When companies think about training one of the first questions asked is how much to spend.
While the question is both common and understandable — those in charge usually expect some justification, perhaps even an ROI estimate — it doesn’t address the most critical issue of training. That question: What will it cost if you don’t train employees?
According to research done by Deloitte, one of the largest professional services companies in the world, US corporate spending on training grew by 12 percent in 2012 — the highest growth rate in the last eight years. Company training budgets ranged from $200 to over $3,000 per employee per year on training, depending on the industry.
However, focusing exclusively on dollars misses many important factors.
Among those are:
• What is the training intended to achieve?
• How complex is the training?
• How good are the trainers?
• Is the training required to meet regulatory standards?
• How much does it cost to replace employees who leave?
Higher employee turnover usually entails more spending on training. If you have a revolving door for personnel, basic training expense will grow simply because new employees almost always require some training.
But the better reason for emphasizing training is it should help you keep employees longer. Moreover, your employees will be happier and more productive.
Zig Ziglar, a well-known US motivational speaker, was fond of saying, “What’s worse than training your workers and losing them? Not training them and keeping them!”
Employees want to see investment in them by their employer. Training is one way to demonstrate such investment. Without it staff tend to be less motivated, less satisfied and more likely to seek other employment opportunities.
In short, companies that skimp on training keep poor performing staff — those who are generally less motivated or see themselves as less desirable in a competitive workforce. Such companies also tend to lose talented employees, those who are capable and ambitious, because such personnel are constantly looking to expand their expertise, sharpen their skills or grow with the company.
As the US economy continues to expand and the unemployment rate falls, keeping skilled and motivated workers becomes a more significant consideration. In such a business climate the question of how much to spend on training may be less important than what it will cost if you don’t.
By David Hawkins