U.S. Small Business Administration

What do employees need in order to excel?  A pleasant environment?  An appreciative manager?  Motivation?  While these things are important, the key ingredient shared by all successful employees is confidence.  Confidence comes from ability, and results in productivity.  Employees who have the skills and knowledge needed to perform their duties -- and whose accomplishments are recognized -- will out-produce, both in quality and quantity, employees who are uncertain or struggling with their assigned job tasks.

Since confidence begins with competence, it follows that employee training is a crucial component in molding a productive work force.  Without employee training, your company could easily slip behind the competition, because no amount of savvy merchandising can compensate for employees who miss sales opportunities, bungle orders, or alienate customers.

Unfortunately, many small business owners feel that employee training is something only large corporations can afford to do.  Fortunately this is not true.  Training employees doesn't have to be expensive.  It can start with a foundation that is free, and that is probably already playing a part in your company at least to a certain extent.

Targeting Informal Training

Consider what makes you knowledgeable about your industry.  You probably acquired much of your ability on the job:  from colleagues, by trying new approaches to solve problems, and from chance encounters.  The first step for any small business owner wanting to create a more effective work force is to build on this base.

Consider the senior members of your staff.  Do you have someone who has been with the firm since it began, and knows every job intimately?  That person is conversant about the company's operations, can spot duplication, knows what's needed down the line, and could help staffers devise ways of doing their jobs more effectively.  But if this person is now your accountant or sales manager, her knowledge about the company is probably underutilized because it only reaches people within her immediate sphere of influence.

You can change this by asking someone who has valuable expertise if he would be willing to take over the orientation of a new employee from outside his immediate circle, and then informally serve as this person's mentor.  And make sure new staff members have the opportunity to observe and talk with peers in their own and other departments.  It's the fastest way for them to absorb the company culture, its "do's and don'ts," and existing attitudes toward customers.

Foster an atmosphere that encourages trial and error by small groups of employees.  Breakthroughs, whether in procedures or products, don't occur without innovation, and what's innovative is often the final attempt to solve a problem.  When personnel know they won't pay for their mistakes, they are more likely to share the thinking that contributed to a failure, and benefit from collective creativity.

Be sure to provide feedback, as it reinforces employees' positive behavior or performance, and alerts them to the need for improvement.  Even a wall chart showing the number of sales this quarter, compared with sales last quarter and a year ago, provides feedback that can be encouraging, or correcting, just by the position of the lines.

Remind supervisors to commend people for doing their jobs well, and to suggest specific improvement where needed.  Differentiate between unspecific requests for improvement, which can destroy confidence, and specific requests that suggest how the employee can meet a desired outcome.  Insist that corrective feedback be tied to performance standards that are measurable or unambiguously recognizable.

Make informal training a part of performance evaluations, and commend supervisors who actively encourage it.  Ask them to create opportunities for employees to work together and learn from each other.  All staff appraisals should include the question, "How many other employees have you helped, and how?"

Assess Training Needs

Once you have a "training attitude" in place, it's time to assess the actual training needs of each employee.  Look at current performance and your company's future needs.  Involve every staff member in answering these questions:

• What would we be like if we were producing the best possible product and providing the best possible service to our clients?
• What challenges are you facing in your position and what skills, if strengthened, would enable you to meet those challenges more successfully?

You must distinguish between challenges that call for training, and those needing other solutions.  For instance, are customer representatives abrupt on the telephone because they need better communication skills, or because they are overwhelmed by the number of incoming calls?  Are dispatchers working late hours because they are inefficient, or because the shipping orders don't arrive until mid-afternoon?  Are the products with high returns missing quality control checks, or are they being oversold?

Ask your customers what service or product problems they have encountered recently.  Their feedback can alert you to trouble spots such as misdirected invoices, delayed shipments, unreturned phone calls or lack of follow-through.  Well directed training can make an employee feel appreciated and motivated, two qualities needed for superior performance.  To optimize future training, ask customers what additional products and services would make your company more valuable to them.

Finally, decide on the measurable objectives you want from your training program.  Ask yourself and key staff members:  "How will we know if the training is working?"  You need criteria such as fewer complaints or returns, a growing customer base, or fewer crises.

In setting your objectives, include cross-training.  You can increase the value of your employees by training them to fill in for each other during vacations or sick leave, and when one department is slack and another is undergoing extra stress.

Provide Educational Resources

The ideal tool for personnel training and cross-training is a detailed set of job manuals.  Such manuals also help managers review job performance by providing criteria that both employee and manager can agree upon.

