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A Risk Manager Looks At Developing A Training Program

Operator training as a billable item

Within the material handling industry and elsewhere, risk is defined as a chance of suffering or encountering harm, loss or danger. Life is filled with risk: Risk of death, risk of pain and suffering, risk of financial loss and litigation, and risk of a soiled reputation. It is impossible to eliminate risk. At best, risk can be mitigated or even transferred.

With risk comes opportunity. In 1999, a tremendous opportunity presented itself to mobile equipment dealers in the form of changes in the way that OSHA regulated Powered Industrial Truck (forklift) Operator Training.

OSHA took one sentence, “Operators of powered industrial trucks must be qualified,” and turned it into over 30 pages of regulations that placed employers at risk for citations, fines and litigation.

Training had to consist of classroom lectures on 20 subjects and be worksite, hazard and equipment specific. Videos and online training alone would not meet the regulations.

The employer or its representative must certify that its employees know how to use the equipment and all attachments in their unique workplace environment and alert employees to the associated worksite specific hazards.

Objectives of a Training Program
In 1999, Gary Moore, president of Materials Handling Equipment Company (MHECO) in Denver, Colorado, asked me to develop a Forklift Operator Training Program that would:

  • Meet the needs of his customers by helping to make their forklift operators safer and more productive.
  • Help users of forklifts comply with Federal Law 29CFR1910.178.
  • Be worksite and equipment specific.
  • Be more comprehensive than the videos or online training put out by most forklift manufacturers (cover broader, related safety topics as well as most forklift makes and models along with attachments ranging from forks to roll clamps).
  • Do more than state rules; it would also teach productivity and skills.
  • Be more comprehensive than the lower-priced competition.
  • Produce a profit.

As a decision maker looking at expanding the scope of his business, Gary needed to run through a five-step process. My job as his Risk Manager was to:

Step 1 – Identify exposures to accidental loss related to training that could interfere with his organization’s basic objectives, such as profit, increased market share and positive public relations. Exposures include passing along faulty or incomplete information; damaging customer property or equipment; physical injury to the trainer, students or others; and subjecting MHECO to litigation.

Step 2 –Examine alternatives for dealing with the exposures encountered with training.

  • Do not train at all and be hit with “you never told me” claims.
  • Outsource training to a third party and take the blame for their mistakes.
  • Hire in-house trainers.
  • Sell training videos offered by manufacturers represented by Materials Handling Equipment Company.
  • Provide online training.
  • Only offer classroom training.
  • Only offer driver evaluation.
  • Offer both classroom and driver evaluation.

Step 3 – Select the apparently best risk management approach to training if training was to be done by an in-house trainer:

  • How do we make a profit?
  • How do our customers perceive our product? Is the cost worth the benefit of a comprehensive training program?
  • How do we minimize loss?

Step 4 – Implement the chosen training approach:

  • Whom do we use as a trainer if we choose to offer training?
  • Do we use pre-packaged training videos or a program created by a forklift manufacturer and only relating to the products of that manufacturer?
  • Do we develop our own program?
  • Do we train on attachments used by our customers?
  • Do we train on rules or train in skills?
  • How long should professional training take?
  • How do we market the service of our Risk Management and Training Department?

Step 5 – Monitor the chosen training approach:

  • What additional business has been generated due to professional training?
  • Changes in laws
  • Changing customer demands for more training products
  • Requests for safety audits from our customers
  • The business cycle and market trends
  • Requests from law firms to be expert witnesses
  • What is the competition doing and how can it be done better?

Exposures A Business May Encounter When Starting Its Own Training Department
The first exposure is cost: What does it cost to provide training? How much time will it take to train? If someone is taken out of a sales position and asked to train, what lost sales opportunities will arise? If a service tech is taken out of a service position, what lost repair income will result? What resources will a trainer need: supplies, equipment, association membership, licenses, travel and entertainment or insurance? How will it be sold? What marketing tools and cost will be required? What are employers willing to pay in order to keep their people safe?

Another exposure is related to information. Is the information being conveyed up-to-date and thorough?

Another exposure is staying informed of changes in enforcement of regulations. How do you stay up-to-date and how is this information passed on to the customer base?

