Subscribe to Entrepreneur for $5
Subscribe

Is On-the-Job-Training Killing Your Organization's Potential? Here's What You Need to Know.

On-the-job training is inefficient, not standardized, unreliable and very hard to scale. Here's how leaders can ensure their organizations' training programs are truly effective.

By
Opinions expressed by Entrepreneur contributors are their own.

On-the-job training is a common practice, regardless of how many employees work in an organization. As human beings, we naturally observe and model the behavior of those around us, especially when their behavior aligns with compensation, promotion and cultural norms. The not-so-secret secret of on-the-job training is that it relies on top performers to teach when they could or should be performing revenue-generating tasks. Relying on top performers to deliver training also limits the scope of skills exposure to what a top performer is willing or able to share. Not every expert is conscious of their own competencies or actions that help them achieve consistent success, nor is every expert a good instructor. The reality is that on-the-job training is inefficient, not standardized, unreliable and very hard to scale.

However, on-the-job training does have one core benefit — it isn't theoretical. Practicing real skills in real situations gives individuals the benefit of experiencing when, where and how a skill is employed on the job — seeing the consequences of actions, gaining personalized insights (if the mentor is in tune with the mentee) and establishing the first set of experiences that might lead to performance confidence.

Related: Most Companies Fail at Employee Training. What are They Doing Wrong?

The myths of the 70:20:10 model

Myth: 70% of training is on-the-job, in real-time

Myth: 20% of training is delivered socially, through coaching

Myth: 10% of training is formally structured, in a course

As an observation of what most organizations do for training, it's not unreasonable to believe only 10% of professional skills are supported with formal training. Great training is expensive and time-consuming to create. It's estimated that it takes learning and development professionals nearly 490 hours to create 1 hour of quality (level 3) training.

In a corporate environment, training and development is generally viewed as a cost center, not a revenue driver. On paper, the arithmetic of 70:20:10 looks ingenious, 70% of training costs are free. Don't be fooled, the most expensive training you can buy is training that doesn't work.

A bad lecture, boring eLearning or required reading that doesn't create any new skills or organizational change wastes the time of all the employees who could have been productive. On-the-job training that needs to be provided repeatedly, or worse, processes that always need to be supported by the one expert at the company creates massive lost opportunity costs that find their way to the balance sheet.

When it's time to perform, it's too late to practice. — Dr. Michael Allen

In the modern era of corporate training, many organizations don't believe 70:20:10 is a prescriptive model for smart training. 70:20:10, however, is an ingrained legacy model that's hard to give up. The core assumption to justify making an investment in effective training is that new or perfected skills will lead to enhanced business operations:

  • Increase revenue

  • Minimize accidents

  • Lower operational costs

  • Create loyal customers

  • Reduce turnover

It will enhance business operations but only if the training is effective. The outcomes of ineffective training create organizational beliefs that training is not worth investing in. As a business leader, now is the time to review how training is being delivered to your employees. Taking the best of what each modality has to offer, from on-the-job training and coaching to formal course development, quality training solutions include:

  • Sufficient and spaced skills practice on authentic application scenarios

  • Individualized learning paths, skipping skills already mastered

  • Motivational support to encourage mastery and utilization of new skills

  • Contextually rich training to connect when and where performance is expected

The ingredients listed above can be deployed in many training modalities. None are exclusive to on-the-job training; in fact, each is more powerfully and cost-effectively delivered in formal training. To challenge training norms, business leaders need to align strategic outcomes to learning budgets. How much should a change in behavior net the organization, and how much would you spend to ensure that change happens with quality training?

Related: Training New Employees Sucks. 3 Ways Make It Faster, Easier and More Effective.

The massive gap in talent

Consider space-related industries. The space economy is on pace to be a $1 trillion industry by 2040, with tens of thousands of open positions and frantic startups popping up everywhere. On-the-job training has become the norm. But to create a highly skilled workforce and meet revenue goals, space organizations can't rely on top talent with subject matter expertise to mentor every new hire.

In service industries experiencing both labor shortages and high rates of turnover, internal subject matter expertise can be one resignation away from leaving a company stranded. Without creating a digital and scalable solution for training, today's organizations risk losing the ability to provide effective training solutions altogether. The gap in available talent will inevitably hit your industry, business and team. How should a business leader prioritize spending on training?

Your first training dollar

The cost of a digital training program is really for the first employee. Once in place, digital learning is inexpensive to deliver to the second through millionth employee. Here are a few dimensions to evaluate if training should be created at all:

  • Is the skill risky to the person or business?

  • Does the skill get used once a year or many times a year?

  • Can you hire already skilled individuals?

  • Could a job aid or checklist be used every time the skill is needed?

  • How many people are required to perform the skill?

  • What's the rate of attrition/turnover?

  • Do employees need extra motivation to perform the skill, even after mastery?

Related: How Innovative Technology Improves On-the-Job Training

Performance success in our careers makes an enormous impact on our lives. Your future employees will no doubt evaluate training programs not only for the applicability in doing the job at hand but also for the usefulness in advancing their career opportunities. By making an investment in quality formalized training, your business can make a tangible and measurable impact that on-the-job training is hard-pressed to match.

Entrepreneur Editors' Picks