Over a period of three to six months, have all your employees write specific and detailed job descriptions, describing the steps needed to complete each task they perform.  Such descriptions can also remind employees who fill a position temporarily, or seasonally, what needs to be done.

However, not everybody can describe the components of a position clearly and succinctly, so you may want to hire a freelance business writer to expand on the staff-written notes and create comprehensive manuals for each area of your operation.  In addition, independent film makers can videotape complicated procedures, with a supervisor's voice describing precisely what the operator is doing.

When these manuals, videos, and copies of equipment handbooks are made available to employees, they form the basis of one of the most cost-effective training tools a small business can develop:  an employee library.

To promote the use of your library, add subscriptions to each of the major publications serving your industry, as well as sales or marketing magazines, and buy affordable workbooks and paperbacks on key topics.  You will then have a resource to which supervisors can refer people for a wide range of information.  Both AMACOM Publishing of New York, and Crisp Publications of Los Altos, California, are known for the readability and practicality of their books and tapes.

Most important, don't let the contents of your library get old and dusty.  Weed out books and old issues of magazines that don't get read.  Keep interest high with new additions; and buy several copies of any book you think will be of strong interest and assistance.  Locate the library where employees will peruse it, and provide an "honor book" for signing out materials and registering as "next in line" for specific items.

Find the Most Cost-Effective Training

While a considerable amount of employee training can be done through in-house resources, to impart the skills that make a major difference you must think of training employees as a capital investment.  Such training can be divided into two categories: personnel whose skills need to be individually upgraded, and employees whose training needs can best be met in a group setting.

In either case, the best training solution can often be found in-house.  At Hodges Badge Co., Inc., a manufacturer and retailer of ribbon awards in Middletown, Rhode Island, customer service representatives are continuously educating their clients on the ins and outs of ordering customized award ribbons.  "In the past, we would start each rep with an intensive tour of the manufacturing plant," explains their manager, Barbara Mello, "but they still didn't understand the operation well enough to do their jobs effectively.  In order for us to deliver products that are just what the customer wants, our reps have to ask the right questions so as to fill out the manufacturing work order accurately."

To solve the employee training problem, Mello developed lists of questions relating to each step of the manufacturing process.  During their first two weeks of employment, employees now visit the plant and "interview" supervisors about their operations.  Once back in headquarters, the questions become the basis of one-on-one discussions in which Mello ensures that the new employee understands the manufacturing side of the business, and can answer any questions customers might ask.  To formulate her questions, Mello considered each of the company's products and asked herself "What might customers want to know?"  She adds, "From the factory's perspective, maybe I'm asking some crazy questions, but the answers are going to be the customer service reps' tools for more effectively dealing with newly elected club officers who may not have ordered award ribbons before."

When generic training is needed, universities, colleges and vocational training schools have thousands of courses ranging from remedial reading to advanced management techniques.  Most offer extremely good value for the time and dollar-cost involved, and many can also be customized.

In addition, seminars lasting one to five days are available from trade organizations and private training companies.  Most are designed to give in-depth instruction on a specific subject, in a setting that is highly conducive to participant interaction.

Other sources of classes and seminars include chambers of commerce, SBA trade associations, and professional organizations.  Seminars on the latest advances in an industry are often run in conjunction with conferences and trade shows.

If you can't find the specific training you want at any of these venues, call the most likely facility and ask them to create a course.  Offer to help design the contents and to find someone, perhaps you or a staff member, to teach it.  Or suggest to several non-competing small businesses in your area that you join forces in providing training seminars for your employees.  Splitting the expenses of a freelance trainer or consultant can make the costs affordable to all.

When you have a number of employees who need training on the same subject, see what's available from your suppliers and customers.  Many vendors provide formal classes on their equipment, some on allied subjects.  Contact the presidents of your largest customers, and ask if your employees may participate in their training programs.  Explain that you are trying to find quality training, which you as a small company can afford, so your people can provide better service to companies such as theirs.

A San Jose, California, molding machine manufacturer arranges for its sales representatives to spend two weeks during their first year working in a customer's plant.  The reps learn how their machines are actually operated, the time pressures under which they are used, and the benefits and limitations of their products compared with the equipment offered by competitors.

