Society of Human Resource Management (SHRM)

The True Cost of Training

A Society of Human Resource Management (SHRM) article cited a 2004 statistic that the average annual training cost per employee was $955.  But what is the true cost of training?  What is the value achieved?   What are the lost opportunity costs?   What does turnover cost because a potentially good employee is lost who was first hired because of their perceived potential?

I’ve listened to the audio files of live calls from real prospects responding to ads for manufactured homes.   I’ve listened while employees:

– rattled off a statement that made an upscale manufactured home community sound like a flashback to Lucy and Desi in the movie The Long, Long Trailer.  The employee routinely began by saying:  “We have paved streets, city water and sewer…” – this was in a major metropolitan area!  Did anyone ever think about ‘first impressions?’   Who did this ‘sales pro’ think was calling?  Did this employee think the caller was looking for a comparison to a campsite in a wilderness area, or for a modern manufactured home residential community?

– a self-identified (and clearly educated, motivated, capable) cash buyer was dissuaded from coming to visit an upscale property, due to a series of questions geared around their qualifications for financing, some of which may have violated Fair Housing guidelines as well as good common business sense.

– a flyer promoting a church group (…the church of the community manager…) was passed out to every resident at a large manufactured home community, and was placed on the front desk.  Recruiting for that church was routinely done by the CM and sales person (a husband and wife team) in a manner that was capable of drawing huge fines from HUD for Fair Housing guideline violations….

Without going into more examples, the point is that your employees and associates can cost you money, or make you money.

Good training, good people, does not ‘cost’ as much as it can pay!  But improperly trained and poorly motivated people can cost you a fortune, $100,000s annually.

Let’s take a simple example:

– 1 sales person closes 1less sale every other week;
– Let’s say each sale is worth $7000 net after all expenses;
– That’s $182,000 per year in lost opportunities;
– Then think about the cost of floor planning on unsold inventory, and all the other costs that result from the lost sales…

Good training and soft skills development pays.

Failure to properly train your associates is what really costs your business.

Let’s look again at the example above of lost sales due to poor training, having improperly motivated or the wrong people on staff.

Imagine if every retail center in the U.S. diminished their performance by 23 new homes a year.   Let’s take an average sales price per new home of $50,000 each.  Let’s consider only the 3500 ‘retail sales centers’ (a.k.a. ‘street dealers,’ not manufactured home communities).   What’s the total?

That’s $4,025,000,000 annually in lost gross sales to American HUD Code manufactured home retailers.   That’s 80,500 lost new home sales a year to HUD Code manufactured housing builders, at a time when total new home shipments have hovered around 50,000± for two years.  That’s insurance policies that are never sold, homes never delivered or installed, products and services never provided, because of sales that never closed.

To improve your team’s performance, go to MH Speaker Resource.

To recruit your ideal team members, post a job at’s Jobs page.

If companies won’t train their people, why don’t:
– insurance companies
– manufacturers
– lenders
– and others who sell through retail distribution, team up to make this potential wave of sales happen?

Fellow manufactured housing industry professionals, these costs estimates are low.  The true costs of failing to train are much, much higher.

The true cost of training?  It is far more than the billions in lost business to our industry when companies fail to continuously train.  It is the countless lost opportunities to millions of potential manufactured home customers.  Dreams are lost when business is lost.

Good, consistent training pays. # #

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