The ROI on human resources

I like to think of myself as a generous employer, but when employees leave after I’ve just paid to have their skills upgraded, it does make me think ungenerous thoughts.

Running a business is not a democracy and sometimes you have to make decisions based on commercial returns, not just what people would like. Remember: I am committed to the development of our people and always will be. But it has to be a two-way street.

I’ve always run my business based on our shared values, but if I’m not sure how I should act on a particular decision I will often refer back to our values for guidance.

One of those values is generosity. As such, when any of the team has come to me to ask to attend a training course or seminar – I have never refused them. When my HR leader joined some months ago and she reviewed our training and development spend – she remarked that “per person it is very generous – upward of what many corporations would spend”.

That is good, I thought to myself. The question she posed to me was: “And what is the bottom line return you are getting for that investment?” I’d not really thought about it.

There are two things here: one is relevance of the education and the second is how it is applied when the participant returns to work.

We have chosen as an organisation to make available to every employee on commencement the Gallup Strengths Finder. This is a great way to get to know someone and to ensure that the new starter’s KPIs are set according to their strengths. The second program that we offer for each person once they complete their three months’ probation is the Landmark Forum and Advanced course. Both really operate in the area of personal development.

Then there is also vocational training, and this is where I have the most challenges (and where I believe that there is a fine line between living our values and being taken for a ride).

One employee asked to do elocution lessons (speech training). She was in sales and on the phone a lot and she said she wanted to get rid of her broad Australian twang. This seemed like a good idea to me and the lessons proceeded, over months of expensive one-on-one coaching sessions.

She completed the course successfully then promptly had a falling-out with a new manager and left, with barely so much as a beautifully pronounced ta-ta as she flounced out – taking with her my newly invested speech training.

I had heeded my technical people’s request to attend a technical development conference. My credit card statement had not even returned when one decided he had met an interesting organisation at the event and he was off.

There have been many examples in the past year.

My mentor told me he has had a training guarantee payback scheme in place for years. Ask a person to sign a document on the expected deliverables of the training for the organisation and that if they leave the company within 12 months a proportion (depending on the length of time) is repaid to the company.

My HR leader said such a practice is not uncommon in big corporations. However, when I presented the idea to my general managers – one was particularly unimpressed (saying it made us look stingy). He said why “punish” everyone for the selfishness of a few past people.

What are your thoughts on this? Join our online debate by sending us a comment.

Naomi Simson is the founder and CEO (Chief Experiences Officer) of RedBalloon Days, Naomi is passionate about pleasure! Backed by enthusiasm, energy and drive and recently named one of Australia’s best bosses (Australia’s Marketing Employer of Choice), the Entrepreneurs Organisation (Sydney Chapter) President 2007 – 2008 and mother of two, Naomi also inspires others as a regular speaker, writes a blog and has recently completed her first book.

To read more Naomi Simson blogs, click here.

Comments

C Joyce from SA says: Naomi, they are not ungenerous thoughts. This is a huge problem with Gen-Ys as they are less loyal, are far more likely to leave with in a few years of starting and of course because they are young, they need so much training. I say cough up if you leave in less than a year.

Ken Wood at universalevents.com.au writes: Our situation is a little different to yours, because we are a training company. We give each of our office-based staff free attendance at their choice of any one of our own courses each year (three to seven days), and in some cases they have the opportunity to earn an additional course through incentive programs. We’ve deliberately chosen to develop a company culture that places a high value on learning and personal development – which makes obvious sense given the nature of our business. We always highlight this component of our salary packages when we’re recruiting and it helps attract candidates who match our existing culture.

Admittedly our costs are lower because we’re running these courses ourselves, but we’re still paying salaries for up to seven days out of the office while they attend. In my previous IT business, I had a standing offer open for the team that they were told about when they started and reminded from time to time. While we naturally paid 100% of the cost of any skills training directly related to their work, we would also pay 50% of the cost of any personal or professional development that they chose to undertake. I didn’t put any restrictions on the offer apart from the fact that they had to pay the other 50% of the cost themselves.

I thought that was a fair and reasonable approach but it there was one minor problem: in the six years since I started the company and built it up to 28 staff, despite my best efforts only one person ever took up the offer. So the drawback if you adopt my model is that your team’s interest in personal and professional development might largely dissipate very quickly…