Specialized training comes at a cost, but so does lack of training, especially in long term

By Sean O’Boyle, Gauge Training

Professional technical training is not cheap, but can it “pay for itself”? Your company’s QA-QC and Production managers may be fully onboard and even adamant about pursuing necessary training, but they do not set the budget. Securing the necessary skills for your key personnel is an investment and a dedication of resources that generally must be proposed, discussed and approved with your company’s Purchasing and Accounting managers. The discussion becomes how and when is training justified, and how can the issue be quantified and best addressed.

On its face, training costs are a “standalone expenditure” and look to be solely on one side of the ledger – the cost side. Disbursements of thousands of dollars for technical training are generally opposed by accounting and purchasing personnel as the costs are immediate while the benefits are accrued over time. Advanced knowledge and improved skills for employees can be more tenuous and harder to visualize or perceive.

These differing perceptions can lead to a “tug of war” within the company that sometimes winds up on the desks of upper management. Meanwhile, the training is put off, and the benefits of improved skill sets are delayed. The short-term impact is temporary cost savings, but at what cost in the longer term?

What is training?

The Cambridge Dictionary defines training as synonymous with learning and “the process of learning the skills you need to do a particular job or activity.” With very few exceptions, nothing we do is intuitive but learned. This is especially true with workforce activities involving procedures, systems, processing techniques and product construction and verification. Training is an enhancement of skill sets and is meant to address specific shortcomings and produce desired results.

Specialized education for employment purposes is also emphasized in the industrial community. Virtually all successful companies engage in “employee enhancement education” for new hires. So what about specialized training for an organization’s existing key workforce members? While there may differing opinions on whether enhanced training is worth the cost, there is evidence to suggest that more training leads to better performance, greater efficiency, and, ultimately, a positive impact on the bottom line.

As a case in point, let’s look at the inspection and certification of manufactured product parameters. In a manufacturing environment, it is common practice to “measure as you go” when producing products. If the first item off the line has parameter issues, should you produce more of them or pause and make adjustments? If your completed items show non-compliance issues, do you ship them to your customer and risk their rejection and negative feedback? In either case, can you trust your measurement results? That will depend on whether your technicians know what they are doing and if they have been properly trained. If you haven’t properly trained your inspectors, how can you be sure you are not continually welcoming these problems?

Return on investment

A simple cost-benefit analysis of enhanced training can illustrate if it is worth the expenditure. First, determine the current cost of non-compliant materials by asking:

• What is your current reject rate for materials produced? How does it compare to times past and is it getting better or worse?
• Is your reject rate and its associated cost within acceptable parameters or does it need improvement?
• What is the dollar cost of rejects, including material cost, machining costs, cost of wasted labor, cost of transporting and handling materials, and other related costs?
• If you shipped bad material to your client, are there additional costs, such as transport cost to the client, cost of visiting the client to assess the issue, return cost of the rejected material, scrap cost of material less reimbursement for scrap value and possible legal ramification costs?
• What are the intangible costs of shipping bad products to your clients, such as loss of goodwill, reputation in the industry, lost future sales and decertification?

Calculating the cost of training

How should you go about determining the cost of securing effective training? It is an information-gathering process that involves asking:

• Is there effective training available specific to your needs?
• Where are the sources for appropriate training?
• Which training source is the most cost-effective?
• How many of your personnel need such training?
• Can you obtain a fixed and firm per person cost quotation for training?
• What is the total cost for training all the necessary personnel and in what time frame?

Armed with the current cost of producing non-compliant materials and the cost of obtaining corrective training, the decision can be made. As soon as the training is complete, the company can be on the road to improved performance and cost savings. DC