming:

NOTE - Many organizations have handed off Knowledge Management (KM) initiatives to the MIS department. This is because the software industry has grabbed hold of KM and peddled it as a software solution. However, KM is NOT a technology solution! KM uses intellectual capital (employee knowledge and experience) as an asset through knowledge sharing and documentation. Your employees have a firm hold on this intellectual capital and they have been taught that "knowledge is power." That is, they benefit by hoarding what they know, so they are reluctant to let go of this power. KM is implemented by changing the company culture from "I" to "collaboration." This is best done by a change agent, namely your performance specialists who can be found in many a good training departments. They do this by:

* First identifying a business need -- what knowledge can be captured that will prove most profitable? Who will use this knowledge -- customers, individuals, managers?

* Secondly, implement tools to capture and organize. It could be a hard copy book that is created semi-annually or a web site for sharing. Earlier I mentioned TRDEV. This is a good example (this newsletter is another example). Join TRDEV or another list on Yahoo to see how it works. You can then create one for you company for free (you can limit membership). KM does not have to be expensive...but the software vendors would like you to think so!

* Thirdly, reward knowledge sharing -- build incentives. For example, make it a part of the performance review and give recognition to employees who provide the most frequently accessed contributions.

4. Capital Spending - When funding gets tight, managers will try to stop projects that appear discretionary. However, capital spending that has write-off potential will often be saved. Capital expenditures are purchased items that will be used for the current period and several future periods (such as equipment) , verses revenue expenditures, which are items that will be consumed or used in the current period (office supplies). Most organizations start
their new budgeting period on October 1 (the beginning of the fiscal year), so depending upon the scope of the project, it might be too late for the upcoming period, however, there is always the year after. Some thoughts are state-of-the-art classrooms, computers for e-learning, or teleconferencing equipment. Be sure to check with your accounting department as laws vary as to what constitutes capital expenditures. For some ideals:

5. Federal Regulations - Managers hate the thought of a federal audit. Programs that keep the feds (such as OSHA) from breathing down their necks are normally saved. Be proactive with these types of programs.

6. Improve Efficiency - Cost-cutting is a bad goal, while improving efficiency is a good goal. Let me explain. When your goal is to cut costs, you start throwing things away. Pretty soon you are down to the bare minimal, and the next thing you know, you are throwing out processes that generate revenue. This puts the organization in a
viscous cycle by throwing out the very thing it needs --revenue-generating processes. As trainers and performance improvement specialists, you need to use your various political avenues to convince upper-management of the folly of cost-cutting. Instead, concentrate on identifying processes, target the inefficient ones, perform process improvement, and then continue the cycle (remember, it is actually "continuous" process improvement). See the Continuous Process Improvement Page at:

7. Riders - Depending upon the size of the organization, there are normally several projects in various stages being implemented throughout an organization. Offer your department's expertise in the implementation of these projects. This allows you and your department to become known as "team players." These funded projects often have the latitude of allowing you to "ride" your projects on them. This provides a double benefit for the organization -- you are able to help other departments, while at the same time getting help from them. This might sound political, but in political arenas, it is, "you scratch my back and I will scratch your back." Using riders differs in that you are going to help the business units no matter if they give you something back or not. However, if you can ride your project onto theirs without too much inconvenience, then so much the better. The goal is to achieve strategic partnerships within the organization, while at the same time increasing the value of your training department.

8. Developmental Programs - These are often the hardest programs to get funding when money gets tight. This is because the immediate payoff is unknown. However, "growing" the employees enables them to "grow" the organization. Implementing development programs generally requires a three prong approach:

- First, implement programs using the above suggestions, this shows that you are a trusted person who spends the organization's money wisely.

- Second, choose a developmental program that coincides with a high profile enabler, such as the CEO's goals or the mission statement. For example, if your mission statement has a short blurb about "embracing diversity," then develop a program that enhances diversity.

- Third, narrow down the program to a process that will actually help the organization. For example, do not just implement diversity training simple because you can, instead, locate a weakness in the organization and target a program to fix it. Remember, the goal is to grow the organization, not to implement money wasting programs.

Note that you have to work the second and third approach together as they are synergic in nature. That is, you have to not only find a "developmental enabler" but that enabler must also need "fixing".

Also, note that organizations who are entering extreme economic hard times will be the hardest to convince of the necessity of such developmental programs, even though it might be their only saving grace. This is because they only have one solution on their minds -- cost-cutting, however, as noted before, cost-cutting is not a solution -- it is a reaction.

To build development programs, it helps to use models:

This article is taken from Training Word, an e-mail newsletter published by TrainingZONE website award winner Don Clark. You can visit the site and subscribe to the newsletter at


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