In the increasingly competitive and tough economic climate, funds directed towards employee training are falling as firms try to cut costs and remain competitive. In such firms, employee training is viewed as an extra, a bonus, not a necessity. However, perhaps employee learning and development should be seen as an essential part of businesses.
A number of cost-saving benefits can arise from training which enable firms to gain competitive advantages.
#1 Improved Productivity:
The objective of training is to improve certain skills that the employees can then translate to a business context. The skills targeted can range from trust within teams to communication skills among leaders. Consequently, the appropriate training, resulting in the enhancement of business skills, can enable employees to carry out their work to a higher standard while ameliorating productivity and quality of work. Additionally, due to employees’ increased and improved skill set, they will no longer need such stringent supervision – leading to less time wastage.
#2 Improved engagement:
Progression in employee motivation, performance and efficiency can also be accounted to increased employee engagement – a consequence of learning and development. Past research shows that there is strong correlation between better engagement and improved performance.
For example, Gallup (2006) examined 23, 910 business units and compared the top quartile and bottom quartile financial performance with engagement scores. Those with engagement scores in the bottom quartile averaged 31-51% more employee turnover, 51% more inventory shrinkage and 62% more accidents. However, those with engagement scores in the top quartile averaged 12% higher customer advocacy, 18% higher productivity and 12% higher profitability.
What is more, Tower Perrins-ISR found from their 2006 global survey a 52% gap in the performance improvement in operating income over the year between companies with highly-engaged employees versus companies whose employees had low engagement scores.
In other words, training results in improved engagement which aids staff retention, productivity, customer loyalty and profitability.
#3 Competitor Advantage:
Another benefit of training can been seen in maintaining competitor advantage. This is true for a number of reasons. Firstly, through regular training, employees will be better than those of competitor firms. In addition, through having the top employees this will, in turn, attract other high calibre employees to the firm. This attraction will be further reinforced as new recruits will see that the firm is engaged with and committed to employee development.
Moreover, another outcome of training can be staff satisfaction and employee motivation. This can be accounted to employees feeling valued and invested in, as well as the resultant supportive workplace developed from training. Satisfaction is an important element – and potential employees will find high satisfaction rates appealing.
Evidently training is extremely advantageous. One of the most significant outcomes of training is saving the firm money – and in tough economic environments, money saving initiatives are at the forefront of most businesses’ minds. However, the right training course must be chosen for your business. This can take time, but if the appropriate training is provided for your employees, the benefits to your business could be extraordinary.
Berrison design and deliver training, engagement and change programmes for leaders and business teams. Training that supports change, growth, innovation and efficiency. If you would like to find out more about our employee training please get in touch.
References/Further Reading:
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- Gallup (2006) Gallup Study: Feeling Good Matters in the Workplace in MacLeod, D. and Clarke, N. (2009) Engaging for success: enhancing performance through employee engagement. London: Department for Business, Innovation and Skills.
- Towers Perrin-ISR (2006) ISR Employment Engagement Report in MacLeod, D. and Clarke, N. (2009) Engaging for success: enhancing performance through employee engagement. London: Department for Business, Innovation and Skills.
