Investing capital in your company is a normal part of financial business life. The investment law is simple, the company should gain profit, the Return On Investment (R.O.I.). But what about investing in your most important Capital, Human Capital? And how do you get ROI from that investment?

Through training and developing your employees, you directly influence your sales and your service levels, which means that your customers directly will notice and experience that they are served and treated better. And we all know that a satisfied customer returns, becoming a loyal customer and a fan of your company.

Did you ever notice the difference in service levels as you walk through the town centre of Zagreb?

You might be a bit like me; you choose to have a coffee or a beer not at this terrace but on the other one; just because you remember that the last time(s) you were not served well in that place, you choose to go where you are treated nice and friendly and you choose to spend your money there.

You might also notice the difference in the quality of service by visiting shops or banks. In general employees in banks are very decent and customer oriented; in shops for e.g. mobile service providers you feel like a customer who is welcomed as a guest.

It is a complete different experience then when you for instance go into a supermarket, some have 14 checkouts but then in general only 4 are open, while customers are waiting in long rows to be allowed to finally pay.

This is the difference between companies that do invest in their Human Capital as well as in the quality of their service and the companies who do not care about their employees and their customers. Committed employees and loyal customers!

What kind of company would you like to work in?

There is research showing that investing in Human Capital, thus making your employees better, has a R.O.I. of 5-6 % of your annual profit. Bigger companies invest 3-7% of their total payroll per year in training and development. Why would they do that?

As I wrote some time ago, in practice the best companies have the best people. The second-best companies have the second-best people. The third-best companies are on their way out of business. Your ability to select good people and then to train, develop and manage them well is the critical determinant of the success of your business.

Your customers will notice this and they'll talk about it with others.

Good or bad experiences, the mouth-to-mouth marketing has a ratio of 1:10; meaning that one unsatisfied customer shares his/her negative experience with 10 other people. That is bad publicity, that is bad for your image, bad for your brand, bad for your sales.

In this case your marketing campaign turns out to be spilled money because your customers do not believe your slogans, your promise does not fit with reality, your customers’ experience is the opposite of what you communicate!

Good service experiences (also in that 1:10 ratio) is therefore even cheaper than an expensive marketing campaign, your customers do your promotion for you for free! And never forget, in the end it is always the customer who makes the final decision where to spend his/her money.

Better late than never

Of course you see enough companies that do not train their people, but they still have a choice to start, better late than never.

However, if you will start an effective training and development program, then it is good to think about a few standards in your approach. Creating an effective training program is pretty hard, you will need professional help and start with a critical intake. And managing a good training process is difficult. Training and development of your people can only be effective (R.O.I.) if the program is in line with a clear business vision. And this vision should be clearly communicated throughout the whole company; ‘All heads are looking into the same direction’.

Then you will come to questions like: How do you motivate your employees to participate in the training? How do you prepare them to take an pro-active role? What are the concrete (smart) training goals? What should be the training results? What needs to be improved in practice based on your company vision and goals? How do you stimulate the trainees after the training to bring into practice what they have learned? How does your support and coaching program for your employees after the training look like? How do you internally communicate about the training? How do you measure the results of the training?... and so on. With an approach like this you will be able to develop an effective training program that gives you a good R.O.I.

Finally, the assignment for management is always to make sure that your people, your human capital, knows where you are going, where you want them to go to together with you, know how to do it and yes, you have to show that you care about your staff.

Show that you care as much about your human capital as you care about your financial capital.

How could Balance Consultancy help you?

We can provide you a tailor-made solution for your training needs to make your employees and your company more successful.
www.balance-consultancy.com