Make a training budget

I have spoken, lectured and written many times about running a drycleaning business “by the numbers.” That is, set, strive for and attain a certain level of productivity in each department.  I like to break it down like this: (the goals will not be the same for every plant)

• Drycleaning Room labor: 60 pieces per labor hour (PPLH)
• Laundry Washroom: 200 PPLH
• Drycleaning Inspection, Assembly & Bagging (IAB): 60 PPLH
• Total Drycleaning department: 17.5 PPLH
• Shirts IAB: 60 PPLH
• Total Shirt Department: 28 PPLH
• Hot Head: 21 PPLH

It doesn’t matter whether or not you agree with these goals or believe in their attainability because my point today has to do with training new employees.

Often, plant operators fail to attain their goals and the official “catch-all” excuse is that there are trainees in the mix of employees.  Fair enough.  First of all, you must make sure that the trainees have been trained.  That is certainly job one.  The problem with excusing poor numbers and blaming them on the “new kid” is that it is wasteful, costly and complete <insert common barnyard animal colloquialism>!  Here’s why:

Let’s say that your laundry manager needs a new shirt presser.  The interviewing process takes place and a new hire is given a job as a shirt presser.  Let’s assume a single buck unit where the previous presser regularly pressed 55 shirts per hour and the total department PPLH was at 25.  With the introduction of the newbie, shirts per hour productivity drops to, say, 40 shirts per hour and the total shirt plant PPLH to 19.  Let’s further suppose that the company policy here has been that the laundry plant manager reports his productivity numbers to the owner daily.  Now, with the 25 PPLH out the window, the laundry plant manager reports a subpar number coupled with the stock explanation; “we got a new guy pressing shirts.”  The question is when does a “new guy” graduate to non-new-guy status?  When he is pressing 55 shirts per hour?  After 60 days?  If it’s after a certain amount of time, does that newbie ever somehow morph from “new guy” to “under-producing employee on a short leash”?  Probably not.  In real life, he probably drops the “new guy” moniker when he has begun to mingle with the staff and talks to his co-workers in the break room.  When he demonstrates that he is part of the staff.

But the subject is numbers and the manager’s responsibility for those numbers to his superiors.  Naturally, I am presuming that someone is accountable to someone else for productivity numbers.  (I wish that wasn’t such a huge presumption at so many plants).  But, I admit, that there must be some concessions made when a new employee is introduced.  A training budget is the first thing that comes to mind.  Let’s say that you have calculated into your operating expenses such a budget, and that dollar amount is $20,000 per year.  You can call it $1650 per month if you like.  In this scenario, your laundry manager gets to effectively “spend” some of that money in such a way that his numbers look fine.  The training budget depletes, of course, as time goes by.  If the shirt laundry in this example processes 2500 shirts per week, the actual cost for the difference in PPLH from 25 down to 19 is around $300 per week.  Therefore, the manager subtracts $300 from his training budget, leaving $1350 for that month.  Arguably, he would always be within budget because he would never run out of “training” money assuming that he doesn’t ever hire another person.  The fact is this is called lying with numbers.  It is foolhardy to think that this plant is anywhere near 25 pieces per labor hour.  The trainee is the personification of “smoke and mirrors.”  The trainee excuse will linger, profits will fall far short of their potential, labor costs will be too high, and it will be too late to address the real issue:  ill-trained employees that under-produce.

So, what is the solution?  It isn’t that complicated.  I always recommend that the person in charge of a particular department is really in charge of labor costs for that department because it is such a huge expense.  Sure, quality and service remain a large part of their responsibility too, but labor cost can never be ignored.  With that in mind, a department manager should be bonused based upon pieces produced per labor hour.  True, low labor cost that yields poor quality and service is suicidal, but remember how we started this discussion:  the new presser replaced a presser that was producing, so the proof exists that quality and quantity can co-exist.  We can always complicate this issue with the feeling that the newbie does a better job than the person that he replaced, but that is a digression from the point.  How do we compensate for a trainee’s relatively inferior production rate without penalizing the manager who is doing the best that he can?  The answer does lie with a training budget, but it isn’t so much measured in dollars, but rather in hours or time.

Typically, a newbie is hired and allowed to “get better” with practice.  You probably have become aware of my feelings regarding that.  The newbie will simply get better at being slow.  Nothing more.  If they do get faster, it is more attributable to chance then proper training.  What you need to do when a new hire is introduced is grant the manager a grace period that allows for proper training.  To illustrate using the aforementioned example, PPLH has plummeted to 19 from 25 and this is directly caused by the new shirt presser.  The department manager is allowed to retain his bonus structure for a limited period of time.  Let’s call it 2 weeks.  After that time period has lapsed, the manager loses his bonus because he has failed to adequately train a new employee within a reasonable time frame.  You are charged with setting those time frames.  It might be 2 days for a bagger or 3 weeks for a shirt presser.  This method puts reasonable pressure on the manager to do his job while making it clear that the company does not afford him an endless supply of money for labor.

The manager is granted artistic license for substandard numbers for a limited time but knows that it will cost him personal money if he doesn’t get on the ball and train the new shirt presser.  Now, before anybody screams “Foul!”, consider how fair this really is:  if you are the owner reading this, you are paying a manager to do a certain job (run a profitable shirt department) with built-in bonuses for reaching certain levels of quality, service and profitability.  The manager’s pay structure, by the way, should always be setup as a minimal base pay, plus bonuses.  The manager has to really want the bonuses to make his job one with a good pay.  If he fails to meet his goal, he punches you in the nose (so to speak) and you don’t have to pay the bonuses, you effectively get to punch him right back.  In biblical terms; an eye for an eye.

So, this keeps the pressure on the manager to do his or her job, certainly a big part of which is to develop his/her subordinates.

“If you do what you’ve always done, you’ll get what you always got.”