Dr. Allen Nazeri explains how documented employee training programs boost clinic value for investors. Trained staff are more engaged, need less supervision, stay longer, and cut hiring costs. Investors see this as competitive advantage through better service and talent retention.
Chapters
Value engineering strategies to 10x the value of your clinic and dominate the market. Part 7 Chapter 6 10x your team's potential.
A formal, documented employee development and training program speak volumes about a business's culture and its value over its human capital. Professional investors predict a business outlook by looking at their team's quality and the training they receive. To better understand why employee development is essential and why those companies with formal and ongoing training programs value higher, let me share these program benefits from an investor's perspective. 1. Employee who receive ongoing training are more engaged and more productive. Employee engagement is about how passionate and psychologically connected they are to their job and the company. Employees who are more engaged work as if it is their own business. They are spending less time working hours on social media, have a lower rate of absentism, and have less chance of workplace accidents and are more responsive to customers. 2. Trained employees work smarter and require less supervision. With proper training, employees become more self reliant and less dependent on supervisors for detailed and constant monitoring. As a result, employees end up working smarter because now they can resolve many of their problems. Professional investors are looking for cultures that are self sustaining and requires less of their time micromanaging a business. This attitude toward investing in a business is not a deal breaker. However, when an investor does not have to be hands on, it means lower operational cost and higher profit leading to higher beta and valuation which I will cover later in this book.
3. Employees stay longer when trained, which in turn reduces the cost of new hire and training. Research has shown that a company can pay as much as nine months of an employee's salary when they have left the job. This figure does not consider factors such as market and customers perception of a company that that continues to lose valuable employees loss in revenue and profitability. I estimate that income loss is much higher in healthcare settings as there is a stronger bond between employees and patients. Often this employee patient relationship can be more durable than a doctor patient relationship. Thus, investors are looking for stability in business. When investing, they know trained employees generally feel more valued and therefore feel more comfortable staying with a company longer. However, it is not enough to have a formal training and development program. A learning culture starts from the top. Management and founders must be proactive and visible, showing they are continually learning with a stiff competition for skilled healthcare workers. Having a formal an ongoing employee development program also builds a company's reputation in the marketplace, attracting other talented individuals, which reduces the cost of recruitment.
4. Companies with trained employees have a higher competitive advantage. In my MBA training programs, I often teach about the vrio framework to better understand their competitiveness in the marketplace. Jay Barney developed the vrio framework in 1991 in the article Resources and Sustained Competitive Advantage, in which he uses Vrio as a tool to analyze a company's internal resources that can be the source of a competitive advantage. V stands for Is it valuable? R stands for Is it rare? I stands for Is it imitable? O stands for has organization exploited it?
Most clients are surprised after this exercise to discover they don't have anything unique over their competition that cannot easily be imitated. A few may only have a temporary competitive advantage. Therefore, the competitive advantage comes down to one thing and that is being different. There are two sources of differentiation that make practices more competitive. One is service, or I like to refer to it as the quality of experience and the other is employee talent. Both of these are interrelated and both are related to training. No one can argue that well trained employees become more talented, enhance patient experience, quality, and vice versa. It is therefore one of those valuable assets considered by professional investors. Consequently, you can leverage your team's potential by devoting to your employees Training and Development.
Frequently Asked Question.
Question what does it mean when you say that our company must show a well documented training program?
Documented training includes anything used in developing your team's potential. It can consist of things like employee orientation, onboarding, technical skills, software skills such as communication, scripts, safety and medical emergencies, and anything else you think is required for employees to learn. These documents can be a mix of printed materials, PowerPoint presentations or videos and should carry your company's logo and brand.
Do you recommend outsourcing the training or developing our own training and development center?
It all depends on the size of your company and organization. If you are a smaller company with less than 10 locations, training is best outsourced and eventually you can build your own team of trainers in house. Our consulting practice helps clients develop their initial training platform and to take over the training and do it themselves.
Do I have to pay my team for hours spent on training?
The training must be part of a job description rather than something external. There may be external courses that you may require an employee to attend, but it still must be part of their job description. If you look at it from the point of view that is part of their job, the then the question of whether you should pay for them or not must not come up. If it is part of the working hours, you are not paying anything extra and if it is outside of the working hours, you must follow the local labor laws. It is always best to consult with the legal advisor.
Can I ask my employees to sign a job commitment letter before attending any of the training?
If your company's training is beyond the ordinary training employees receive, you can ask for a commitment letter. For example, if your company is sponsoring an employee for an MBA educational and paying for the program's tuition, you may very well request such a job commitment agreement. Always check with your local legal advisor. This is the end of Part seven, Chapter six. Please proceed to Part eight.
