If you’ve been in business a while, I’m
sure you’ve heard the saying: “You’re only as good as the people you hire.”
In another tutorial in this series on HR for small business, I covered the process of hiring employees. But hiring good people is not enough on its own. You also have to give those people the support to develop their skills and do their best work. That’s where training comes in.
Here’s the problem, however: Due to limited resources and other priorities, many small businesses don’t provide the same kind of structured training plans that larger companies do. A 2016 report by the Federation of Small Business in the UK found that although 91% of business owners recognized the value of investing in staff training and development, only 43% said they did so.
So in this tutorial, we’ll look at how small businesses can create an employee training plan and provide better training opportunities to employees. We’ll look at some of the benefits of providing good training and then show you how to put together a comprehensive employee training plan for your small business. We’ll consider various different types of training, including those with minimal cost, so that you’ll be equipped to design an effective training plan, even if you're on a tight budget.
1. Why Employee Training Is Important
You probably already appreciate the importance of training your employees, but just in case, here’s a quick rundown of the main benefits:
When people haven’t been trained, they can often still perform tasks, but inefficiently. To take a simple example, years ago I used to create PowerPoint presentations by formatting each slide individually. Then I went to a quick training event and learned to use slide masters and presentation templates.
Afterwards, I was much more productive—I could create a presentation in half the time, and the end result was much better, meaning less reworking. The same applies to pretty much any relevant skill your employees learn—it will make them better at their jobs.
People value training and development. A Bridge survey found that having a culture of learning in an organization was the #1 driver of both engagement and loyalty among employees.
One survey found that 40% of employees leave a job within the first year if they receive poor job training. Turnover of employees is costly for your business in so many ways—not just the cost of hiring someone new, but the lost knowledge, the waste of time, etc. Train your existing employees well, and they’re more likely to stick around.
Good training helps to ensure that everyone is on the same page. It gives your employees direct training on the skills or behaviors expected of them. If all your people have been trained in the same way, there’s a higher chance of them doing things the same way too.
Be Ahead of the Curve
No matter what industry you’re in, these days you’re probably encountering multiple, rapid changes due to technology and other factors. In this fast-changing world, companies have to be nimble to stay ahead. Having well-trained employees who are up to speed with the latest developments is essential.
2. Different Types of Employee Training
When it comes to employee training and development, you have plenty of options available to you. Here’s a rundown of the main types of training you could offer, with a summary of the pros and cons of each.
Simple In-House Training
The simplest (and often the cheapest) form of training is to have your employees train each other. It makes perfect sense: Your employees all have different skills, so why not encourage them to share those skills with each other?
The advantage of in-house training is that it’s simple to arrange and involves zero or minimal cost. It can also have benefits not only for the people being trained but also for the people doing the training, who can feel more empowered and gain confidence, improve their presentation skills, and so on.
The main disadvantage is that you’re not introducing new skills or knowledge into the organization—you’re just ensuring that what people do know is shared more widely. There may be other skills or perspectives that you can only get from external sources. And while some employees feel empowered by the opportunity to train people, others may see it as a burden—you have to be careful how you handle it.
In-house training can take several forms:
- Informal, One-on-One Training: One employee sits down with another and explains how to use a piece of software or complete a certain business process.
- Presentations/Brown Bag Lunches: Or if one employee has skills that could benefit a larger number of people, you could arrange a one-to-many training event. This could either be a formal presentation or an informal gathering over lunch or coffee.
- Mentoring: A mentoring program is about much more than just training, but often there is an element of training to it. A mentor will often pass on important skills, tips and advice to the person being mentored.
The good thing about online training is that it’s often quite low-cost, and you can access a wide range of training across lots of different subjects. It’s also flexible, so employees can easily fit it in around their other work or do it in their spare time. You don’t have the problem of everyone being out of the office at the same time to attend a scheduled training event.
This very flexibility can also be a downside, however. Employees have to be quite self-motivated to complete the training, and it may end up getting postponed. It may be worth working with employees to help them schedule a few hours of regular training time each week. This also avoids another potential problem: employees feeling as if they’re being asked to do work-related training in their own personal time.
