Author: Joe Mullich

Sonesta Hotels, a chain of 25 properties stretching from Boston to Cairo, wants nothing to do with e-learning. The hospitality company tried to have employees learn customer-service techniques using self-paced computer modules, but found that they hated not being able to bounce ideas off one another during training. On top of that, the cost savings weren’t significant.

    IBM, on the other hand, discovered that managers who have been exposed to online chat forums and computer simulations of work situations say they never want to go back to classroom-only training. Not only that, but Big Blue found that using such technology has enabled the company to trim the cost of training by $400 million a year.

    Whether e-learning is currently in a state of boom or bust depends on your viewpoint. The conflicting claims of the e-learning naysayers and proponents can be hard to sort out. Consider, for example, the experience of Express Personnel Services, the world’s largest privately held staffing firm, based in Oklahoma City. Four years ago, during the Internet boom, Express Personnel invested in an expensive streaming-video training system that offered every bell and whistle imaginable and gobbled up so much bandwidth that no one at the company could use it. After junking that system, the company has returned to e-learning with a less expensive system that uses shorter online classes.

    E-learning is making a comeback. While spending for corporate training remained flat in 2003, e-learning expenditures rose by a striking 22 percent, says Michael Brennan, an analyst at International Data Corp. What’s more, IDC predicts that funding for e-learning will rise by an average of 27 percent over each of the next five years. Analysts are quick to add, however, that the e-learning of 2005 will be nothing like the version that crashed and burned with the dot-com implosion. As in the case of Express Personnel, e-learning initiatives now tend to be far more modest and targeted.

    Companies no longer accept the notion that technology and the Internet are the perfect solution for every kind of training. Many firms are still licking their wounds from those earlier efforts. The seven-figure learning management systems that many firms purchased took, in some cases, years to fully implement. Many of the expensive libraries of content remain largely unused. Employees frequently found that big clumps of static material were too dry and difficult to figure out. Many companies bought a three-year subscription to a catalog of courses, put the material up on their intranet, and then found that no one ever logged on, says Jeff Snipes, CEO of Ninth House, a San Francisco maker of online training modules.

Successful e-learning starts with a commonsense practice that is often overlooked: carefully thinking through the purpose of a training initiative.

    Now companies are treating e-learning strategically, with greater attention to ROI and more awareness of how to use–and not use–online training. The American Society for Training and Development recently released its 2003 state-of-the-industry report, which shows that many companies are avoiding the most cutting-edge e-learning technology. Old-fashioned CD-ROMs represent 46.9 percent of technology-delivered training, virtually the same amount as two years before. Perhaps as a result of the dot-com fallout, networked online delivery of training decreased in 2002. It represented a mere 31.5 percent of technology-delivered training, down from 41.3 percent two years earlier.

Blended is best
    Even the most technologically gung-ho firms no longer promote the notion that e-learning can replace all forms of training. The mantra, more than ever, is “blended learning,” which means using technology in conjunction with classroom training. D.L. Karl, vice president of product development for AchieveGlobal, a training firm in Tampa, Florida, says that the blend between new and established methods commonly has been accomplished by guesswork. This mentality has led to disappointing returns for the training dollars. Karl’s experience has been encountered by many others in the same arena, who conclude that e-learning does an excellent job of helping workers learn conceptual subject matter, such as product information or the tenets of customer service, but that developing interpersonal skills requires personal, face-to-face practice.

    Express Personnel, for example, found that managers can benefit from online material about the principles of hiring, but need classroom instruction with role-playing to learn those skills. When personnel go to one of the company’s training centers, they learn a lot from other people doing the same job at a different location. “You can’t package that in a class,” says Diana Scott, the firm’s e-learning manager. The company experimented with online forums to promote such exchanges but found that busy workers simply wouldn’t use them. Experts say that the methodology used for each of the various phases of the training process should reflect the desired outcome for that stage, not the cost or convenience of a given technology.

    No one has found an ideal mix of technology and classroom instruction, but IBM seems to have come close. It conducts 48 percent of its training electronically, says Ted Hoff, IBM’s chief learning officer. With 320,000 employees scattered across 76 countries, the company has a special need to quickly and efficiently train its people. But like many other firms, IBM has found that e-learning works most effectively when strategically coupled with classroom training.

