A Difficult Question?

While I do not expect most CEOs to know off the top of their heads what they spend annually on the training function, I do expect them to have a rough idea of how much is budgeted.  In most instances when I have asked that question though, I find that the CEO rattles off a ballpark figure these days without blinking.

Ten years ago the CEO would have had to look it up to even give a ballpark amount, but today they are very focused on dollars being spent and training is no different from most department in the organization, or is it?

You see part two of my question is always along the line of “how much of that budget is returned on the investment?”  In other words, if you spend $500,000 a year on the total training function of salary, benefits, facilities, systems and materials, how many dollars are saved or earned as a result of that money being spent on training?

What I usually get is a lot of stammering, and not even the willingness to guess how much is returned on the investment.  So while this economy is driving the CEO to be conscious of spending, it has not yet filtered down to training as a department that should return on the investment.

My position is simple in this area.  Whatever is spent on training should somehow be tracked in improved sales, retained customers and employees, reduced recruiting costs, and reducing liability claims for starters.  If you are not getting your money back on training, then training is not doing a good job, or demonstrating their value.

When training is unhealthy, lacking competencies and has no accountability, it is only by luck that they produce a return on investment.  The sad truth is that an unhealthy training function will not get better on its own.  It needs a transfusion of new talent, leadership or a consultant to treat the illness.

Although the first part of my question to a CEO is relatively easy these days, I am finding that part two is rather difficult for them to answer.  Yet I try to impress on them that just because it is difficult to answer doesn’t mean they should avoid finding the answer.  Money spent these days on any function, needs to return a value, or it needs to be eliminated from the expense column.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s