Companies can reap the rewards of providing training for their employees because well-trained workers help increase productivity and profits. Investing in employee training should improve worker retention rates, customer satisfaction and creativity for new product ideas. Effective training saves labor by reducing time spent on problem-solving and saves money in the long run by producing a better workforce.
Saving Time and Costs
Investment in training can improve a company’s financial standing. Poor performance often results when employees don’t know exactly what they’re supposed to do, how to do their jobs or why they need to work a certain way. Training can help solve these performance problems by explaining the details of the job. This should reduce duplication of effort in the workplace, the time spent correcting mistakes and the problem solving necessary to correct bad performances. Improved performance from employee training can reduce staff turnover, lower maintenance costs by reducing equipment breakdowns and result in fewer customer complaints. Better performance from employees typically creates less need for supervision and brings increased worker output.
Job satisfaction generally increases and self-esteem improves when employees better understand the workings of the company. Training can also enhance morale on the job and loyalty to the company. Workers who believe their company offers excellent training opportunities are generally less likely to leave their companies within a year of training than employees with poor training opportunities, according to Howard Community College in Maryland, which points to a poll of employees by Louis Harris and Associates.
Expectations and Needs
Training plays a key role in employee commitment, according to Scott Brum of the University of Rhode Island. The training program must meet expectations and needs of the employees, though. Companies are more likely to retain employees who view their training as relevant to their jobs and subsequently have a positive commitment to their company. A successful training program consists of management providing employees with accurate information and communication about the training as well as a program that ensures that training is relevant to their jobs.
Keeping well-trained employees pays off significantly for companies because the cost of employee turnover can be high. Costs include separation costs, such as exit interviews, administrative functions related to termination, severance pay and unemployment compensation. Replacement costs consist of attracting applicants, entrance interviews, testing, travel and moving expenses, pre-employment administrative expenses, medical exams and employment information. A study by the University of Wisconsin found that 75 percent of the demand for new employees was related to replacing workers who left the company.
Many factors determine whether a training program will be effective for a company that has lost employees, depending on how many workers are leaving. For example, using temporary workers to fill in for former employees on occasion might actually save costs. Management can determine if a training program will work out by looking at the increased workloads for employees caused by vacancies, the stress and tension from turnover, declining employee morale and the decreased productivity that results from high loss of employees.