1st Lieutenant Brett Burnside had this to say about being trained in the US Air Force’s F-35 Joint Strike Fighter: “You can practice and practice and practice as much as you want, but when it comes to flying the jet, whether it’s in a training or combat scenario, you have to have the ability to execute.”

To get to the phase where Lt. Burnside was able to practice and hone his skills in piloting this aircraft, training was critical and not optional. It started with a month of classroom basics to learn each system in the aircraft and its capabilities. This was followed by another month of long hours in simulator training and finally, even more training flying the real thing. The final price tag to train a $80 million F-35A pilot was $10.17 million.

How important to your organization are your employees and their respective skills? Most organizational leaders would not even hesitate to admit that employees are essential to the success of the organization. In fact, the success of the organization is dependent upon the human capital element of your organizational capacity. Has your organization seriously considered the question of What is the cost to your organization for not providing essential training to employees?”

While leaders may be able to inspire, direct, coach and communicate well, if they are unable to leverage employee skills and knowledge for the benefit of the organization, their results will be mediocre, at best. To maximize the value of any employee, skill enhancement and understanding gained through training is essential. Employee development is directly tied to an organization’s ability to successfully execute strategy. Michael Leboeuf, author of “The Great Principle of Management” states, “If you believe that training is expensive, it is because you do not know what ignorance costs. Companies that have the loyalty of their employees invest heavily in permanent training programs and promotion programs.”

Many organizations see training as an expense rather than an investment. In turbulent times where cash flow is threatened, organizations tend to cut training budgets first. By adopting this line of reasoning, the organization can actually be short-circuiting their organizational strategy and ability to successfully execute. Many organizations that reduce or put a suspension on training, in times like these, fail to fully consider the cost of not training their employees and providing necessary, as well as enhanced capabilities.

Studies show that companies who put a priority on employee development show a median revenue of approximately $169,000 while organizations that do not prioritize employee development have a median revenue per employee of less than half that amount or about $82,800. While the cost of hiring and training a new employee can cost up to approximately 30% of that person’s salary, studies show employees who believe there is no opportunity for the fulfillment of their career goals are 12 times more likely to leave their organization. Turnover due to lack of opportunities for training and development is much more expensive than providing quality training.

According to HR magazine, companies that invest $1500 average training per employee have an average profit of 24% or more than companies that do not do this. Finally, a study conducted in more than 3,100 workplaces showed a 10% increase in educational development produced an 8.6% gain in employee productivity.

One of the basic premises in utilizing the Balanced Scorecard as a strategic performance management system is to align employees with the organizational strategy. Training can be a key component in this effort. At the end of the day, employees need to understand what is required in their position, understand how it impacts the organization’s ability to execute and be provided with the skills and training to be successful.

The Balanced Scorecard Professional certification offered by the Balanced Scorecard Institute in conjunction with George Washington University Center for Excellence and Public Leadership is a great place to start with assisting your employees to better be able to contribute to your organization’s future success.

Sources

The cost of Training U.S. Air Force Fighter Pilots, Forbes: https://www.forbes.com/sites/niallmccarthy/2019/04/09/the-cost-of-training-u-s-air-force-fighter-pilots-infographic/#597ffd77973c

The F-35 is Cheap to Buy (But Not to Fly), Popular Mechanics: https://www.popularmechanics.com/military/aviation/a29626363/f-35-cheap/

HR Magazine: http://www.huffingtonpost.com/emad-rizkalla/not-investing-in-employee_b_5545222.html

The National Center on the Educational Quality of the Workforce (EQW): http://www.businessknowhow.com/manage/higherprod.htm

IBM The Value of Training: https://www.ibm.com/services/learning/pdfs/IBMTraining-TheValueofTraining.pdf

Right Management: https://hr.blr.com/whitepapers/Staffing-Training/Employee-Turnover/Strategies-for-Retaining-Employees-and-Minimizing-

 

Terry is Balanced Scorecard Institute's Director of Training and Senior Associate with over 30 years of experience working in both the private and public sectors.

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