Maintaining a Competitive Advantage
By The Learning Group

An effective training program in a small business has the potential to catapult it to great competitive heights.

A large number of Australian financial planning organisations fall within the small business segment. Due to size, and accompanying budgetary constraints, they traditionally struggle with how to keep their staff abreast of the constantly changing marketplace.

These smaller financial planners have traditionally competed with larger financial planning firms by providing a higher degree of personalised customer attention and service. Hiring the best financial planners is a start, but the ongoing challenge in many small organisations is how to ensure all staff – planners and support staff alike – have the opportunities to improve their skills to a level which ensures gaining marketplace competitiveness, and maintaining it.

We believe that a sound and well-considered training strategy – as well as specific training maps for each employee – can create an important competitive advantage.

Of course, specific skills in financial planning – investment planning, superannuation and retirement planning, estate and taxation planning, as well as the construction of a sound financial plan – are important to your service levels. But it is often non-specific skills – general business and customer-facing skills that may make the difference in your organisation’s competitiveness.

Why Train At All?
Training costs money, it takes time, and many employees – especially busy employees like financial planners – are sometimes not keen.

Simply put, training aims to improve knowledge and skills. Training is generally more effective:

• if it is closely tied to job competencies,
• if employees can see direct links to their job success, and
• if the return on your training dollar spent is clear and measurable.

What Should Employees Be Trained In, And How Much Training Is Appropriate?

Different jobs have different competency requirements, and therefore different training needs. The smaller financial planning organisations tend to have jobs that fall into:

• administrative,
• management,
• junior financial planners,
• senior financial planners, and sometimes
• para-planners.

The training requirements for each of these job types can vary greatly depending on the specific job profiles an organisation determines, and in fact, can vary greatly throughout the year, as employees come and go.

A good first step is to create an annual training strategy for the organisation – in effect, determine what the organisation’s key business objectives are, what competencies are needed to fulfil those objectives, and therefore, what training is required to meet these competency requirements.

Without a clear training strategy document, updated annually, organisations can easily spend double the training dollars required to fulfil its business objectives.

How much training is appropriate? Generally, it has been our experience that organisations budget between 2% to 10% of an employee’s compensation package annually toward their training. The reason for the wide gap is largely due to an organisation’s size, its competitive aggressiveness, and the maturity of its human resource practices. In recent years, a “best practice” training offering has become a significant reason to join, or not join, a new organisation.

Many small organisations, however, do not have the training budget to enroll employees in a string of externally supplied workshops or e-learning courses, however there are ways to provide effective training, without spending a lot of money.

Who’s Responsible For Training, And What Is A Training Map?

The organisation is responsible. The employee is responsible.

It has been our experience that organisations which provide employees with a structured training process, and give ownership of the training to the employee, generally get the best results.

The structured training process can be as simple as an organised training strategy, and a training map for each employee. A training map may be created by a negotiated session between a manager and an employee.

Generally, a manager starts by taking relevant parts of the organisation’s training strategy to the employee’s training map, meets with the employee to agree on the specific competency “gaps” needing to be filled, and the training solution relevant to the need. Some organisations leave it to the employee to schedule the agreed training solution.

The training map is best reviewed quarterly, if possible, the accomplishment of all training events should be tracked, and it is highly recommended that the manager schedule something – an assessment, a follow-up activity, or a discussion – at the conclusion of the training event. Many employees forget what they’ve learned if the new skills are not utilised as a part of their jobs.

With the emphasis on Continuing Professional Development (CPD) in financial planning, it has become more important in both your recruitment and training strategies for CPD to be integrated into your performance management and compensation systems. Good planners are looking for this.

What’s Available Out There, And When Is E-Learning Appropriate?

There are lots of training alternatives out there, for both financial planning-specific training areas, and more broadly business and customer service areas. It is important to distinguish between “public” training solutions – courses which are not customised to fit your specific organisational needs, and “custom” training solutions – courses which are built from the ground up for your organisation’s specific requirements.

Generally, custom solutions are more effective in reaching your training objectives, but they can cost 5 to 25 times as much.

How do you find the training solutions out there? The best option today is to 1) ask industry colleagues, generally available through your industry groups, and 2) Google internet search facility. If you’re not familiar with using Google ask a computer-savvy friend to help. When you evaluate suppliers, be sure to get references from organisations similar to your size and business objectives, if possible.

What are your alternatives? Generally:

1. Instructor-led courses – these can be sourced from an external training supplier, or developed internally, and can be held in a classroom, or in a virtual “Net Meeting”.
2. E-learning courses (learning taken on a computerised device) – these tend to work best in learning about your product and service offerings, regulatory areas, as well as for “core” scenario-based learning, such as deciding what to do in a sales or customer-service situation. E-learning may be offered on a single cost basis (usually on CD or DVD), or on a subscription basis (per user pricing).

The costs vary widely depending upon the quality of the program, but generally you can expect to pay between $300 – 400 for half a day of instructor-led public training. E-learning, if available, can cost less, depending on the area. It has been our experience that financial planners are comfortable with both training alternatives.

What If We Have Very Little Training Budget?

If you do not have adequate budget to provide your employees with all of the training programs you feel are needed, there are ways to do it on a shoestring.

Here are a few low-budget alternatives:

• When your experienced employees teach a new employee something, record it on video. Cameras are relatively inexpensive these days, and if you make this a part of your informal training process, it is an inexpensive alternative, when no one is available. In other words, make ongoing training a part of what you currently do today.
• When you create an important internal document, whether for product, or service, or process – 1) ask someone to create a quick assessment or quiz for it, and/or 2) require at least a telephone call to a manager, to discuss the document, after it is read and absorbed. It is sometimes surprising what a document with a quiz or a quick conversation following it can accomplish. If you want to standardise your assessment process, there are many easy-to-use e-learning assessment tools available to you at a low cost.
• If you are using an external vendor, don’t be afraid to negotiate the price, or seek to form a consortium with other suppliers to get a lower price. It never hurts to ask.

A course which costs you $500 per employee, but which is not followed up by a manager, tends to be less effective than a low budget alternative, followed up effectively by a manager.

A structured training strategy, specific training maps for each employee, and a structured follow-up for every training event are three ways to make sure your training – no matter what the investment level has impact on your business, and helps to maintain your competitiveness in the marketplace.

(Article by The Learning Group appearing in Fidelity International's CD for Financial Advisors - "practiceone^TM - Putting your practise first. Module 1: Human Resources" 1st August 2005)

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