Employee Training Programs: Investing In Your Biggest Asset Will Yield Favorable Returns

We have all heard the expression “employees are your biggest asset”. For this reason, many employers today are investing substantial resources in employee-development programs. Especially in today’s competitive marketplace, it is important for workers to be equipped with more than just the technical know-how.  They must also have the ability to think resourcefully, implement plans strategically, and interact effectively with others. Employee training programs can be a key investment in the success of your organization, as they increase workforce productivity and improve your bottom line. Without proper training, you run the risk of employing an underachieving staff and, thereby, losing money in lost productivity.
So, how do you determine if the training cost is justified?  You need to consider the Return on Investment (ROI), a mathematical comparison of benefits to cost expressed as a percentage of the original investment, according to Ben Worthen of CIO Magazine. The ROI formula is expressed as ROI = (savings/costs) x 100. In simpler terms, it is a way of determining if the benefits received from training justifies the investment cost.
To complete an effective ROI on training programs, you would identify the critical areas in your property management operations that need improvement, establish goals you wish to achieve from the training, then analyze the results. In order to calculate the ROI, the results must be converted to monetary values to come up with the savings amount. In the case of increased productivity, it can be measured in terms of employee compensation saved.  You would simply multiply the hours saved by the employee’s hourly wage.
For example, ABC Company has two similar properties requiring improvement in closing ratios and tenant retention, managing customer complaints, and problem solving. ABC Company decides to send property managers and frontline staff for training on effective selling, customer service skills, and strategic planning at a cost of $600 per person.  The goal is to have fewer vacancies, fewer customer complaints, and less maintenance time.
In order to complete an effective ROI analysis, ABC Company sends the six employees from Property A, but holds off on sending the staff from Property B until it has assessed the impact of the training. The success of the training program is evaluated in the 30 days following the seminar by tracking: a) the vacancy rate, b) the number of customer complaints received, c) the number of problems solved at the frontline staff level, and d) the completion time on projects.
The Results: Property A spent $3600.00 on training for six employees. The Property B staff received no training, therefore incurred no additional expense. During the evaluation period, Property A increased their closing ratios by 25%, received fewer customer complaints, resolved problems quicker, usually without management involvement, and maintenance staff was called ten hours less for the month. The decreased vacancies and the increased productivity, converted to a monetary value, produced a savings amount of $7250.00. In the same time period, Property B’s numbers remained flat, showing that the training had a measurable impact. Did the training produce a positive ROI? To calculate, the measurable improvement is divided by the cost and multiplied by 100. ABC Company’s training ROI is ($7250/$3600) x 100 = 201%.  This is a valuable 201% return on their investment for employee training.
Can you afford the lost productivity of an underachieving staff by NOT allocating resources toward training? Your company’s investment in training can be one of your biggest competitive advantages. It will result in a more focused, results-driven organization that will ultimately improve property performance.