If you need to train additional people to fill current jobs, upgrade current employee skills to meet new requirements, or retrain workers for new positions, you should definitely contact your local government job training office.  In many states the federal government's job training program is integrated with state programs, which means there is no single description of what's available.  Typically, training has to be for a group of people either at a local educational facility, or at their work place.  The subjects taught can be as basic as reading and arithmetic or as complex as using state-of-the-art computer equipment.  Training must relate directly to the employees' jobs.  Some programs compensate a business for training and/or wage costs, while others provide trainers and materials.  You may be asked to prove that a certain number of jobs (in ratio to the financial assistance given) will be retained or created.

Consider an Outside Consultant

Hiring a training consultant may be the most practical way to meet some training needs without overextending your in-house resources.  To get the most cost-effective customized training, shop around for a company that has "canned" programs it can effectively individualize.  And you should certainly expect the trainers to get to know your company culture, your products and markets, and your employees so the final program fits your needs precisely.  (See "Consultants and Your Business" in Volume IV of Small Business Success for more tips on using consultants.)

Consultants can offer a wide range of training programs.  Nordstrom uses the services of Michael K. Yacobian & Co. Inc., of Waltham, Massachusetts, a company that teaches retail personnel to create sales by reaching out to potential customers instead of reactively waiting for people to walk into the store.  Michael Yacobian points out that, "People love to learn, but hate to be taught or told."  He maintains that good outside trainers can provide ongoing training that keeps employees sincerely enthusiastic about their jobs.

Yacobian is concerned that small retailers are going under because they concentrate on merchandising products in an era when service is the ingredient that ensures customer loyalty.  His approach to retailing trains managers, who then train their salespeople to create ongoing relationships with walk-in customers, so regular phone calls will bring those customers back into the store repeatedly.  Such training is honed by the training company's continuously serving a certain type of client, and can seldom be replicated by training put together by a small business owner.

Make Your Expectations Clear

Employees will get more from their training if they know precisely what your expectations are.  Tell people what new skills and knowledge you want them to obtain, and why they are important to the person's position and the company.

Agree on a standard.  Too many training sessions are attended and then forgotten.  If you don't want to waste your training dollars, the material should be relevant to the employee's job and resultant improvement should be measurable or readily observable.  The trainee should actively assist in deciding the appropriate criteria for evaluating post-training performance compared to pre-training performance.

Also make sure the training is relevant to the particular situations your employees face.  Probably the most common complaint people have about training is that it is not applicable to their activities or needs.  Often they really mean that they don't know how to translate dry theory into liven situations.  When training uses real examples -- usually in the form of case studies -- it's much easier for people to see how they can use the information.  The more interactive your training sessions are, the more employees will remember what they have heard.  And the more they practice the new techniques, the more likely they are to use them in the future.

Maintain ongoing evaluation.  Keep your door open so employees can come to you the moment they suspect their training might not provide the skills that will meet your joint criteria.  If you are paying a consultant, such feedback is essential to ensure that the training is appropriate.  If employees are using independent study, it ensures that their time and your money are invested in programs that will make a real difference in their performance.

Each year Hodges Badge Co. receives nearly 400 letters praising its representatives.  Each letter is placed in the personnel folder of the person who served that customer, and every six months the employee getting the most letters is honored at an awards ceremony.

The recognition at Hodges can't be earned by working longer hours that anyone else, or other such ploys.  The letters are genuine expressions of appreciation from customers, and the company recognizes that they are a direct indication of the success of its employee training.  Since only a small percentage of customers ever write such letters, receiving even a few means an employee is competent, confident, and doing an outstanding job.

Health plus Trains Employees to Respond to Emergencies

Regina Phelps, founder and president of Health Plus, and previous chairman of the Board of Directors of the San Francisco Chamber of Commerce, says her 11-year-old firm "teaches skills we hope people never have to use."  A specialist in emergency preparedness training, she and her 11 employees (as well as 10 contractors) have worked with companies throughout California ranging in size from 10 people to 57,000 -- the latter being Bank of America, the country's second largest commercial bank.  "Fifty percent of small businesses which undergo disaster will not be around 12 months later," claims Phelps.  "Even a fire can prove catastrophic if arrangements have not been made for backing up computer data regularly, storing invoices and other important materials such as client lists off-site, and getting equipment up and running quickly."  Phelps, whose consulting services include looking for safety hazards, developing individualized business recovery plans, and teaching medical emergency procedures such as administering first aid and CPR, cannot overemphasize the importance of this kind of training.  "As a business owner, you're making an investment in your people.  And people are everything."

Interactive Video/Computer Training

The newest, most exciting, most versatile and probably most cost-effective training tool is here.  Certainly it's the tool with the most potential.

