One of the most common assertions companies make is,
"Our people are
our most valuable asset."
This is a big corporate lie.
While many CEOs may gush over their employees while the camera and
recorder are running during interviews, research continually shows most
don't make their people priorities.
Study after study reveals that when CEOs are asked to identify their
top priorities in running business, developing their people rarely places
in the top five or six. These company heads routinely identify increasing
sales, increasing recognition, cutting expenses, research and development
and other priorities, yet fail to realize that it's their people who
accomplish all of these things.
I've been in the professional sales training business for more than two
decades, and without question, the most commonly overlooked avenue to
increased sales - but commonly the most effective - is a company's
decision to invest in the professional training of its greatest asset: its
people.
It's puzzling how many companies are willing to invest in their
infrastructure but don't view the sales organization as such.
Manufacturing companies are willing to invest in their machines and
finance-driven companies in their software programs, but few companies see
their people as an asset worthy of investing in.
However, cultivating and training a company's greatest asset - its
people - can yield outstanding results. A worthy example to consider can
be found in the career progression of one of our seminar graduates.
Several years ago, while living in San Diego, he began working at a
retail store. (If you've had any experience in a retail environment, you
know that turnover is often more than 100 percent annually.) He was almost
immediately promoted to sales manager.
Soon thereafter, he convinced the company's controller, a CPA, to
attend a Track Selling System workshop. The results were outstanding. Two
years later they started their own furniture business. Within one year the
company had $2 million in sales and within five years there were six
stores with $5 million in sales and 80 percent of the market in that
niche.
Taking a CPA and giving him the selling skills he needs makes for a
rare combination. Doing so helped this company dramatically reduce
turnover and helped it develop a reputation for providing its salespeople
with the best possible training. Consequently, management never had to
advertise for salespeople as they had a waiting list of candidates hoping
to come aboard due to their desire to be professionally trained and
developed.
The costs of not training
Does all training guarantee similar results? Of course not. The
decision not to invest in training, however, doesn't have positive profit
margin guarantees, either.
So many companies fall into the trap of focusing only on the initial
cash outlay for training without regard for the costs they're incurring by
not doing so.
For example, I know of one executive whose company spends $150,000
annually alone just for classified advertising seeking salespeople. The
company's turnover is very high yet it never has the money to invest in
training. Does this make sense?
What management who holds this belief is missing or overlooking,
however, are all the hidden costs associated with turnover that dwarf
training fees. Costs that can't all be listed on a balance sheet. Costs
such as: lost productivity due to an open position, lost sales, client
dissatisfaction resulting from missed deadlines and orders, client
departures, increased burden on, and lowered morale of, remaining
employees - the list goes on and on.
And the overt costs of turnover are obvious. It can easily cost more
than $100,000 to replace a manager or professional when all of the
underlying costs of replacing an employee are considered such as:
advertising, interviewing, travel, relocation, severance pay, ramp-up
periods, new hire processing etc.
Yet company after company continues to claim it can't afford training
in the face of the overwhelming evidence supporting its ROI - evidence
such as Motorola's estimate that the company receives a 30-to-1 return for
every dollar invested in employee training and Harvard University-Warden
Business Schools study that revealed a company's surest way to profits and
productivity is to treat employees as assets to be developed.
When contemplating the decision to train their people, companies would
be wise to consider the benefits beyond the dollars required. Benefits
such as improved morale, greater satisfaction, increased loyalty, reduced
turnover, more effective teamwork, increased sales and increased profits.
More than anything, a company's employees are its greatest assets -
assets worthy of being invested in.
Roy Chitwood is an author, trainer and consultant in sales and sales management and is president of Max Sacks International, Seattle.
Puget Sound Business Journal Article
