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Three roads to cost-effectiveness
or ... how to have your cake and eat it
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by Clive Shepherd
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Managing a training department can be a difficult balancing act - providing the volume of services required by the organisation to meet learning needs, delivering those services effectively and delivering them at an appropriate cost - all at the same time. This article provides ideas for ways to maintain this balance while forging ahead and providing a better service - delivering more learning, better learning and cheaper learning.

Contents
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Maintaining the balance
Cheaper learning
Better learning
More learning

Maintaining the balance
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Cost-effectiveness is such a dry term that few training managers would voluntarily place it at the centre of their priorities. Unfortunately the 'cost' word dominates, so that, for many people, cost-effectiveness is synonymous with cost saving. But taking the phrase as it was originally intended, cost-effectiveness is a central concern to any service department - providing effective solutions to identified needs at a cost that provides good value for money.

'Cost' and 'effectiveness' do not in themselves paint the whole picture. There is a third important dimension - volume. It would be relatively easy to reduce costs or improve effectiveness if you did less training - but that would not be meeting the identified needs of the organisation. Cost, effectiveness and volume all need to be balanced if you are to deliver a complete service.

A training manager looking to increase cost-effectiveness actually has three options:

  1. Reduce the level of cost whilst maintaining effectiveness and volume ('cheaper learning').
  2. Improving effectiveness whilst holding costs and volume ('better learning').
  3. Increasing volume whilst maintaining effectiveness and holding costs ('more learning').

Each of these allows you to have your cake and eat it - improving one of the measures without sacrificing the others.

Cut can it be done? Well, here's some suggestions for actions you could take that might just achieve the impossible.
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Contents

Cheaper learning
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Here's two ways to reduce costs whilst maintaining effectiveness and volume:

  1. Train the right people
  2. Deliver it efficiently

Train the right people
How many courses have you been on, or run, where you have to wonder 'what on earth is this person doing on this course?' Sometimes they already have a grasp of the content and are just attending because 'everyone has to'. Sometimes the content has no real relevance to their work and they are just taking the course out of interest or 'because it's there'. These people deliver no return on the investment. Training them is a waste of money.

But, I hear you saying, if we cut out these people, we're reducing volume, so we're not having our cake and eating it. True, but this is not volume that counts, it is not meeting an identified need. It's volume you should never have counted in the first place.

How is it possible to make sure that you're training the right people at the right time? Here's some ideas:

Deliver it efficiently
There are ways of making small cost savings, but if you are interested in a bumper cost reduction, try technology-based training (TBT). TBT can deliver substantial efficiencies, regardless of whether it is delivered from CD-ROM or online. Research has repeatedly shown that interactive, self-paced learning takes much less time to deliver than classroom methods - the saving could easily be more than 50%. There is a proviso - TBT must be appropriate to the learning objectives, otherwise you'll impact on effectiveness.

TBT can also make significant savings in delivery costs. Once designed and developed, TBT is extremely cheap to deliver. As the number of learners rises, TBT gets less and less expensive per learner, whereas classroom training, which takes much less time and effort to design, stays at much the same cost level.

As if that wasn't enough, TBT will also save you money in travel and subsistence costs. That's three cost savings in one!

The effect of cheaper learning
Imagine that you could reduce your training effort down to a few simple figures. You train 500 people a year at a unit cost of £1000 and with a financial benefit to the organisation of £1200 a person. The return from this effort would be £200 x 500, or £100,000. If you could reduce costs by 20%, without affecting volume and effectiveness this would be the effect:

 

Before

After

Volume

500

500

Cost

£500,000

£400,000

Benefits

£600,000

£600,000

Return

£100,000

£200,000

Contents

Better learning
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Here's two ideas for ways to improve effectiveness without raising costs or reducing volumes:

  1. Do the right thing
  2. Do it more expertly

Do the right thing
One of the most powerful ways of improving effectiveness is to make sure that you're using the right method for the job. All training methods - traditional or modern - have their place, but too often they are used out of habit, familiarity or for simplicity, when they don't do the job at all.

