6 Reasons Over-Investing in Training Will Make You Millions
Invest more in training your team now. Times are tough. Everyone is looking for a way to shear costs so we can make the next payroll or afford the next rent check. There are many ways to wield your meat cleaver to cut the fat in your organization. Don't cut training.
Despite conventional wisdom, doubling down on training right now will help your team accomplish tasks and succeed. This rare strategy will generate millions in profits, positioning your company to thrive. At my company, we invest 8 percent to 10 percent of employee salaries on training. This is a huge investment in the middle of uncertain times; however, this will make our prospects certain, because we will have the best talent in the industry. Their artful handling of tasks will be superior to our formidable competition, so we will accomplish missions that no other can. Our talent will make better-quality product faster than all others. Because my team is so well trained, they make fewer rookie mistakes and we have less scrap and wheel-spinning. Clients are more likely to be delighted with our performance, so they will send us more business. This extra revenue leads to more profit and in Marlin Steel's case--more training. Training initiates a positive, virtuous cycle. Here are the six reasons why over-investing in training will make you prosper:
1. Make Superior Quality the First Time
Your clients are thrilled when you ship on time. Matter of fact, they expect you to ship on time every time. Well-trained employees are more likely to make the parts right the first time. Your clients will get in the habit of buying from you because you deliver consistently. If your competitor is saving money by not training, it is more likely that they will stub their toe goofing up a delivery. You will eat their lunch, and your new client will not leave you.
2. Optimize Your Biggest Investments--So You Get the Most from Them
Our factory has a laser, and it cuts sheet metal. It was a huge investment. To get the most out of the machine, we sent a team of seven people to Connecticut for a week to learn the machine. Losing seven productive people, plus providing them with nice hotels, food, and plane fare is burdensome. Then we spent even more money for our team to attend "advanced laser school" for an additional week. Now we have seven highly trained laser commandos who push our machine because they all talk "laser." They debate and discuss ways to make the machine cut steel like no other. When the smoke settles, our client is the winner, because our training investment means we provide superior products.
3. Magnet for Your Rock Star Employees
Rock stars crave interesting new challenges. Your best employees desire to learn new things, such as state-of-the-art techniques, innovative machines, or groundbreaking technologies. They appreciate you investing so much in their career. This exceptional talent is more inclined to be engaged, and their tenure will increase. Keeping rock star employees for a long time will be the difference between your success and failure.
4. Diversify the Risk of Losing a Key Employee
Foolishly "saving money" by training only one person on a technology or piece of hardware will ultimately backfire. Sooner or later, the employee will be busy, go on vacation, or worse, quit, and you will have no one to run the equipment, and your client will be disappointed in your performance. Having a deep pool of talent well cross-trained increases your chances of success. Don't put all of your eggs in one basket (one individual) because, inevitably, that rare talent will not be available when you need him or her. Do not jeopardize your client relationships when you need that machine or robot running.
5. Reduces Scrap
Untrained employees make mistakes. They do not know how to make things right. They are winging it. Well intentioned but ineffective is no way to satisfy a demanding client. The rookie employee wastes time with setting up projects, and they create product that will ultimately be discarded. Product that is destined for the trash can slows down client deliveries and cannot be recovered. This waste costs more than most companies' training budgets. Redeploy this scrap cost to training your team, so they make it right the first time.
6. Less Downtime
Teammates well trained on your technology or robots will follow checklists that maintain the machine or technology. In the old days, giving a car an oil change every 3,000 miles was critical to its long-term health. You want your talent giving your investments the "oil changes" at the right time, so you have less downtime and fewer surprises. We all know an unmaintained machine will fail right when your biggest client needs your help.
Drew Greenblatt is the president of Marlin Steel, a U.S. manufacturer of steel wire baskets and sheet metal fabrications. Marlin Steel Wire has grown sevenfold since 1998 and gone more than 2,050 straight days without a safety accident, and believes passionately in the American manufacturing renaissance.