#3 Not training your staff
Entrepreneur magazine cited lack of staff training as one of the top reasons companies fail.
As consultants to many types of firms (e.g., asset managers, custodians, software vendors, pension funds, endowments), we often encounter cases where improper decisions were made because of lack of training. Take GIPS(R) (Global Investment Performance Standards), for example. We strongly encourage our new GIPS verification clients to allow us to conduct a pre-verification in advance of the actual verification, to ensure that they are heading in the right direction. Part of this day is spent educating the client about the standards, to help them avoid making costly mistakes. Firms that fail to take advantage of training often make many errors as they move towards compliance, because of the Standards’ complexity and many areas of confusion. We believe that moving towards GIPS compliance without proper training is usually a waste of time and money. [Reminder: The Spaulding Group is hosting a free GIPS webinar next Monday!]
Other aspects of performance also need to be addressed, such as performance attribution, rates of return, benchmarks, and risk. The lack of knowledge often leads to poor decisions being made. Having untrained individuals carry out performance and risk measurement related tasks is an expense that often results in a waste of money.
Investing in proper training is not only good for the firm, it’s also very good for the team members. They recognize the organization’s desire for them to grow and to enhance their ability to contribute. They appreciate their company’s willingness to invest in them. It is a motivational factor that leads to more productive employees.
Poorly or insufficiently trained staff can often result in a waste of money.