I have been providing training services to the equipment leasing industry in classroom, online, and self-study modes for thirty years. During that time I have seen the nature and quantity of training go through many cycles. One thing that has remained constant, however, is a lot of what I will refer to as lip service to training employees.

The topic of employee training, for instance, appears regularly in the Equipment Leasing and Finance Foundation’s annual Industry Future Council (IFC) Report as a key component of success. We consistently see statements from the IFC such as:

“Companies must and will pay more attention to training employees. People do not become knowledge workers automatically.”

“Lessors who empower themselves with talented and well-trained personnel will be more able than their competitors to redefine their companies and their markets.”

In spite of this emphasis, we are observing a knowledge gap amongst line employees, from front-end sales to back-end operations. This gap is not necessarily due to a lack of experience. Instead, it is more of a lack of understanding of the fundamental building blocks (tax, accounting, legal, and financial) of the industry.

I find this to be troubling and interesting at the same time, particularly given that current industry leadership prides itself on its leasing knowledge and hungrily sought it out in their formative years in leasing. Why then is there a knowledge gap and why does it appear to be growing? Is it because the same vigor is not being applied to creating learning opportunities today? Perhaps. Other reasons might include:

• Current management got theirs and sees no need to extend any further effort. Although a possibility, given how well I know the current leaders in the industry and their professionalism, I have to reject this reason out of hand.
• Learners take a different approach to career development today. Today’s employees may not be taking on the individual responsibility of making certain they are well-versed in leasing knowledge. Another possibility is that they do not perceive any benefit, or are not encouraged to do so.
• Management is unwilling to make the investment. Training budgets are the most sensitive to economic conditions, and generally are the first to be cut in a downturn. Just like other programs, once cut, it is hard to reinstate them. Perhaps management believes that leasing knowledge is automatic in an experienced workforce. We know this correlation is not always valid, however.
• Management is unaware that the training being offered is suboptimal in terms of effectiveness. This ineffectiveness may be manifested through a lack of ‘stickiness’ or retention, or a lack of absorption.

I would posit that a likely reason for the growing knowledge gap is management unawareness of the training results. Money is being spent on training, but it is not being spent effectively or results are not being monitored. An example of this is an increasing reliance on e-learning. When first introduced, e-learning was touted as being the answer to every training director’s prayers – content that is easy to deliver, is flexible, and has a low cost/high ROI.

It is true that e-learning is not suitable for all topics. For instance, how can the material be designed to capture the dynamics of structuring a synthetic lease under the new accounting rules that addresses the cash flow, tax, EBITDA, and off balance sheet needs of the customer? I am not speaking to the appropriateness of the e-learning medium for given situations here, though. I am addressing the results of the current, appropriately directed efforts.

The reality of what I see when out and amongst lessors on a regular basis is that much of the e-learning outcomes do not reflect a solid understanding of industry fundamentals. This may be a factor of poor instructional design, employee effort, reinforcement techniques and follow-up, or rigor surrounding monitored assessment of the learning outcomes.

Please understand that I am not espousing scrapping your e-learning initiatives. E-learning can be effective. Its results, however, must be monitored, assessed, and verified and the learners made accountable for their success. Without this process, you will continue to spend money and the knowledge gap will continue to grow.

Of course, I would love to be proven wrong regarding this knowledge gap, as it would certainly make me feel better about the future of the industry. So, challenge me on this if you would like. If you are confident in the efficacy of your current training efforts, perform an assessment of how well your people understand the fundamental concepts of leasing. Better yet, tell us the level of learning you believe your company has, and we will supply the test questions to assess that level of learning. What do you have to lose?