There is a frequently circulated meme that cites a conversation between, and CEO and CFO and it goes something like this:
CFO: What happens if we spend all this money training our employees and they leave?
CEO: What happens if we don’t, and they stay?
You would think that most organizations would understand the significance of corporate training, but sadly many still don’t. Some managers fear their employees will leave them, and they’ll fail to get a return on their training investment. Businesses also struggle to justify training costs for roles which are seasonal or part-time. Or, some organizations are simply unable or hesitant to spend time training a new employee because they would rather focus on growing their business.
But the risks are even greater when we don’t invest in employee training. From diminished productivity and weakened customer service, to loss of customers or even safety risks–it really doesn’t take much to see that employee training is critical to the success of almost any organization, regardless of industry.
While employee training can be delivered in various formats, more and more organizations are relying on on-the-job training, also known as OJT. OJT is designed to prepare employees for job performance through task-oriented training, led by qualified OJT instructors in the actual work environment. Employees benefit by receiving the knowledge and skills required to be productive from their first day on-the-job.
OJT itself isn’t exactly new, but new technologies that help facilitate OJT are transforming it, while at the same time helping to significantly cut training costs.
Limitations of Traditional Training
Boring PowerPoint presentations delivered by disinterested executives and trainers, endless PDFs on an outdated intranet, and binders and binders of useless printouts. Just thinking about how companies have historically delivered training can put the best of employees to sleep! Beyond the obvious problems with the traditional methodologies (sleeping in your first meetings at your new company is never a great idea), classroom-based trainer-led sessions have additional disadvantages and limitations.
For starters, every moment an employee spends in a classroom means less time spent on the actual job they were hired for. And while you may not consider a classroom session as exceptionally long in duration, consider scenarios where employees have to travel across the country or globe just to get to the classroom itself. This alone could eat up days, if not weeks of productivity. Even if that exact training session is worth the time and effort, the reality is that it is still taking an employee away from their work. In fast growing sectors like energy, transportation, and medical device manufacturing, the quicker you get your employees onboarded, the faster they’re on task and on target delivering on what they were hired to do in the first place.
The other downside of traditional training involves the associated costs. Sure, many of us are aware and mindful of training costs, but rarely if ever do we consider the cost of disruptions to our everyday workflow. And even if we do, we only consider the department directly impacted. We don’t recognize that human resources might also be affected by the need to hire additional personnel to take on the workload of overseeing training programs, not to mention the costs associated bringing in employees from other departments who are needed to deliver very specific training on select topics where they are one of few subject matter experts.
Calculating Training Costs
If you are starting to question the costs of your own internal training programs you might be wondering what your costs are. Here’s a simple formula to use:
Total training expenses/ Number of new employees = Training cost per employee
Your training expenses might include the cost of materials (binders, paper, pens), costs to take people away from their regular jobs, costs for corporate trainers, costs for team breakfasts and lunches and so forth. Add all of that together and divide those costs by the total number of new employees who are being trained.
For example, if you spent $3000 on training materials, $2000 in lost productivity, and $2000 on new computers, then you spent $7000 a year on training. If you hired just five employees, then your training cost is approximately $1400 per employee. Of course, if you also need to factor in the costs of air travel, not to mention costs for hotels, per diems and so on, that $1400 number starts to sound reasonable, doesn’t it? Hopefully it doesn’t; hopefully you want to lessen those costs even further.
How Video Can Help Reduce Training Costs
A survey by the Ontario (Canada) Skills Development Office found 63% of respondents planned to “introduce new technology into the workplace that would require staff training.” A third of the respondents included “improving employee job performance” and “keeping the best employees” as desired outcomes. It follows that implementing a training program that meets these same outcomes should be a priority.
Yet organizations are often hesitant to change how they conduct employee training. It can be a touchy subject, especially when some of us are aware the status quo isn’t working. The good news however is that employee training costs can easily be reduced by incorporating interactive How-To video into an OJT training program.
Emerging technology that blends video along with micro-training elements is helping organizations in a variety of industries elevate their training while substantially slashing budgets. With just a few clicks, almost anyone can now create short and interactive video tutorials and share it with their team.
Below are some of the ways video can help you save money on OJT training:
Reduces travel costs
Many organizations hold training for new employees at offsite locations. Depending on the industry, it might happen quarterly, or arbitrarily when new employees are hired. And while these training events might help align employees to important core values and culture, it is an exorbitant expense. Imagine if 20 new employees were flown to a central location for training. Now let’s assume each flight is $500, and the hotel costs are $150 per night, for three nights. Don’t forget catering costs that can be upwards of $75 a day. Plus, facility rentals could be another few thousand a day! That comes to approximately $30,000 for one single event. And this didn’t even include the cost for the corporate trainer! Compare this to the cost of training employees instead on brief tutorials. No travel, no facility rental, no catering, and no flights.
No costly training manuals/printing
While some envisioned a paperless society by 2015, the reality is we still have a long way to go. Companies waste, on average, 14% of revenue on document-and print-related inefficiencies. Eating an enormous chunk of printing costs are complex and heavy training manuals. A set of typical training manuals can cost approximately $500-$2000 to print–even more to ship domestically, and significantly more to ship internationally. Video substantially reduces these costs because it eliminates the need to print. For industries that rely heavily on training manuals, this could potentially be a savings of hundreds of thousands of dollars a year.
Simplify certification training
Some organizations are bound to stringent regulations that require employees to keep up with specific training and certifications. While this can be a hindrance for many companies, OJT training that incorporates How-To video makes this easy to maintain.
For example, in the medical industry, HIPAA requires that both covered entities and business associates provide HIPAA training to members of their workforce who handle PHI (personal health information). This means that even small medical offices need to train their personnel on HIPAA. Doctors need to be trained, as well as nurses. OJT simplifies this by providing brief knowledge capsules that employees can digest without disruption of their important duties.
Reduces employee turnover
Poor training can also lead to high employee turnover, which is largely a preventable expense. And because 43.98% of employee turnovers take place within six months of starting at a company, it’s imperative that employee training happens from the first few days on the job. Without the proper tools and education, employees are forced to fend for themselves. OJT training with video helps ensure that employees understand their role earlier in their tenure. And when they understand their role, they are more committed to the organization.
It’s available on-demand
Attempting to assemble groups of employees together at once isn’t an easy task. Not that it ever was, but today’s workers are often stretched with a busy work life balance, family issues, and sometimes even seconds jobs. By providing brief interactive training modules, employees can access the content they need on their own time. And because video lends itself easily to micro-training, employees can even attend specific training modules without disruption to their schedules.
Traditional workplace learning failed to incorporate the broad variety of learning styles and speeds. Video removes the barriers of learning by increasing the comprehensibility of the content. Also, some employees struggle understanding the language training content is presented in, especially if it is not their native tongue.
Consider a scenario wherein dozens of new entry-level or warehouse laborers are hired. Their individual roles may not require knowledge of a specific language, but these roles still require instruction at some level. Video improves the comprehensibility because employees can rewatch content multiple times at their own desired speed. Also, because transcriptions can be incorporated, the audience can take advantage by reading subtitles while listening to the audio.
We often forget that training and development isn’t just about the employee–it benefits the entire company. So why wouldn’t you invest just as much in training as you do anywhere else in your business?
As Richard Branson put it best, “Train people well enough so they can leave, treat them well enough so they don’t want to.”