Training New Employees For Less

How To Cut Your New Employee Training Costs In Half

The cost of training a new employee can be expensive, especially when there is not a formal training program.  Most small businesses do on the job training with little guidance and the cost of the mistakes of a new employee can be significant, depending on the position.  There are also uncounted costs related to customers and other stakeholders that are affected by mistakes.  However, the obvious costs are the salaries for the person doing the training and the person being trained.  Training takes time and there is a learning curve for a new employee to get up to speed.  The longer this learning curve is, the more expensive it is to train a new employee.

Cut new employee training costs over $100k annually by creating an operating manual with key processes for the position documented in detail

Operating manuals could be thought of as the “Owner’s Manual” for every employee’s position.  This is an authoritative guidebook on how things are done in the position. These manuals are also not static documents they are continually updated.  The manuals include:

  • Information about the company

  • Information about the products and services

  • Information about the policies that apply to everyone in the company, including the employee handbook and any additional policy documents and/or updates

  • Information about the specific position

  • Documented Systems/Processes for the position, including all the forms, scripts, checklists, flowcharts, etc. that explain how to do the key tasks of the position

This manual is provided to the new employee.  They do an orientation with their manager, who explains the purpose of the manual.  The new employee reads the manual and meets with the manager again to ask questions and get clarifications.  Then the employee is prepared to begin working.  The manager is available for questions and meets with the employee daily, every other day, or whatever is appropriate until the employee feels comfortable with the tasks.  After that, there is a weekly or monthly coaching session to review their performance based on the quantified management reporting on the key processes of the position, and the employee is continually developed this way.  The processes are also improved as needed by the employee and manager.  This process saved our company over $100k annually.

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2013 Jim Anderson

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