Are our associates REALLY our most valuable asset - where are the investments made?

Most companies make the claim that, “People are our most valuable asset." But, do actions match the words? Do they walk the "most valuable asset talk?" Unfortunately, in some cases the answer is “no.” One very simple way to determine whether actions align with words is to consider where investments are made.

Obviously, to remain competitive, a company must continuously invest capital to update the physical assets and, due to the cost of technology, these investments tend to be rather large. But, comparatively, how much is invested in developing the workforce - the MOST valuable asset - to operate the technology and maximize the investment?

Here's a bit or irony - while investments in infrastructure always DEPRECIATE, investments in people actually APPRECIATE. Money invested to develop associates makes them more competent and motivated and therefore, more valuable to the company.

Just how do investments in associate development help a company? Here are the results of some recent studies showing the benefits.

Training improves associate performance. Performance in quality, productivity, safety, problem solving, attitude, ethics, motivation, leadership, and communications are improved through training. According to those who have studied poor performance, most problems occur because associates:

1. often don’t know what they’re supposed to do.

2. often don’t know how to do it.

3. often don’t know why they should do it.

Training saves supervisory and administrative time and costs. If associates are competent, the less time a manager has to spend monitoring and guiding them, and the more time available for more profitable activities that are best completed by the manager.

Training improves customer satisfaction. Better skills mean better quality work which means better-quality products and services . . . resulting in happier customers.

Training enhances profitability. Training results in increased sales, increased referrals, new product ideas, and improved customer satisfaction and retention. According to the Association for Talent Development (ATD - formerly the ASTD), investments in employee training enhances a company's financial performance. An increase of $680 in a company's training expenditures per employee generates, on average, a 6 percent improvement in total shareholder return.

Based on the training investments of 575 companies during a three-year period, researchers found that firms investing the most in training and development (measured by total investment per employee and percentage of total gross payroll) yielded a 36.9 percent total shareholder return as compared with a 25.5 percent weighted return for the S&P 500 index for the same period. That's a return 45 percent higher than the market average. These same firms also enjoyed higher profit margins, higher income per employee, and higher price-to-book ratios.

Firms that invest $1,500 per employee in training compared with those that

spend $125 experience an average of 24 percent higher gross profit margins and 218 percent higher revenue per employee (source: Laurie J. Bassi et al., "Profiting

From Learning: Do Firms' Investments in Education and Training Pay Off?" (American Society for Training and Development, 2000).

Training saves labor. How? By reducing duplication of effort, time spent on problem solving, and time spent on correcting mistakes.

Training saves money. A better skilled workforce means fewer machine

breakdowns, lower maintenance costs, lower turnover, lower recruitment costs, fewer customer complaints, less need for supervision, reduced downtime, and increased worker productivity.

Training increases worker productivity. Just a 2-percent increase in productivity has been shown to net a 100 percent return on investment in training (source: "The 2001 Global Training and Certification Study," CompTIA and Prometric).

Motorola calculated that every dollar spent on training yields an approximate 30 percent gain in productivity within a three-year period. Motorola also used training to reduce costs by over $3 billion and increase profits by 47 percent (source: Tim Lane et al., "Learning to Succeed in Business with Information Technology," Motorola).

Training improves employee satisfaction and retention. Many employers assume that once employees are trained, they are more likely to leave the company for greener pastures, but actually, the opposite is true: trained staff is happier and more likely to stay put. Their self-esteem improves, which in turn improves their morale in the workplace and their loyalty to their employer. The According to a study by Louis Harris & Associates for Interim Services Inc., companies that fail to train their employees are more than three times as likely to lose them.

Investment in professional development training is a win-win for the company and employee alike.

So, if employees ARE our most valuable asset, let's start leveraging that advantage by providing the training they need.