    A prime example is “Basic Blue,” IBM’s training program for new managers. In years past, the more than 5,000 new managers who are trained each year would be brought together for a five-day event to learn the basics of the firm’s culture, strategy and management practices. That was too much information to absorb in such a short time, so IBM expanded the program to 12 months by adding different types of e-learning to the weeklong live event. Five months before the live event, managers now do self-paced Web learning modules that discuss basic management skills and use simulation modules to handle real-life business scenarios using videos of a fictional colleague or customer. By the time the new managers meet for the five-day event, they have been in the field long enough to discuss actual experiences. After forging those face-to-face relationships with other managers, they continue to do online group simulations and mentor one another for seven months.

    Studies conducted by Harvard Business School and other organizations determined that the program enables managers to learn five times as much material at one-third the cost of a classroom-only approach. Before going through Basic Blue, managers said that they preferred face-to-face training. Afterward, Hoff says, surveys indicated that managers overwhelmingly liked the blended approach better, and in the future always wanted some training delivered electronically.

Analysts are quick to add, however, that the e-learning of 2005 will be nothing like the version that crashed and burned with the dot-com implosion.

Still wary
    BM, of course, sells e-learning technology and has a vested interest in its success. Other companies remain more wary. Four years ago, when the Internet was still considered miraculous, Express Personnel looked for an e-learning system to help save its franchise owners time, travel and training costs. An Express Personnel vice president checked out some programs and was wowed by the setup at a real estate company where e-learning was provided 24/7 through streamed video delivered by satellite. Soon afterward, Express Personnel purchased a similar video training system. Problems started immediately. Creating content was expensive and time-consuming. Worse, many franchise owners didn’t have enough bandwidth to view the videos over the Internet. “The videos would get stuck all the time, and the presenters looked distorted,” Scott says. “We bit off more than we could chew.”

    The experience was not uncommon. In the first go-around of e-learning, many companies had a follow-the-leader mentality. They installed state-of-the-art learning systems with 3-D simulations, but never considered whether the systems were necessary or cost-effective.

    “In the past, people used a lot of crazy metrics and spent hundreds of thousands of dollars to build e-learning systems with a lot of gratuitous functionality,” says Dave Palumbo, head of the learning practice for Sapient Corp., a Boston consulting firm. Those kinds of approaches have been scaled back, he says, along with high-flying e-learning providers that could charge whatever they liked for support. What remains are crisp, clear solutions that solve well-understood problems.

    Express Personnel got rid of the expensive Internet video system, and the vendor that sold it, in 2002. The second time around, the company’s training department involved the IT department in choosing a simpler e-learning system that wouldn’t tax the franchises’ computer systems. Now, franchise owners and their employees can log on and, instead of being confronted with a mountain of videos, are directed to shorter online classes designed for their specific job functions, such as inside or outside sales.

    If an e-learning system overwhelms the users with too much information, they will not come back. “The new system has a lot of capabilities that we turned off and are not using,” Scott says. “In e-learning, more is not better.”

Briefing and debriefing
    Many companies believe that how employees are prepared for e-learning has a big effect on the training’s outcome. Kathy Harris, an analyst at Gartner Group, notes that student-managed learning is a radical change for most people, and companies must provide incentives to use it. Before IBM inaugurated a series of Web seminars for salespeople on how to sell e-business technology, a vice president of sales sent a message to all salespeople about why the information was important to their jobs and to the company’s future. Like many other successful e-learning initiatives, the seminars were well attended because they were mandatory. But it is important to send the personalized note about why this is valuable so the participants have the right mind-set, Hoff says. The training won’t be effective if people are doing it only because it’s required.

    Granted, IBM has tremendous resources. Still, even small firms with modest e-learning programs are finding that the same principles apply. Windsor Frozen Foods finds that few employees are interested in attending training after work, especially if the course is held at a remote location that requires additional transportation time. George Young, Windsor’s corporate director of human resources, thought e-learning was a perfect solution, so he purchased learning modules on management practices from Ninth House about subjects such as how to ask better questions at meetings. The key to the success of the self-paced modules, he found, was setting up sessions afterward for the users to discuss what they had learned and how they could apply the information to their jobs.

“In the past, people used a lot of crazy metrics and spent hundreds of thousands of dollars to build e-learning systems with a lot of gratuitous functionality.”

    Given employees’ past lack of interest in additional training, Young approached the program with trepidation. But the employees had a lot of lively discussions, and he now frequently sees situations in which people apply some of the things they’ve learned from the modules, even if they don’t realize that’s what they’re doing. A crucial aspect of the self-paced training was letting people know in advance that these discussions would be held, so they had greater focus and a sense of accountability. Despite the success, Young is taking the go-slow approach that now characterizes many e-learning initiatives. The first modules were done by 14 company officers, and e-learning is being rolled out to the rest of the workers gradually.