This training tool is voice interactive, uses real situations in training, is customized to each individual trainee, has endless patience, proceeds at the optimal absorption pace for each user, and provides training where and when it's wanted.  And yes, there are less expensive versions that are keyboard interactive and less customized, but just as patient with slow learners and responsive to quick studies.

In its various permutations the newest tool is called "interactive video/computer training" by its developers, and has already made "self-taught" the new buzzword for get-ahead company employees.

The advantages of personalized video/computer-based learning are many.  Heading the list is immediate, objective assessment of personal mastery -- and proof of new learning -- because that's the best way to keep interest and motivation high.  Self-directed learning occurs more quickly, and is better retained, because trainees can study only what they need to know, instead of working through full-length traditional college or vocational courses.  Study time is minimized when employees can self-pace, or study at a time and speed that best suits them.

For the employer, time off is minimized because you avoid pulling people from their normal work for day-long seminars, and employee schedules can be set up to alternate hours of study with hours of application.  This way each activity reinforces the other and reduces the time needed to get up to speed with new skills.

An electronic training program may be part of a presentation by a human trainer, a testing mode for a paper-based system, a voice-activated simulated desktop-based program, or provided on a single disk that runs on a lap-top computer, on the road, at the trainee's convenience.

Perhaps the most exciting aspect of video and PC-based training is that it can be personalized to meet the specific needs and competency of each person being trained.  You can even "customize" off-the-shelf programs yourself by listing the sections specific trainees are to review, depending on their job responsibilities and existing expertise.

Most electronic training starts with the trainee taking a computer-based test that assesses knowledge of the required subject.  Based on the trainee's responses, the program then directs the employee to appropriate study modules.  The modules might consist of paper products such as a textbook, an equipment manual, or one of your company's policy handbooks;  a videotape demonstration of sales techniques or machine operation;  or an interactive learning file to be run on the computer.  Typically, as each study section is completed, the user returns to the computer program's assessment mode and runs a question-and-answer drill that reveals whether the data has been mastered.  Programs are often designed so trainees cannot proceed with the next module until the current one has been successfully completed.

The most recent advances in computers are voice control and speech recognition.  Voice control programs respond to spoken instructions – the operator says "load word processing" instead of typing the command – and speech recognition programs "type" what the operator says into that specific word processing program.

The most sophisticated interactive training systems use these vocal technologies  to simulate training that is more like the actual event, and more likely to reveal the weaknesses and strengths of the trainee's presentation.  For instance, a sales trainee "meets with a client" who appears on screen in a graphic representation, and "makes a sales call" by orally responding to the client's comments and questions.  Meanwhile the program tracks instances of poor judgment or when the trainee had to correct earlier actions, and assesses overall performance.  The "interaction" can be recorded for later review, alone or with a sales manager.

Since its debut in the early l980s, interactive video and PC-based training has become more interactive, more effective, and cheaper each year.  Today, system prices range from a low of $250 for a one-person module to $16,000 or more for a training center using the latest advances in interactive simulation and speech recognition.  In between the two extremes, a wide variety of effective and customizable software provides training in numerous subjects ranging from sales calls to equipment operation and specialized procedures.

According to Orrin Broberg, president of Applied Learning Systems of Minneapolis, Minnesota, "Most trade associations have information on computer-based training that's been developed for their industries."  He also recommends contacting the North American Telecommunications Association (NATA) or the American Society for Training and Development (ASTD), and reviewing the ads in ASTD's publication Technical and Skills Training Magazine and in Training magazine.

Ongoing Training Pervades the Working Environment at Standard Copy

Training begins from the moment employees are hired and is an ongoing process at Standard Copy, which sells and services photocopiers and fax machines from five locations, including its Latham, New York headquarters.  According to Bonnie Crandall, public relations director, an overall orientation comes first, with new hires meeting each manager to learn about their background and responsibilities.  Sales or service training follows, with the sales reps and service technicians subsequently riding together to learn firsthand how the two aspects go together.  "When new products come in," says Crandall, "one rep will be responsible for learning about the equipment and, in turn, will teach the other employees.  It gives each rep a chance to be a leader."  Personal relations skills are taught by in-house managers, all of whom have taken outside classes on company time in personally selected areas such as quality management.  "The firm pays for the training and is very supportive," Crandall emphasizes.  And, under a "buddy system," administrative employees train on more than one job and can "switch and swap, giving them a change and enabling them to fill in for each other during leaves and vacations."

*Excerpted with permission from "Small Business Success" magazine, Volume 6, produced by Pacific Bell Directory in partnership with the U.S. Small Business Administration and the Partners for Small Business Excellence.