Joining Industry Associations
This may not seem like a training option at first, but many industry associations do provide training for their members, as well as offering journals, eBooks and other resources that can help your staff develop new skills.
The advantage is that this is often highly targeted, specialized training for your particular industry, and it can be cost-effective. Plus being a member of an industry association has other benefits too, like networking opportunities, gaining credibility, staying up to date with industry trends, and so on.
On the other hand, the training options may be more limited than with the other options, since training is not the primary function of an industry association.
Sending Employees to External Training Programs and Seminars
There are training opportunities everywhere: seminars, conferences, specially designed training programs, and so on.
These can be great for your employees because they are often high-quality events provided by professional trainers, and they provide the opportunity to network with other people in the industry. Making this kind of investment can also show your staff that you really value their personal and professional development.
The main downside is cost. These programs can be very expensive, and then there’s also the cost of travel, accommodation, etc. Large companies pick up the tab for this kind of thing all the time, but a small business may simply not have the budget for it. You’re also losing that staff member and their productivity for the duration of the training.
Hiring Training Companies
A related option is to hire a training company to come to your place of work and train employees on-site. You avoid the travel expenses that way, but it can still be an expensive option. And you lose some of the benefits like networking, getting away from the office, etc.
But on the other hand, you are getting customized, face-to-face training from experienced professionals. If your budget can stretch to it, it can still be a great option.
College or Other Formal Education
Some employers pay for their staff to pursue formal education, like a business degree or an accounting qualification. This is a wonderful incentive to offer, although of course the costs can rack up quite fast. To keep to your budget, consider contributing only a certain amount and having the employee pay the rest, or limit it to shorter, less expensive programs.
If you can afford it, the benefits are a better educated and trained workforce, with the skills and qualifications to take on more responsibility, allowing you to promote from within instead of having to recruit externally for senior roles.
3. Create an Orientation Training Program
Now that we’ve seen the different types of training, let’s start putting together a training plan for your employees.
The first place to start is with new employees: What do they need to know in order to get up to speed quickly?
The Nuts and Bolts
Some of it is the practical information we covered in the employee handbook tutorial: how do pay and benefits work, what’s the policy for taking vacation, and so on. But an orientation plan will go further than that. Give the new employee a full introduction to the company: your history, what you do, why you do it, etc. What’s your philosophy? How do you like to do business?
Then introduce the people. What’s the overall structure of the business, and how will the new employee fit into that? Who are the key employees? As you know, if you’ve ever been introduced to a bunch of people at a large party, it’s impossible to remember too many names at once. So keep it light and just focus on the key people the new employee will be interacting with at first.
And what about the customers? Who are they and what do they want from your company? This is important even if the person will not be in a direct customer-facing role. A business exists to serve its customers, so everyone in the company should understand how to do that and be working towards the goal of doing it more effectively, even if they never deal with a customer directly.
Then cover anything specific to your company or the person’s role. Do you use special software that the employee will need to learn? Do you have special processes that they’ll need to understand? Any special skills that the person will need to acquire if they don’t already have them?
As you’ve probably realized, some of the material for your orientation plan will be common to all employees, while some will need to be customized to individual employees depending on their job function, the skills they arrive with, and so on.
So start by creating a core orientation training program containing the elements that are applicable across the board, and then evaluate it for each new employee and add any necessary areas. If you hire a large number of new people, it may be worth creating “modules” of information applicable to certain common roles, such as a sales module for customer-facing staff, a module dealing with financial software for the back-office staff, and so on. Then just choose the appropriate modules for each new employee’s situation.
A key element to an effective orientation or onboarding program is to run regular surveys of new employees. Catch up with them after a week or two on the job, and find out what worked and what didn’t. What questions were left unanswered, and what problems did they encounter in their early days? Then incorporate that into future orientation training programs.
4. Create Individual Employee Training Plans
Getting the new employees trained effectively is a good start. Now you can move on to your existing employees. Often, managers and business owners are quite reactive when it comes to training—they wait for employees to request training, or they happen to come across a training program that sounds good, and tell employees to take it. But it’s better to have a more systematic approach, and create an individual training plan for each employee. Here’s how:
Step 1. Take a Skills Inventory
Start by assessing the employee’s current skills, compared with what’s necessary for their job. If you created a proper job description when you hired them, you should have a clear idea of what’s required for the role. Consider:
- How does the employee measure up? What are their strengths and weaknesses? Where do they need to improve?
