Introduction: Do you want to know the real cost for training your employees? I think you’ll want to know. Today, we’ll discuss the importance of training, how much should be spent on employees, and the formula to calculate the cost. We’ll also highlight some common pitfalls in the industry.
Biggest Problems in Construction:
- Lack of Proper Planning: Projects are not planned well enough, and people are not given enough time.
- Using Incorrect Systems: Many projects do not utilize the right systems.
- Insufficient Training: Companies are not training their people adequately anymore.
Over the years, training budgets have not grown proportionally with the companies’ revenues. This leads to higher risks and insufficient training for the growing workforce.
Minimum Training Required: Every employee in your business needs a minimum of two solid weeks of training each year. That’s 80 hours or 10 working days. Additionally, you should be spending at least $1,500 per year per employee on external training.
Investing in Training: Especially for higher-level roles like superintendents or project managers, the investment in training increases significantly. Training costs can range from $3,000 to $30,000 per year for these positions due to the complexity and responsibility of their roles.
Calculating the Cost of Not Training: Here’s the formula to calculate how much not training your employees is costing you:
- Take the amount of work they are responsible for.
- Multiply it by 0.5.
- Multiply by the percentage that represents the training they are not receiving (e.g., if they need 10 units of training but receive only 4, use 0.6).
- Divide by the number of people on the team.
Example Calculations:
- Assistant Superintendent: Responsible for $20 million worth of work, lacking 80% of necessary training, and with 5 people on the team. 20,000,000×0.5×0.8÷5=1.6 million20,000,000 \times 0.5 \times 0.8 \div 5 = 1.6 \ 20,000,000×0.5×0.8÷5=1.6 million
- Project Manager: Responsible for a $100 million project, lacking 40% of necessary training, with 15 people on the team. 100,000,000×0.5×0.4÷15=1.3 million100,000,000 \times 0.5 \times 0.4 \div 15 = 1.3 \100,000,000×0.5×0.4÷15=1.3 million
Impact of Insufficient Training: Not training employees properly can lead to significant financial losses. Projects often experience budget overruns and delays, which can be mitigated by investing in proper training.
Final Thoughts: If you think it’s expensive to train employees and worry they might leave, consider how expensive it will be if you don’t train them and they stay. Investing in training is crucial for preventing costly mistakes and ensuring project success.
Resources: For more details on specific training requirements for roles like superintendents, check out the linked resources provided.
I hope this information has been insightful and has highlighted the importance of investing in employee training.
If you want to learn more we have:
-Takt Virtual Training: (Click here)
-Check out our Youtube channel for more info: (Click here)
-Listen to the Elevate Construction podcast: (Click here)
-Check out our training programs and certifications: (Click here)
-The Takt Book: (Click here)
Discover Jason’s Expertise:
Meet Jason Schroeder, the driving force behind Elevate Construction IST. As the company’s owner and principal consultant, he’s dedicated to taking construction to new heights. With a wealth of industry experience, he’s crafted the Field Engineer Boot Camp and Superintendent Boot Camp – intensive training programs engineered to cultivate top-tier leaders capable of steering their teams towards success. Jason’s vision? To expand his training initiatives across the nation, empowering construction firms to soar to unprecedented levels of excellence.
On we go!
