5 Reasons Why You Must Budget for Training
April 3, 2019
I had lunch last week with an administrator who manages a staff of thirteen and leads a board of six surgeons. We were discussing staff performance and training issues. I asked what type of training her team receives, and whether she had thought of creating a professional development plan for those she is cultivating for supervisory roles.
Her response was one we so often hear: “We don’t have a training budget for staff.”
If the same is true for your practice, here are 5 reasons why that needs to change, and why you should get serious about investing in employee development.
1. Audits, take backs, and revenue loss – oh my.
If a practice team’s knowledge isn’t updated at least annually (and preferably more frequently), they are doing their jobs with outdated and often inaccurate assumptions. At best this leads to suboptimal performance and broken workflows. At worst it can result in lost revenue, low patient satisfaction, and serious compliance issues.
Unfortunately, we find all three of these with regularity in practices that don’t invest in training. In some cases, the lack of knowledge costs the practice tens of thousands of dollars.
Would you seek treatment from a physician who hasn’t taken any CME since 2011? I wouldn’t. Yet, it’s common not to send staff to training for five or more years. Failing to budget for training leaves your team frozen in time, following old rules. Simply put, they don’t know what they don’t know, putting your practice at risk, and generally being out of touch with modern practice efficiencies.
2. New ideas, better performance.
Training exposes employees to new information and ideas – not only from the instructor, but from the other attendees as well. As a savvy practice operations manager recently said to me, “Even if I know the material being taught, I still walk way with pearls. And, I’m humbled to hear people share things I had never thought of before.”
Exposure to new information not only gives people the skills and knowledge to do things right. It opens their minds to new concepts and ways of thinking that encourage them to do things differently. It unlocks the “boxed in” thinking that keeps people stuck using the same poorly designed forms and the same inefficient processes that have been used for the last twenty years. And, it can build their confidence for suggesting new ideas and embracing change.
3. Reduced turnover, especially of top talent.
In a study of more than 234,000 exit interviews, the top reason employees gave for leaving was the lack of opportunity to learn or develop skills. Given the high expense of turnover – the U.S. Department of Labor estimates that it costs 30% of first year earnings – building staff knowledge and skills could save your practice tens of thousands of dollars.
High performers in particular want training, mentoring, and coaching, according to the results of a study conducted by Harvard Business Review (HBR). They know that learning new skills increases their value. And if they don’t get this kind of development with your practice, these high performers are likely to leave to find it elsewhere.
This is particularly true of the Millennial generation, the oldest of which turns 40 next year. A survey of Millennials by PwC found that the number one reason they find a company “compelling to work for” is the opportunity for advancement, and number three is “excellent training/development programs.” On the flip side, the study found that untrained and unhappy employees are more likely to become frustrated with their job and be less loyal.
4. Shinier, happier people.
We see staff attitudes and enthusiasm perk up when a practice announces a plan to invest in staff training. It makes staff feel valued. An investment in developing their skills also signals that you are supporting their growth – which in turn makes them more loyal.
We worked with a client who had terminated a manager that withheld training and reduced benefits to “save money.” Her replacement had the opposite attitude; she had built teams in previous organizations by empowering them with knowledge. The new manager not only arranged for outside training of all kinds, but conducted multiple, ongoing in-services – led by her, a well as internal staff “experts,” and team leads.
Three years later, the practice has nearly doubled in staff size and revenue has increased significantly. The attitude among employees is night and day. People are happier and healthier, and everyone feels valued as a contributor to the overall growth of the practice.
5. If you budget for it, it gets done.
Putting training into the annual budget indicates you’ve made it a priority. Plus, budgets are a funny thing. Once you earmark the money for something, it tends to get spent. So, you’ll be more apt to seek out training opportunities or say yes to staff requests if there is budget to cover them.
A training budget also gives you an objective way to monitor how much – or how little – is spent throughout the year. If you’ve set aside, say, $5,000 for the year, and have spent $6,500 by August, you can adjust next year’s budget accordingly, as well as benchmark how much you’ve invested in employee development, year over year.