- When you've been evaluating their performance, either formally or informally, where have they been doing well, and where do they need more help?
We’re talking personal skills here, like time management and presentation skills, as well as mastery of software, processes, and other tasks necessary for performing their job. For people who manage other employees or may need to do so in future, you’ll also need to evaluate their management skills.
Step 2. Examine the Needs of the Business
Although the specific needs of the employee’s job are important, it’s also worth going beyond that and thinking about the needs of the business as a whole.
Do you have any skill gaps overall? Are there any extra functions that you’d like this employee to take on in future, for which he or she will need training? And what about trends within the industry? Is there any new technology that the person should be trained in? New management trends or business practices that you want them to understand?
After all, training is about meeting the needs both of the employee and the business, so make sure you cover both angles.
Step 3. Take the Employee’s Input
Sometimes, staff members will have clear ideas about what they want to learn. Perhaps they’ve heard about a new technology that they want to master. Maybe they want to move into a more senior role and want to acquire management skills.
An important part of creating a training plan is to encourage the employee to suggest training they’d be interested in. As long as it’s relevant to the job and within your budget, try to accommodate these requests wherever possible; self-motivated learning is often the most effective kind. Adult learning is not like school—people need to see what’s in it for them, to feel that the training is relevant, and to be fully aligned with the goals.
Step 4. Craft a Plan Together
Now that you’ve gathered all this information, sit down with the employee and craft a training plan together. This is something you should do regularly, at least once a year or perhaps more frequently. Plan out the skills you want to focus on in the year ahead.
Again, try to listen to the employee as much as possible. Your business has certain needs, of course, but if the employee is really resistant to the idea of learning a particular new skill, it’s unlikely that the training will be effective. Be ready to compromise, and try to find a fair match between your needs and those of your employees.
When you’ve settled on the skills, then decide how they’ll be acquired. Which of the options we looked at in section 2 will you use? Some of this will be based on your budget, and some will be based on the employee’s preferences and learning style. Everyone has their own way of learning—one common framework is to break learners into three groups:
- Visual learners respond best to pictures, videos, diagrams, and text. They need to see something in order to remember it.
- Auditory learners learn by listening. So a lecture or other audio format would work well for them.
- Kinesthetic learners prefer to learn by doing. They want to get plenty of hands-on practice, and it’s through the experience, not the theory, that they learn best.
This is just a quick summary, and there are many other competing models out there. The basic idea to remember is that everyone learns differently. So try to get to know what kind of training would work best for each individual, and arrange training options on that basis.
5. Look at the Bigger Picture
As you craft a training plan, and as you return to it and update it each year, keep in mind that it’s not just about acquiring skills—it’s about the direction of a person’s career.
The training that people do can often determine what opportunities are available to them, so it’s important to take that into account. As well as the immediate needs of the business and the individual, also take the time to plan further ahead. What are the employee’s long-term career goals? How can you help them achieve those goals?
In some cases, your employee’s career path may end up taking them to roles that are simply not available in your company. You may end up training people who leave. That can be hard, but it’s inevitable. If the person is determined enough, they’ll leave anyway—or they’ll stay and be dissatisfied. It’s better to enjoy the services of a loyal, motivated employee for a few years than a disengaged employee for decades.
Or, as the long-standing corporate joke puts it:
A CFO asks, “What happens if we invest in developing people and they leave us?”
The CEO replies, “What happens if we don’t, and they stay?”
In this tutorial, you've learned how to create an employee training plan for your small business staff. You’ve seen the benefits of training, explored the different options available, and then seen how to craft orientation training and ongoing individual training plans for each employee.
This tutorial is part of a larger series on HR for small businesses. Stay tuned for the rest of the series, in which we’ll be looking at better employee communication, HR software solutions for small businesses, and more.
Before you go, here’s one final employee training tip: Small businesses can sometimes get government incentives or tax credits for employee training. So be sure to examine what’s available in your area—it could help cut the cost of training dramatically!