INVESTING IN TRAINING
May 1, 2003 12:00 PM, MICHAEL MACDONALD
The contracting market has never been in a more dynamic state. Technology is changing faster than ever before. The scope of the work is expanding, and integration from outside sources to A/V systems is increasing dramatically. This technology explosion comes at a time when the average contractor is challenged to improve profitability, decrease working capital, and lower expenses.
So how do you respond? Many contractors are in a retraction mode. They're cutting expenses every place they can. Although I agree with that approach in general, the one area that should not be touched — and, in most cases, should be expanded — is in the area of training.
I'm going to step back a moment and look at some trends and how they impact training. One big trend is the continued migration of systems devices to an IP interconnect. This trend is driven by computer networks, but now that structured cable is well understood by the contracting and consulting community, it is becoming clear that we need to see how our slice of the system pie could ride on the same cable and distribution infrastructure.
One example is the trend of telephone networks, or what used to be called PBX, now moving toward IP-based systems. This is a new phenomenon, and though you still run into technical types in the business who will tell you that they still don't trust telephone on IP systems, the trend is clear.
It is clear that terms such as LAN, Ethernet, and Cat-5 are going to find their way into specifications of all kinds of products that contractors never thought would be connected, like a computer network. But the fact that creating a cost-effective standard for low-voltage audio, video, data, and control interconnect is extremely attractive, it will drive a myriad of products into this arena.
Although this new standard for interconnect will be a great boon to contracting efficiency and will standardize terminations and make estimating jobs quicker and easier than ever before, it should be obvious that it carries a dark potential. That potential is for any contractor with network installation skills to move into the A/V integration side of the business. If you don't come to terms with this, you will fall behind the competitive race of commerce.
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What is the answer to this problem? Training! Training is a big investment, to be sure, but one that will be more critical than ever in the industry.
Training is an expensive proposition. Besides the cost of training itself, there is an opportunity cost in which the revenue your employee could be earning is lost because he or she is sitting in a classroom learning some new-fangled technology.
When I raise the topic of training with contractors, I frequently get the same response: “I don't really want to train my staff because they will just quit later, and I will be training my future competitors.” Although that may be a true statement in some cases, it's worth exploring the root cause of those defections to assess whether the training investment really was the cause.
Ultimately, a contractor has two choices: train staff and take the risk that they will leave, or train staff and devise a strategy to retain them. Staff retention is an interesting topic that leads to philosophical questions such as, “What do employees need to feel fulfilled long-term?” Everyone wants to feel that they are working to their full potential and earning a wage that is commensurate with their experience.
People do not focus enough on the dynamic nature of staff management in this fast-changing marketplace. Training increases a person's confidence as well as his or her value in the market. When you train staff, you need to recognize that you are providing additional skills that will allow your staff to move up and, yes, potentially out.
Here is the big point. Through training you are adding a dynamic component to the value and aspirations of your staff, and your organization needs to become dynamic, as well. For example, you have an employee who is smart, well educated, and eager to take on more responsibility, so you send him or her out for training. That employee now needs an opportunity to use those new skills. The organization needs to respond by creating an opportunity for him or her to not only use these newly acquired skills but also be recognized and compensated for those skills.
That means that the organization responds to the changes in staff skill levels. What are all of the implications of this? First, you need to be ready to charge customers more for the work. In most cases, this means that you have to change or expand the scope of what your firm does. You can't charge more for the same service just because you trained your staff, but you can expand the range and depth of the services offered.
You also need to recognize staff members as they expand their skill set — meaning that you create an organizational structure that has different tiered titles — and reward training success with incased titles. For example, create a tiered system such as junior engineer, engineer, senior engineer, principal engineer, director of engineering, and vice president of engineering. By creating many title classes, you can keep moving staff up, recognizing their achievements while still keeping them in their area of technical interest.
In addition, you need to compensate staff for educational achievements. You can't afford to pay people more just because they took a class, but as the company's total skills increase, you need to be able to increase your billing to afford the increase in human resources costs. Of course, if the training results in much greater efficiency, then you can fund the increased employee wages without a negative impact on your margins. The services and rates that your firm markets to the industry must be dynamic, as well.
One final thought: you also need to send yourself out for training. So many contractors do not take advantage of training themselves. Training is learning, and learning is fun, invigorating, and refreshing. Meeting new people, seeing new ways to do the same old thing, and gaining new perspectives on the business will make you feel fresh and keep the burnout at bay.
Although training is an expensive and risky proposition, it is not an option in today's rapidly changing technology landscape — it is a necessity. Companies that do not train their staff and learn to embrace new technology will lose out to contractors who do. Which group do you want to be a part of?
Michael MacDonald is the founder of Pilot Business Strategies, a firm that provides marketing consulting for technology-based product manufacturers. He has been involved with the professional audio industry for more than 20 years and has experience in contracting, tour sound, and broadcast audio. MacDonald has also worked for manufacturers such as Yamaha and JBL as an employee and a consultant. He can be reached at email@example.com.