How will upgrading your people impact your bottom line?

© 2013 New Horizons Computer Learning Centers, Inc.

wwww.newhorizons.com


executive summary

A chain is only as strong as its weakest link. The links of your computing environment chain include myriad hardware and software components that are continually upgraded and refreshed or strengthened. A frequently overlooked link is the people who manage, maintain, and use this infrastructure on a daily basis. Unless they’re strengthened with proper skills training, the entire chain is at risk.

This paper illustrates the need for IT training as an integral element of computing optimization. Not only is there an IT skills gap, but too frequently the budget to provide user training to take advantage of the new features and tools is lacking or dismissed as unnecessary. With each hardware and software upgrade, employees are left behind, negatively impacting business productivity and the customer experience. Maximize the return on your technology investment by offering training for your employees. People need upgrades, too.

“In tough times, companies need to improve the skills of their workers more than ever, and they need to do it efficiently. You wouldn’t expect to buy a computer and never upgrade the software, would you? People need new skills, People need upgrades too.”


upgrades outpace training

At the core of information technology is innovation, and the pace is fairly rapid, measured in months instead of years. To stay current and productive, IT directors should build into their budgets the cost of training to support these inevitable upgrades. It is only with training on how to use the new products and features that your return on those technology investments is realized. Without training, your employees aren’t being as efficient or productive as they otherwise could be. In a 2011 article, Corporate learning evolves to meet today’s needs in the Atlanta Journal Constitution, Laura Raines quoted Pat Galagan, executive editor for the American Society for Training & Development (ASTD), the world’s largest professional association dedicated to training and development, who said, “In tough times, companies need to improve the skills of their workers more than ever, and they need to do it efficiently. You wouldn’t expect to buy a computer and never upgrade the software, would you? People need new skills, People need upgrades too.”

For those keeping track, Microsoft Office 2013 was released on January 29, 2013, meaning that if you’re running Office 2010, you’re missing out on new features and improved functionality, such as cloud integration. If you’re still using 2010, 2007, or 2003, you are further behind compared to what your competition may be using. If you purchased Windows Server 2008 but you’re not using its virtualization capabilities, then you’re not getting out of it what it’s worth. Yet, how often your organization upgrades the computing environment is determined by budget and the need for certain functionality. But keep in mind that simply installing new software means nothing if your employees can’t use it.

smart companies can be lean

A 2013 Microsoft News story, IT training essential to maximize technology investments, stated that Bill Florence, as quoted in an article in the Dunwoody Crier, outlined ways for businesses to make the most of their technology. He cited computer training professional Joan Shumaker who said:“Companies continue to become leaner, which means people have to produce more. Having the right software for your business and being proficient in using it to the company’s greatest advantage, is critically important these days.” She added that “Microsoft Office training for all employees is particularly essential in order to ensure that staff is equipped with the tools necessary for small and medium-sized business operations.”

training vs. support

Often when purchasing new hardware, it comes with support so your IT staff can ask specific questions and get the answers they need as they encounter unfamiliar situations during the lifecycle of the product. But support is different from training. Support is reactive and limited to the issue, while training is proactive and comprehensive. To realize the full potential of the product means you’re getting your money’s worth in both the hardware usage and the investment in professional development of your workforce. Imagine the opposite for a moment, and reflect on what’s happening right now in your organization. Ask yourself, “What kind of return on technology investment am I getting?” If you don’t have some sort of training program in place, then you’re missing a crucial element that impacts business productivity, employee morale and efficiency, and ultimately the bottom line. Without training for your infrastructure investments, your employees are not using these expensive tools to their fullpotential. Why, then, did you upgrade if no one knows how to use the newest features? You could have stayed with what you had, but you’d be slipping farther behind the competition.


