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Professional training : which return on investment ?

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2_txtRecently, I answered to a question proposed by one of my LinkedIn contacts.
The question was to know if trainings given to employee of a company should be considered as a cost or an investment ?
When we talk about an investment, we are talking about mid and long term. The key element is to know if the company defined a clear vision and defined long term goals.
With these two elements, the company can define several projects in order to meet these long term goals. The next step is to know if all the team members are subscribing to the vision and the projects of the company, and following their respective competences, which role they can play in the organization, a role matching with their expectations. In other words: “The right people at the right place” If these two conditions are true, then we can define the tasks and the responsibilities of each team player, but also define which are the competences and tools needed to fill their assignments. These ingredients are the conditions to develop a long term partnership and a training program. In this context, the trainings given to the employees will represent an investment.
If these conditions do not exist, there is a risk to see an employee leaving the company few months later after having followed the training, because the gained expertise with the training is an asset to face a new challenge with better conditions. In this case, it will be clearly a cost for the company.
Another reason I already heard, why companies are considering some times training as a cost is that when people are following training sessions, they are not operational, not productive during the training time. And sometimes, they are under work pressure and have no time to follow trainings.
If we have look to the definition of an investment, it is usually defined as an expenditure which will create future benefits. The goal of a training, is to acquire new knowledge and competences. These new competences will help the employee to work on a more efficient way, to perform activities on a faster way. The time spent to follow the training will be largely compensated by the future gains of productivity.
I would like to take an example: the information technologies. It is obvious that IT represents a revolution in the work organizations. The computers should help us to execute processes on a faster and efficient way. But how can we use the potential offered by this technology, potential increasing every day, if we do not receive the related trainings? What’s the necessity to change the hardware and software every five years to more performing tools, if we are not able to use all the offered power ?
By providing the necessary trainings, you are increasing your return on investment on your IT, and on your training’s investments too.

We have to think also that by giving trainings, and in this way, tools helping to fill their assignments, people are more motivated to solve issues, to find solutions and learn by themselves.

As conclusion, I would say that training represents an investment if all the conditions mentioned below are there. Even if salaries costs are booked as expenses in accounting, the human capital is an asset, which can provide sustainable added value.

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Written by Eric Saint-Guillain

August 26, 2009 at 21:36

Posted in Human capital

Tagged with , ,

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