Improving business performance through L&D

Century 21

Century 21 is a real estate franchiser, servicing 370 agencies across Australia. Each agency employs an average of 10 staff. The company itself has just 30 staff across Australia providing service to franchisees, but plans to grow to 700 franchises. The company’s L&D offering is a key part of the marketing exercise to attract new franchisees.

The real estate industry in Australia has undergone great changes in the last few years, leaving Richard Hayden, Century 21’s national training manager, with some major L&D challenges. “New legislation has meant we’re now required to provide specific continuing professional development in NSW for real estate license and registration renewals. There has also been a cooling down of the hot property market (in various states at different times). This has meant sales people and agents have needed new skills and attitudes to service a slower market with levelling prices,” Hayden says.

Century 21 has state managers who work closely with Hayden, identifying training needs within the franchises. In mid-2004, Century 21 achieved national registered training organisation (RTO) status and is now able to offer full training to become a registered real estate salesperson (requiring five subjects of study) or a licensed real estate agent (requiring 17 subjects of study). In order to comply with the NSW legislation in 2004, it ran 80 face-to-face courses over a three month period in Sydney and regional NSW.

Servicing the training needs of a widely spread geographic customer base has required that Hayden find innovative and cost-effective training solutions. Delivering compliance training to a large number of people across NSW in a short space of time meant using RTO-approved sub-contractors for the project. He has also developed an ‘electronic training passport’ which tracks compliance training and flags renewal dates. This program is currently being tested prior to a national rollout.

Given that all training is paid for by franchisees, Hayden must ensure that it is timely, cost-effective and that the content provides desired results. He has developed recorded training courses that are delivered via audio CDs in the post and as MP3 sound files that can be emailed directly to a participant. For example, a salesperson may have done a lot of valuations, but might have trouble converting them to exclusive listings. To assist, Hayden recorded a 10-minute sound bite with a salesperson who has a high conversion rate, with suggestions on how to improve performance in this area. State managers deliver most of the live training courses, developed in consultation with Hayden. Regardless of the mode of delivery, skills assessments are conducted after all competency-based training.

Unlike many organisations, Century 21’s L&D program is subject to outside competition from other training providers. The NSW regulations have resulted in a number of RTOs entering the real estate industry market through associations and partnerships, which resulted in course fees becoming more price sensitive.

Hayden and Century 21 responded to the competition by value-adding services such as audio CDs and electronic passports. They also offer franchisees a one stop shop for training, as well as a packaged discount for all staff training. Training is priced at a revenue-neutral level. Creating and delivering a 10-minute sound bite over the internet is very cost effective, while being specifically targeted.

Century 21 is also in discussions with its headquarters in the USA to use its ‘online live’ training program across Australia. The training will be delivered from a server in Hawaii. Australia only needs to pay for the server time, which coincides with Century 21 USA’s downtime.

“With the slowdown in the property market, some industry leaders are questioning the value of compulsory training, as it is ‘compliance driven’ rather than ‘skills driven’. However, we’ve seen an increased demand for training, as our franchisees see that it’s important to bring more professionalism into their businesses,” Hayden says.

Franchisees can also see a direct relationship between profitability and L&D spending, he adds. As part of a continual business review program, the company electronically tracks five key performance indicators from when the first time contact is made. One Sydney franchisee had problems with staff who were unable to turn contacts into sales. Hayden says the franchisee has seen the direct benefits that training has had on his bottom line and, as a result, the franchisee is reallocating financial and other resources away from sponsorships and into training for 2005.

“We treat training as an integral part of both our customer service plan and our franchisee growth plan,”Hayden says. “Century 21 is like a three-legged stool supported by brand, service and training. Remove any leg and the organisation falls over.”

Kimberly-Clark Australia (KCA)

Known worldwide for its Kleenex and Huggies brand names, Kimberly-Clark is much more than a FMCG manufacturer, although consumer sales is still its core business. KCA employs around 1,800 people in manufacturing, sales and corporate functions across Australia.

After a new CEO was appointed to Kimberly-Clark Corporation three years ago, the position of global HR director was recreated. Helen Blesing, who joined the company four years ago as learning and organisational development manager, says there have been some substantial changes since. “We have gone from being very locally focused to being globally focused in the last two years,” Blesing says. All the HR systems from performance management, remuneration and rewards, organisational development and strategic planning have received a global overhaul. “We’ve been able to incorporate our local needs within the global plans,” she says.

In the past, training courses that were offered to the business units were often generic solutions. Blesing says there were ongoing problems of participants pulling out just before a course was to be delivered, or last minute shuffling of training days or times. Things have now turned around completely.

“I find providers who tailor solutions directly to the business problem. For example, rather than running the same course on negotiating and influencing for salespeople and the finance department, the course is now tailored to each group’s specific needs. Although both groups need to be good negotiators and influencers at the end of the course, the people they’ll be dealing with and the participants themselves are quite diverse,” Blesing explains.

KCA ran an employee survey in 2004 – the first in five years – and intends to run it annually from now on. Blesing says she has used some of the feedback to link in training courses.

From a budget perspective, Blesing feels no pressure to cut L&D expenditure during tough times. Firstly, only performance management, change management, leadership development and targeted selection training falls within her costs. The business units pay for the rest of the training done within the organisation. “Because the business units pay for training themselves and because the solutions are now tailored to meet their specific needs, there is much more buy-in than before. They will always find the money needed for training,” Blesing says.

The only other training that falls within Blesing’s remit is an internal MBA program conducted through Mt Eliza. She assesses ROI each year, working with the participants’ managers to evaluate the return to the business through projects completed by the students. “Every year, returns far exceed the costs,” she says.

In order for L&D strategies to be well accepted throughout the business, Blesing believes it’s vital for all parts of the business to know where they’re going so that a direct link can be drawn between L&D strategies and the business objectives. “If the business has to pay for it, it values L&D expenditure much more than if it can just access it for free, with no real buy-in,” she says.