Monthly Archives: October 2016

Learn More About 4 Secrets Behind the Best Employee Training

In many ways, employee training is the secret to the long-term success of a workforce. The opportunities employees are given to grow and develop allow them to do their best work and advance their careers. These opportunities also keep a company competitive as its industry changes and evolves.

From the top senior leadership to the newest hires, everyone benefits from great employee training. There’s just one problem: Most employees hate the training they receive.

The State of Employee Training 2015 report from West Unified Communications Services surveyed more than 200 full-time employees about their experience with work training. One-third of respondents said the training they’d been through wasn’t a productive use of time. Another third said the material wasn’t interesting or engaging.

Clearly, there’s a disconnect between the purpose of employee training and how it’s actually being implemented. A big part of the problem is the assumption that one method of learning benefits everyone. But as any visual learner who’s struggled through a math class knows, that’s not true. To give employees the best learning experience, employees must consider what makes them unique.

Here are four ways to find out what type of training is best for employees:

1. Evaluate generational gaps.
When you consider the evolution of educational technology over the past few decades, it makes sense that there are generational differences in how employees prefer to learn. But the differences might not be what’s expected.

A 2016 study of 1,000 professionals by Activia Training found that younger employees prefer the classroom as a learning setting over elearning. While 55.9 percent of employees between 18 and 24 in the study had a positive attitude toward classroom learning, just 15.9 percent liked elearning.

At first, this might seem counterintuitive. Why would the digital generation prefer face-to-face training? But, consider the different lifestyles of younger and older employees. Older employees are more likely to be balancing work with family and children at home, which makes the flexibility of elearning more appealing to them. Younger employees, on the other hand, have just recently left school, making the classroom setting more familiar.

Address these generational gaps by offering employee training options that can meet every lifestyle. And let employees choose. Just because the majority of younger workers prefer classroom learning doesn’t mean all do. Give individuals the chance to pick the course that’s right for them.

2. Consider all learning types.
One of the biggest factors in the success of training is how engaging the material is. If employees can’t feel a connection with what they’re learning, it’s less likely that they’ll absorb and be able to recall the information later on. Some people learn better through hands-on methods, while others learn better independently.

By providing a variety of ways for employees to learn about and practice their skills, employers increase their chances of finding an engaging method that works for them. For example, many believe that rote repetition of a task is the best way to master something. However, 2014 research from Harvard BusinessSchool found that learning is more effective when the learner takes the time to reflect after performing a task, rather than just repeating it over and over.

Allow employees time to think about what they’ve just learned, so they can interpret and interact with the material in a way that makes sense to them. Maybe they need to write out the process in their own words, have a conversation about what they just did or even show the skill to someone else. Whatever form of reflection fits them as an individual will help them learn more efficiently.

3. Address your teams’ and individuals’ strengths and weaknesses.
The whole point of employee training is to give the team the skills and information they need to perform at their highest level. However, not everyone starts out at the same level or even needs to know the same skills. By knowing the strengths and weaknesses of individuals and the overall team, employers can implement more effective training.

For example, say there’s new software coming out that will make the entire organization run more smoothly. Chances are, everyone would benefit from experience with and basic knowledge of how the program works. In that instance, group learning is probably the best way to get everyone up to speed quickly.

Now, if six months after initial training pass, and several employees are still struggling with the software, individual training will help them catch up. That way, they receive the additional training they need, without having to put everyone else through the material again.

4. Ask for employee feedback.
One of the best ways to determine how effective different training experiences are is to get feedback from employees. Their input points out holes in the materials, what information was confusing and even what training was unnecessary. Not to mention that it shows employees that their training is meant to help them grow and succeed, not just help out the organization.

One way to collect feedback on employee training is with a tool like Vohtr. These kiosks, which can be placed anywhere in the office, provide everyone with a physical spot to voice their opinions. Organizations can create their own engaging questionnaires that get to the bottom of how well training programs are going. The feedback system also gives trackable data that reveals trends in the overall effectiveness of employee training.

In sum: It’s said that knowledge is power. For employees, the quality of the knowledge they receive is completely dependent on the training they receive. By better understanding individuals’ learning differences, offering a variety of training options and gathering feedback, you will create more effective developmental opportunities.

More Information About Improve Employee Performance

There are thousands of reasons to train and develop employees. New employees need to understand how to perform the required work. Current employees need to keep their skills sharp.

Changes in technology, new product introductions or modifications to policies and procedures are all reasons for training.

A major portion of our careers has focused on creating effective workforces. As you might guess, we are huge proponents of training and developing workers. Well-trained staffers produce higher quality work, less scrap and less wasted time. They’re better prepared for future challenges and additional roles in your organization.

However, all reasons for focusing on workforce development boil down to performance. We’ve previously written two of a five-part series on ways to improve employee performance in your organization. These paths include include providing clear objectives, removing roadblocks internal to the company, emphasizing training and development, motivating staffers and coming to grips with an employee unable or unwilling to perform.

