Why Invest in Training?
You can worry that your well-trained employees might leave for another opportunity, or worry that your untrained and unmotivated employees might just stay.

By Cliff Premer

For many small businesses, and perhaps all human resource managers, investing in training or career development programs for employees seems to make obvious sense. Effective training increases employee morale, reduces employee turnover, increases productivity and increases an organization’s competitive edge. Most important for the business owner, training helps to boost the bottom line. Why, then, do so many employees complain that they are not adequately trained to perform their jobs?

Challenges
Although large organizations typically have well-defined job training programs and career development paths for their employees, many small businesses do not. In several small businesses, one person might be responsible for many management roles, which might be in direct conflict with each other. Consider the CEO/owner who also is the HR manager, and has to balance time between day-to-day operations to create training and development plans for employees. Or, what about the company whose CFO also is the HR manager and views training as just another expense that can be cut today to increase profits tomorrow.

Another challenge is the fear that if an organization invests in training its employees, the newly skilled employees are now more employable, may expect higher compensation, or worse, may leave.

Several years ago, the fear of well-trained information technology employees leaving was very real because of the significant shortage of skilled IT professionals. These organizations had two choices: hire new employees with the new skill sets, or invest in training the current IT staff to implement the changes brought about by technological advancements. Although either choice eventually would yield the desired results, many organizations shied away from training current employees because they feared losing those employees—and the training investment.

Martin Bean, now COO of New Horizons Computer Learning Centers, addressed this fear by asking, “What if you don’t invest in training your employees, and they stay?!”

Why Invest in Training
•    Increase Retention. Investing in training for employees to increase retention rates can pay off handsomely. In an “Emerging Workforce Study,” it was found that an organization could increase retention rates by 300 percent by providing ongoing employee training. In the same study, employees were asked: “What is the likelihood you will leave your employer within the next year?” Only 12 percent of employees who felt their employers had an excellent training program planned to leave, compared to 40 percent of employees who felt their employer had a poor training program.
•    Reduce retraining costs. Lower turnover means less retraining. Depending on the industry and the job position, surveys suggest that it costs an organization between $10,000 and $100,000 to replace an employee.
•    Improve productivity. Many organizations have downsized over the years, and employees are expected to do more in the same amount of time. Effective training programs can increase employee productivity by 40 percent or more.
•    Higher profits. Training does increase the bottom line. An American Society for Training and Development study concluded that companies that invest in training outperform the market by 45 percent, while those that don’t invest in training trail the market by 22 percent.
•    Increase loyalty. Although loyalty in the workforce today may not be the same as it once was, organizations that invest in their employees have on average more loyal employees who are more likely to stick with the company through the ups and downs.
•    Standardization. Training programs build consistency and can standardize how particular job functions are performed, thereby increasing job performance.
•    Increased morale. Providing training to employees is one way an employer can say, “I believe in you.” Employees know there is a cost to the organization for training them, and when an employer makes that investment the employee knows the organization is behind them and wants them to succeed.
•    Stay competitive. Training allows employees to keep their job skills up to date and to keep the organization competitive.

Invest in Them
If an organization does not invest in training its most valuable resource, it is almost surely doomed to fail. Training is an investment in your employees and your company. If your employees aren’t given the opportunity to continually upgrade their knowledge and skills to meet a changing world, how will your company remain competitive?

As Martin Bean said, an organization can invest in its employees and possibly risk them leaving, or choose not to invest in training and face the risk of them staying. What choice is your organization going to make?

Cliff Premer is a certified technical trainer and general manager of ExecuTrain of Kansas City and Wichita, specializing in enhancing business productivity through business skills and computer technology training. Premer can be reached at (913) 451-2898.