Investing in People Helps Bottom Line
North Bay Business Journal - September 22, 2004
by Gloria Dunn
We don’t have the time! We don’t have the money! These declarations from company leaders thwart progress, productivity, and profit—the benefits derived from investing in well-trained managers and employees.
Instead, lack of skill development costs time and money. Untrained people and inefficient processes create red bottom lines. Here are a few reasons why:
- The top three barriers to productivity are: insufficient management planning and control; inadequate supervision; and ineffective communications as shown in 1,600 detailed studies by Proudfoot Consulting. Together these factors account for 81 percent of all lost time.
- The Saratoga Institute performed 20,000 exit interviews and found that poor supervisory behavior was the main reason employees quit their jobs. Chronic turnover usually costs a company more than double an employee’s salary. Multiply turnover by the number of people who leave your company in a year and you will see the red ink seeping.
Companies cannot drive revenues up and keep costs down without the knowledge and skills of the people who do the work. By investing in the development of a highly-skilled workforce, companies not only save time and money but gain a competitive advantage. Organizations with well-trained employees provide better service, develop superior products, and offer more benefits to their customers.
Four Steps
Here are four ways to determine if your company is wasting its resources by not training its people:
- Examine your financials for the costs associated with poor product quality, undesirable customer service, turnover, work-related accidents and healthcare costs, employee dissatisfaction, and other workforce expenses.
- Determine if improved employee skills and performance would cut costs.
- Provide training in job, people, and process skills.
- Re-examine your costs in six months and then a year after you provide training, and document the difference. Continue training. Ongoing learning should be a company staple.
There can be no greater investment in your company than the people who you depend on. Without skilled human capital, you lose.
You are encouraged to link, pass along to others, and or reprint these articles/pages electronically or on paper, as long as the following credit line is used:
Gloria Dunn is a management and organizational development consultant, and president of Wiser Ways to Work. She is the author of "From Making a Living to Having a Life", and also writes and speaks on management topics. She can be reached at 415-883-8239 or at
gloria@wiserwaystowork.com or
visit her website: www.wiserwaystowork.com.
Go to Top