Doug often says that business is about figuring out what to do and getting people to do it. Therefore, concentrating on those two goals makes good business sense. Here’ll, we ‘ll address the third lever business owners and managers can pull: training.

First, though, a word of warning: Training and development is not always the answer. Don’t get pulled into the trap that says, “If my employees are underperforming, I should provide more training.” Instead, first ask the following questions to determine why employees underperform.

What are my employees doing or not doing that is causing the issue in my organization?
Do the employees know how to perform that specific action/process/procedure?
Have the employees been given enough time to become proficient?
If the answer to any of these questions is yes, then training is not the solution. Look to the four other possibilities in this series for your solution.

But if the answer to your questions is no, then ask this question: “Exactly what do I want my employees to be able to do differently as a result of the training? Do they need to recognize quality problems, answer customer questions more completely and accurately, garner more sales?

Once you have analyzed the need, determine the “make or buy decision.” Do you have the skills and resources to provide the training internally, or would it make more sense to engage resources outside of your organization to develop and/or deliver the training?

Training that’s internal to the organization
Many organizations provide new employee orientation and on-the-job (OTJ) training. Training normally consists of one or more experienced employees passing on her/ his knowledge to the newcomer.

Since smaller organizations often don’t have well-documented processes, the success of such programs may vary. Training depends on the skills of the experienced employee to deliver correct and consistent information. Even when a process is in place, most internal OTJ and orientation programs we’ve seen have no clear objectives and do not measure outcomes.

If a new employee fails to “catch on,” the student is often blamed, not the teacher or the training itself.

An example: We worked with a broker-dealer in Philadelphia. The investment advisors complained about the inconsistencies in the company’s employees’ performance. Sometimes those employees executed their trades in two days, and sometimes it took them five or more days to execute. Mistakes were the norm.

Through our analysis, we found that what employees believed to be “the process” depended completely on who had initially trained them. So, we took action, developing clear processes; we assigned internal resources to retrain the back office staff. This solved the immediate problem, as well as created a consistent process for future training.

Such internal training can be highly effective, but requires that organization leadership determine training objectives, develop processes/curriculum and deliver the information in a way that maximizes the probability that employee will perform in the desired way.

Internal training also requires that outcomes be evaluated. Determining whether or not the organization has the time and the expertise to develop and deliver these programs is critical to the organizatin’s overall success.

Training that’s external to the organization
Sometimes it makes sense to bring in outside resources. Organizations can use human resource development (HRD) professionals in a variety of ways:

Determine training needs: Experienced HRD professionals can conduct surveys, focus groups, interviews and other techniques to help an organization determine the skill and knowledge gaps in its workforce. Gap analysis can ascertain exact needs, allowing the organization to target training and development to specific individuals or organizational requirements, ultimately saving both time and money.
Develop curriculum: Sometimes the organization knows what it needs but lacks the time or expertise to create the programs and materials. In this case, the company should hire an outside expert to work with one or more subject matter experts (SME) internal to the organization to develop the curriculum. The SMEs provide the internal knowledge while the curriculum expert develops the appropriate materials.

Delivering information: If you want a message given special attention, having an outside “expert” deliver it may do the trick. Internal experts can suffer from “prophet in their own land” syndrome. We worked with an HR manager who had been trying for several months to get the managers in her organization to hire employees with a particular system without success. As external experts, we explained the hiring system to the managers in a training session — and they accepted the system immediately. We were able to provide the needed emphasis and, therefore, help to change behavior.

Determining delivery: An outside expert may be able to help you determine the best method/s for delivering the information. Would your organization be best served by using a classroom method, via computer, through self-study or a combination of these or other vehicles? An experienced HRD professional can help you to determine the most effective methodologies given your specific goals.

Evaluating training: Finally, an HRD professional can help you to determine the effectiveness of your training. How much and what did the participants learn? What knowledge, skills and behaviors have they used in their job and did the changes have the desired effect? Measuring the results of your training and determining ROI can help you improve your training processes.

Whether you decide to assess needs, develop and deliver your training internally or use the skills of an expert to help with some or all of the process, your focus should be on increasing the skills and performance of the employee. If you concentrate on outcomes, your training will benefit your organization.

Should You Know About The Retirement Plan Strategy Small Business

Entrepreneurs are gravely mistaken if they think an IRA or SEP are the only strategies for tax-deferred retirement planning. The 401(k), historically only reserved for large companies and their employees, has evolved to be one of the most creative and flexible retirement vehicles for small-business owners.

Here are a few key points about the 401(k) you need to know that could save you thousands and require your action before Dec. 31.

