Why Investments in Training Make Dollars and Sense

Today's economy isn't the same one we grew up with. Many modern businesses do not have the hard capital, like equipment, machinery, etc., that traditionally provided the basis for a sustainable business. Today's modern businesses succeed primarily because of the knowledge and skills of its workforce.

While this is true of the global economy as a whole, it is even truer of the retail furniture industry. As Joe Capillo points out in a recent Furniture World Magazine article, "every dollar of revenue you generate passes through your sales staff"(1). We all know how valuable an effective salesperson is and how vital those people are to the success of your business. Recognizing these facts should lead retailers to the conclusion that investing in employees' skill development is a worthwhile and necessary component of their business strategy.

Laurie Bassi and Daniel McMurrer have spent years studying the effect investing in employee skill development has on a company's bottom line. They have shown "that treating employees like the assets they are – by investing in their development – boosts returns over the long term" (2). They point to "a growing body of empirical research showing that organizations that make extraordinary investments in people often enjoy extraordinary performance on a variety of indicators, including shareholder return." In other words, the money you spend to help your employees become better at selling furniture will pay off for your business. I believe it is one of the most profitable investments you can make, and I will share some reasons why in this article.

Reason #1: You're in it for the long term.

If you are like most business people, you recognize the value of long-term thinking. Even though we all have to adapt and respond in the short-term, successful companies make decisions based on long-term goals and strategies. Short-term thinking undermines a business’s value. It is near-sighted to worry "what if I train my employees and then they leave?" The fact is, if you don't train associates how to effectively sell furniture, they are less likely to succeed and, therefore, more likely to leave to work somewhere else. Since you are in business for the long term, you should consider the returns that training investments have over the long term.

Reason #2: You can't succeed unless your employees succeed.

As mentioned above, all the revenue you generate passes through your sales staff. This is not bad news. In fact, it is good news because the more effective they are, the more money your business generates. If you can increase their closings by 5%, that additional revenue flows right through to your bottom line. You would be hard pressed to come up with an investment that has the same potential to increase revenue as an investment in training your sales staff how to sell more furniture.

Reason #3: Trained employees are more satisfied employees.

You may worry about potentially wasting training dollars on an employee that may or may not stay with you. This is a legitimate concern and something to consider; however, there is a large body of evidence that indicates that employees who are given effective training opportunities by their employer are more satisfied with their jobs. More satisfaction means that they are less likely to leave. Most salespeople leave a job because they are not being successful. If you invest in a training program that focuses on improving a salesperson's ability to sell more furniture to more customers, you are giving them an opportunity to increase their commissions. The more money they are making the more satisfied they will be and the less likely they will be to look for another employer. The best thing about this kind of training investment is that it is a Win-Win situation for the employee and for your store.

Reason #4: Stop wasting your advertising dollars.

How much money are you spending to bring traffic through your doors? If you are like most others in the industry, it is a significant amount. How much money are you spending on improving the ability of your sales staff to turn your store's visitors into paying customers? If you are like most in the industry, it is not much. Can you see the problem? You are literally throwing your advertising dollars away unless you are supplementing your investment in traffic with investment in skill development.

A recent report on the training industry indicated several trends in employer-sponsored training in the United States. This report shows that an increasing number of smaller businesses are investing more money into training initiatives. Why? More and more small businesses recognize that they must invest in the skill development of their employees to be competitive in the modern economy. Many furniture retailers, including both the independent owners and the larger chains, are seeing lower revenues and are recognizing the necessity of investing in developing their employees' skills. Good investments in training now will pay big dividends for your business over time.

References

1. Joe Capillo, March, 2007, Staying Alive During Tough Times -Part 1, http://www.furninfo.com

2. Laurie Bassi and Daniel McMurrer, March 2004, How's Your Return on People?, Harvard Business Review, Vol 82 Issue 3, p. 18.

3. Training magazine, December 2006, 2006 Industry Report: Training magazine's analysis of employer-sponsored training in the United States, pp. 20-32.