In theory, software and hardware upgrades offer faster, more efficient ways of getting work done, but in practice that happens only when those using the technology know what they are doing. For instance, if you were to upgrade from Windows 7 to Windows 8, you would have access to the Metro user interface and its touchscreen functionality. The “start” screen is completely different from what users have become accustomed to since Windows 95. This basic feature alone impacts every single Windows 8 user and is not intuitive. With proper training, maximum functionality can be realized very quickly. Add in the differences in accessing applications or powering down tablets vs. desktops/laptops in Windows 8, and it’s evident proper training affects worker productivity and hardware stability.

skills gap affects business performance

There’s no doubt that a skills gap exists in IT, and it’s no wonder. The pace of innovation is fast, and it impacts how business is done. Just think of the changes that have resulted from mobile devices and the cloud. According to the 2012 State of the IT Skills Gap study from CompTIA, the non-profit association for the IT industry, 93% of employers indicate there’s an overall skills gap defined as the difference between desired and existing skill levels among their IT staff. Moreover, almost 6 in 10 companies report being only moderately or not even close to where they want to be with IT skills. That means that there’s a strong need for training in order to bring employees up to an expected level of competency and productivity.

Most organizations see skill gaps within core IT priorities such as security, data storage, network infrastructure, upgrading computers and software, and business continuity as well as in areas of emerging technology, such as mobility and virtualization (CompTIA, State of the IT Skills Gap, 2012). As innovation continues to foster growth and new ways of conducting business, one would expect the gap to widen if it’s not addressed.

But how is the skills gap affecting business productivity? Most organizations agree that technology is a critical component of business success, a trend that is expected to grow. The study also found that the skills gap frequently impacts at least business areas such as staff productivity, customer service, and security (CompTIA, State of the IT Skills Gap, 2012). Each of these affected areas directly impacts the bottom line. For example, implementing a virtualized environment promises savings in hardware and power costs. These savings also include fewer employee hours spent on maintenance and storage. Ignoring this type of technology improvement is costly, an expense that increases with time.

In its 2012 State of the Industry report, the ASTD found that more than 72% of high-performing organizations considered their learning goals to be aligned with their business goals to a high or very high extent. Lower performing organizations did not fare nearly as well. Only about 50% of lower performing organizations felt their learning and business goals were aligned. The ASTD says that this report “examines the ways in which organizations approach the evaluation of learning and tie that measurement to overall business performance measures.” With a majority seeing a direct correlation between training and productivity, the message to CIOs is first to identify where you want your organization to go and then support that vision with relevant training.


close the skills gap with training

Realizing that skills obsolescence is a byproduct of rapidly changing technology, IT and business leaders have to work together to bridge this gap. Standing by as resources are outpaced is not an option, and the longer you wait before bringing systems and employees up to speed, the more it will cost your organization. You can pay up front by offering training initially or wait and pay later, but you may be shocked at the cost that delay can bring.

“Training investments foregone are multiplied six-fold in opportunity costs each year that action is put off,”Hank Moore, Corporate Strategist for Training magazine, in his 2011 article, Evaluating training providers, cautions that “training investments foregone are multiplied six-fold in opportunity costs each year that action is put off,” a concept he refers to as “The High Cost of Doing Nothing.” When it comes to training, sooner is better and less expensive.

According to CompTIA’s State of the IT Skills Gap 2012 study, almost 60% of organizations train or retrain existing staff in areas where skills are lacking. More than half of respondents cited the dynamic nature of the tech space as the leading cause of this gap (CompTIA, State of the IT Skills Gap, 2012). Most agree that it’s a challenge to keep skills current given the speed and variety of innovation. The next most common influence was lack of resources for IT skills development (CompTIA, State of the IT Skills Gap, 2012), which means the funds were not available. CIOs have to make the case for allocating budget for training. If you can demonstrate a solid ROI, then there’s a greater likelihood of funding. In fact, a 2012 study conducted by KnowledgeAdvisors of more than 3.6 million evaluations from those who had completed IT training courses showed that 98% utilize the knowledge and skills gained through training in their job, and 77% of the new knowledge and skills learned is applied on the job within the first 6 weeks (New Horizons). The content taught is relevant, addressing specific areas of weakness that are essential to performing the fundamental requirements of that role. This, in turn, leads to increased business productivity and therefore ROI.

“Training investments foregone are multiplied six-fold in opportunity costs each year that action is put off,”


measure roi and impact of training

As is evidenced by the skill deficits, companies should be considering IT training as an important business need. One way to argue for its inclusion is to determine the ROI. Putting numbers behind the anecdotal evidence provides needed support to make a solid business case for allocating this necessary portion of the budget.