Why a 401(k) vs. a SEP IRA?
The SEP IRA is a super-charged IRA account that runs off of IRA rules, while the Solo 401(k) is an employer-based retirement plan used solely for the business owner(s) when they have no employees. The 401(k) has several features that are either similar or far superior to that of the SEP. Here are a few of the similarities and differences:

Both a SEP IRA and a Solo 401(k) can be self-directed and invested into real estate, private company stock or precious metals. Under a SEP IRA, you will have a self-directed IRA custodian. However, under a Solo 401(k), you can serve as your own trustee and administrator, saving you administrative costs and giving you more control of your investment choices.
Under a SEP you can contribute up to 25 percent of your salary or self-employment income. However, with a Solo 401(k), gives you a much more cost-efficient contribution strategy. You can contribute $18,000 ($24,000 if you are 50 and over), plus 25 percent of your salary or self-employment income. This creates tremendous tax savings when you couple your 401(k) with an S-Corp. You can keep your FICA amounts much lower and still put away the same amount as a SEP with tax efficiency.
All SEP contributions are traditional dollars and all funds in a SEP must be traditional dollars. However, through a Solo 401(k) business owners can have a traditional account and a ROTH account within the same plan. You can also convert traditional sums over to Roth as well within the 401(k) plan and not having to take a distribution from the SEP first.

The Power of the Solo 401(k)
First, keep in mind that the Solo 401(k) is only available to self-employed persons, while a standard 401(k) would include multiple employees. It is called a “Solo” 401(k) plan because only the business owner and his or her spouse can participate in the plan.

Next, the primary reason why a business owner would choose the 401(k) is because they want to put away more tax-deferred dollars, whether in a ROTH or for a tax deduction.

Here’s what it comes down to: If you want to put away around $5,000 a year, stick to an IRA. If you want to put away around $10,000 to $15,000, use the SEP. If you want to put away more than $20,000, utilize a combo strategy of the Solo 401(k) with an S-Corp. The tax efficiency is amazing and you can sock away those big dollars you are envisioning and also self-direct the funds on the backside.

Setting up the 401(k)
If you want to take advantage of a 401(k) tax deduction in 2016, even if you make the contribution and “match” later next year, you must set up the 401(k) this year. Moreover, you must plan sponsors — companies that help you establish your 401(k) are going to file your paperwork in early December. Don’t wait until the last minute. A lot of sponsors will turn you away and suggest you wait until 2017 if you call them around Christmastime.

The cost to set up a 401(k) will vary based on whether it’s a “Solo 401(k)” or a “traditional plan” because you have other employees besides you and your spouse. Prices can range from about $1,250 to $3,000. Some companies may assist you in setting up a lower cost 401(k), but your investment options will be limited to their portfolio of funds, so you want to be careful when you sign up and confirm how much flexibility you have in your investment choices.

Takeaway: Consider a 401(k) plan and get it set up before Dec. 31 if you want the deduction in 2016.

How much should I contribute?
For S-Corporation owners, you have some critical decisions you need to make before year-end. Others can wait until next year. The first is how much money you want to contribute to the 401(k).

The second decision is if and how much you should contribute to the spouse’s 401(k). The same deadline being that you need to report this on his or her W-2 in early January. I typically recommend you never put your spouse on payroll unless you are going to contribute to his or her 401(k).

Why issue a W-2 to the spouse and incur the cost of FICA, if you aren’t going to contribute to the 401(k)? It doesn’t make sense even for social security benefit reasons. Now if you are going to contribute to the spouse’s 401(k), I strongly recommend you “back into” the amount of payroll necessary for the 401(k) contribution. For example, if you are going to contribute $18,000, then the payroll amount will be around $21,000 (to cover FICA) and you keep the cost of doing the “contribution” to the least amount possible. The company match amount can be decided upon next year before filing the tax return.

Takeaway: Only put your spouse on payroll if you’re going to contribute to his or her 401(k) this year.

Should I be my own trustee for the 401(k)?
Yes, you can probably set up a 401(k) before year-end on the cheap if you give up control to a broker-dealer offering you limited investment options. You can guarantee there will be some management fees buried in the 401(k) as well.

However, if you want to self-direct the funds, and/or play a more active role in the management of the 401(k), I strongly recommend you serve as trustee. This allows you to self-administer your 401(k) plan, under the guidance of a law firm or third-party administrator (TPA) that keeps you out of harm’s way of committing a prohibited transaction.

When it comes to investing the money in your 401(k) or other retirement accounts, don’t feel trapped into using one of the menu options you get from your financial advisor — you don’t have to settle for a select group of mutual funds when investing your retirement money.

Instead, you can self-direct your IRA into all kinds of legal investments, including small companies, real estate, loans or precious metals.

The most popular self-directed retirement account investments include rental real estate, secured real estate loans to others, small-business stock or LLC interest, and precious metals such as gold or silver.

In sum, if you want to make a significant contribution to a retirement account before year-end, you need to act now. The deadline is approaching fast and if you don’t use the 401(k), you will either be limited to $5,000 to $6,000 with an IRA or paying a lot in self-employment tax (FICA) to make a large contribution to a SEP. The 401(k) could be the difference in thousands of taxes you may pay next year.