Wasting money on training? Here’s how to make it pay

It looks like a great deal: a registered training organisation that will train your people, and pay you for the privilege.

It’s done via well-intentioned government training subsidies and it’s perfectly legal, says Grant Saxon, the founder and chairman of leadership training company, Leadership Management International.  “A number of providers use the incentive of cash-back rebates to win companies as customers,” Saxon tells LeadingCompany. “They say to companies, ‘You have 1500 employees, we will give you $100 a head cash-in-hand to enrol them with us, then take the $2,500 for themselves, and do the minimal amount, just ticking all the boxes. People have a 45-minute session with a person from the RTO once a month with a training booklet you can buy off the shelf. The following month they go back, if there are areas they don’t know, the trainer says, ‘Just tick this, tick that. OK, you are competent’.”

LMI has been in the business of training leaders and managers for 40 years, and has 1600 clients and 160 staff and contractors. About 40% of its revenue comes from large corporate clients, another 40% from government and 20% from small companies.

“We guarantee three things,” Saxon says. “Permanent attitudinal and behavioural change; measurable results against pre-determined outcomes established before we commence the training; and an identifiable return on investment.”

Training controversy

Training is an unnecessary expense in the view of many companies, Saxon says. “You have 40-50% of the market that are companies that really see training as a pain in the arse. You do it as cheaply and quick as you can.”

Ruslan Kogan is not against training – he’s against paying for it. The founder of the online electronics store, Kogan, which turned over $1 million in a single day in July, has strong views on the role of training courses in business. “At Kogan every new staff member is told there will never be any formal training, and if you don’t like it, don’t proceed,” he says. “The reason is that we believe formal training is for those who want to look like they are learning; Google is for those who want to learn.”

Kogan, a former consultant for Accenture, says people sign up for training to get away from work.

“The other thing is that by the time someone puts together a training course, it is old information. On Google you are getting new information,” he says. “Because of that, I have an ex-accountant doing digital marketing, an engineer in charge of IT, people with arts degrees running operations. In the six years I have run Kogan, I have never has a person come to me saying I can’t solve this problem. That is a step towards getting fired.”

Susan Herron, the chief executive of the Australian Institute of Management, disputes the idea of Google as the one-size-fits-all training alternative.

She says: “Really, you can’t discount the individual’s experience and the impact that has on their learning needs. Searching on Google for training tips does not take into account that each person’s brain absorbs, retains and uses knowledge differently.  While you can get content from Google, good or bad, what is missing is how that content applies to the working environment. Doing a Google search also doesn’t allow for the discussion amongst peers and colleagues as other learning experiences can do, or the ability to reflect on your own view and understand the differences that exist against it.”

Measuring return on investment

AIM, which started over 70 years ago in 1941, runs short courses, online simulations, offers qualifications and recognition of prior learning. Herron is also committed to providing customers with a return on investment argument.