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Dinesh DivekarDear Ashish,
Conducting training in itself does not save revenue. You should have outcome based training. For this you need to study systems and processes of each department, find out what costs are involved, measure them. Any training programme conducted should aim at cost reduction or maintain costs at certain level. It appears that numbers were not included in your reply. When I say numbers, I did not mean to say how many training programme did you conduct or how many persons were trained, but what was the result of the training in what span of time.
Training on motivation and team building is at times humbug. You need to embed all these things in the systems and process. These things should be embedded in the culture of the company as well.
You are from auto company or auto component manufacturing company. Have you identified costs involved in upstream and downstream supply chain? Are your training efforts addressed to reduce these costs?
Third way of generating revenue is by making employees to self-learn. Many things employees can learn on their own also. Why do they need someone else to train? HR or Training Department's role is there to measure the competency and accredit them. Self-learning saves lot of revenue of the company. However, this is far easier said than done. It requires tremendous organisational maturity and you need to have that kind of knowledge assets available.
Examples of outcome based or cost-based trainings are as below:
a) Sales: - sales training is conducted to improve the strike ratio from ____ to ____
b) Production: - production staffs are trained to improve/maintain OEE from ____ to ____.
c) Purchase: - procurement staffs are trained to improve Inventory Turnover Ratio from ____ to ____ or maintain at ____ level
In India, HR does not take much initiative in organising outcome based training. When I say outcome based, I mean to say conducting training to reduce some cost. They will talk lot of HR jargon but scratch a surface and ask them about operational costs and they will blinking.
Just yesterday, I spoke with Head of Training of one of the prominent FMCG company. We discussed about training for FMCG sales persons. I told him that FMCG salespersons are part of downstream supply chain. They do not do any "selling" as such. You tell me what costs are involved in the downstream supply chain and I will give you the training solution to curtail those costs. That training head did not agree for my initiative. He had fancy of idea of conducting simulation for the participants. HR professionals understand little that case studies, role plays, games and simulations etc are all the training techniques. These are the means to attain the goal. How can you make means as your goals?
This very immaturity of HR speaks loudly when country like India does not have any company that figures in the top 25 supply chains of the world.
Jai Ho India's HR!
Dinesh V Divekar
From India, Bangalore
NK SUNDARAMHR stands for Human Resource - something like finance, equipment, raw material etc etc. So, the HR department also plays a crucial role in generating revenue, albeit indirectly, through recruitment of competent work force, implementing rules and regulations so that avoidable manpower related expenses & leaks are plugged and truly act as a neutral force between between Management and workforce. Like electricity, one Rupee saved is equivalent to one Rupee earned !
saiconsultMany a time we loose sight of our goals whether it is generating revenue or resources by indulging in complex thinking instead of confining ourselves to simple basics or trying to innovate new concepts without verifying their relevance to the environment in which the business is operating..There may be many ways of generating revenues. You cannot make every employee to go through a training programme that reels off grand strategies of generating revenues and expect them to fill the sacks with money once they are out.Training cannot be the answer to every challenge if done mechanically or pedantically Not every horse can be trained to run the race.Only a few can. They are a breed apart.Therefore the first and arduous job of HR is to identify those with flair,aptitude, natural inclinations and special skills and a keen eye and ear to be able to put their mouth where the money is.Therefore recruiting right talent and relevant talent is the first step to begin the journey on the road that leads to revenues. The second step may be identifying the means, methods and tools of generating revenues and the third step may be to hone the the special talent of the identified calss of employees.to harness these means, methods and tools.
HR & IR Advisor
From India, Mumbai
HardeepHR in an industrial concern is generally perceived as a cost center unless it takes continuous steps to position it otherwise. From a recruitment / retention perspective, two clear parameters are sometimes used :
- a year to year comparison of attrition rates at different levels
- a similar comparison of the cost of recruitment
these of course are interdependent and also depend upon other HR initiatives as well as external factors . But if you want to give figures , and such analysis supports your case, shout out ! If it doesn't, not only HR but the whole company should be worried :-)
From United States, New York
Rajat JoshiHi Ashish,
I thank Dinesh Divekar for answering your question to the point especially with the emphasis on outcome based training.
Traditionally HR has been historically focused on cost cutting and lately Organizations are waking to the fact that why HR cant contribute to Revenue Generation. This is because anyone can cut costs using the arbitrary number during the budget meetings. This can be a short sighted measure as it can impact the culture of the Organization on the longer run.
HR has to understand what and who are the Revenue Generators of the Organization.
We all know average salespeople produce sales and outstanding salespeople give much better results. If HR analyses this well and implement measures – it can have an impact on the Corporate Goals.
As Dinesh pointed out that the Training & Development function must target its offerings so that they cover all aspects of revenue generation. In this light, Wal-Mart routinely makes it a part of pre-shift store meetings to make sure all employees are aware of which specific products produce the highest margins and revenue. This awareness allows employees to focus their sales and customer service efforts.
Other example is onboarding training for the new joinees on the first day they clearly need to understand the importance of revenue generation, no matter what job they have. They also need to be informed about how their revenue generation/impact will be measured and rewarded.
HR must proactively use surveys, interviews, and define metrics for revenue generation and also have a process for rapidly identifying current problems and the barriers that restrict revenue generation.
From India, Pune
Alkemist HR EnablersDear Ashish,
Outcomes of the technical (production in your case) training areas are easily measurable. You need to fix the problems or improvement areas, measure the current status, provide the training and then measure the status after about 4-6 months.Though not directly related, reduction in absenteeism saves revenue for the company. So, HR can organize suitable training / counseling for concerned employees to reduce absenteeism.
Outcomes of the training in managerial areas can take longer for measurement. For example, training in Managing Employees. Now one of the outcomes after such training could be reduction in the attrition under the trained managers. That is a saving.
Outcomes of the training in behavioral areas are not measurable and by definition, outcomes are 'felt'. For example, training in presentation skills or in leadership or change management.
Ketan T Bhatt
From India, Ahmedabad
I fully agree with you when you say all the trainings need to be outcome based or /and cost based .
This to some extent is possible when you train the sales staff and measure the strike ratio and also with respect to production/inventory etc.
How to measure the effectiveness of a management development programs for the senior management team members... as huge costs are involved in conducting these off-site programs like leadership skills, change management ... they dont make any immediate contribution to the bottom line but as HR we need to be conscious and measure the cost as well as efficacy.
From India, Mumbai
Dinesh DivekarDear Vineeta,
Sometimes Management Development Programmes (MDP) is nothing but humbug. These programmes serve no purpose. These programmes serve purposes of HR or Training Managers who do not wish to study the operations of their organisation and come up with the research data. Each training programme must be backed by organisational research data.
Why conduct those trainings where it is not possible to measure their effectiveness? Better to give priority to all the trainings where the measurable outcome is there. Measure the direct and indirect costs associated with each department and address each training programme to reduce this cost.
Secondly, many of the soft skills training can be learnt on one's own also. Why train engineers or diploma holders on communication skills or personality development? Is it a subject to be taught?
Thirdly, if public workshops are organised on subjects like leadership or change management etc, you may nominate the senior management personnel for any kind of workshop. However, let them pay the training charges on their own. Reimburse the training charges only if they are able to prove the learning effectiveness after six months of a year.
Lastly, to save the cost of the training, you may tell the managers to come up with presentation on the topic like how the teamwork helped them in some project or how he handled the conflict in his/her department. Each presentation must include the savings accrued by the company. When you have library of the videos of the presentation, a person with average+ IQ should be able to grasp what that particular skill is.
From India, Bangalore