What is the cost of untrained staff to your business?

24 Oct 2017

Spend for Profit, Discount for Profit, Cut back or Train for Profit?

In times of business uncertainty and faltering sales, there is an historic trend to cut down on research, training, and advertising spend. 

It would seem that too many influential accountants and finance directors have an eye for the future that is about as long as the rest of the day ahead.  

Do they participate in doing the normal things in life, like use shops, restaurants and airlines. 

Perhaps they are immune to dismal service, promotional discounts and mouthwatering offers. 

Those day to day events and items that persuade us to either part with our money and the negative incidences that result in an emotional decision to "forfeit" the services of a company.

Unfortunately, monthly accounting figures show reality in black and white with no shades of grey. 

Accounts do not necessarily show the potential for profit or the reasons for lack of profitability.

Why so many British companies are getting so much brilliantly right, but also some core fundamentals so expensively wrong?

We know spending on advertising can increase turnover and profit in most business climates, providing the promotion is well targeted. 

We know discounting can, without doubt, entice customers away from competitors and is a useful tool in the armoury, but usually, this can only be maintained on a short-term basis. 

Cost Reductions
We know reducing costs is a prudent and required control, but where to cut the costs and the rationale behind the reduction is the question.
Pruning research spending will certainly delay company development and may be harmful on a long-term basis. Any savings are usually short term. 

Training Budget
So then we come to training budgets, frequently there is not sufficient training spend to make a significant or obviousdifference to a company’s bottom line profit.
So few directors and managers of businesses really grasp the very large and significant effect that training has on the profit a company makes.

Many captains of industry will pay lip service to the necessity for training without understanding the deep and lasting advantages it brings, including that word profit. 

Definitions of training:

  • Training is the process of learning the skills that you need for a particular job or activity.
  • The process of bringing a person, etc, to an agreed standard of proficiency, etc, by practice and instruction
  • Training is the physical exercise that you do regularly in order to keep fit or to prepare for an activity such as a race.

The "Aha" moment:

Training is also about realisations that are experienced along the way as well as the implicit comprehension of following a developed procedure and the rationale behind it.

It is the realisations, that dawning, illumination even, or the satisfaction in finding that one's own conclusions are borne out in the programme that gives merit to behavioural change through understanding. 

A Turning Point

Have you witnessed turning points in friends or colleagues, when they realised they had a contribution to make, that mental awareness, a gamechanger in self-esteem and a new found confidence, that, actually, they were really good at what they did?

And it was as if the brakes were now off and they just got better and better, their contribution and momentum increased and they gained a recognition from both peers and seniors for their output and performance.

Customer Experience

As a consumer or customer do you regularly frequent the businesses that give you bad or indifferent service?

“Unlikely, unless I really have to” is the usual response.

Do they even know they are delivering a bad or indifferent service?

Do you use the service because you are compelled to, yet detest the service as inadequate?

In that “captive audience” scenario; nowhere else to go, how does that service level impact on your attitude in your one to one dealings when using the service?

Blatant hostility

The natural responses range from indifference, projected indifference, resignation, keeping the interactions to the absolute minimum, rudeness, blatant verbal hostility and incremental negative behaviour.

What is yours?

Research shows that: 

35% higher customer satisfaction results from formal employee engagement programmes.

It also shows that as a result compared to companies not involved in employee engagement there is a 26% greater annual increase in revenue.

Let’s qualify that statement, for the profit and loss report:

So let's say that a company is forecast to turnover 500,000 in revenues per annum with growth calculated (multiply it as you will ) and as a result of effective staff engagement it generates 630,000.

 “People will sit up and take notice of you if you will sit up and take notice of what makes them sit up and take notice.”

A favourite quotation by Harry Selfridge founder of Selfridges store in London. 

Here is a man who recognised back at the turn of the twentieth century, that, if you treat your customers with respect and understand what they are looking to buy or the service they would expect to receive, fulfill that expectation and more and they will repay that understanding many times over.

By training staff to be helpful and courteous and have a full knowledge of the items they are selling, they will be confident and their performance will be improved and the customer’s experience enhanced.

“Goodwill is the one and only asset that competition cannot undersell or destroy.” 
(Yet another of Harry Selfridge’s mottos).

The philosophy of Marshal Field, owner of a large New York store, was, that tangible items and money are easily adjusted to bring customers in, but it’s the intangibles like goodwill, courtesy, respect and dignity that make the difference. 

This underlines the importance of how training to do the right thing, and having good values will always translate into good business, which can, of course, equate to excellent and sustainable profits.

Customer Feedback

If you have access to a bigger market, then the opportunity to thrive is there, but in this day and age with social media platforms and online purchasing, there is as much of a risk to “goodwill” being adversely affected when service is inadequate or absent. When automated systems replace real people and deny the customer the opportunity to give feedback or the resolution of an issue, so is the opportunity for the angst to be vented on the numerous social media platforms.

That is not to be said that the “real people” would do any better all of the time, some of the time or even at all, but many is the opportunity where poor service has resulted in a complaint which, when dealt with effectively can turn a disgruntled customer into an ambassador.

So, what do your customers think of the service you provide as a company?

