Offering employee training can be seen as a significant outlay for a company, with the cost at the forefront of the employer’s mind.
However, there are important positive outcomes that can make training a worthwhile investment in the organisation as a whole.
We’re taking a look at the facts and figures that make the business case for employee training, with evidence-based conclusions. This kind of incentive can have a much bigger impact than initially apparent, with a wide-reaching effect.
How Training Impacts the Employee Experience
When you provide training to an employee, they realise that you’re invested in their future growth and development. This simple act can change their perception of the job, the company and their future within both.
A study conducted by LinkedIn found that a whopping 94% of employees stated that they would stay within a company for longer if there were training opportunities available.
In the same study, the results showed that 87% of millennials report that development is important in a job. 69% of non-millennials reported that this was important in a job, which is still a significant amount of those polled. The number of millennials within an organisation is growing and expected to reach 75% of the workforce by 2025, so development will become ever more important in the future.
With 85% of employees reporting that they’re not engaged at work, training can be an effective tool to improve the productivity of this staggering amount of the workforce. When these employees are more engaged, they take 41% fewer sick days and increase their productivity by 17%.
Employers often worry that by training their employees, they’re setting them up to seek higher level jobs elsewhere. This doesn’t have to be the case however, as treating employees well and providing training can form a robust retention strategy.
As well as providing training, it’s essential to also show clear routes for progression within the organisation as the employee becomes more qualified. If employees are lacking in knowledge, then this can also have a serious impact on their colleagues.
Under skilled managers, weak links and costly errors can do significant damage to the bottom line of any business.
Poor management can easily drive away otherwise engaged employees, so consider whether this could be remedied with further training.
Almost half of UK workers polled by Forbes had left a position due to poor management, so it’s safe to say this is a major contributor to a detrimental employee experience.
Driving Productivity and Profitability Through Training
Unsurprisingly, training your people to be more effective at their job has a positive effect on the bottom line.
The Association for Talent Development (ATD) found that companies offering a formalised training programme increase their profitability per employee by 218%.
They also found that these companies had a 24% higher profit margin when compared with others spending less on training. As a workforce becomes more adept and efficient, it’s only natural that costs are reduced and profits are increased.
Upskilling people can be a more worthwhile investment than upgrading the equipment that they work with, according to the National Center on the Educational Quality of the Workforce.
Developing talent in-house can also be more cost-effective than resourcing higher level employees from outside of the organisation. Alongside recruitment costs, the salary required to tempt an experienced employee from another organisation can be higher than the amount required to develop an existing employee to take on this role.
This also gives you the flexibility to focus on the education and experience that is relevant to the role within your organisation. Outside hires may have more experience or work in a way that’s not entirely relevant to your industry, which takes yet more resources to reskill them in your line of business.
Balancing Training and Responsibilities
While many employees want to learn, the biggest deterrent is finding the time to do so. Striking a balance between day-to-day roles and training can be difficult for employees. To ease this issue, it’s essential for training to be convenient and for managers to support the employee through their training.
The manager can have a huge impact on the acceptance of a training programme, as well as its further success. As well as influencing the culture within the workplace, they also have the potential to encourage training requests and identify skills gaps.
66% of employees report that they would engage with a training programme if this was requested by their direct manager.
58% of these employees also want to learn at their own pace, to increase their chance of success by structuring their learning around other responsibilities.
Making learning more convenient and offering support through managers creates an ideal approach in which employees and employers can benefit.
Reducing the Cost of Employee Training
Training doesn’t have to be a huge investment for a company, as this can be funded in a multitude of different ways. If you’re already paying into the apprenticeship levy you have ring-fenced training funds set aside to use.
This can allow you to provide staff training for free, fully funded by your pre-existing levy amount.
It’s a common misconception that apprentices have to be young school-leavers, but anyone can be an apprentice within your organisation. These apprentices can work towards globally accredited qualifications in professional sectors, such as marketing, human resources and management.
These can be suitable for those working in entry-level roles or more experienced colleagues looking to improve their knowledge.
Studying online will generally be more cost effective for employers, as there are no travel costs or time away from the office. Online learning can reduce the cost of training by 18% and also reduces time off for learning by 15%.
Through online learning, BT were able to deliver a training programme to 23,000 employees over the course of 3 months at a cost of £5.9m. It's estimated that if delivered in person, this would have cost £17.8m and taken five years to complete. You can find out more about these case studies in our whitepaper - download it here.
The business case for training is strong; it’s no longer a question of whether you can afford to provide this it’s now a question of whether you can afford not to. With productivity, engagement and overall profitability taking a hit if you don’t provide training – it’s essential to implement a robust training scheme.