The recession is said to be “over” but the economy is still dictating that savings be made in many organizational departments. All too often the training and development budget is the first to see change. Training dollars are being reallocated into recovery and restoration spending in order to compensate for the reduction of cash flow, available credit and other opportunities. But what do these cut backs in training really cost the organization?
The contradiction between ‘reduced costs’ and ‘increased profitability’ typically requires enhancing the knowledge and training of talent in order to foster more efficiency, increase innovation and advance the company’s offerings. Cutbacks to the training department can make it more difficult to become or remain a market innovator and leader. Providing customers, partners and resources with creativity and enhancements to increase opportunities requires investment of the organization; investment in its people.
The trade off in training-to-cost savings is a critical element that is part of the balance between increased opportunities or stagnant growth. Another way to look at it is to understand that training and development of talent can provide the organization with many new opportunities but without relevant and current training programs the organization may fall to the way-side allowing fresh and innovative competition in.
Let me provide you with a few examples. Let’s say you took a course on “10 Simple Steps for Reducing Internal Costs”. Armed with new knowledge, you return to the office and begin implementing ways to save your organization 10% on internal costs on next year’s budget. Perhaps you would view the training as a tool that saved you money and a worthwhile investment. Now let’s say you took a course on “How to Reduce Waste and Increase Productivity”. Again, you return to the office ready and able to implement tools that will make your organization efficient and more productive. Wouldn’t you agree that the investment in training would be worth your time and money if you can make an impact in productivity and on your bottom line?
When training budgets are cut completely, the loss that can be measured is ‘Opportunity Cost’. This is the cost associated to losing an opportunity that you would have otherwise had by taking action, in this case, investing in training. When you look at the cost of losing an opportunity and weigh it against the benefits that could have been realized, you come up with the ‘Opportunity Cost’.
There are 3 types of direction one can take when deciding whether investing in training is worthwhile:
- You can look at training as a cost, thus being an ‘expense’ to the organization
- You can look at training as an opportunity and using training to produce ‘results’ for the organization or;
- You can look at training as unimportant to your organization and see it as a potential ‘loss’ or ‘opportunity cost’
Regardless of the path you and your organization choose to take, the best course of action is the one that leads you to more success.
So ask yourself this; what if you were able to have it all? What if the training cost impact on your organization could be curved by a product that required no travel, no lost productivity and at a fraction of the cost of traditional in-class training? Our answer for you is eLearning and with today’s available technology, you can have it all!
Keep moving forward!