How do you get feedback?

Is it by asking the question in person, an open survey or as a survey which asks closed questions without allowing any flexibility of response.

What are your Key Performance Indicators (KPI)?

In recent times telephone surveys or ones that land in your inbox relate specifically to how one’s interaction with a member of staff rated and did it resolve the issue, but omits the crucial question about what was the issue that necessitated the communication.

Staff Feedback

This is as essential as customer feedback, as they participate more often than not in the customer experience and influence it to both positive, negative and often unremarkable outcomes.

Getting honest and candid staff feedback is crucial and sometimes generates epiphany moments of insight and revelation that can have real impact in identifying how aspects of the business are being run, practices within it and more than that the depth of staff feeling both positive and negative.

Inevitably staff feedback generates options, solutions, and opinions, but most essentially discussion, dialogue that takes an issue and makes it a topic of focus. All of which have a value from which to take action, inaction or a deferred course of action, but the “consultative” nature of formal staff feedback if done correctly also generates a positive momentum from which to develop.

So where are you now?

 Are you at your full potential:

  • Sales
  • Productivity
  • Positive customer experience and loyalty
  • Positive staff experience and loyalty
  • Staff retention
  • Performance
  • Growth

Is generating customer feedback a recognised tool in the company arsenal?

Is staff feedback on a formal basis encouraged and recognised as a positive tool by the staff?

More importantly are the issues addressed?

Introspection when clouds are on the horizon

The familiar scenario is that companies start looking inwards when there is a drop in sales, profitability or a perceived threat to the business and this will not ever change.

Management by exception

Paul Cook explains in this video how some smart thinking companies look at it from a different perspective.


If customers are unhappy then probably the staff are too

While we are quoting one of last century’s great business entrepreneurs, why not think about a quotation from one of our recent successful company founders.

Bill Gates a man who made a spectacular amount of money out of Microsoft the company he founded. Bill Gates is quoted as saying;

“Your most unhappy customers are your greatest source of learning” 

Engaging with customers is the first step in staff engagement.
Without that valuable feedback from customers some of the most important factors that customers appreciate, cannot be acted upon quickly and the inability to rectify a matter can be very costly. 
It may be a simple complaint that staff do not smile enough or more seriously a product or service is of a poor quality compared to the competition.

What puts the smile on a happy employee’s face? 

It might be more money but more likely it will be the working environment.
A confident staff member working with a well-trained team of individuals all working as a team motivated and competitive yet still helping each other for the good of the team.  Impossible? 

Not a bit of it.

Staff retention is a win-win situation for everyone

The cost of constant recruitment and even more costly disruption to the smooth running of an operation is to be avoided and more importantly noticed, analysed and rectified.

Regular long-term employees work miracles for customer satisfaction, staff morale and the standard of operation increases along with the profitability.

Staff selection and training staff might seem an obvious course to take and it is often presumed this is a natural process and second nature to those involved.

The reality is that far too many companies for a variety of reasons just do not recognise the problems, let alone set about the right course of actions to make changes for improvement.

It all sounds plausible and is possibly a contributing factor but companies must look for success in what sounds a contradictory fashion, that is; look outside of the box for opportunities and look inwards for efficiency.

Seeing opportunities is not the easiest thing to teach and one can only guide an individual to think harder about the possibilities for opportunities and perhaps sharing judgment with others. 


The realization of employees as to their own value, the contribution that they make and being exposed to the bigger picture on an incremental basis through structured training, mentoring and experience turns them from employees into assets, but their value is enhanced significantly by recognition of that value and its further development by senior management and a company ethos which supports and encourages staff engagement. 


Greater opportunities for saving money and generating more are as we all will appreciate, if we think about it, stems from keeping existing customers loyal and encouraging them to spend more and to recommend to others. 

How do we do this? 

By making their experience consistently excellent not just OK. 

The method?

Let's start at the top 

“Even when organizations are good at assessing leaders’ talents (e.g., their skills, expertise, and generic leadership capabilities), they forget that an essential element of effective leadership is the congruence between leaders’ values and those of the organization, including the leaders’ team. As a result, too many leaders are (correctly) hired on talent but subsequently fired due to poor culture fit.”

A quote this time from a professor of business psychology Tomas Chamorro-Premuzic and CEO of Russell Reynolds Associates Clarke Murphy.

This is not a casual observation but a well-researched phenomenon that many larger organisations have the misfortune to have suffered. 

Whilst always in search of increasing performance and profit many larger companies employ high profile well liked and admired business leaders. This may not be the panacea that will take the company forward as will be the expectation. 

Premizic and Murphy observe and state; “altruistic leaders will strive to improve other people’s lives and drive progress in the world, so they will suffer if their organizations are purely driven by profits and disinterested in having a positive social impact”.

So much depends on the perceived culture of a business and the actual culture and how the employees operate within the business. 

Would having a more positive social impact also be the catalyst to a different culture within? 

If employees are educated in the ways of a CEO who embraces a more socially responsible attitude, then the way that they view customers may be more positive and thus this may reflect in a company’s bottom line through happier customers. 

Inspired leadership, a happy staff,  means happy customers,  means happy shareholders, means happy taxman.