Two Common, Unfortunate Mistakes: The Importance of Setting Up Separate Accounts When Receiving Training Grant Funds

by Frank Gibson, Workforce Development Advisor, retired from The Ohio State University – Alber Enterprise Center

Two common, unfortunate mistakes that can derail a company’s sincere effort to address the training gap at their firm are easily overcome, but toxic if unaddressed. Getting upper-management on-board with trying to build a deliberate training infrastructure is not easy, as most who have tried have found out. Taking preemptive measures to avoid these land mines seems worth the while.

The first, the champion who took the initiative to create a training strategy, lobby for it and attempted to implement it at their operation fails to establish proper leadership of that effort. W.Edwards Deming often said, “divide responsibility and no one is responsible.” And something as important as establishing a new, deliberate training program to address the neglect of the past has to be led by someone who recognizes that fact, understands the implications and knows how to lead the effort to successfully reach its goal.

Some firms believe that putting two or three stakeholders in charge, for which none of them have the background and experience, to manage a training strategy is sufficient to lead the effort. This false notion that “political buy-in” outweighs selecting the right leader, or elevating people with time on their hands to something they lack experience for is sufficient, can be a fatal miscalculation. This usually leads to the project falling far short of its goals and/or interest waning as results seem to come up short of expectations. This can lead to those in charge vacillating between taking blame or credit instead of making sure the project succeeds. Another example is when the “leadership group” is lopsided and one, or a few of, the team has more knowledge and experience in setting up and implementing a training strategy but lacks the votes on critical decisions. This can lead to conflict and hard feelings that jeopardize the cohesiveness of the group and its message. Yet another example is that the “power vacuum” is a opportunity for one or two ambitious designated leaders to put aside their lack of subject knowledge and experience for a speculative chance to show upper management what they are capable of. This can go one of two ways, and one is at the expense of the training project and everyone who sincerely supported it. “Deming also said, “You have one chance to train a worker, only one so don’t muff it.” Picking and supporting a good leader for something as critical as training of necessary workers is a valid solution to avoiding this dilemma.

The second mistake often made that can sink a worthy project resides in the accounting department. Accounting departments rarely see a training effort bring in money, such as state-provided training grants. Any activity associated with the training effort will be classified, by default, as an “expense” which, if not addressed quickly and correctly, will call for an end of the historically perceived luxury, exorbitant, “lower priority” cost of the project that may literally pay for itself. This is unfortunate since the cost of informal, unstructured and often incomplete worker training is far more of an expense than the effort to make it efficient and effective alone, never mind it being offset by training grant funds.

So, when grant money is received for efforts completed as part of the requirements of the grant, the company’s accounting department typically receives that money into a general fund – not tied to the investment that attracted the grant funds. That money is then used for any other activity other than the training effort and no connection made when corporate discussions take place on where to “cut costs.” The connection is not made for strategically utilizing these funds to offset the investment to create a training infrastructure where there was none (on one not able to keep up), enhance or replace expenses in maximizing each workers capacity and expertise and to minimize opportunity costs of the previous insufficient training program.

Unfortunately, too many good projects achieving significant successes have been canceled even though the training activities were reimbursed 100% and added no cost or expense to the balance sheet. Because there was no one leader on the “leadership team” that understood this and was willing to speak up when asked to explain the training program expenses, as corporate pressure mounts for answers the team, in fear of losing their jobs, pull back or began to defensively attack the project’s purpose in its vulnerable creation stage before the benefits can be fully realized. This could have been easily prevented if the accounting department was asked to set up a separate account for training expenses versus “income” received from grants, and that the accounting department reports that information so that everyone in upper management clearly understands why they should continue to support the training strategy.

These two preemptive solutions seem pretty common sense, but it is surprising how often they are overlooked or thought to be unnecessary out of, perhaps, naivete or neglect. If implementing a deliberate, training strategy was essential enough to enact, it is worth the time and effort to take these two extra steps and considerations to protect it and allow it to achieve the success for which everyone was initially optimistic.

A good, deliberate training strategy for incumbent workers and new hires can pay off in terms of return on investment many times over. Improvements in product or service quantity and quality, improvements in safe performance, improvements in compliance with quality(such as internal, ISO, IATF and AS) and engineering requirements, and more. All of these can be achieved with an effective training program and can lead to higher returns on worker investment for each worker and collectively the organization, yielding higher value for doing something deliberate that was previously done in an ad hoc fashion. The benefit of training grants to offset some or most of the investment to realize these gains is a huge bonus and should be taken very seriously, as with any other investment the company might make.

If you recognize these challenges and have shed your fear of even looking for other solutions, check out Proactive Technologies’ structured on-the-job training system approach to see how it might work at your firm, your family of facilities or your region. Contact a Proactive Technologies representative  today to schedule a GoToMeeting videoconference briefing to your computer. This can be followed up with an onsite presentation for you and your colleagues. A 13-minute promo briefing is available at the Proactive Technologies website and provides an overview to get you started and to help you explain it to your staff. As always, onsite presentations are available as well.