As you consider the benefit-to-cost ratio of infrastructure upgrades to your organization, remember to include the investment in your workforce as part of that calculation. A great deal of time and resources go into the hiring process, and it’s less expensive to train than it is to outsource or rehire (CompTIA, State of the IT Skills Gap, 2012). Employees appreciate professional development, and employers reap the rewards. By offering training, companies are better positioned to recruit skilled employees looking forgrowth opportunities. According to an article by Jeff Davis of TechRepublic, when you commit to training your new employees, morale and productivity increase, making for happier and more efficient workers (Put IT on the Training Agenda for New Employees, 2000). This translates to fewer employees who will simply take the training and leave, a chief concern among employers. In a 2012 survey of 250,000 on-the-job evaluations of New Horizons’ students by KnowledgeAdvisors, training yielded a 4.6:1 benefit-to-cost ratio relative to the predictive increase in performance (tied to a standard salary classification), and more than 68% of New Horizons’ students state that they are more productive in their position as a result of their training experience.

budgeting for training

After you demonstrate ROI, it’s time to calculate how much of your budget will be dedicated to training your IT staff. Moore suggests the following tips for budgeting and pricing training services: allocate budget at the start of the fiscal year, averaging 10% of gross sales and view training as an investment that is both short- and long-term (Evaluating training providers, 2011).

mitigating the perceived risks of training

Some organizations are hesitant to provide training to their employees out of concern that they’ll soon leave to put these new skills to use for another employer. The economy is not quite in a place that encourages job-hopping, but the ASTD in their Trend Alert: 2013 Workforce/Workplace Forecast speculates that turnover may increase with an improved economy. In the meantime, however, how can you encourage employee retention? Sharon Jordan-Evans and Beverly Kaye in their Retaining employees article asked more than 10,000 people why they stayed in an organization for “a while,” and the top five responses included exciting, challenging work; career growth, learning, and development; great people; fair pay and benefits; and a good boss. This shows that employees not only benefit from but also stay because of training.

“A great deal of time and resources go into the hiring process, and it’s less expensive to train than it is to outsource or rehire.”


Another concern is that employees may forget what they’ve learned. This implies that the training occurs before the employee needs to use those skills or that employees do not have references to consult when they begin the work. Possible solutions involve providing training that is supplemented with documentation in case there is a delay between training and application of newly acquired skills. Easy access to a broad range of training formats helps employees take advantage of their optimal learning style, whether it’s reading manuals, watching training videos, or doing the work alongside a mentor, for example.

maximize training efficacy

Once you’ve chosen a training provider, be sure to make the most of that investment. An article from CIO Update lists some common failure points in the design, execution, and application of training, but some keys to success include setting the expectations of those who will attend training by establishing a strategic focus and giving employees the opportunity to apply learning on the job to improve performance and generate positive business impact (A CIO’s Guide to Maximizing the Training Investment, 2011). The more the employees use their new skills, the more familiar they’ll become, enabling them to build upon that knowledge base and provide greater impact.

In his article Enhance the transfer of training for the ASTD, Dennis Coates lists eight ways to enhance training transfer by focusing on shortcomings, setting up training transfer, coordinating learning networks, preparing coaches, integrating follow up, insisting on accountability, aligning culture, and gaining commitment. Without each of these in place, your training results will vary in effectiveness, and the time to reach your training goals will increase, hindering your potential business growth.

Also remember that for training to be successful, it should cater to the various learning styles of your IT staff. Effective options include virtual instructor-led classroom; mentored, self-paced video; on-demand e-learning; and online live webinars. Not everyone learns the same way, so your training should vary in media type delivery and duration.

summary

A large percentage of your IT budget is earmarked for upgrading hardware and software to improve business productivity, but consider who uses those resources. As you upgrade your business infrastructure, be sure to include your employees. It’s the people in the business who install, configure, manage, and maintain these crucial systems, and they need to be trained in order to leverage the new features and tools to get the most out of your technology investments.


Technology

How will upgrading your people impact your bottom line?