While sales and customer relationships are the lifeblood of any service company, additional aspects of a business can help improve profitability with a relatively small investment.

Companies that invest in employee training enjoy longer retention and experience fewer on-the-job accidents and equipment breakdowns. It might seem like an intuitive step, but many landscape companies don’t see the value or purpose in budgeting for employee training. Capital items such as new office space, equipment, trucks and materials are more important.

But if companies don’t train their employees properly, they end up with the same results year after year. Many times this is that everyone at the company receives a different message, which is often the wrong one and could lead to turnover. When new employees receive little to no training, the chances of those employees delivering an on-time, properly done job and staying with a company long term aren’t good.

In fact, research shows productivity is 5 percent to 10 percent lower than it should be because of the start-and-stop nature that results from high employee turnover. Not to mention, it costs a company $3,500 every time it replaces an $8-an-hour employee, according to the Society for Human Resource Management.

What are other pitfalls of high turnover and untrained, unsuccessful employees? They include:

• Accidents. Employees get hurt, and equipment breaks down because of misuse.
• Understaffed crews. When crews aren’t staffed properly, they complete jobs slower, often leading to missed deadlines and unhappy clients.
• Incompetency. For instance, what’s the cost to a business owner when one of his clients watches workers fuel equipment on their grass, or they’re smoking while doing it or doing something else unprofessional?

Some companies spend as much as 1 percent of their total revenue on training. Whatever a company spends, it always will be less than the cost of injuries, broken equipment, low productivity, high turn-over and, ultimately, the potential loss of business for not meeting due diligence requirements. To put that in perspective, are you, as a business owner, willing to spend $5,000 for a return on investment of $50,000 to $100,000?

For example, take a company with $5 million in revenue and $2 million in labor costs. If employees are 5 percent more productive, the result is $100,000 to the bottom line. If they’re 2.5 percent more productive, that’s $50,000 more profit. For nonbelievers, factor a conservative 1-percent increase in productivity. That’s still $20,000 to the bottom line and a return on investment of 4 to 1.

Changing the company culture is the key to developing an atmosphere of effective training. Corporate culture is an energy field that determines how people act, think and view the world. If a culture emphasizes the importance of training on the equipment used daily, it translates from the top down. Schedule training as a requirement for professional development and populate the session with participants who can grow and practice their new skills together. Anyone operating expensive equipment on clients’ properties should be trained about the safe and proper way to handle it, which will protect the worker, client and bystanders. Understanding the nonregulated aspects of the industry, it still holds true that an ounce of prevention is worth a pound of cure.

 

Urbano is vice president of LS Training System. Reach her via LSTraining.com.