How Do We Cut the Cost of Training?

How Do We Cut the Cost of Training?

So, you’ve taken on a new employee and now it’s time to get them oriented with their responsibilities. As a small business owner, how much would this cost you and your company?

There’s a lot to consider. Training usually takes a certain amount of resources, time, and investment. Not to mention the indirect costs generated by the diversion from normal day-to-day operations. The average cost for small companies to train an employee is about $1,900 and it takes roughly 43 hours for an individual to be considered trained, according to Training Magazine.

But, it’s a necessity. Companies that don’t train suffer major profitability losses (about 24 percent, HR Magazine). What are some ways that small employers can curb some of the costs?

 

Partner with a Local University

Colleges and universities throughout Indiana are seeking input from employers in various industries to align their curriculum with current workforce needs. Almost every major institution in the state is building its career pathways for students, many through new partnerships and internship programs. On the employer side of things, many companies are seeking ways to develop new talent. By partnering with a local academic resource, you could connect with an affordable, or even free way to equip your staff with the skills they’ll need for your company.

There are also programs available with many schools where you can retrain your long-time employees. Bumping up the skillsets of your best people will always be valuable for competitiveness and employee retention, among other things.

(Check out our Pro Voices article in this issue for details on the ways your company can partner with Indiana universities.)

 

Join Associations, Chambers, or Trade Groups

This suggestion is the top recommendation from the U.S. Small Business Administration for reducing the costs of training. Through business events and seminars hosted with other organizations in your community or industry, one can often find training and educational opportunities through your membership. Plus, it’s great to be more involved with other firms in the business community in any case. There’s a great deal to be learned from our peers.

 

Remember, there are ‘Next Level’ Funds Available for Employers

One great way to reduce training expenses is to be reimbursed for it, as long as your company and the type of training you’re conducting is in one of many “high-demand” fields that Indiana’s legislators have earmarked. Under the Next Level Jobs initiative’s Employer Training Grant, employers who train, hire, and retain new or incumbent workers to fill in-demand positions within recognized job fields are reimbursed for training expenses – possibly even covering the entire cost. The grant will reimburse employers up to $5,000 per employee who is trained, hired, and retained for six months, up to $50,000 per employer.

 

Condense and Consolidate

Borrowing from the LEAN strategy that many Indiana manufacturers utilize, individuals that are conducting training should consider which elements of their program might be expendable and which could be picked up from getting to work and actually doing the job. Often, you’ll realize that several of your tutorials or lessons could be merged into single sessions, saving time and money. Take stock of the types of questions your trainees are asking and adapt your instruction to better suit those questions. Also, reduce the number of training sessions you’ve required in the past. Trim off the excess.

 

Cross Train as Often as Possible

There’s a two-fold reason to cross train as many of your employees as you can. One, it strengthens your company by covering any and all personnel gaps should an emergency or business change occur. Everyone will know how to fulfill the various duties of each other’s positions. Second, it turns every ordinary work activity into a hands-on training opportunity, mitigating disruption and keeping things moving. Keeping up a rotation will ensure that all of your employees are continually developing.

 

Use Your Best Asset: Your Employees

The experience that exists within your company is likely going to be a much more valuable resource than any outside training materials you could invest in. Job shadowing and mentoring provides hands-on experience that’s typically valuable for your company right away – transitioning a person from learner to worker much faster than other methods. Plus, your veteran employees already have a grasp of what works and what doesn’t.

Individuals working in sales have a lot they can learn by shadowing an experienced sales rep. They’ll come to learn the needs of your clients, your product offerings, and strategies that have proven effective.

 

Use Every Online Tool Available

Digital instruction and online educational tools for employers have been shown to reduce training costs expenditures by a whopping 50 percent and can reduce training time by 60 percent (Business.com). In many cases, specific online tutorials for things like new software or equipment are free and are provided by your suppliers. Also, for when group instruction is required, webinars are vastly cheaper than day-long business trips to attend seminars.

 

Get to Work, Cheaper

There are many ways to save on training and get down to business faster and cheaper. Taking on a new employee should be an exciting time for your company, not an expensive one. A combination of several of the suggestions we’ve mentioned with additional ideas that fit your specific needs will enable your company to onboard new talent at a lower cost, getting you back to what you do best.