Training may be defined as a process for acquiring skills that improve performance that leads to success. Success in the collections environment depends on continued enhancement of collector performance. The comprehensive approach to budgeting for training, therefore, includes both initial and advanced training opportunities. Before undertaking the details:
1) Assess the benefits of training.
Regardless of size or years in the business, management of the collection company will want to know what the returns on investment (ROI) in training will be. Companies have other business obligations and budget requirements with which training will compete. The first step in budgeting is to make the business case showing that the dollars invested are justified by the potential return. While it is important that the company fundamentally believes in training, the case for such must be made on a concrete return to the company measured in dollars.
2) Show what will happen as a result of the training.
For example: Let’s say that the training will result in improved number of calls that can be made by the collector. The dollar impact can be quantified in terms of fewer hours needed to do the job. Perhaps the training also reduces the number of employees needed on a new hire basis, which also impacts compensation and benefits and maybe overtime expenditures. Quantify. Show the relationship or link between employee proficiency and the company’s earnings.
3) Define the measurements of success.
Develop a system or methodology for tracking and assessing the results, measured against your desired results. In the example above, did the training result in a daily increase of the number of calls made per collector? And did the company not have to hire more people? Typically, measurements are developed as either pre-test/post-test (the difference between measurements taken before training and after training) or with a control group versus an experimental group (the difference between those who took the training and those who did not). In our example above, either of the methods would be useful.
A budget needs to be in line with the company’s capacity and requirements but must also meet employee need.
4) Delineate a budget that gets you what you want in a manner you can afford.
Allocate the largest expenses first. Be realistic! Using the following guidelines, develop a budget that can be translated into a per employee cost (total cost/number of persons trained):
- Outside Instructor Fee (If an internal person, calculate a “fee” based on the trainer’s salary and number of hours that will be devoted to training.)
- Instructor Expenses (travel, lodging, meals)
- Manuals/Printed Materials
- Incentives (awards, gifts, etc.)
- Meals/Coffee/Juice (for participants during training)
- Miscellaneous Supplies
- Internal Operational Costs
- Office or Space Rental (if company has no available space)
- Equipment (AV equipment, tables, chairs, etc.)
- Dedicated Salary of Training Coordinator
With any proposed training, consider the number of sessions needed and the amount of time for each session. Include overtime costs if some employees will cover for others while they are in training. Include a calculation for lost productivity (time spent in training rather than on the phone).
Knowledge is power. A well-trained collector is bound to be a greater asset over time to the company than one who is not. Employees who know you will continue to have a stake in their personal and professional growth and development are more likely to be higher producers, have a longer employment period with the company, and generally are a stronger asset to the company. Who could ask for a better return?