Some of these costly risks include high staff turnover, missing out on high-value and tech-savvy recruits, as well as losing competitive edge when team members don’t have the latest skills to meet current-day challenges.
In this chapter, we’ll discuss the costs of not providing training. When you’re making your decision, first consider the costs associated with the lack of training in the workplace and balance them against the costs involved in providing training.
Losing Your Best Employees
High staff turnover is one of the most common challenges businesses are facing today. However, few businesses realize just how much this challenge costs them. When an employee decides to leave, the financial blow is two-fold.
The greatest loss is usually the intellectual property that the leaving employee takes with them. Think about it. All that subject matter expertise, that skill, and that insight into the organization and the team – lost.
And not only is it lost, but it has to be replaced. This means expenses incurred to onboard a replacement employee, and lost time, and productivity as the new recruit finds their feet in the business.
Some experts even advise that the total cost of losing an employee, when all factors are taken into account, can range from tens of thousands of dollars, to twice that employee’s current annual salary. That’s a serious loss that, in many cases, could easily have been avoided through training.
Why training? Lack of training in the workplace is often the reason why seasoned, top-performing employees seek greener pastures in the arms of competitors. These high-performing individuals want to grow and develop their skills in line with industry trends because this is the best way for them to flourish in their careers.
But when their employer isn’t providing them with opportunities to learn these skills, employees are often left with few options other than seeking opportunities where they will receive training or direct exposure to new developments in their field.
Missing Out On New Generation Hires
It’s well-known that Millennials and Generation Z employees expect employers to actively invest in their skills development. This bright new digitally-native workforce considers training and development opportunities as central to their willingness to commit to a business for the long-term.
In fact, Millennials, and Generation Z workers are more likely to value relevant training opportunities over other job benefits, like a slightly higher salary. In recent surveys [i], more than 1/3 of respondents even reported that they consider a comprehensive training and development program to be the top benefit they seek from the organization they’re looking to join.
This makes the lack of training in the workplace an especially serious mistake if you’re hoping to attract the best of the new workers entering the field.
This means that if an organization fails to provide satisfactory training opportunities, it’s not only unlikely to attract the best candidates but also risks losing them to the competition.
Crippling Your Competitive Advantage
It may sound drastic, but ultimately the lack of training in the workplace not only results in losing your best employees, and struggling to attract new ones – but it also means that your remaining workforce is stuck with outdated skills.
We’re living in a time of exciting change, but it has its risks. With the rapid and constant introduction of new technologies, new regulations and new methodologies in almost every sector, businesses can handicap their growth by letting their training fall behind the times.
For example, if relevant employees are unaware of new regulation in the handling of customer personal information, this can introduce significant litigation risk to the organization. In another case, business analytics employees working with outdated models and techniques simply aren’t as effective as they would be with exposure to new methods.
Some of these inefficiencies may seem small or insignificant on their own. But by working through the layers of the organization one by one, you can quickly begin to see how the lack of training in the workplace becomes a serious obstacle to staying ahead of the competition.
Never Reaching Full Productivity
Sure, training might seem like a drain on time that could be better spent working. Because time is money. And if you’re not planning or executing training correctly, that can, unfortunately, be true.
However, when training is planned and delivered effectively, it can produce a rise in productivity and a reduction in staff turnover that can more than account for the costs invested. Productivity in even one or two key departments often feeds directly into profit and sustainable growth for the organization.
So, why do organizations not leverage this opportunity?
In most cases, it’s an unfortunate side effect of short-term thinking. The lack of training in the workplace is usually the result of executives thinking “we can’t afford to invest time in this right now, we’re too busy”. Put like that, the irony seems obvious.
Gaining the ability to do more in less time won’t just improve the bottom line, it can also give upskilled employees more time to invest in their work in other ways.
For example, if a software developer receives training that makes it 80% less likely that they have to rewrite their code, they can devote more energy to innovating in their work, sharing their ideas and learnings with others, and contributing to the company’s intellectual property and clout in the industry.
Failing To Innovate
Without the best employees, the brightest young minds in the business, and the latest skill sets across the board, no organization can expect to be an innovator in their field. And sadly, the change-driven competitive climate is not kind to those who can’t innovate.
That makes lack of training in the workplace not only short-sighted in terms of the organization’s immediate success, but also its long-term health.
Businesses that don’t create opportunities for employees to learn to struggle to keep pace with those that harness a learning culture. As a result, they return poor value to shareholders, fall behind the competition, and in more cases than not, find themselves in a swift downward spiral.
On the contrary, those organizations who do prioritize their employees’ ongoing professional development flourish. These businesses experience a higher personal investment in their mission, improved efficiency, and a more fertile environment for innovation.
Even “hidden” innovations, like clever improvements to existing business processes, can make the difference between losing out or being at the top of your game.
Think ‘Bigger Picture’
If all of this sounds just a little daunting, think of the bigger picture and the bottom line. Even simple corporate training programs built on best practices can yield a meaningful return on investment, and boost profit and enterprise growth. Effective training unlocks the potential of both individuals and organizations. In this competitive business climate, the question is no longer whether a business can afford to provide corporate training, but if it can afford not to.
Let’s recap this chapter:
It’s understandable that many organizations are wary of investing in training, especially when they don’t understand the costs involved, and what influences those costs. However, with a sound understanding of the essential costs, the hidden costs, knowing how to choose online or offline training, and being able to execute excellent eLearning courses within budget, every organization can avoid the risks that result from a lack of training in the workplace.
[i]. (PwC, 2017) The Workforce of the Future: The Competing Forces Shaping 2030