Why Should We Invest in Training?
by Bill Murchison, Jr.
Why should my company invest in a good training program? Research has shown three very good reasons for investing in training programs. They are 1) Better Stockholder Returns, 2) Employee Retention, 3) Better Communication and Supervision.
Better Stockholder Returns
Companies should invest in training because research has shown that "companies that invest in learning outperform the market by more than 45%. Companies that do not, under perform by 22%."
These were the findings of the American Society for Training and Development (ASTD) when they examined the average annual training expenditures of more than 500 U.S. based publicly traded firms. In fact, in that study, the top half of the group who spent the most on training had a "total stockholder return 86% higher than firms in the bottom half and 46% higher than the market average."
Another great reason for investing in training is to retain valuable employees. Employee attrition can be very costly for firms. "Business Week (3/1/99) cites the 1999 Emerging Workforce Study when estimating the average cost of losing a typical worker at $50,000.00. Putting numbers to that statistic shows that a 1000 worker company with an ineffective training program stands to lose as much as $14.5 million.
The same study showed that 41% of employees who rate their company's training offerings as poor plan to leave within a year. It also showed that among employees who rate their training opportunities as excellent, only 12% plan to leave within a year."
With the current expansion and growth in the oil business, companies cannot afford to lose valuable personnel. In fact they need to be doing everything they can to retain them and to recruit other skilled workers.
Better Communication and Supervision
A third reason for investing in training is to improve communication, efficiency and supervision. According to the Economist (7/22/2000), miscommunication and inefficiency were cited as two of the leading causes that can hurt companies and their stockholder value.
Good drilling training programs do not merely give out information; they help drillers, engineers and rig foremen learn to communicate with each other, optimize their drilling operations and properly supervise the well. A good drilling training programs will also pay for itself. For example, if training prevents one unscheduled event from happening, the savings would be enough to pay for the training of the entire drilling department.
When Bill Murchison started Murchison Drilling Schools in 1977, he set forth 5 objectives for his Operations Drilling Technology and Advanced Well Control Course. They were:
- How to supervise a drilling operation.
- How to preplan field operations.
- How to analyze and solve drilling problems.
- How to prevent unscheduled events.
- How to communicate on the rig.
Twenty-four years later, the same 5 objectives are helping companies around the world to supervise, optimize and communicate better on the rig. The training has proved so valuable that many service companies have made it standard policy to put all their new service men through the Murchison Drilling Schools Operations Drilling Technology and Advanced Well Control Course. It has become part of their overall training that they receive before going out into the field.
Why invest in training? Companies should invest in training so that they can operate more efficiently, generating higher earnings and increased stockholder value. Secondly, they should invest in training to retain and recruit the best personnel that they can. Third, companies should invest in training to improve the communication, optimization and supervision of their drilling operations.