How To Calculate The Cost Of Poor Training

business woman blowing money away|Corporate Training| Lewisville TXDo you ever wonder “where on earth does all my money go?”  It’s like a leak in the bucket of profitability that you can never seem to plug.  What is the cause, and how do you plug that leak once and for all?

Everyone who knows me, knows I’m a NUMBERS FREAK!  I always ask “how does the data support that?” before I endorse a change someone wants to make.  Whether it’s a coaching client suggesting a solution to a problem they are having, or an employee from one of my companies that has a great idea.  I always ask:   “What do the numbers say?”  “SHOW ME THE NUMBERS!”    I’ve learned over the years that the numbers never lie and they always tell a story.  If you want to know what it’s actually costing you in terms of dollars and cents to continue to run your business with a weak or non existent training program, consider these real factors:

3.75 Hours – If a team of three cleans 5 jobs today, and they waste 15 minutes per job due to a lack of well-defined cleaning strategies and processes, that equates to 3 hours and 45 minutes of totally wasted productivity TODAY.  Here’s how that was calculated:

  • 15 minutes per job wasted X 5 jobs = 75 minutes per person
  • 75 minutes wasted per person X 3 in a team = 225 min. (divide that by 60 min. and you get 3.75 hours of lost productivity for the day and extra wages paid)
  • If your team of 3 wastes 15 min. per job 5 days a week, that’s 18.75 wasted hours per team per week
  • Payroll Cost – If you pay each member of the team $12 per hour, then you’ll fund an extra $225 a week in unnecessary wages PLUS worker’s comp and payroll taxes for that one team.
  • Monthly Cost – is up to $974.25 (+ payroll taxes) for one team
  • Annual Cost – is over $12,000.  Again, “extra wages” per team

What if your team actually wastes an hour per day per person, due to inefficient cleaning times?  That cost is now 4X and is up to $48,000 in extra payroll expense FOR ONE TEAM!  Uh-Oh, you have three teams??????????????

Here’s the problem, we get so focused on ALL THE REVENUE our staff is generating that we fail to pay attention to where all the profit is leaking out.  There are many reasons why a company could be losing profits, but training is one of the big ones.

Now, let’s do this in REVERSE and end on a much more positive note, lest you close this email and begin sobbing

uncontrollably into your hands!

If a team of three could increase their productivity by just 15 minutes per job (and most could improve more) here’s what you could do with all that extra productivity without even hiring one more person:

  • You could sell another 3.75 hour job per day, per team!  If your rates are approximately $40 an hour that’s an extra $150 in revenue you could say “yes” to rather than “so sorry, we are booked up for today, how about tomorrow?”
  • If you did that every day, your team would generate an extra $750 in revenue for the week, and that’s 100% profit for those who pay hourly because they got the extra job done in the same amount of time they used to spend doing one less job.
  • Repeat that 5 days a week, 52 weeks a year and your team brought an extra $39,000 in revenue and SAVED you that $48,000+ in extra payroll expense
  • Oh!  You have 3 teams?    We’ll now you’re net gain is……. too much for me to calculate!

Yes, these figures are accurate.  If you have 10 or more hourly paid cleaners, the cost or savings to your company is over the roof top!  Of course you might not add one full job per day per team for 52 weeks.  I get that.  But, for many these numbers are not extreme, they are EYE OPENING!

So………what were you saying about not wanting to spend the money to send your entire admin staff and trainers to the Speed Cleaning Conference in June?  ………….. you’re welcome!

Speed Cleaning For The Pros Conference

 

Don’t miss this opportunity to attend a two-day LIVE Event to improve or create your effective residential cleaning business training program!

REGISTER NOW!  

Space Is Limited So Hurry And Register!

Leave a comment below!  Tell us what your biggest frustration is in training, or what you do to successfully train a new employee: