The ROI of Expert Training
Posted by Des Sinkevich on October 28, 2020
The negative impact of a lack of training opportunities
Consider the cost of high turnover within your organization. Whether you’re in a high-turnover business like retail or are operating in a more stable industry, turnover, like taxes, is something you know will happen every year. While some turnover is inevitable, a steady stream of it over time can impact your revenue. On average, it can cost upwards of $4,129 to recruit and hire a new employee. Multiply that several times and you’re looking at a slow –bleed loss of income.
Besides taking a hit in revenue, turnover adds additional stress to current employees and company morale. If you’re hemorrhaging workers, employees take notice and may start to question what, exactly, is leading so many others to leave the company. Those who stay are then often asked to add training a new recruit to their full list of tasks, taking away from productivity. Cyclically hiring and losing employees and losing employees is a stressor that impacts all aspects of the business, even up through client satisfaction.
Why is training a necessary investment?
Besides ensuring an employee can handle the work they’re given on a regular basis, providing in-depth training to your workers builds career confidence and motivation. It also allows you, as the employer or hiring manager, to create a strong, developed talent pipeline within the company that can feed into high-level or more skilled roles.
Effective, long-term training can
- Improve performance. An employee who knows what their job duties are and has the tools to perform those duties well is confident in their work, improving their performance which drives accelerated company performance- meaning training is good for business.
- Increase loyalty or motivation. If someone is doing well in their job and that is being recognized by managers, they’re more likely to stay motivated to continually meet that high level of performance. Providing training opportunities also increases employee loyalty – if an employer is willing to invest in their career growth, there’s more incentive to stay with that company.
- Decrease turnover. Turnover can be financially and culturally detrimental to a company. It’s estimated that hiring a new person to fill a vacated role can cost the employer as much as 1.5 to 2 times the annual salary of that position. Others calculate the loss in revenue as an average of $4,129 for each employee. From recruiting costs to the length of time it takes a new hire to acclimate to the role, it all adds up. Through offering workforce development and training opportunities, turnover that ultimately impacts revenue can decrease dramatically.
- Create a talent pipeline. Recruiting can be costly, especially for higher paid roles. After recruitment, the onboarding process can then take up to 90 days, meaning that the new hire won’t be as productive while they’re learning the ropes of the role. By offering training and development opportunities, you can reap all the other benefits while also creating a pipeline of skilled, knowledge workers that can take on new roles and promotions.