Guest post by Jessica Dieken, Director of Marketing and Sales at Pioneer Engineering
Employees are among the most important investments an organization makes. Investing in the right people for the job is crucial to the long-term profitability of a company. It costs time and money to hire and train new employees. That is why the hiring process takes time; it is important to make sure that the person being hired has the right skills, the right personality, and the desire to be with the organization in the long run.
But keeping employees is just as important as hiring the right ones. Making sure that employees are happy and productive is an ongoing process. When starting a new job, most of us have had the opportunity to undergo some kind of training – whether it is to learn how a plant works, why safety is important, or a simple welcome orientation. These types of employer-based development opportunities are important to how hard employees work and how long they want to stay with a company.
By training and developing employees, you are empowering them, helping and encouraging them to grow. Research has shown that there are many benefits an organization, both large and small, experiences when employees receive training and development opportunities, including:
- Increased productivity and improved performance
- Decreased employee turnover
- Decreased need for supervision
- Increased efficiency
That’s not all. Well-trained employees also tend to have better self-esteem, and increased self-worth, and become a valuable asset to the organization.
International corporations, like IBM and Motorola, are strong advocates for ongoing employee training. They believe that by investing in their employees, long-term financial gains will be seen. In a whitepaper published by IBM (IBM Training White Paper, 2008), the long-term benefits of employee training were explored. IBM discovered that:
- According to the American Society for Training and Development, 41% of employees at companies with inadequate training programs plan to leave within a year versus 12% of employees at companies who provide excellent training and professional development programs.
- The cost of replacing skilled employees ranges from US$75,000 to $450,000.
- The average cost to recruit a professional candidate is $18,374.
- Companies in the top quarter in training expenditure per employee per year ($1,500 or more) average 24% higher profit margins than companies that spend less per year.
- According to a Merrill Lynch study, Motorola estimated that every dollar spent on training yielded US$30 in productivity gains within three years.
- A company with 1,000 employees can save at least $240,000 per year as a result of an average productivity gain of just three minutes per day.
By training and developing your employees, you are taking steps to reduce employee turnover, and saving them time and money it takes to hire and train a new person. It is impressive to see how much training your employees can do for your company – while the initial cost for training and development may, at first, seem high, it is important to focus on the long-term return on this investment.
Benjamin Franklin once said, “An investment in education always pays the highest returns.” For companies big and small, the question is not how can you afford to train your employees, but rather, can you afford not to?
Training by Ana Maria Delgado, CRL