Less is more
    The ASTD report shows that learning technology is rapidly taking the place of much of the training traditionally presented in a classroom. Overall, 15.4 percent of corporate training in 2002 was conducted through learning technologies, compared to 8.8 percent two years earlier. Among Fortune 500 companies, learning technology constituted 25.5 percent of all training, up from 18.7 percent two years before.

    Not surprisingly, the more advanced forms of e-learning are much more popular among larger firms and companies that are technology-savvy. At Fortune 500 firms, 73.6 percent of technology-delivered training comes through networked, online methods. This has increased steadily even during the dot-com collapse. However, most firms are looking at more modest technology and smaller initial investments.

    Companies are still trying to find the right balance to make the e-learning experience engaging but not overwhelming. In many cases, experts say, workers will be happy with the new generation of 10-minute training modules that address a specific need. “The content doesn’t have to be so flashy that it looks like Steven Spielberg produced it,” analyst Palumbo notes.

    Companies are also grasping for better metrics to measure e-learning, such as increased satisfaction and reduced turnover, as opposed to what Palumbo calls the previous “smiley-face metrics like ‘I liked it better.’ “

    Too often, experts say, companies have looked to e-learning as a cheaper solution, without considering whether it is an effective solution. Successful e-learning starts with a commonsense practice that is often overlooked: carefully thinking through the purpose of a training initiative. Brennan of IDC still sees companies set arbitrary e-learning goals, such as planning to have 80 percent of training online in four years, without thinking about how receptive the audience will be, what the business drivers are, and how they will combine e-learning with other forms of training. “When I hear numbers thrown out without business arguments other than ‘we’ll save money,’ I’m skeptical,” he says.

    Analysts say that skepticism about e-learning is a good thing. Remembering and avoiding the sins of the past will enable a firm to reap the many real business benefits that can come with careful purchases and sound planning.

Workforce Management, February 2004, pp. 51-55 — Subscribe Now!

Isn’t it ironic. Companies spend anywhere from $2,209 to $11,209 to hire a new employee, according to Staffing.org, but few put much effort into helping workers acclimate and become productive. The result is that many workers quickly leave or take longer to reach what economists call the “break-even” point–the point at which, basically, a new worker stops costing the firm money and starts making some.

    Every minute that a worker’s break-even point can be accelerated helps build the business and contributes to the bottom line. Quint Studer, CEO of the Studer Group, a consulting firm in Gulf Breeze, Florida, finds that companies that take steps to “re-recruit” new employees can accelerate performance and reduce the costly problem of workers leaving in their first three months by as much as 66 percent. A survey of 610 CEOs by Harvard Business School estimated that typical mid-level managers require 6.2 months to reach their break-even point.

    “The job of recruiting doesn’t end when someone signs on the dotted line and comes to work for you,” says Bill Catlette, a management consultant and co-author of Contented Cows Give Better Milk. “You have to be constantly in the mode of making sure the goals of the organization and the individual line up.”

Think 30/60/90
    The concept of re-recruitment has been most widely adopted, consultants say, by service industries like restaurants and hotels, where turnover is both high andcostly. A report by the American Hotel and Lodging Association found that it takes about 90 days for a new employee to reach the level of productivity of an existing worker. If new hires don’t receive proper training and support early on (as they do at companies likeNational City), though, 47 percent leave their jobs within the first six months.

    Sonesta Hotels, a family-run chain of 18 properties on the East Coast of the United States as well as abroad, has developed a formal program to continuously acclimate new hires to their jobs throughout their first 100 days. This effort to boost performance and lower turnover is especially important in the hotel industry, which has suffered three tough years during the economic downtown. Over the past 12 months, Sonesta has lost $4.8 million on revenues of $85.6 million. The main thrust at Sonesta is to re-recruit workers on their 30-, 60- and 90-day anniversaries.

    At 30 days, the human resources director sits down with new employees to see if their expectations are being met, and whether they have all the tools they need to perform their work. “This time period is far enough into the job so the employee has an idea what it’s like, but not so far down that adjustments can’t be made if necessary,” says Grace Andrews, president of Training By Design, a Melrose, Massachusetts, company that runs the program.

    At 60 days, new employees receive a second orientation, called “the Booster.” The focus is on developing the workers’ communication and service skills. The company also solicits feedback about the employees’ training, and asks them what else they need to be successful, Andrews says.

