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The New York Times ran a great article today about funding cuts for state / community colleges, training programs, and others that are causing them to increase tuition and not meet demand.

Community colleges & schools - we can partner with you to help you meet demand. We provide the capability to do so, quickly.

At Wake Technical Community College in Raleigh, N.C., enrollment has grown by about 30 percent in the last three years, while total state funding has fallen by 21 percent, an amount not fully offset by tuition increases. The college cannot afford to expand its popular nursing program beyond its 275 slots, leaving 1,000 frustrated students on the waiting list. To keep these students, the college has enrolled them in a “pre-nursing” program, a new prerequisite for staying on the waiting list. But even those courses have a waiting list of more than 400 students. Some flagship universities in state systems, with relatively wealthy alumni and robust endowments, have survived the state cuts with less damage. The University of California, Berkeley, for example, has started a $3 billion fund-raising campaign and begun investing its working capital more aggressively.

(Source: levelearning.com)

There is a direct relationship between what you LEARN and what you EARN, for both individuals and businesses. The most recent data from the US Census Bureau 2012 Statistical Abstract (232 - Mean Earnings by Highest Degree Earned: 2009) shows the differences in average earnings for different degrees:

The only exception here, it seems, is the Doctoral (PhD) degree. Perhaps this is the law of diminishing return! (just kidding) As with any study, there are outliers. Yes, some of our most successful entrepreneurs don’t even have a college degree (and in some cases, a high school education).

We can see this relationship between learning and earning clearly for individuals, but how do we measure this for businesses? Is there a way we can see how the number of degrees, certifications, and other credentials the business’s employees hold (or perhaps certifications the business has obtained itself like ISO 9000 and others)? I am not sure if this data is readily available. It is likely private company information, and/or you would have to complete some data collection procedure to obtain this somehow.

If you wanted to, you could dig a little deeper & compare income statements of companies with highly educated, certified individuals versus those without, or companies with certifications against ones without them. However, you’d have to be careful to filter out noise to make sure you can isolate & compare these individual variables effectively. Some companies generate a lot of income through manual labor compared to others who are service-based. You’d have to figure out how to create an even index to compare apples to apples, accounting for industry differences, experience, macroeconomic exposure, and other factors.

However, common sense would probably signal to us that companies who learn from their customers, who study the marketplace, and those who adapt new technologies, skills, and capabilities are the ones who stick around for the long term. In the words of Niolfer Merchant, “the social era rewards the gazelles — the ones that are fast, fluid, and flexible.” Taking that a step further, the companies who observe and learn are the ones who will win today and grow to be around tomorrow. If you actually need data to support this, I recommend comparing the financial statements (growth rates) of companies known for learning against those who have a reputation for not learning, preferably in the same industry. I haven’t done the research, but I’m willing to bet the farm that smart, learning companies win.

(Source: levelearning.com)

You probably already know this: businesses spend roughly 40 - 60% of their expenses (on average) on their human resources (think benefits, payroll, training, etc.). That’s a big chunk, but it should make sense, especially for companies who are more service than good-oriented.

Take a look at the NY Giants, for example. They spend 40 - 70% of their total revenue on their players (a little bit more than just 40 - 60% of expenses):

Here’s what the proportions look like over time, with a trend line (note that revenues likely increased sharply due to their recent Super Bowl wins and new stadium):

That’s quite a nice return on investment if you look at the sharp turn from 70% in 2010 to 45% in 2011. I would imagine when all the final numbers come in for the Super Bowl (and looking ahead), this upward trend of revenue and downward trend of payroll expense as a proportion of revenue will continue.

One more item to note, Eli Manning will likely take in close to $13MM for his work this year.

Let me ask you this - do you think the NY Giants invest anything in developing the talents of stars like Eli Manning, Corey Webster, and Justin Tuck? Do you think they do anything around building talents in up & coming stars like Hakeem Nicks? I can assure you, without doing any in depth research at all, that there is a ton of effort invested in strength, conditioning, practicing, learning, and growing going on behind the scenes of the games.

There is no chance at all that New York is taking a laissez-faire approach to winning Super Bowls. They are driving performance through incentives and training. This is a well-managed team that works as a powerful, cohesive unit. Yes, they hit some bumps along the way and were at one point considered out of the race in the middle of the 2011 season. But, they learned from their mistakes and became a stronger team.

In a context closer to home, your business is going after a Super Bowl every day of the year. You’re winning customers, fighting competitors, gaining market share, growing, and becoming more productive. What has worked for you to get ready for the game? Hiring the right talent is critical, but training & developing your talent is the key to becoming an agile business that thrives in a tough market.

(Source: levelearning.com)