Data Science Shows the Business Impact of Training and Development Over Time
Our predictive workforce assignments yield staggering results; saving / making businesses millions of real, measurable dollars. Often this yield is in a single project. Business ROI with these predictive projects is so significant, I wanted to share some of our findings as they may challenge some concepts we hold so closely.
Large organizations spend millions on training, coaching, mentoring, re-training and competency development programs. We do this believing employee development programs can train someone to better or even great performance. It seems to make sense. And, the only option a business has after hiring someone is try to develop employees to greatness. Better training, better managers, better raises, better perks, better culture, better benefits, more time off, better work life balance, more and more and more that the organization needs to do, to prop up and hopefully “develop” the employee into being a better performer. But does it work?
Data Science Studies: Do Development Programs Help Increase Performance Over Time?
We recently completed two analytics studies quantitatively analyzing sales rep. performance. Among other goals, we analyzed sales rep. performance over time – both before and after training is completed. We documented their sales performance as new hires, during training, and finally after they reached full self-sufficiency in their role.
Results: Two Data Science Studies Sales Rep. Performance Does Not Measurably Increase Over Time — Even With Substantial Training and Development by the Business
What we found is perhaps shocking to many, though we see this time and again in our predictive analytics work across many roles. For the purposes of this paper, we’ll show graphs from the work we did studying Underwriter sales performance.
In both of sales projects referenced here, analytics results showed that sales rep performance did not measurably increase over time – despite multi-millions being spent on development efforts including: training, coaching, competency development and the like.
Top performers began as top performers – and continued to be top performers.
Business Cost, of Developing “Bottom Performers” With Hopes of Turning them Around
In many of today’s businesses around the world, when a bottom performer unfortunately enters as an employee, massive support systems are engaged to prop up, support, train, coach, prompt, and cajole that bad hire into some kind of average performance.
The support systems required are extraordinary — and very, very, very expensive. The best possible outcome is that you can nurture them to averageness, not to greatness.
The only thing your organization can do once hired, is to try to develop that low or average performer, hoping to squeeze some kind of value out of them. It’s all you can do once they are hired.
The greatest cost to the business, seen in Figure 2, is what could literally lead a company to either mediocrity or wild success.
This difference is worth mega $millions (purposely not revealing too much so as to protect the identity of our client).
Options? Predict Top and Bottom Performers – Before You Hire Them
The financially optimal solution is to predict and screen in top performers and screen out bottom performers before they enter as an employee. Today there are people in your organization that are performing very, very well without need of an expensive and extensive support organization. Yes, they need some managing and coaching here and there. They needed time to ramp up to full productivity, but guidance they need now is minimal. They don’t need propping up. You are not their crutch.
