Invest in Training. Reap the Rewards.
A quick look at global headlines produces a bit of confusion. We see employment numbers rising on one hand but on the other, layoffs, particularly in tech, are on the rise. Inflation and consumer confidence are at odds with one another. Companies are once again being forced to make difficult choices to ensure financial stability. An odd practice among many businesses who are facing financial inflection points is to immediately suspend training initiatives, working with outside consultants, and in some extreme cases, cutting the human resources budget. This article will focus on these three practices, since they are intertwined. We’ll show that when you invest in training, you reap the rewards.
The rewards for no training investment
Formal studies indicate that there are five adverse effects to neglecting to invest in formalized training programs. They include:
Increased turnover: When your team feels unsupported or undervalued, their previously focused eyes begin to wander. If the grass looks greener on the other side of the fence, it just might be. This leads to an increased likelihood of leaving your company for an unknown, but intriguing, opportunity. This can lead to increased turnover costs, which can be significant.
Reduced productivity. It’s no secret that productivity takes a hit when the team isn’t properly trained or supported. Recent conversations with front-line production workers can be summed up thus: “I keep getting asked to do more and more without specific training for these new responsibilities. Then when things break down, which they inevitably do, I’m blamed for not knowing the process—the same process I was told to “just figure out.” This lost productivity hurts the team and the company’s bottom line.
Poor morale. Morale takes a hit when the team perceives they are not being valued. This can lead to decreased motivation and engagement, which can impact the quality of work. Ever heard of a “Friday car?” Not investing in your team can turn your product from a “Friday car” to an “Any day that ends in Y” product.
Increased risk of legal issues. Businesses without proper training programs in place may be unnecessarily exposed to legal risks. This can include claims of discrimination, harassment, and wrongful termination.
Damaged reputation: If your company “earns” a reputation for poor training and development practices, it can damage their reputation with customers, investors, and other stakeholders. In a tight labor market, this can make it difficult to attract and retain top talent. It can be the difference in your ability to accomplish your corporate objectives.
When you invest, you reap rewards
What’s the antidote to these issues? According to the American Society for Training and Development (ASTD), companies that cultivate a strong training culture are 21% more profitable than companies who have a weak or non-existent training culture. This is a strong suggestion that training and development have a significant impact on the financial health of the company.
According to the Aberdeen Group, companies that invest in training (sometimes as little as $1,500 USD per annum) are 2.5 times more likely to achieve their business goals than companies that do not. What does this mean? Skill up your team to execute and you’re on the road to success—likely in the fast lane. Finally, per the McKinsey Global Institute, those companies that invest in training are 3.4 times more likely to be high-performing than companies that do not invest in training. Looking for a competitive advantage? Take care of your people and they’ll take care of you.
These studies suggest that there is a clear financial benefit to investing in training programs. Companies that invest in training are more profitable, more likely to achieve their goals. As noted, they are also more likely to be high performing. There are so many more data points that suggest a direct correlation between investments in training and development and improved bottom line financial performance. This includes statistics that show impact on customer satisfaction scores, employee satisfaction (NPS) scores, productivity, and decreased turnover costs
Are you ready to reap?
These are just a few examples of the financial benefits of training. The specific benefits that your company experiences will vary depending on the type of training that you offer. When you couple that with your specific needs, your impact can be massive. At NVSI, we specialize not just in world-class development programs, but in working closely with you and your executive team to determine your specific needs. While we may speak generally of “training and development,” we know that cookie cutter solutions often miss the mark. We know your desired return is the most important metric and we will work with you to maximize it.
If you’re ready to invest in training and reap the rewards, we should talk. Start the conversation here.
