There is something in business that I find absolutely crazy. This is downright irrational. Yet, it is common in American business. I cannot understand why.
Study after study clearly shows that education is the key to success. The more education, the higher the level of success. Yes, college dropouts succeed. They do, however, conduct their own studies of subjects of interest to them. New parents start adding to college funds immediately after the birth of a child. Investment firms focus advertising on retirement and college funds. Government speeches always have something to say about education and student loans.
Few businesses see value in education.
Sure, they may hire an MBA over a BA if given the choice. But how many businesses are willing to invest in education? Few.
As I speak with HR managers around the country, I often hear that the ‘training’ budget has been depleted or eliminated. Training is different from education. The budget goes to training which mostly is about compliance. You need a safety officer? Pay for safety training. Stay in compliance. Training is about tasks. Education is about thinking.
What about education to improve productivity?
I often hear, “there is no money for that.”
This mystifies me. Let’s look at a scenario.
I’m using a subject with which I have familiarity, presentation training. In business after business, I have seen direct increases in sales and productivity after completion of presentation training. I’m seeing huge returns for clients.
Typically it looks like this:
A presentation training program for 20 people costs around $8,000. Let’s say these are 20 salespeople who sell $100,000 per year of product. (That isn’t very much. In fact, that wouldn’t even cover salary but I want to use small, round numbers.) Those 20 people produce $2,000,000 per year in sales.
If professional education improves the teams productivity by 3%, we see a return of $60,000.
Now consider the cost of education. $8,000. The return on investment is 750%. Even a modest 1% improvement yields $20,000. That’s still a 250% return!
I hear from business after business that they cannot afford education for their teams. Those same businesses will drop $10,000 on advertising that may or may not produce anything. Those same businesses will drop $20,000 on a trade show because “we need to be there.” Why?
My business has very low overhead so I don’t need a lot of businesses to say ‘yes’ to an education program to support me. That doesn’t reduce the shock of how few can see the value of education. I’m always surprised to hear, “we can’t afford it.”
As the economy shrinks and foreign firms take more and more market share, can we not afford education?
Wow.
Chris Reich, TeachU