Closing the gap in employment needs

by Susan Levering

Distributors often tell me, “We need to grow our business. We need to increase our productivity by positioning ourselves to do more with less. To do this, we need good people.”

Whether you grow your business by opening new locations, expanding the breadth of your commodity lines, or acquiring new companies, you still need good people. Whether you install more effective operating systems, expand the use of technology, or change the way material flows to the marketplace, you need good people. You need people who understand the nature of your business, who are a good fit within your corporate culture, and who are driven to be successful. Wouldn’t it be wonderful if we could wave a magic wand and instantaneously have top performers?

One intent of a research project with NAW and the Distribution Research and Education Foundation (DREF) was to learn how successful wholesaler-distributors support their growth initiatives through investments in human resource development. We conducted an employee development survey to:

• identify training practices within the industry

• learn how successful wholesaler-distributors make training and development decisions

• discern similarities to and differences from processes accepted as excellent business training practices

• distinguish areas of profitability and productivity that may be influenced by employee development initiatives.

We uncovered both good and bad news that shed some light on how to develop top performers. The survey findings and information from extensive interviews, along with a step-by-step approach to human resource development, are included in the book Smart Investments: Developing Top Performers in Wholesale Distribution published by NAW/DREF.

One of the most significant findings was that companies that invest heavily in strategic training and development activity draw upon the same decision-making and problem-solving strategies they use to plan for and invest in all other aspects of their business. They capitalize on their training initiatives to assure that they achieve their business objectives.

What emerged from our survey and the conversations that followed with a group of distributors was a snapshot view of the way successful companies think about training. Inherent in each company’s growth plan was a strategy to “grow its own” employees. The solution to finding and keeping good people for these companies was to invest in developing their people at the entry level and then continually moving them through their operations, thereby providing ongoing educational activity to all employees.

As we learned more about the training initiatives of these successful companies, we became aware of five common trends. Each of their training and development plans, while unique in outcome, approached planning and delivery with amazing similarity.

1) They were concerned with communicating a corporate culture that all employees bought into.

2) They shared a commitment to career enhancement for all employees. They made it a practice to promote from within; in other words, providing the training experiences that not only taught people how to do their current work, but prepared them for a future position as well.

3) Recognizing that multiple people within their organizations held responsibility for employee development, they were committed to appointing someone to be responsible for coordinating all training activity.

4) Recognizing that senior executives, operations managers, sales and marketing staff, and human resource personnel each had special skills and expertise, they engaged them to deliver training.

5) They were committed to partnering with vendors and suppliers to make certain the training they provided was supportive of the distributor’s marketing and sales initiatives.

Top performers do more
The top-performing companies in our survey assured that employee training activity went beyond operations, selling techniques, and product. They also focused on business acumen, communications, team building, and leadership, as well as other areas.

These companies made smart investments:

• committing more than 1 percent of their payroll
budgets to training

• aligning training activity to business initiatives

• requiring employee accountability.

This is the good news.

Now here’s the bad news. Picture the hamster on the wheel in his cage. He goes around and around, getting nowhere fast. Many distributors are caught in the hamster wheel. They continue to go around and around, repeatedly providing the same training to new faces but rarely getting ahead. They spend, rather than invest, their training dollars. These are the companies that find it hard to compete in today’s job market and to hire good people. These are the companies that are frustrated by their inability to grow their business as quickly as they would like, and these are the companies that fail to get beyond the basics of procedural training.

It’s a sad fact that the wholesale distribution industry lags in its commitment to training and development activity. The DREF survey indicated that distributors greatly under-commit training investments — the average being 1 percent of their total payroll. Translated into dollars, wholesaler-distributors reported spending an average of $178.59 per employee. According to the 2005 State of the Industry Report (Sugrue, 2005) by the American Society for Training & Development (ASTD), U.S. businesses invest approximately 2.34 percent of their payroll budgets in training and development initiatives. ASTD’s Best Practices Forum companies averaged expenditures at $1,368.18 per employee. This exposes a tremendous gap between wholesaler-distributors and all other businesses in the race to build a successful workforce.

All is not lost, however. There is more good news from the survey that provides solutions and touches at core values. To be successful in growing your business, you must take an active stand for employee development. You can’t rely on schools to train young people about the wholesale distribution industry. You can’t expect your vendors, suppliers, or trade associations to do this job either. You must be proactive. You must build training and development initiatives that align with your business strategies and are consistent with all of your other business practices. You must consider long-term strategies, instead of quick fixes, to build a productive workforce. In today’s marketplace, people look very seriously at working for companies that are willing to invest in their future career development. Employees want to learn and grow and be successful.

An employee development plan doesn’t need to be costly to build and deliver. To assure that you invest training dollars wisely, you will want to begin with a review of your business plan and an assessment of employee needs in relation to the plan. At this stage, it becomes pretty apparent what skills need to be developed. Throughout my 18 years in the electrical distribution industry, we were committed to delivering a balanced training program to our employees. Although courses, modes of presentation, and faculty changed, the core areas remained the same. The structure of the program encouraged the wise investment of training dollars, and it yielded excellent results.

Once again, the good news is that you, too, can do this. I continue to hear from clients about how difficult it is to get started, to get through the planning stage. The task is not as arduous as it may seem. You can build a framework for a productive workforce that is integrated with other business practices.

Competition for good employees will not go away. Wholesaler-distributors can no longer complacently wait for good employees to knock on their door. The smart solution to the challenge of finding and keeping good employees and enhancing productivity at your company is to make smart – strategic and well-planned – investments in employee development initiatives.

Susan Levering, Ph.D., is an 18-year distribution industry human resources expert. Reach her at susanlevering@verizon.net. Order the book Smart Investments: Developing Top Performers in Wholesale Distribution at www.naw.org/smart.

This article originally appeared in the May/June 2007 issue of Progressive Distributor. Copyright 2007.

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