The Bottom Line

In this era of massive cutbacks in the OEM world (see GM and Ford, among others), there cannot possibly be any budget allocation remaining for training, right? In previous years, training was often routinely slashed in the name of expenditure savings—one of the first line items to go, in fact. That's not necessarily the case anymore.

The problem in the past was that there was often no clear link established between training and the accomplishing of company goals and objectives. After many years of research and reports, however, that link is now more visible than ever. Yes, in order to remain competitive and keep customers, companies do have to control costs and offer a needed product at a fair price. But according to a mid-1990's article by Tom Kramlinger, "A Trainer's Guide to Business Problems," cost control is only one of four essential factors required for companies to stay in business. The four he lists are as follows:

  1. Customer Acquisition
  2. Customer Satisfaction
  3. Maintaining Adequate Resources
  4. Controlling Costs

It should be obvious that training has a direct effect on items two and three above.

When it comes down to it, a company can offer only two things to separate itself from the competition: a better product and/or better service. And in the fleet business, it is all about service! Thus, training and customer service often go hand-in-hand. Mistakes, vehicle comebacks following repairs, vehicle down time or employee indifference are sure to reduce customer satisfaction in the long run.

Regarding adequate resources, keep in mind that this doesn't just mean cash flow, vehicles, or inventory and equipment. It means, most importantly, dedicated and well-qualified employees.

But what about the real "biggie" that we hear about on the news: controlling costs? What does training have to do with this factor?

It has taken a long time, but many corporations are finally looking at training as a method of cost control, instead of just an expense.

Business 101 will tell you that profitability is achieved through both reducing cost and increasing efficiency. Though implementing new processes or automated equipment can help, the latter rarely happens without increasing the skills and knowledge of your workforce—getting them to do more quality work in less time.

There is also a tendency for organizations to look at training solely in terms of how it benefits the employee. A shift in this focus needs to occur for the organization to really see the value of training towards the bottom line. According to the ATMC publication, Return on Instructional Investment, "Instead of trying to decide what skills your employees need, it is more important to determine what performance level the organization needs."

Taking this a step further, fleets can impact the bottom line by setting both long-term and short-term goals, and investigating the role that training can play in achieving those goals.

Examples of some short-term goals could be "reduce repeat repairs due to misdiagnosis by ten percent in the next six months," or "increase on-time deliveries by five percent per month over the next three months."

Long-term goals should almost always be bottom line driven, such as to, "increase corporate net profit by two percent over the next 12 months."

We can't forget that there are also non-training factors that directly affect the bottom line. Still, at least the view towards training is changing at many companies from an "expense" to a "profit enabler."

Stephen Howe is employed by Tweddle Litho Company, a global provider of information development, management and delivery that has served the automotive and heavy vehicle industries for over 50 years.

Stephen is also a past president of the Automotive Training Managers Council (ATMC), a global, non-profit organization of over 60 member companies dedicated to recognizing training excellence and raising training standards in the automotive, heavy vehicle and related industries.

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Sources:
1. Gene Brown, Richard Lough, John Richter, et. al. Return on Instructional Investment: A Process for Measuring Effectiveness. ©1997, Automotive Training Managers Council.

For more information on this publication, visit: www.atmc.org/resources.php.

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