    At 90 days, employees have a formal review with their manager, which focuses primarily on joint goal-setting for the rest of the year. “It’s more of a conversation than a review,” Andrews says. “People don’t want to be graded; they want to know what their future is.”

    Studer says that in the health-care field, surveys indicate that more than 25 percent of employees leave within the first 90 days. The Studer Group found that organizations can reduce that costly number by two-thirds using 30- and 90-day re-recruitment meetings. It recommends this process as a core retention strategy for the 250 hospitals it coaches.

    Quint Studer, author of the upcoming Hardwiring Excellence, tells supervisors to ask five key questions to head off potential problems and cement early retention:

• How do we compare with what we said in your interview process?

• What’s working well?

• Which individuals have been helpful to you?

• On the basis of your past experience, what systems or ideas do you feel could improve our operations?

• Is there anything you are experiencing that would cause you to think about leaving?

Up to speed faster
    Some companies find that the best way to bring new employees up to speed quickly is to have veterans share their “secrets.” Michael Watkins, an associate professor at Harvard Business School and author of The First 90 Days, worked with one company that accomplished this by selecting 10 employees who had been with the firm for two to three years. This was long enough to know the terrain, but short enough so they remembered what it was like to be the new kid on the block.

    The 10 employees–all of whom were articulate and successful in their jobs–were videotaped candidly answering the kinds of questions that new employees have, like “What do you wish you had known about this place when you started?” The responses were edited into a 30-minute video that was handed to each new employee immediately after hiring.

J&J’s tools
    Watkins notes that a new employee’s relationship with his or her boss is the top factor in determining failure or success. In his book, Watkins details five key conversations that every boss should have with a new employee early on:

• The Business Situation. Is it a turnaround, a start-up or a realignment? How did the company reach this point?

• Expectations. What does the employee need to do in the short term and long term? How and when is the employee’s performance measured? What constitutes success?

• Style. How can the boss and employee best interact? Does the boss prefer communications in writing or by e-mail? What kinds of decisions does the boss have to be consulted on?

• Resources. What does the employee need to be successful in terms of equipment, funding and personnel?

• Personal Development. How will the job improve the employee’s personal development? Are there projects or special assignments he can do without neglecting his main duties? Would courses or programs strengthen his capabilities?

    Many of the five conversations that Watkins cites are as much negotiations as dialogues. Of course, not every manager is skilled at discussing such matters. Some companies that he works with, including Johnson & Johnson, use online tools to cascade these practices down to managers. The Web site designed for this purpose provides forms that both managers and new employees can fill out before the conversation about, say, setting expectations, to keep the dialogue on track. “The key for this to be successful with line managers is to keep it simple,” he says. “If it’s more than one page, people’s eyes glaze over.”

Don’t wait a month
    Managers should try to connect the new hire to key people throughout the organization. At the start, managers should hand a new employee a list of 10 individuals that she should touch base with early on because they will be critical to her job.

    Smart companies also look at the social aspects of a new employee’s indoctrination. “Let’s say a department with a staff of six had its regular monthly staff meeting a week ago,” Catlette says. “If a new person starts today, you shouldn’t wait a whole month to hold the next staff meeting, even if you don’t have the most robust agenda.”

    At Sonesta Hotels, managers are “highly encouraged” to take the new hire and the entire department out to lunch during the first month to foster team-building. At first, Andrews says, departments that have less of a people focus, like accounting, bristled at the notion. “That attitude started to shift when they saw the benefit of having people talk in an informal setting,” she says. “New employees learned a lot about their jobs and came up to speed much more quickly.”

    The departmental lunches are best held 20 to 30 days after a new employee has started. Before that, new workers are usually too overwhelmed with learning their jobs to benefit from the informal exchanges.

    There’s no question, in Sonesta’s view, that this kind of attention to new hires is essential to retention. “With it, they become good employees faster,” Andrews says. “Without it, they often don’t stay.”

A key strategy for retaining older workers is phased retirement. Rather than simply retire, many employees prefer to cut back on their work hours, which often means they continue working on a part-time basis long past traditional retirement age. Many companies don’t realize, however, that their pension plans unnecessarily discourage phased retirement, says Valerie Paganelli, senior retirement consultant for Watson Wyatt Worldwide.

    Most companies have defined-contribution benefit plans, also known as 401(k)s. Many of these plans are not set up to permit employees to take out loans against their retirement holdings, withdraw money in installments rather than in one lump sum or make hardship withdrawals before age 59. However, all of these things are permitted by the Internal Revenue Service and can be quite appealing to phased retirees.