There are four important considerations in selecting a training method for its effectiveness in meeting a particular need:

  1. Match the method to the phase in the learning process. Some methods may be well suited to the preparation phase (providing an overview, reducing anxieties, getting to know each other), others to the delivery of learning content. Still others may be ideal for providing opportunities for practice, for facilitating feedback and reflection, or for supporting application on the job.
  2. Match the method to the preferred learning style. Learners differ in the way they like to learn. Given that you can identify a predominant style for your target population, try to identify a method that will be compatible.
  3. Match the method to the type of learning. Your learning objectives are likely to be a mixture of knowledge, skills and attitudes. Each of these - and their sub-varieties - requires a different learning strategy and possibly a different learning environment. Select a method that's compatible with the type of learning that you are aiming to achieve.
  4. Match the method to the media requirements. Some learning can be accomplished with text and graphics, while some requires the assistance of audio-visual media. In other cases, it's essential that the learner has access to equipment or situations that can not be brought into a classroom nor simulated on a computer.

This is a lot to take into account and you may never find a single, perfect solution. What is increasingly likely is that you'll use a component approach - mixing methods that, in combination, provide everything that you need to do the job.

Do it more expertly
It does matter which methods you use, but not as much as the way that you use them. Thomas L Russell, of North Carolina State University, made a compilation of research into the comparative effectiveness of different training media and methods, stretching over several decades. One common finding stood out - no method was inherently superior. In fact Russell's research has been published under the heading 'the no significant difference phenomenon'. What did become evident from the research was that every method was capable of being used well or badly. In fact, the quality of design or delivery was more important than the choice of method.

So, any contribution you can make to improving the quality of design and delivery must make an important contribution to the effectiveness of your training. What can you do?

An interesting example of the latter is the Trainer Activity Profile (TAP) methodology, developed by the Institute of IT Training to improve the quality of classroom delivery. A survey (July 1999) of the 500 people who have so far received TAP training showed that:

Of course these are not necessarily indicators of effectiveness, but they do indicate that training trainers can make a difference. As they say, if a job's worth doing …

The effect of better learning
Taking our previous example as a starting point, this would be the effect of improving effectiveness by 20% while holding volume and costs:

 

Before

After

Volume

500

500

Cost

£500,000

£500,000

Benefits

£600,000

£720,000

Return

£100,000

£220,000

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More learning
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This is our third and last opportunity to improve cost-effectiveness without sacrifices. Here's two ideas for increasing volume while maintaining effectiveness and keeping costs under control:

  1. Improve accessibility
  2. Run to capacity

Improve accessibility
In your organisation you probably provide a wealth of learning opportunities. But how easy is it to take advantage of these? In the ideal world, learning resources would be available at any time and in any place. Fortunately, advances in networking technology mean that this possibility is getting closer.

Online learning uses the Internet or company intranets to deliver learning wherever there's a computer and a network connection:

Online learning also makes it possible for learning to take place in any of the 168 hours available in the week - whenever it's convenient for the learner.

According to a study conducted in Spring 1999 by Epic Group plc for the UK Department of Education and Employment, improved accessibility is the principal driver for the introduction of online learning. Better accessibility means more volume for the same cost.

Run to capacity
Too often courses run with less than the ideal number of delegates. Why is this?

In the first case, it might be better to employ external courses (or use self-study methods) to meet minority needs, rather than to put on half-full internal courses. In the second, there's no excuse, given the array of communication methods now at your disposal, not least email and intranets. There's a simple cure to the last problem, but one that makes many training managers nervous - you charge a hefty fee for any cancellations.

The effect of more learning
Continuing with our previous example, this would be the effect of increasing volume by 20% while maintaining effectiveness and costs:

 

Before

After

Volume

500

600

Cost

£500,000

£500,000

Benefits

£600,000

£720,000

Return

£100,000

£220,000

Why have benefits gone up? Well, assuming benefits per student were £1200, an increase in the number of students would reflect in the benefits total. The training is not more effective, there's just more of it.

No monopoly
So there you have it. Six ways to improve cost-effectiveness without harmful side effects. Some may seem like common sense, but then if common sense really was common, we probably wouldn't need training at all. And some may seem like a right pain to implement, but then you've heard enough clichés from me without hearing about no pain, no gain.

Anyway, six is an arbitrary and, in this case, symmetrical number. There's probably many more ways of achieving the same goal. All further ideas will be gratefully received by the author.
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