How to Properly Budget for Training

July 6, 2018
Before investing in an employee’s training, you’ll want to make sure they’re passionate and likely to be loyal to your business. Here are other tips for properly budgeting for training.

The thought of budgeting for staff training might elicit a groan from many service managers. Gary Vinson, however, loves a tidy bottom line, and he knows that planning ahead is key in that pursuit.

So, when January rolls around each year, the service manager at Piedmont Honda in Anderson, S.C., plots out a yearly training budget for his staff, allocating roughly 2 percent of the department’s monthly gross toward additional schooling.

“It gets a little easier each year,” says Vinson, who has worked in the auto industry since the late 1980s. “If you do it for a fair amount of years, you know your employees and what kind of training needs they’re going to have.

“You’ve got to plan for it.”

Successful fixed operations typically understand the importance of training and the significance of helping employees tap their full potential. Thus, budgeting for training is a necessary evil for nearly any facility.

Vinson, whose workplace boasts a CSI of 93.7 and an average monthly car count of 1,250, offers his tips for how to budget for training in the most painless manner possible.

As told to Kelly Beaton

We set aside about 2 percent of the gross every month. We look at employees’ training levels, and that’s kind of how we budget. We make technicians do all their self-studies, and, if they’re going to be heading to the training center, we print off all the modules that they do; that way, it’s really time efficient down there and can save them money, too, because they’re not walking around looking for training materials.

You’ve got to figure what the training center will cost, and then multiply that by how many techs you’ve got. We send them not just to training, but to a motel. And, you’ve got to factor their pay in for that week; you know, the eight hours you’re paying them while they’re at school. You just put those numbers together for each employee and calculate it out. Our comptroller can figure out how much it’ll cost if I’m going to send X amount of guys to school.

We basically have a spreadsheet that you can look at, and it’ll tell me the training status of every employee we have. Like, if this guy is 50 percent, or this guy is 100 percent. The spreadsheet is right there for you in Honda’s online Interactive Network, so you can look at training needs at any point.  You need to know your employees before you can really start your training budget, because you’ve got to know what level they’re at, and how much money you’ve got to spend to get them to the level at which you need them.

I’ve never flown a technician anywhere. There are enough training sessions all over the country. Most of our training classes are close enough that they just involve using a rental car. We wait for the training centers to open up a session and then we plan for them. We don’t really have to plan to fly anybody anywhere. We can rent them a car, and that’s like $40 per day.

Unlike some, I don’t budget for training two years ahead. Because a lot can change in two years. Once we get our cycle started I usually do it like the first of the year and budget out through the year. I usually make sure I at least send employees to training three weeks per year. That can change every year, and it just depends on the type of employees you have, like if you have some young ones coming in.

If something unexpected happens, I have the budget for it. I kind of plan for an extra week’s worth of training in the budget. I plan for the hidden cost. It’s basically like a cable bill or whatever; I’m going to take this much money and put this in there; whether I use it or not, it kind of builds up. When we need to send somebody somewhere, we have the money.

I’ve had vendors come in and do training for free. They’ll usually buy the guys lunch, because they’re usually pushing their product, and you can get some valuable information that way. I’ve never paid one vendor to do a class, because they’ve usually been open to wanting to do it. And, if you host training you can get discounts at times.

We usually sit down and re-evaluate in December, with all the managers and advisors, and talk about the classes. Say I sent a service advisor to a class, I ask, “What did you get out of that class? Was it good? Was the instructor good?” I’ve found there are certain instructors that are a lot better than others. If I see an instructor teaching training and I’ve heard that they’re not really that good, I don’t want to send employees. I want them to learn something. So, we pass on that class until we get a better instructor.

You’ve got to send the right individuals to training. It’s about knowing the employee and knowing that, if you spend money on them, they’re going to get value out of it. You’ve got to make sure that you’ll get your financial return back. Job hoppers, you don’t want to send somebody like that to school. You want to send a dedicated employee. If you know them, spend money on them, and they’re loyal to the company, it seems like a win-win for everybody.

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