No matter what method of training is selected, the most basic question is: Is the trainer qualified to train?

In November 2000, OSHA amended the definition of a Powered Industrial Truck (Forklift) Safety Trainer by way of a directive letter. As originally written, 29CFR1910.178 stated that a qualified trainer must have the knowledge, training and experience to train and evaluate powered industrial truck operators.

Just looking at this definition should scare most firms from even thinking about training. Advertising that a trainer is qualified and professional will cause a firm to be held to higher standards if litigation occurs. If you claim to be an expert, you better be able to back it up in court.

You just cannot pull a so-called experienced PIT operator out of the warehouse and ask him or her to be a trainer. Experience alone does not qualify one to train. Mechanics and salespeople may not be the best people to do training if you worry about litigation.

Added to the regulation standard for a trainer, the November 2000 directive added, “A qualified trainer would be a person who by possession of a recognized degree, certificate or professional standing has the knowledge, training and experience to train and evaluate.”

It is clear that the trend in government regulation is to make sure that safety trainers are professional and effective. Being professional and effective will reduce the risk of litigation.

The latest Voluntary standard from the American National Standards Institute (ANSI,Z490.1H) states that safety, health and environmental training trainers have the ability to:

  • Establish a positive learning environment.
  • Make participants aware that they are free to make mistakes and experiment in the classroom.
  • Describe their roles as guides, facilitators and trainers.
  • Express the priority of meeting students’ learning needs.
  • Describe and document learning objectives.
  • Describe and document an agenda for sequencing and delivering training.
  • Make good use of training aids and materials.
  • Use all materials designed for the course.
  • Keep the session alive by soliciting resources and assessing the amount of learning occurring.
  • Have and use back up plans if chosen training methods are not effective.
  • Manage the classroom and physical environment so learning is promoted.

After all is said and done, anyone who is thinking of expanding into the training arena would have to ask this question: “Would a reasonable and prudent person sitting on a jury think that a firm made its best effort to use a professional and qualified trainer if litigation developed after an incident involving a forklift?”

Results For MHECO
It has been five years since Materials Handling Equipment Company developed its own behavior-based Forklift Training Program. Over those five years, we have trained 2,700 operators of powered industrial trucks at an average price of $175 per person. In four years, revenue from the training program has increased from five figures to mid-six. The majority of employers who have used our services call Materials Handling Equipment Company back for new hires and refresher training.

Additional training programs have been developed in the following areas due to customer requests: Forklift Operator Train the Trainer, Pedestrian Safety, Safety and Productivity in Material Handling and Warehousing, Pallet Rack Safety, Fall Protection, Overhead Crane, Hoist and Rigging Safety, Loading Dock Safety, and Battery Charging and Changing Safety.

Forklift operator training has resulted in the sales of maintenance contracts, new forklifts, dock equipment, racks and shelving for Materials Handling Equipment Company. Training has been done as far east as Baltimore, Maryland, and west to Los Angeles, California.

All of this has been done with a one-person training and risk management department, supported by a product support sales force, which routinely offers these training products to Materials Handling Equipment Company’s customers and prospects.

Marketing support has included:

  • Direct mail postcards
  • A quarterly safety newsletter, produced by MHECO, mailed to our customer base
  • PowerPoint presentations
  • Brochures outlining OSHA regulations and courses offered
  • Professional résumé of the trainer as a handout and online
  • Web site information (check it out at www.mheco.com)
  • Informational safety seminars
  • New rental agreements highlighting training requirements
  • Information sign-off sheets used when delivering new or used forklifts, emphasizing legal requirements and safety issues.

No employer who has used the operator training provided by Materials Handling Equipment Company has been fined under 29CFR1910.178.

Did Gary Moore take a risk in July of 1999? You bet he did. Did the opportunity associated with that risk pay off for Materials Handling Equipment Company? Says Gary Moore, “You bet it did.”

Material Handling Equipment Distributors Association

Arthur Varga Meet the Author
Arthur P. Varga is director of training and risk management at Materials Handling Equipment Company, located in Denver, Colorado, and on the Web at www.mheco.com.

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