The Inbetweener: It's very annoying when firms spend loads on training "parties" then cancel everyone's bonuses

I recently caught up with a friend and, being somewhat nostalgic about my old career, asked how things were going in her current role. She looked exhausted and after a long sigh told me how much she hated work. Her frustration came about because, as a manager with staff under her, she was in the midst of negotiating bonuses. Problem was, although her staff had outperformed their goals, higher management was adamant that no bonuses were to be paid.

My friend was dishing out the donuts, even though the decision was entirely out of her hands. To make things even more awkward, it was her responsibility to organise staff training where the facilitator was internal but the event was to be held at a plush off-site function room. No one could understand why a bonus of a few hundred dollars (which would have kept junior staff happy) couldn't be approved, yet several thousand was being spent on training that could be done much more cheaply on-site.

Party pooper

The firm she works for isn't one notorious for paying poor bonuses, nor one with a low-base, all-bonus compensation structure. It actually has a good reputation for looking after employees, and traditionally low staff turnover. So my friend was devastated when two of her team quit in the wake of the bonus debacle. Time and productivity were lost, and additional costs were incurred to find new staff. So why not just pay the bonuses in the first place and save the cost of turnover?

In all areas of financial services, you have professional development obligations in order to remain competent. You need to update yourself on changes in the law and/or new procedures which affect the industry. But is it always necessary to spice up training and make it a party?

A simple lunch (i.e. sandwiches) was always was good enough for me during a training day. But in order to satisfy a basic legal requirement, many firms have junkets involving a three-course meal, a speech from a MP, and of course the promise of "networking" opportunities - all at a much higher cost.

Fancy, not free

I have experienced this myself. A while back, I was sent interstate and put up in a fancy hotel for an entire week in order to attend training which could have been done at our local office. It cost the firm a ridiculous amount of money. If given the choice, I too would prefer on-site training, in return for a slight pay increase or bonus.

I asked my then manager what our staff turnover was like and he admitted that it came in waves, with groups of people often leaving at a similar time. Attrition actually went up after training was completed and he had to waste time finding replacement employees.

No one I have asked understands why there is such overspending on training in financial services, which is mandatory in most case anyway. In the long term, it could be more cost effective to just pay the difference to employees. Everyone loves a bonus.