Monday, February 26, 2007

When It Comes to Training, Invest Wisely, Not Cheaply
by Ed Hansen, MBA

When it comes to training, it pays to spend. Companies that invest in training reap the benefits of increased employee satisfaction, competence, and confidence, happier residents and families, increased census and reduced turnover, and mitigation of risks of all types. Some studies indicate that when training funds are spent wisely, more is better. For example, the Pennsylvania’s Frontline Long Term Care Workers report, published in 2001 by the Polisher Research Institute at the Philadelphia Geriatric Center, found that companies in the top 25% of training spenders reported fewer problems with turnover.

You may wonder, then, what constitutes a significant investment in training. The American Society of Training and Development (ASTD) 2005 State of the Industry Report notes that in 2004, mid-size companies – averaging 8,000 employees – spent an average of $955 annually per employee for training. This represents an increase of 16% over the previous two years. In the sample of large organizations – averaging 58,000 employees – spending on training was even higher, at an annual rate of approximately $1,368 per employee. Finally, in a sample of what ASTD ranks as the “Best of Breed” learning companies, spending per employee averaged $1,554 per year.

More recent data is available through Bersin & Associates Corporate Learning Factbook 2007. Bersin & Associates found that healthcare organizations spent, on average, $948 per employee on training. The biggest spender – the technology sector – came in at $2,763 per employee. The lowest spending was in the retail sector at $519 per employee.

Approaching training expenditures from a slightly different angle, several studies have uncovered average training costs in the senior care industry. The Polisher Research Institute report found that average annual training costs per nurse aide, were as follows:

Government Nursing Homes - $1,604
Private Nursing Homes - $1,066
Licensed, Certified Home Health Agencies - $955
Large Personal Care Homes - $455
Unlicensed, Non-Certified Home Health Agencies - $442

Another report, The Role of Training in Improving the Recruitment and Retention of Direct-Care Workers in Long Term Care relied on an informal questionnaire sent to AHCA affiliates. This questionnaire uncovered costs ranging from $150 to $2000 per trainee, with a majority of states reporting costs ranging from $500 to $1000 per trainee.

So, how much should you spend on training the most visible, highest customer contact employees in your organization? I can only speak for myself, but when I am finally dependent on others to care for me, I would prefer that they receive more training than the person who rings up my groceries.

View the 2005 Executive Summary at

Order the Corporate Learning Factbook 2007 at

View Pennsylvanian’s Frontline Workers in Long Term Care at

View the Workforce Strategies report at

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