A typical Fortune 500 company has a $50 million/year budget set aside for training.  The top 100 have spent more than $50 billion in training over the last decade. These are the same companies that have actively trimmed payrolls, cut health insurance coverage, and reduced retirement contributions over the same period of time. I am not one to recommend the Fortune 500 as gleaming examples to follow - this is a group that has gotten particularly shortsighted and cheap of late - but when it comes to training, I think they are on to something. Remember, these folks only spend money on things from which they see a measurable return. Training clearly is giving them a bang for their buck.

There is a general complaint across all industries about the sorry state of the job applicant pool. In this case, the Fortune 500 is no different than you. So big training budgets make perfect sense. When the Fortune 500 can’t find personnel with the skill level they require, they look within and create their own.

And never mind the lamentable state of the applicant pool. The ever-changing business environment demands new skills - skills that your employees didn’t need a mere 10 years ago.

Let’s go through some of the basic questions you need to answer to get the maximum bang for your training buck.

Who to train?

Training takes time and money - so who should be sent to training?

Here are three cases:

1. Too often management is certain that they are managing well - and any problems in the company are entirely the fault of the workers. Thus, these companies opt for training the workers, figuring that will solve all problems.

Example: I have an insulation manufacturer client who decided that his workers really needed some help. He agreed to have a series of Lean Manufacturing training sessions performed at his plant. When I looked at the attendance sheet, I was surprised to see only workers coming - nobody from sales, marketing or management. The classes went well - the workers “got” Lean. They could easily understand and apply what they learned in class to their factory environment. Yet, Lean Change didn’t really take hold. Management hadn’t participated or grasped the concepts and hadn’t seen their workers in action.

2. The flip side of that attitude is management decides the workers are hopeless and not worth investing even a dime’s worth of training. These companies train their managers only, completely ignoring the people who make, pack and ship their products.

Example: I have a chemical processing client that went for some intensive training - they sent their managers to expensive executive MBA programs at Wharton, had in-house leadership training and team building as well as industrial marketing. Certainly, management had their skills wonderfully enhanced - but this didn’t improve quality on the floor, nor did it improve overall yields and productivity. The workers perceived their value to management (pretty darn close to zero) and responded accordingly.

3. The only correct answer is - everybody. And when possible, train in mixed teams.

 Management, sales, the workers, finance, customer service - everyone should be in there, or at least a representative from each area should attend training.

Example: I am currently working with a metals fabricator, a small company in the Bronx. The president of the company closed the factory for a day to send all of his employees to an Introduction to Lean class. He brought in bilingual translators to ensure that his Hispanic workers got the most out of the session. I was there doing Lean Workflow and Factory Layout.

Instead of hostility or general indifference (it’s a pretty tough union shop of metal workers), the proposed changes were met with enthusiasm. Most of the workers had never had an employer offer them training before. They appreciated it more than any of us had anticipated. And they learned a lot.

What kind of training to offer?

Training comes in all shapes and forms. There are very targeted types of skills training, such as Web site design or new trends in financial accounting. Only your IT guy and your finance guy need to take these.

There is some more general training from which all your employees would benefit. Basic computer training and training on your products would be helpful to everyone. The more familiar your team is with your computer system (can they take an order? find an order? look up a customer? check out inventory levels? etc.), the more flexible and productive your workforce will be.

Similarly, all employees should have some knowledge of your products. They should know the industry vocabulary. This will reduce everything from picking mistakes to poorly jotted-down phone messages. It also paves the way for people to advance. The receptionist can become the assistant for marketing; the forklift guy in the warehouse can now do some shipping and receiving. No one learns the PVF industry overnight - but a bi-weekly session on products isn’t a bad way to start.

You need to decide what kind of training your staff would benefit from. Are they lacking in specific skills (computer, accounting, sales)? How about middle and top management? They are no doubt a bright crowd of well-credentialed people - but do they know how to manage? To lead? To coach?

I recommend Lean Training to all my clients. While Lean was created to train manufacturing employees, everyone benefits from learning “Lean Principles.”

Most training should be performed by an outsider. You want someone who has no preferences or prejudices for specific employees or departments. You also want someone who has no agenda. Also, training is a profession. Your trainer should have a number of years of training experience under his or her belt. The trainer needs to know how to manage the session so that loud/opinionated employees don’t drown out the quiet ones.

Training sessions are best absorbed when there is a nice mix of learning and doing. No matter how fascinating the training, no one wants to sit and listen to someone yap at them for eight hours straight. Training is quite personal. The trainer has to “click” with your people. I recommend taking your trainer on a test drive before committing to a longer training program. Ask the trainer to come in and do an “introductory” course (maybe for a half day).

In order to really have an effect, training needs to be ongoing. You don’t get to train everybody once and then you’re done. Start thinking about training as a quarterly event. Start small with one-day sessions and go from there. Why search the applicant pool when some of your potentially best employees are right under your nose? Invest in them, develop them, train them!