Why new technology forces a business to retrain
Definition
Retraining: teaching existing staff the new skills their job needs after the way the work is done changes, most often because the business has bought new technology.
- Technology in a business does not stand still, so a new till system, a new machine, a new piece of software or a move to online ordering all change what the job actually consists of.
- Without retraining the investment does not deliver, since equipment nobody can operate properly produces nothing.
Example
A bakery that fits a £6,000 ordering and stock system shows the chain: if the counter staff keep writing orders on a pad, the system never sees the real sales, so its stock figures are wrong, so the owner over-orders flour and the machine that was bought to cut waste has increased it.
What retraining looks like in practice
Few businesses send everyone away on a course, so retraining for a new system usually arrives by one of three routes.
| Route | Who runs it | Cost to the business | Best suited to |
|---|---|---|---|
| Supplier session | The firm that sold the equipment | Often bundled into the purchase price | The first days after installation |
| In-house training | A colleague trained up first | Low, but pulls them off their work | Rolling the system out across a team |
| Online modules | The employee, at their own pace | A licence fee for each user | Software and refresher training |
- The supplier route is the quickest but it ends when the engineer drives away, so most owners pair it with in-house training to keep the knowledge in the building.
- Every route carries the same hidden cost of a period of lower output, so a counter assistant who took 20 seconds to ring up an order may take 45 in the first week and the lunchtime queue grows.
Benefits: what the business gets back for the training bill
- The promised productivity gain arrives: staff who know every function log orders as they take them, so the owner spends two hours a week on paperwork instead of six, and those four hours go into serving customers.
- Fewer mistakes and less waste: trained staff enter the stock counts correctly, so the system orders the right quantity of flour, so less is thrown out on a Sunday night and the cost of sales falls.
- Staff can be moved between tasks: once everyone can work the system, an absence on the counter is covered from the kitchen, so the shop opens on time and nothing is paid to an agency for cover.
- Experience stays in the business: someone retrained rather than replaced still knows which customer orders twenty rolls every Friday and which supplier delivers late, and a new hire would take months to learn either.
Example
- Tesco sells through its shops and also offers click and collect.
- Picking an online order is a different skill from filling a shelf, because it means working a handheld device, choosing a substitute the customer will accept and finishing before the collection slot.
- Retraining shop-floor staff for that work uses people who already know where every product sits, so orders are picked faster than a newly hired picker could manage.
The costs and difficulties of retraining
- The direct cost: a supplier's training day might be £400 on top of the equipment, and the wages of everyone sitting in that room are paid whether or not anything is sold.
- Lost output while people learn: the shop serves fewer customers for a fortnight, so takings dip in exactly the weeks when the first repayment on the new system falls due.
- Resistance from staff: nobody on the counter asked for the change and some fear the technology is there to replace them, so they use only the parts they already understand and quietly keep the paper pad going.
- Saying early what the system is for, and that the plan is to retrain rather than cut jobs, removes most of that fear, because the anxiety comes from not knowing.
- The risk of losing the skill: a retrained employee is now worth more to a rival as well, so the business can pay to create a skill that walks out of the door in six months.
- The true cost of a new system is therefore the price of the equipment plus the training, the lost output and the management time behind it, which is why a purchase that looked affordable can overrun its budget.
- Retraining is what turns a technology purchase into a technology benefit, because a system only repays its cost once someone can use every part of it.
Exam technique
- Name the technology and the skill it demands, then trace the effect through to output, cost, quality or customers.
- Develop one complete chain rather than listing several benefits without saying what changes for the business.
- For a judgement, weigh the training cost and temporary dip in output against the gain, using how long the system will be used and the firm's cash position.
Self review
- Why does buying new technology on its own not raise output?
- Give two routes by which a small business can deliver retraining.
- Build one chain from retraining to lower waste.
- State two costs of retraining beyond the price of the course.
- Why might a business hesitate to retrain someone a rival could poach?
