October 2002 Track Selling Times Feature
"Investing in your greatest asset"
by Roy E. Chitwood, CSP, CSE |
(From November 2001 Track Selling Times)
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, however 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% 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% 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.
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 their incurring by not doing so. For example, I know of one executive whose company spends $150,000 annually alone for classified advertising seeking salespeople.
The company's turnover is very high yet they never have the money to invest in training. Does this make sense?
What management who holds this belief is missing or overlooking, is 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 they 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 increase profits.
More than anything, a company's employees are its greatest assets - assets worthy of being invested in.
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