Training – Is it an Investment or Expense?

Training – Is it an Investment or Expense?

It would not be wrong to say it is a million dollar question to answer the question whether Training is an expense or an investment. Each & every company’s senior management is confused whenever they face this question.

Perhaps, the question needs a prelude. Let us imagine that we need to enrol our children in a school. It is quite obvious, that we will be looking for the “best-ever” school based on our considerations irrespective of the fees charged by the school. If asked why, the answer would be, “I would like to ensure or guarantee a bright future for my child”. Ensuring a bright future gives us a mental comfort that our children will have a financial comfort at a later stage in their life.  Now, let us ask our question, “the money spent on our children’s education – Is it an investment or expense? We must be telling a lie if we replied, its an expense.

Imagine a similar situation in our organization. We need to nominate someone for training. We will be looking for the best-ever solution. Here comes the Budget-part. Every organization has got a budget for training. Now, let us try to find out what a budget is – expense or investment? More or less, this is looked as expense. When we consider the education of our children as investment, why should we consider the training of our colleague an expense? At the same breathe, let us try to answer, whether training needs a budget or not?

The irony in India is “the moment we start to earn, we stop to learn!” and it’s a different story that what we read in our colleges & schools has nothing to do with our job. We need a professional training. According to the National Employability report, 85% of Indian graduates are unfit to be directly employed and has to be given professional training.

Almost all Organizations are aware of this situation and are providing training to their people from time and again as to build the capabilities of their personnel that would, in turn, improve the competitiveness of the organization.

The learning has to be purposeful. When it is purposeful, creativity blossoms and when creativity blossoms, thinking emanates. When thinking emanates, knowledge is glowing. When Knowledge glows, economy flourishes. So, if the training is not purposeful, economy would not flourish and then it cannot be stated as in investment. People should be trained on those essentials only which would be applied by them in their Gemba.

Training is a problem solving tool. Training builds a culture of continuous learning thus continuous improvement becomes their daily routine. It will not be considered as an additional task or burden. Culture is the collective habits of individuals. When an individual becomes great, obviously the organization gets benefited. As multiple individuals become great, the organization becomes great. When the culture is built in, one does not have to chase the greatness but it follows them. This greatness is achieved through training from the best of the schools. We do get back more than what we thought from training.

Now, tell us whether training is an investment or an expense?

By Narasimhan Gopalakrishnan

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