Employee training as a tool to improve manager performance

A depressing aspect of working in the field of human resources is seeing things happening that we know are wrong, when there is evidence that what we are doing doesn’t make sense.

Perhaps the biggest example of this is with respect to training, which seems to get cut every year. Even if we use the most crude measure—simply asking employees if they got any training and they can pick what counts (fire safety, how to use new office equipment, compliance with new rules, etc.)—only about half of U.S. employees appear to get any training in a given year. And the average amount is about one day per year.

Among other things, the reason we have so few “entry-level” jobs, and why new graduates struggle so much to get these jobs, is because there is no training for them. New hires must have the skills already to do the job. Often, those skills are ridiculously specific: Candidates must have three to five years of experience on a particular piece of equipment, knowledge of clients and so forth. That is also why employers complain that there is no one qualified to hire.

I think back to the days when IBM mandated three weeks of training every year for all employees—how did we get to this place we are in today?

The short answer is that training is expensive—so, if we don’t see the benefit from it, we cut it. But the reason we don’t see the benefit is because we aren’t looking. In fairness, looking and measuring can be hard to do, especially for HR departments where cuts have meant that there is no one around who could do that analysis.

There is a lot of hard evidence published in academic journals—where you might not look—that training pays off.

For instance, here’s a new and very carefully done study by Professors Miguel Espinosa and Christopher Stanton that shows the benefits of training in ways we have not thought to check before. It involved running a real experiment with randomized trials in an organization that had the ability to measure performance.

The training was intensive—120 hours spread out—and taught self-management skills and use of data processing tools.

Here’s the part that we would expect: Turnover was lower for those who were trained, and their performance against assigned goals was 10% greater than those who weren’t trained. But here’s the part we would not expect: The performance of the managers on their own goals whose subordinates were trained jumped as well. How could that happen?

Because the trained workers needed less help. Emails from them to their managers usually asking questions dropped by almost two-thirds, leaving more time for them to get on with their own work. The performance of managers increased by about 3%, which may not sound like much but remember: The work of managers in terms of the value each one contributes is greater than for their subordinates.

The value a typical employee contributes to an organization, based on sophisticated value-add accounting exercises, is roughly double what they are paid. If a manager is paid $100,000 per year, their contribution is $200,000, and then the value of training their subordinates was $6,000 per year. If the subordinates are paid $50,000 per year, the value of training them and the 10% increase in their performance is worth $10,000 per year.  Let’s say they get no work done when they are training and they never make any of it up, then the cost of that training is just under $2,000. That is a 500% return just on the subordinate’s work—not counting the additional $6,000 from the supervisor or the reduction in turnover. And while the training costs are a one-time expense, these improvements in value continue for years.

Training: a modern mandate

A conclusion from this study is that training of all kinds likely has benefits we are not capturing. Why is this finding especially important now? Because U.S. employers have decided to operate with much larger spans of control—that is, more subordinates per supervisor; in some cases, doubling them. The idea that this move is to empower employees is laughable, of course, and the assumption is that all managers do is watch and monitor. The reality is that most of their time is spent addressing problems for subordinates.

If we are persuaded that the cost savings from expanding the span of control is worth it (that’s the real reason it is happening), about the only chance this is going to work without completely frying the supervisors is if we train the subordinates so that they don’t need as much help from their supervisors.