Cutting the Training Budget - How to Save Money in Lean Times
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This may not be the first time that your CEO has sliced your training budget
and I am sure it will not be the last. If you already run a lean and mean
training function, then congratulations on your efforts. You may find, though,
that your previous good management will not slow the CEO from asking you to shed
some more expenses. Whether you have already optimized your training function in
the past or you realize that you have a long way to go, here are ten practical
steps that you can take to weather any financial storm.
1. Provide more self-help workbooks and on-the-job aids.
Replace some of the high cost training sessions with materials and aids
placed where people do the work. Laminated procedures, checklists, tips’n’tricks,
lists of shortcut keys, ready reckoners, and so on, may be effective
replacements for full-blown training sessions. If somebody is having difficulty
handling angry customers or using Microsoft Excel, check out your local training
publishers for self-paced workbooks.
2. Conscript local experts or coaches to take the place of some training
If people have some knowledge and skills about the subject, identify one or
two local experts in each area to act as a central point for all questions. Make
sure that the experts and coaches you nominate have the required communication
and interpersonal skills.
3. Cut training sessions that do not add value to the organization.
Does your organization really need that assertiveness skills training course?
What tangible benefit did your organization achieve from it? Drop courses that
do not show a demonstrable advantage to your organization. I’m not saying that
these kinds of courses are never worthwhile. During difficult periods is the
time to review whether they are of real benefit to your organization now.
4. Reduce participant contact time for face-to-face training.
If you outsource some of your training or hire outside contractors, trimming
contact hours can save you direct costs. If you pay salaried in-house trainers,
having participants spend less time away from their work will save on lost
opportunity costs. Save upfront time by sending out preliminary materials for
participants to review before they arrive. Save trailing time by placing job
aids in the workplace, setting up on-the-job coaches or conscripting
participants’ managers to oversee workplace assignments and exercises.
5. Review and rationalize your list of training suppliers.
Where you use more than one training vendor for a course or a range of
courses, negotiate a better deal based on increased volume. A shorter list of
suppliers also means that you are able to develop a better quality business
relationship with each. For your other suppliers, use your best negotiating
skills to drum down rates. Do your homework and shop around. In tough economic
times, suppliers will be well tuned to not wanting to lose existing clients. If
possible, do not compromise on quality.
6. Review material costs and printing practices.
Find a more cost-effective printing house and consider using recycled,
lighter weight or less fancy paper. Print on both sides of the paper, if you are
not doing so already, for all learner and trainer materials. Send out softcopy
versions of learner materials, if at all possible.
7. Replace original graphics with stock images.
If you pay for the services of expensive graphic designers or spend a lot on
licensing copyrighted graphics, consider using stock images. There are a number
of free and low cost stock image websites available now with an expanding range
of quality images.
8. Enroll employees on courses at local colleges and universities.
Some learning institutions provide high quality learning. Find out what is
available in your locality and compare with your current offerings. Federal and
state governments subsidize some courses provided by such institutions, making
such courses very cost effective.
9. Relocate seminars held at off-site convention centers.
This option may not prove popular with the executive, but everyone needs to
tighten their belts. You can save significant amounts on travel and
accommodation by hosting the seminar more locally or in-house.
10. Demonstrate how your training courses help achieve solid organizational
Gather reliable and convincing data that shows how the achievement of course
learning outcomes lead to real benefits to the organization. How exactly do your
training programs contribute to lower error rates, more satisfied customers,
higher turnover, or whatever it is that your executive team considers important?
In some cases, you may need to calculate the
Return on Investment (ROI) of a training program to prove bottom-line worth.
The suggestions above are not prioritized in any order. Which activities you
focus on will, of course, depend on your circumstances. I do want to point out
that the first nine suggestions above go along with the idea that everyone needs
to tighten their belt in tough times and that the training function is not
sacrosanct. When you are asked to cut costs, you and your training department
will be more respected if you replace a “Yes, but …” response with a “Yes, and
this is what we are doing about it.”
The final suggestion uses a different approach. It says that if you cut these
training programs, the organization will actually lose money or some other much
valued benefit. The two approaches, of course, are not mutually exclusive and
can in fact work in tandem. And don’t forget, we don’t need to be in the middle
of a financial meltdown to be asked to trim down our training expenditures. Keep
the ten pointers above in your bottom drawer, ready for the next time your CEO
comes to you with that pained looked on her face.
Copyright Leslie Allan
About the Author
Leslie Allan is Managing Director of Business Performance Pty Ltd; a
management consulting firm specializing in people and process capability. He has
been assisting organizations for over 20 years, contributing in various roles as
project manager, process consultant and trainer for organizations large and
He is also the author of five books on training and change management and
is the creator of various training tools and templates. Leslie is a member of
the Australian Institute of Management and the Quality Society of Australasia.
He is also a member of the Divisional Council of the Victorian Division of the
Australian Institute of Training and Development (AITD). Leslie may be contacted
from his website at
www.businessperform.com Authors Google+
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Article Published/Sorted/Amended on Scopulus 2009-09-24 11:26:56 in Employee Articles