Friday, May 23, 2008

The Value of Training: An Investment, Not A Cost

David A. Zimmer

David A. Zimmer
Practice Manager
Corporate Learning & Training
Veris Associates, Inc.

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What is the value of employee training?

For most companies, training is seen as an expense and one of the first items to be chopped during the budgeting process. Yet, training, whether in technical skills or critical business people skills, has one of the highest paybacks of any investment.

Pat Muccigrosso, Project Management Officer at NetPlus Marketing, Inc. put it this way, “Training isn’t bodies in chairs being lectured; it is an investment in each person’s life and in the livelihood of the business that pays the bill.”

Sharpen The Saw

Stephen Covey, well-known author of Seven Habits of Highly Effective People, uses a phrase “sharpening the saw.” We need to take time to sharpen our saws – our skills – to meet the demands of today’s competition.

We would never dream of sending our teenagers out to drive a car without training. We wouldn’t dare go to a doctor to treat our critical ailment unless the doctor was trained in the latest information for that condition. The cost of going to a doctor not trained certainly costs us more in the long run and could cost us our life.

So intrinsically, we know the value of training.

Yet we continually require our employees to work with outdated skills because of cost-cutting measures.

Let’s run some simple numbers to see training as an investment.

We know the costs of training. There are the direct expenses of the seminar and the travel costs. Of course, we fold in the cost of the employee while being trained. The hourly rate of an employee making $50,000 per year is $25 per hour. For the purpose of this exercise, we won’t consider the overhead (benefits, etc.).

The cost of a two day, $995 seminar plus $200 traveling expenses (hotel, food, mileage) and the employee’s wages equals $1595.

From that training, the employee learns a better method of working saving five hours per week in labor equaling $125 per week or $6250 for a 50-week calendar year.

If we compare the cost of training ($1595) versus the return ($6250), we increased our investment value by almost 400%. If this efficiency saves as little as 1.3 hours per week, we recoup our total investment.

Key Factors Toward Gaining the Most Value From Training

What key determining factors exist in getting the most value from employee training?

After years of training thousands of people and seeing the effect it has in their daily work lives, I’ve come to the same two conclusions that others have found and documented: management support for training and empowerment to use the newly-learned knowledge.

The number one key factor is management commitment to training. Without active management support, the value of training diminishes. Those who attend a session are constantly interrupted, distracted by emails, phone calls and other “emergencies.” Rather than focusing on sharpening their saw, they continue cutting down trees with dull blades. When asked to prove the value of training, it amounts to a few wasted days.

Employees empowered to use the newly-found knowledge is the second key factor to valuable training. The purpose of training is to improve work methods, not continuing with the old. If we persist with the outdated methods, learning a better way only frustrates people.

Sergio Radossi, an Engineering Manager stated it this way, “In our case, training was a key component of a strategy to integrate project management into the department's culture and to implement project management tools across the facility.” Note: Training was a strategy for improvement.


Training is an investment in the future of your company. No company stands still in today’s market. Employees’ skills cannot remain static. The fastest and cheapest method to sharpen skills with the greatest return is management-supported, implementable training.