The ROI on Sustainability Training
I hear this all the time…
Maybe you do, too?
What’s the payback? Who’s going to pay for that?
Valid questions. If they are questions.
When I get upset, is when it’s being said as a statement. When what they really mean to say is:
That’s not worth doing. That’s a bad idea.
Take training, for example. Everyone knows that training is valuable. But rarely does a company quantify the value — even anecdotally.
In a good company, they will likely include a line-item for “training” when budgeting for any new project being considered. And they should.
No project will work without educating/involving those responsible in how to implement the changes and use the new system.
Can you imagine putting in new LED lights… then not telling operations how they work differently than fluorescent… or not telling facilities who the supplier is, how long the warranty lasts, where proof of warranty is stored, and how to budget differently for replacement since they last 5-10 years versus 1-2 years?
And not just telling them once, but giving them updates, visual aids, email reminders, new tools to track with… training needs to be repeated and reinforced, or it will be forgotten.
That is a good company.
But think about it.
Adding “training” to a line-item budget is looked at as a cost, not an investment. It adds time to the return (ROI) and makes the project payback seem longer.
When looked at this way, “training” might be the first thing to go if budgets are tight and the project manager wants to push this through.
Cut costs. Only keep what is necessary.
An Investment vs. A Cost
I encourage you to look at training as an investment… one with a good ROI.
To do that, you have to think outside of the line-item project budget.
Yes, “training” should ALWAYS be included when implementing any specific project… if you want it to be successful.
But, you can go beyond project and look at the big picture.
Sustainability is about as big-picture as it gets.
Why is that project important? What are we trying to accomplish? How does it add value to the company?
These questions are (and should be) answered when companies look at sustainability strategically, and identify key initiatives that are most relevant to them and their industry.
Take the LED lighting example. The reason for LED retrofits is not because the company has a goal to put in more LED bulbs.
LED (light-emitting diode) retrofits are only important — only add value to the company — if they are part of a strategy to lower energy consumption, reduce maintenance costs, insulate against future energy price increases, eliminate harmful toxins like mercury, or all of the above.
Value is also added in being able to leverage that larger strategy into a marketable story for customers and stakeholders to drive sales and loyalty.
The ROI on Sustainability Training
Training employees on the larger vision and goals of the organization will pay dividends.
It will shift the way people in the company make decisions. They will see the big picture, and not get caught in narrow thinking that costs the company money and opportunities.
Most people think about utility costs as fixed. They just are.
I was told by an executive once that new LEED-certified buildings were over-budget on utilities.
I said, “That doesn’t make any sense. They use 30% less energy per square foot than your older stores. How did the budgets get created?”
They didn’t know.
Turned out, budgeting was done without talking to construction.
They used an average of other stores in the area, but the new stores were 50% larger. They also didn’t control for price differences between utility providers either.
So, in reality. Costs were down. Budgets were wrong.
No one ever trained the accountants and analysts regarding company sustainability goals.
Someone had sat at a table and said, “What’s the payback?” but the people who knew the answer weren’t invited to the table.
Here are 3 other examples (anecdotes) that illustrate my point.
Every company has 3 things in common. They use energy, use water, and generate waste.
- Energy — An employee may get a notice from the utility company saying they need to spend $50,000 for a new transformer at a facility because energy use passed a certain threshold.
- Without training, the employee grumbles and pays the bill, value-added to no one but the utility company.
- With training, the employee realizes that $50,000 can buy several energy-efficiency upgrades, and THOSE provide a monthly energy savings to the company. So, she saves the original $50,000 sunken cost, plus realizes a payback for day-lighting, sensors, better bulbs, new motors, etc. … all because of training.
- Water — An employee in a dry state may get a notice saying they need to spend $30,000 on a larger tap size connecting their new building to the municipal water service because peak demand is past a certain threshold.
- Without training, the employee grumbles and pays the bill, value-added to no one but the city.
- With training, the employee realizes that $30,000 can support multiple water-efficiency upgrades, and THOSE provide a monthly water savings to the company. So, he saves the original $30,000 sunken cost, plus realizes a payback for low-flow aerators, motion-sensors, re-use systems, improved irrigation, etc. … all because of training.
- Waste — An employee may get a notice from their waste hauler and the city saying they need to spend $70,000 to expand their dumpster enclosure because they are over-flowing and there is no more route service days available.
- Without training, the employee grumbles and pays the bill, value-added to no one but the waste hauler.
- With training, the employee realizes that $70,000 can pay for a lot of waste-reduction strategies, and THOSE provide a monthly waste savings to the company. So, they save the original $70,000 sunken cost, plus realize a payback for back-hauling cardboard, diverting metals, re-using scrap, making processes less wasteful, getting single-stream recycling, etc. … all because of training.
Training is valuable.
Look for ways to quantify it.
Beforehand, steal examples like the ones above from other similar companies.
After the fact, justify it with anecdotes, stories, photos, and hard numbers from savings realized. That will help get more training in the future.
Do you have stories of how training paid itself back?
Do you share those with colleagues and other businesses working on sustainability?