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Train Your Way to Retention -- and Profits

Employee training will keep your company on the fast track

Training is the new employee benefit, especially for Generations X and Y. Younger workers, intent on building impressive resumes, aren't willing to take a job where they might stagnate.

Besides being a great recruiting tool, training also helps with retention. The more training you give employees, the less likely they are to leave, say experts.

When to start? For high-growth firms, the sooner, the better. By the time you have 25 employees, something formal should be in place.

Three ways to structure training

There is no one-size-fits-all approach to a training program. However, fast-track companies should think about training on three levels:

  1. Cultural orientation. Beyond the dearth of HR details (here's when you get a paycheck, here's how we fill out expense reports, etc.), it's crucial to share your history, culture and vision - what your company is all about and how the new employee fits in.

    Many companies discount the importance of cultural training. Big mistake. Orientation is the time to get new hires on board mentally and emotionally; it's your chance to get buy-in from employees and start building loyalty.

    New employees want to believe they've joined a special place. Tell them, "Here's the value you bring us, and here's the value we bring to you." Show them how their role will further the company's growth.

    The founder should be involved at this stage. No one can impart a company's mission better than its founder, and his or her participation sends a message to new employees: You're important to us.

  2. Skills-based training. This breaks down into two areas:

    • Getting new hires up-to-speed on mechanics.
    • Keeping existing employees' skills up to date.

    For growth-oriented entrepreneurs, it's more important to hire someone with the right personality, attitude and values, rather than made-to-order experience. As a result, some skills training will be required.

    Capitalize on employees' inherent strengths and assess what specifics they need to be successful. Obviously, if you've hired a salesperson from the medical-supplies industry to sell your high-tech software, he or she will need tutoring on product information.

    There are a number of ways to teach necessary skills:

    • Mentor programs. Pair a veteran employee who possesses the necessary expertise or information with the new hire. Mentoring is about modeling behavior - here's how I do something, and here's why I do it this way. Turning veteran employees into trainers gives them additional responsibility and helps build teams; it also keeps senior people from forgetting the basics.
    • Outside trainers and consultants who share subject-specific or industry-specific knowledge is a way to sharpen skills of both new and veteran employees.
    • Online learning. The Internet is becoming a popular channel for training; it's an inexpensive and easy way to teach very focused skills. Unlike a workshop, an online lesson can be repeated easily.

  3. Managerial training. As your company grows, many of your founding team members will evolve into management roles. And though those employees possessed the technical prowess you needed in the beginning, they probably don't have the managerial skills to nurture the people coming into the company after them.

    Besides learning people skills, such as managing conflict and change, your senior staff is also going to need to delve into hardcore MBA topics such as cost analysis, accounting and financing. After all, they're going to be making decisions that will impact the growth of your company. Arm them with the right ammunition. Providing managerial training is like having a good succession plan in place.

    It's not always necessary to get a full-fledged MBA degree; most graduate schools have open-enrollment programs that can help your senior members or top performers evolve into leaders. Trade associations may also offer programs that could help groom employees into management material.

Setting expectations

An important aspect of training, especially at the orientation level, is to establish expectations - for how the customer will be treated and how the employee will be managed.

"In a service business, you really have to create the difference between your company and competitors," explains Keith Alper, founder of Creative Producers Group (CPG), a St. Louis corporate communications and events agency with $9 million in revenues and 50 full-time employees. "At CPG our goal is to exceed clients' expectations. If we bill you for $100,000, the client should feel like it was worth $110,000. It's like going to a restaurant and getting a complimentary dessert." Yet management has to do more than just cite those expectations for employees, stresses Alper: "The company has to walk the talk."

Alper uses CPG's strategic plan to help set the pace: "A lot of people see their strategic plan as a communications tool, but it's a great roadmap for training: 'Here's what we're going after, and here's your role in it.' A lot of us forget to tell our employees where we're going."

This makes it easier to establish guidelines about what good work looks like. If done well, two things should happen: Employees won't complain about being micromanaged because they know what's expected of them. And managers won't have to manage as much. They can delegate more to employees who have a clear understanding of standards.

Going outside for help

Though founders need to be involved at the orientation level, teaching specific skills is another story.

"An entrepreneur is a crazy kind of bird. We always think we can do everything, but I don't think most entrepreneurs have the patience required to train employees," says Marley Majcher, founder of The Party Goddess in Pasadena, Calif. "Entrepreneurs have a vision of what they want employees to look like, but they don't have a clue how to get employees from point A to point B. Entrepreneurs tend to think: 'I did it at light speed, why can't you?'"

