How Much Should You Spend to Train Employees

How Much Should You Spend to Train Employees

As a small business owner, training employees can be a double-edged sword. The cost of training them well can cut into your operating budget. At the same time, if they are not trained with the best tools and expertise available, your organization can be negatively affected.

So when it comes to determining how much money you should spend on training your employees, it is a good idea to look at developing a strategy that optimizes the options that you have.

Here are some concepts that can aid in helping you to develop a strategy that will work for your firm:

Prioritize Functional Areas:

Given the latest trends in technology, it isn’t likely that you need to focus a major part of your budget on IT training in-house. It has been proven that it is much more cost-effective to move your application infrastructure into the cloud. When Google Applications took the place of the traditional productivity stack that the city of Los Angeles was using, it was estimated that the labor savings would be close to 80% in deployment and customer support. For a small business, that can mean a large savings, and a much more secure data center to store the applications that they allow their employees to use.

You can therefore rank IT somewhat lower in terms of priority than you do a specialized area like accounts receivable/payable or manufacturing.

Sales Never Has Enough:

However you end up prioritizing your training budget, keeping your sales team up to speed and performing is obviously one of the most important jobs that an executive in charge of training can have. In addition to being product or service line experts, they should be exposed to as much quality training as you can afford- even if they are experienced. If your firm offers a path in terms of bonuses or commission that rewards sales people for performance, spending money to develop them will pay dividends.

Perhaps the most important component of understanding how much to actually spend on training in the area of sales is knowing what types of training will be effective. You can look at old episodes of ‘The Office’ and see how Michael tried to continually be creative with his motivation. In the end, if you look forward and become holistic at the beginning of your planning, you can correlate skills that the team needs with professional training that is available and work those types of training into the schedule.

Your Development Plan As A Programming Schedule:

Most training plans for companies take into account the needs that their overall staff will require on an ongoing basis. It may seem daunting if you are just getting started formalizing procedures. On the other hand, the nice thing about locating training partners and vendors that make sense over time is that once you have found a course or a seminar series that fits perfectly into your training program, you can leave it there and move onto other putting together training for other skills.

Another nice thing about putting together a development plan is that it gives you a high-level view of how your training budget is being allocated. If there are areas where you end up having extra time or money for, you can then more easily apply one-off or customized training as necessary.

Filling The Gaps:

Most executives will spend as much money as they need to to get the expert that they think will provide the best training possible for their employees. Yet since the majority of training that goes on within a company is handled by employees, it can pay off to create experts in each department area in a function and then have them be responsible for training and dissemination of ideas in a particular business area. In fact, ownership of a subject matter for employees is often something that engenders greater loyalty and satisfaction. It also can bring costs into line if you have a limited budget. Some of the top companies in the world encourage a culture of learning and offer free lunch for ‘brown bag’ seminars that address an area of training that company workers may need or want to know about. Facilitating this type of training on a regular basis can help ensure that your employees are engaged and your budget remains on track.

Training employees so that you have a competitive advantage in your markets can be a financial cost that seems steep for small company managers. Nonetheless, if you blend and choose your options carefully, you should be able to put together a comprehensive development program that helps your business grow.

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