The Last Mile is a term used in supply chain management and transportation planning to describe the movement of people and goods from a transportation hub to a final destination.
Logistics managers work hard to find the most efficient and least expensive way to transport goods and materials. However, the last mile is often the most challenging. It is estimated that up to a third of the total transportation cost is inhabited in the final transport, i.e. the last mile problem.
Employee Training is Your Company’s Last Mile
Hiring managers and employment specialists recognize a similar issue with new employees. It is very expensive to find and hire a new employee, regardless of whether a company performs the required steps themselves or through a staffing partner. But, what about the last mile of the hiring process, training a new employee? It can often be the most expensive mile of the journey. If not handled correctly, this not-so-simple matter can be far more expensive than finding the worker to begin with.
Have You Carefully Considered Your Cost of Training?
The end goal is to have an employee that is productive, profitable and happy. This is an investment that can become very expensive when you combine the costs of recruitment, time spent reviewing candidates, interviewing and the time spent engaging a new employee in orientation and new hire paperwork. Using a staffing partner is the easiest way to mitigate most of these upfront costs. The agency covers the costs of recruitment, interviewing, testing, screening and presenting candidates. If done properly and skillfully, a company only begins incurring costs on day one, when the employee starts work and training begins. However, it usually takes two to tango, so a company typically pays not only for the time the employee works but also for the time a trainer spends with that person. And what essentially is your company paying for? Maybe 25 percent productivity until fully trained? Maybe less? Additionally, many companies choose their top producers to be their trainers. Is this a wise strategy?
And what happens if the employee does not return on day two? How much does that cost you?
Do You Have a Formalized Training Process?
A company only knows the answers to these questions if they have fully thought out their training processes. A common solution to the immediate costs of training and providing a trainer is to automate portions of the training by instituting classroom sessions by computer or by utilizing video technology.
Additionally, to capitalize on the skill and expertise a company typically has, many utilize the concept of shadowing as part of their training process. This allows a top producer to produce at nearly their ideal level while a trainee observes the process as they learn from a master. Of course, the trainee is producing at a zero output level. A struggle many companies still have with this strategy is determining how long to have someone shadow. Also, it is not uncommon for an employee to quit or walk off the job after the shadowing portion ends. It’s like asking the worker to suddenly jump into the deep end of a swimming pool. Many companies report their biggest turnover at the moment when shadowing ends and productive work is expected to begin.
Have you Defined Your Company’s Ideal Productivity Level?
Training is a process that must be meticulously planned and executed. Metrics are key to this process. Has your company defined what a fully trained individual can produce? Is productivity even accurately tracked to begin with? Is quality clearly defined and the costs of quality issues calculated into production rates? A worker can be a top producer but if their quality is lower, how big a difference does that make to your customer and to your business? For most companies, there is a sweet spot where productivity is at an ideal rate, and quality is also very high. Only by first understanding these metrics can the last mile truly be measured.
Mitigating the “First Mile” Costs
As mentioned earlier, using a staffing partner can almost completely eliminate the upfront costs of finding talent but did you know that some staffing agencies can also provide on-site support services? Although it is ultimately a manufacturer’s responsibility to supervise and train new workers, a staffing partner can help mitigate some of these costs. A staffing representative who is knowledgeable in their partner’s business operations can provide a portion of the classroom training and administer tests or quizzes to ensure the new worker is understanding what is being conveyed to them. Generally, this is provided at no cost for business partners utilizing a high volume of contingent workers but most partners will also provide this service for an additional cost or upon request.
Preparing for the Last Mile
Training is your company’s last mile after the long journey of finding and hiring new top talent. Just like when transporting goods, it can also be the most expensive part. There are many elements of training during the last mile that a company needs to control. Companies must define and understand ideal production levels, control quality issues, and identify who is best qualified to train new employees. Most importantly, the employee must be fully engaged in the process so that they want to return on day two and every subsequent day for years to come. These are all factors that need to be understood and controlled.
Don’t think for a second your company is immune to these demands just because you’re fully staffed today. Although the U.S. Bureau of Labor and Statistics projects employment to decline in most manufacturing industries over the next decade, future job openings are expected to result from the need to replace workers who are retiring.
When it comes to training a new employee, how long and how expensive is your last mile? It could be much longer and costlier than you think.