    Many companies have chosen to forgo the administrative details of more flexible plans because they didn’t think they were important, Paganelli says. However, many retirees would prefer to have access to their money in a more measured fashion. Indeed, in some cases, older employees who wish to continue working yet draw their pension are forced to retire and go to work for another company, even though their original employer would benefit from their staying.

    Carl Gustafson, corporate vice president of human resources for Baptist Health South Florida, believes this happened at his firm before the retirement plan was changed to allow more flexibility. “Before, we had people who would have to officially retire, wait to collect their pension, and come back to work,” he says. “And I have no doubt that during that time we lost some of them to Wal-Mart and other companies.”

    Sometimes pension changes are rather simple. When St. Mary’s Medical Center launched a program to coax retired nurses back into the workforce, some were concerned that returning to work part-time would lower their retirement benefits. The amount of their check was based on their last five years of salaries. St. Mary’s fixed this by changing the formula to their five highest annual salaries.

    Other companies are retaining their key employees by safeguarding their benefits while they “try out” retirement. Baptist Health’s Bridgement of Service policy states that anyone who quits and comes back within five years picks up where they left off in terms of years of service, perks and time off. Ten to 20 people take advantage of that every year.

    In certain cases, Volkswagen permits a “rehearsal” retirement. In this instance, an older worker who is thinking about retirement can take an unpaid sabbatical, keeping benefits, for one to three months. If the employee wishes to return, the position is kept open. “The employee gets a taste of what retirement is like,” says Steve Stephens, Volkswagen’s human resources leader. “In some cases, they’ll decide to keep working for another few years. Either way, they’ll know if they made the right decision.”

Workforce Management, December 2003, p. 52 — Subscribe Now!

For months, and maybe years, a young reporter named Jayson Blair filled the pages of the august New York Times with news stories he often made up. After investigating why he got away with so much fabrication for so long, a Times committee laid some of the blame on an unexpected source: lack of training.

    The group’s just-released report concluded that Blair’s superiors had been promoted to their positions on the basis of their own news-gathering ability, and they had never received proper guidance on how to mentor and manage the hundreds of aggressive journalists in their charge.

    In response, the Times announced last month that it would hire its first-ever assistant managing editor in charge of training, career development, recruitment, promotions and evaluations. Times spokesman Tony Usnik says the paper hopes to fill the position by this month and will follow the committee’s recommendation that the post “be invested with unambiguous authority to oversee the implementation of programs” to correct managerial shortcomings.

    The new training and career-development editor faces a host of problems that go beyond the recent rash of scandals. An internal Times survey conducted last year “suggested that many employees didn’t have a high level of trust in their managers and did not believe the current system would truly recognize merit and advance their careers.” Many veteran Times newspeople have never had a performance review.

    James Naughton, president of the Poynter Institute for Media Studies and a former Times reporter, says the new training editor will have to have the promised “unambiguous” authority in order to succeed. “Newspapers have already cut their staffs to the bone, and editors don’t want to allow their people to spend time on anything that doesn’t help fill the next day’s paper,” Naughton says. “The training editor will need the authority to require that mid-level editors be given sufficient time for training.”

    Naughton believes that the unique, insular culture of the Times would make it difficult for someone brought in from outside to succeed in the position. The training editor, he says, should be a current senior editor who is already respected throughout the organization. To earn the support of skeptical newspeople, Naughton says, the content of the training programs must be practical rather than theoretical. And in the long run, newspeople must see that those who advance through the organization have received training.

    The training problems at the Times are hardly unique. In a national survey conducted last year by Princeton Survey Research Associates, American journalists said lack of training was their primary reason for job dissatisfaction, ahead of low pay and benefits. The news industry spends an average of 0.7 percent of payroll on training, compared to 2 percent by all American companies, according to the Knight Foundation, a journalism group in Miami.

    “Lack of training is an artifact of the newsroom culture,” says Eric Newton, director of journalism initiatives for the Knight Foundation. “Newsrooms are filled with people who are paid to find things out. So, historically, there’s been a feeling that reporters don’t need to be trained because they can just find out whatever they need to know.”

    But experts say newspapers are realizing that journalism managers are no different than their counterparts in other industries—and the skills necessary to motivate and supervise employees don’t come through osmosis.

Workforce Management, September 2003, p. 15 — Subscribe Now!