Skills-based training is often done better by one of your managers or an outside consultant. It depends on your specific business, says Majcher, who launched a restaurant in 1992, followed by a catering operation and a special-events company.

For her catering and special-events division, Majcher turned training over to a partner. Yet for the restaurant, she brought in an outside trainer about three times a year. "Training for off-site events is much simpler than a restaurant," explains Majcher.

The investment for the trainer (about $1,500 for a day) paid off immediately for Majcher; after her employees' first session, check averages jumped about 20%.

Yet before making the decision to go outside for training, do a cost-benefit analysis. "Make sure the growth you get is worth the bill," advises Majcher.

Success with a system

Treating employee training as a core business process has paid off for Carmine Marinaro.

Founder of Corporate Information Systems (CIS), a high-tech executive search firm in Rutherford, N.J., Marinaro made a gutsy move in 1994: He hired an in-house trainer. Because the recruiting industry is comprised of smaller firms, bringing on a full-time trainer was highly unusual. Yet Marinaro was bent on growth, and revenues at CIS (launched in 1987) had plateaued at about $1 million.

CIS created a skills-based training program that is split into two components: candidate development and client development. New recruiters spend six days in a company classroom, then apply those lessons by working with a mentor in an incubator setting for the next month. Once they master the candidate side of the business, they head back to the classroom for client development and repeat the incubator experience.

New recruiters also receive a 400-page manual that leaves nothing to chance. It spells out everything from how to identify candidates to how to strategize with clients.

Since 1994, CIS revenues have tripled to more than $3 million, and Marinaro chalks up much of the growth to the training system. "Training helps employees pick up the business quicker and become successful faster," says Marinaro. It also helps create long-term employees. "There is nothing like employees who like what they're doing, understand it and feel confident about their work," he adds.

Ongoing education

For fast-track firms, training should never end. You must provide continual opportunities for employees to enrich and improve themselves. After all, your company's growth is dependent on your employees' growth.

Send your employees outside of the company to seminars and workshops in search of new ideas. Even if those events are sponsored by a different industry, there are bound to be best practices that your company can adopt.

Three tips for weaving ongoing education into your culture:

  1. Staff meetings. At CPG's weekly staff meetings, a vendor might demonstrate a new piece of software or someone might report on a demographic trend. Though this educational segment is kept short and sweet, it's a tool for consistently exposing employees to new concepts. "We want our receptionist to be as aware of industry trends as our head of projects," says Alper.
  2. Corporate library. CIS maintains a corporate library, stocked with books and tapes on sales, personal development, management and other business topics. Putting educational material at employees' fingertips increases the chances that they'll use it, points out Marinaro.
  3. Training committee. CIS also has formed an employee-based training committee to research speakers, seminars and other educational outlets. "That way it's more of a collaborative effort," says Marinaro. "I don't want to be the only source. I want employees to also be looking for material that can help the company grow."
Some final suggestions

Get rid of "founder's grip." Don't spend all your time in show-and-tell training. Get new employees involved as soon as possible. Certainly, you're not going to assign a rookie to handle an important project solo, but try to get new hires involved. Give them the freedom to learn from mistakes.

Cross train. Whenever possible, allow your employees to learn aspects of each other's jobs. Cross training can be especially important for smaller firms, where things can come to a grinding halt if someone leaves the company - or is even out sick for a few days. This is tougher for technology companies to pull off, but if you're a manufacturer, it's a great way to become more nimble. It can also alleviate boredom on the factory floor.

Use inside sources. Enlist employees from different departments to share skills. For example, someone from your sales team could help your receptionist improve his or her phone skills. An indirect benefit: This helps with team building by giving people insight into each other's jobs.

Take stock and focus. What is the most important thing you need to get done this quarter? What do you need to learn to get that done?

Monitor and fine-tune. It's important to have a training program, but give yourself the liberty to change and update that system. Any number of changes could impact your employee training, such as technology, your customers or the economy.

Implement and integrate. When you or your employees go offsite for training, make sure you share what you've learned. Too often, team members head off to their respective workshops (salespeople go off to sales training, warehouse people go to logistics training), and the resulting skills or ideas don't get integrated with the rest of the company. It's important to turn new knowledge into action.

Remember: Training helps maintain your entrepreneurial edge. It's only a matter of time before someone copycats your product or business model. Your real advantage depends on your team's ability to foster innovation