Workforce Training– Key to Profitability and Employee Retention

 In Business, Business Operations

One of our consultants talked with a refrigerator repairman the other day.    The repairman is an independent businessman who works throughout the United States repairing industrial refrigeration systems.

The repairman told our consultant that much of his work is for a large retail chain who has stores in many locations and towns.  The retail chain does not hire the most experienced individuals, rather those that are available to work at minimum wage, or wages very near to minimum.  The company also does not have an employee training program.    Employees are given minimal training for their position and then “turned loose” to perform whatever task they have been assigned.

The repairman recently constructed a large walk in freezer for this company.  Within 48 hours, he was recalled back to the store to fix the refrigerator.

His first comment was, “I just installed your equipment, what is wrong?”

The response from the manager, “Oh, we had an associate drive the forklift into the refrigeration unit door and destroy it!”

The repairman’s first thought was, “How could this happen?”

Well, that was our thought as well!!

The answer– a new employee  had just began working at the company,was provided with minimal training on the forklift.  Once the new employee demonstrated a slight modicum of forklift operator proficiency, he was allowed to drive the forklift throughout the warehouse without any further managerial supervision or direction.

Here is our thought– It might take 2 solid weeks of training, say 80 hours, to become competent and proficient in the use of the industrial forklift.  If the new employee is paid $12/hour, the cost of the employee is $960 ( 80 hours * $12/hour).  Assume that the supervisor is paid $15/hour, but is not solely dedicated to teaching forklift operations.  The employee cost of the supervisor is $1200  (80 hours *$15/hour).  So, the total employee cost is $2160 for both employees.  The cost to replace and install a new door was somewhere around $5000!

Training and workforce development are keys to increased profitability and reduced staff turnover.  Developing and establishing a rich, robust training program pays high dividends.  Yes, there is an “upfront” investment required, however, once that investment is made, the investment pays dividends.  For the repairman, he said that he was very happy with this company, because he always had a full line of repairs.  This company’s attitude was that lower wage, minimally trained employees were better than higher paid and higher skilled employees.

Look around at your company?  Do you continue to have training issues, high turnover of staff and constant challenges?  If so, a rich review of your employee training is necessary.  There is no reason to waste money– which this company does each and every day.

Need help?  Give us a call.  Our consultants can help!

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