December, 1990

Fruits of Thought

Education Breeds Success

Training is an area of vital importance, yet one where our economic system has not fully resolved the issues of allocation of costs vs. benefits.

Most companies spend more money on payroll than they do virtually anything else. So the obvious corporate desire is to increase productivity. If companies can improve the productivity of their workforce by 10%, they can easily recoup enormous investments in training to accomplish that increase.

When you try to analyze why many firms are hesitant to invest heavily in training, the objections are two-fold. First, employee productivity is often difficult to measure accurately – particularly qualitative as opposed to quantitative improvements.

It may be easy to measure the value of a credit card forms processor doubling his processing speed. But it is very difficult to measure the increase in value of a produce clerk who has become more knowledgeable and thus able to provide advice and information to consumers leading to higher produce purchases and, for that matter, increased preference of that store over another.

This is a difficulty but it is not insurmountable. Many decisions, from changes in décor to advertising, have effects that are difficult to quantify. But careful research can produce evidence of the overall effects of these activities to justify continued investment in them. Equally, the benefits of having a well-trained work force can be reasonably well quantified.

The second objection to training is its cost, both for the program itself and perhaps even more important, for the time it takes away from work to do the training.

If an employee works 48 weeks a year and the training program itself takes 3 weeks a year away from work but employee productivity increases by only 5% as a result of the training, the training program, at least directly, is a loser at first glance.

But often times, the analysis depends heavily on how long an employee will be with the firm after a training program. In other words, if you spend a thousand dollars to upgrade someone’s skills and he or she quits the week after the program, it’s almost impossible to recoup the cost of training. If someone will stay for decades, the investment in training may be well worthwhile.

Ironically, the first thing that often happens when you invest in people’s training is that they ask for a raise and threaten to leave if they don’t get it. After all, fully equipped with the new knowledge your training program provides, they are now a more valuable employee to you…and to your competitors. This is very disheartening to the employer who has spent good money on training and feels a need to realize a return on that investment.

On the positive side, companies with the best training programs come to be seen as the most desirable places to work and so get their pick of the best and brightest prospective employees. In addition, training has a motivating effect on the workforce. In terms of increasing employee satisfaction, training sends a message to employees that the company cares about them and their performance. Training also provides a pathway for advancement within the company as the employee acquires more and better skills. This prospect of advancement encourages employees to stay.

Today there are many different venues of training. The PMA offers two terrific video programs that were funded by Chiquita. Virtually every commodity board has some type of video training. Many large produce companies will travel to their customer’s locations and present special training seminars.

A lot of this training concentrates on entry-level personnel, and this, of course, is important. But in many ways it is training and education for upper-level personnel that is crucial. After all, these are the people that have the biggest opportunity to influence your bottom line. These upper-level people also are the ones most hard to replace.

This February, the United Fresh Fruit and Vegetable Association and PRODUCE BUSINESS magazine are sponsoring a formal type of retail produce training program called the Retail Institute. With a faculty of retailers, wholesalers, top consultants and trade leaders, workshops and seminars will be specifically tailored for three tracks of the upper-level team: top retail produce management, produce buyers and merchandisers.

Open solely to retailers and service wholesalers, the Retail Institute will create and educational forum where attendees can debate, analyze and search together for solutions to the challenges confronting retail produce in the 1990’s.

In the current economic environment, with greater competitive forces affecting the bottom line, retaining employees and enhancing their value, at all levels, will be vital. We all recognize the value of continually upgrading equipment and capital stock. Our employees and associates have no less an impact on our business. We have no alternative but to ensure that we and our employees are always kept up to date and able to make the maximum contribution to our business. When it comes to training and continuing education, there really is no alternative.  pb