Thinking of Cutting Back on Training? It’ll Cost You!
From productivity to profits, training benefits across the board.
Almost every organization looks for ways to cut costs. One of the areas you may have considered cutting is employee training. What you may not realize, however, is that by eliminating or reducing staff training, you may save a little money in the short term, but you’re actually costing yourself in the long run.
Studies have shown that money spent on training actually increases cash flow, and that the return on investment for staff training is substantial. According to a study by CompTIA and Prometric, only a 2 percent increase in productivity is required to net a 100 percent return on training investment. Another study found that training investments contributed significantly to higher stockholder returns the following year.
The reasons for this are simple: by improving your workforce’s skills, you’re improving efficiency. It’s a simple formula: workers with higher skills lead to better productivity, which positively affects all aspects of your organization.
According to business consultant Ferdinand Fournies, performance problems are caused by three main problems: employees don’t know what they’re supposed to do, they don’t know how to do it, or they don’t know why they should do it. Training removes all of these problems. Trained employees improve performance across the board, in terms of quality, speed, problem solving, motivation, communication, and more.
What’s more, training has been demonstrated to reduce employee turnover. According to an ASTD study, one-third of human resources workers surveyed identified career development as their number one strategy in retaining key personnel. By reducing turnover within your organization, you’re not only saving on the cost of training replacement employees but also preventing a brain drain, as you hang on to your best and brightest employees.
In addition to all of this, training saves your organization when it comes to supervisory and administrative costs. By spending less time monitoring employees and solving their problems, your management team has more time to spend on other, more profitable activities.
Really, training your staff reaps benefits across the board. And that’s the main reason why it’s so prevalent: it works. And a better trained staff means you get better productivity, which leads to more money. It’s as simple as that.
CompTIA and Prometric, “Global Training and Certification study” (2001)
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