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Can't Afford Employee Training Programs? Think Again To attract and retain great employees, Fortune 1000 companies spend hundreds of millions of dollars a year on training. Small businesses can't afford not to compete.

By Toddi Gutner

During a period of rapid growth two years ago, principals at Modea, a digital advertising agency in Blacksburg, Virginia, realized that they needed a more effective employee onboarding program to get new recruits up to speed quickly. "When you grow fast, you need people to come in and produce quickly," says Aaron Herrington, co-founder of Modea.

That was the catalyst for Modea's current employee training program, which was started last year. With the guidance of a new professional who had prior experience with a robust training program, Modea implemented a 12-hour training course that ends with a team presentation to executive leadership.

The training program has been a win-win for both the company and the employees. "People are much more aligned and understand the direction and expectation of what everyone else does. That has made what we do and how we do it more efficient," says Herrington.

Using training programs as a recruiting tool
For employees, the program has forced them to think about their careers, short-term goals and action plans to meet those goals. "It's a recruiting tool because people are very excited about it -- but we've also had so many people grow and evolve with our career development plans," says Herrington.

Too often, small-business owners fail to see the value in providing a formal training program. Running on tight budgets, entrepreneurs are focused on the bottom line and think they can do the training themselves. Bad idea.

"[Formal] training gives individuals the opportunity to solve some business issues and find new ways of generating revenue," says Jeffrey Hull, director of learning services at Employers Group, a Los Angeles-based human resources consulting firm. Plus, employee performance improves with training. "The more you know, the easier and faster you can do your job," says Dr. Tracey Wilen-Daugenti, managing director of the Apollo Research Institute, an organization that researches higher education and workforce issues.

Just as important, training is a great retention tool. Unfortunately, there's a perception that if the company spends money on training professionals and then they leave, the company has lost its investment. "You want to [train and] keep good performers instead of fearing they're going to leave," says Hull. That's why business owners should put thought into developing training programs that fit the company culture.

Developing a training program
Training can be unstructured or structured. Unstructured and often free or low-cost programs can involve coaching, mentoring or the new hire shadowing more senior professionals. In many cases, these tend to take on the role of on-the-job training. Large companies often stumble in this area -- an arena where smaller companies can really shine, because their size allows employees to take on a variety of roles.

There are many ways to set up these types of programs, from assigning a mentor or coach to new employees and arranging quarterly meetings for sharing and feedback, to just letting employees find their own mentors or coaches as needed.

Businesses considering a more formal or structured training program, on the other hand, should bear in mind that it can start out small and doesn't have to be a huge expense. "You don't have to be GE or a Fortune 500 company with a large training staff," says David Lewis, CEO of OperationsInc, a human resources outsourcing firm in Stamford, Connecticut.

The Internet is a good place to start -- there are over 50,000 team-building training sites alone. Also, many professional associations, vendors and local chambers of commerce offer training sessions for specific industries and products. "They're typically low cost, short in duration and more focused on business results," says Hull.

Guest speakers, group wikis, internal YouTube videos, webinars and brown-bag lunches can also be an easy way to get started. Hull also suggests pooling resources with other businesses. "You can probably find commonalities, and you can have a trainer come out and do training for all the businesses together," he says.

A couple things to keep in mind before you get started:

  • Business owners should be trained as well. Most business owners think they are good leaders by default. Not so. "They need to look in the mirror and think about what is happening in the workplace," says Hull.
  • Do assessments first. Make sure your time and resources are targeting areas where training is needed.
  • Schedule a regular time for training. "Short increments are fine -- it doesn't have to be the whole day," says Wilen-Daugenti.
  • Define and measure metrics. You need to show progress over time and make evaluating group performance a goal.

Bottom line: Training needs to be a well-thought-out priority -- for the growth of the employees as well as the business. "If you put together a coherent training plan, you will get much more out of it," says Adrian Miller, president of Adrian Miller Sales Training.

Toddi is an award-winning journalist, writer and editor and currently is a contributing writer covering career management issues for The Wall Street Journal.

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