Question

Reduction in Training Time: The Value of Demonstrating Value

This case occurred some time ago, but still has a valuable lesson. Alberta Bell of Edmonton, Alberta, was looking for ways to reduce the cost of its operations. Downsizing and cost cutting were necessary to meet the competition. One cost cutting decision was to reduce the entry-level training program for its customer service representatives from twoweeks to one week. This would save money by reducing the cost of training and getting service representatives out “earning their keep” sooner.

The manager of training decided to assess the value ofthis decision. Using data already available, he determined that the average time necessary to complete a service call for those who attended the two-week program was 11.4 minutes. Those in the one-week program took 14.5 minutes. This difference alone represented $50,000 in lost productivity for the first six weeks of work. He further analyzed the differences in increased errors, increased collectables, and service order errors. This difference was calculated at morethan $50,000. The total loss exceeded $100,000.

Obviously, when he presented this information to uppermanagement, the two-week training program was quickly put back in place.

Questions:

1. Do you think that the decision that has been taken by Alberta Bell of reducing the entry-level training program was rational? Explain why.

2. Explain why the upper management put back the two-week training program.

Answer 1

1. In my views, the decision taken by Alberta Bell of reducing the entry-level training program is not rational. This is so because effective training lays the foundation of good performance by employees. Training helps in keeping the skills and competencies of employees updated, thus facilitating their continuous growth and development. This continuous growth and development of employees helps in enhancing the overall productivity and profitability of business. By cutting down or limiting the desired training time of employees, the company is putting a restriction or roadblock in the overall success of its business.

2. After going through the research conducted by the manager of training, the management would have gauged that putting a limit on training process, was having considerable impact on employee performance and the overall productivity of business was getting impacted. There was loss of around $50000 in employee productivity in the first 6 weeks of work, after this training cap had been put. Hence the management felt it was viable to roll back the two-week training program as it would have facilitated the productivity of business.