Employee training is a huge part of starting, growing, and running a successful business. But it’s also an investment, and like any investment, it needs to yield a return for it to be worthwhile. What are the benefits of investing in employee training?
In this article we’ll examine what the return on investment (ROI) of training is and how it impacts the success of a company. This evaluation will include employee engagement, productivity, morale, etc.
It’s becoming a widely accepted truth that there is no such thing as “unskilled labor.” From food service to tech, every industry requires skills such as intelligence, precision, accuracy, and timing. A skilled workforce ensures that the job gets done well, timely, and with minimum of errors and waste. It also helps ensure a quality product or service is delivered and that productivity is maximized.
When it comes to the value of training, employee morale alome is worth the investment. Just consider that 77% of workers say that they do their best work when they feel valued by their company and highly engaged in the work they are doing. But according to the latest Gallup report, up to 51% of employees are disengaged in the workpace, with 13% of those saying they feel actively disengaged at work, many companies are failing to capitalize on their most valuable asset.
With employee turnover costing US companies an average of $1 trillion every year, according to Gallup, smart organizations know how important it is retain their employees. Strategic, high quality and continual training is a highly effective way to do that. A Microsoft study showed that 40% of workers are thinking about quitting their jobs, but 40% of employees in a LinkedIn study said they would consider keeping their jobs if they were offered professional development and training so they have an opportunity for growth within the company.
Even though employee training has been proven to yield significant benefits, many in leadership see it as “nice to have” rather than an essential part of their strategic plan. In fact, many companies do not see training as a revenue producer, so training is often the first thing cut when a company is looking to downsize. Traditional in-person training comes with a hefty price tag. Costs for multi-day, in-person training can run as high as several thousand dollars per employee. Virtual training solutions like Jigsaw Interactive can reduce training costs, improve training results, and allow for a more strategic and continual training approach.
For virtual training to be effective, the virtual training solution needs to be designed specifically for learning. Zoom Zombies are real and using web or video conferencing tools instead of a virtual learning solution like Jigsaw Interactive, these zombies will soon be part of your team.
In 2021, according to Training Magazine’s Training Industry Report, the average company spent $1,071 per employee on training. That’s $40 less per person as compared to 2020. By not investing in their most valuable asset, companies are experiencing mass resignations, high levels of employee disengagement, poor productivity and a significant decrease in the quality of products and services. When employers don’t invest in their employees, their employees will not invest in them. It’s a simple concept.
All investments come with risk, and employee training is no exception. An organization’s key decision makers may feel that it’s not worth the risk to invest resources in training employees if they can’t be certain that productivity and morale will improve. Many executives worry about making the investment in employee training, only for their staff to leave the company for other opportunities. But as Henry Ford, of the Ford Motor Company said, “The only thing worse than training your employees and having them leave is not training them and having them stay.”
If the study done by IBM is any indication, employees are more likely to leave when they don’t have access to training. The company found that when staff turnover, technological changes, and business evolution are all taken into account, a company’s capabilities are reduced by up to 30% every year. After 3 years, over 40% of its staff are gone. The key takeaway? Businesses that don’t invest in employee training lose more than they realize, and the costs are far more than a lost employee.