The employee training and staff development industry is exploding. North American companies spent over $160 billion on training in 2016, and that number is only increasing.
Prioritizing employee training and staff development isn’t an arbitrary decision. Professional development remains a critical investment because it has a major effect on businesses’ bottom lines. Companies that offer comprehensive training have 218% higher income per employee and a 24% higher profit margin than companies that don’t provide training.
Training has such a dramatic impact on companies’ bottom line because it touches so many aspects of a business, from workplace culture and employee satisfaction to efficiency, quality, and risk management. Put simply, providing comprehensive training for employees is the most effective way to improve the most areas of your business and boost your bottom line.
Well-trained employees are engaged employees
Investing in training demonstrates to your employees that the company is invested in them and their success. This makes employees feel valued and cared for – which in turn produces engaged employees.
Engaged employees are thoroughly enthusiastic about and invested in their work. They are more productive, take fewer sick days on average, and help boost the morale and efficiency of their coworkers.
Engaged employees are also more creative and proactive. Rather than simply punching the clock and doing the bare minimum when it comes to fulfilling their responsibilities, they often will actively seek out or develop new processes and approaches to make the workplace more efficient and productive.
It’s easy to see how engaged employees have an immediate, positive impact on a company’s bottom line. Their work is efficient and high quality, which leads to satisfied customers, repeat business, and referrals – all of which contributes to higher profits.
Training bolsters retention
By some estimates, 40% of employees who receive inadequate or no training will leave within the first year. Given that replacing a mid-level employee can cost as much as 20% of their annual salary in lost productivity, retaining top talent is essential to remaining profitable.
Nobody likes to feel like they’re floundering at their job. Training gives employees the skills and confidence they need to perform at a consistently high level, which helps maintain employee satisfaction.
Better performance equals more profits
Imagine you own a widget-making business. If half of your widget makers are improperly trained, it’s not inconceivable that a maybe quarter of the widgets that go out the door are of sub-par quality. Your customers might return these shoddily made widgets, resulting in a loss of income, and after enough time you may develop a reputation for poor quality and lose their business for good.
By a similar token, if your business relies on employees pitching your services but your representatives haven’t received adequate public speaking training and fail to engage their audience of prospective clients, your sales will suffer.
No matter what you’re selling, if your employees are better at making or doing that, you will make more money. Ensuring that employees perform at the top of their game means offering them opportunities to improve their skills through training and professional development.
Training helps prevent loss
As the old saying goes, a penny saved is a penny earned. Companies lose money in numerous ways, but many of these can be mitigated or prevented by better training. Keeping employees trained and informed regarding safety procedures and best practices can help minimize accidents in the case of manual jobs and increase productivity and efficiency across the board. Staying abreast of regulatory compliance and liability helps avoid fines or legal fees.
Knowledge is money
Imagine a basketball team made up of Lebron James and four high school kids. Sure, they’ve got a superstar on their side, but one talented player isn’t enough to win games. A team composed of five skilled players is going to perform at a consistently higher level.
The same is true in the workplace. Sharing knowledge and skills among your team members helps lift the performance of the team as a whole. Plus, by ensuring that as many members of your team as possible are well trained, you help ensure that your productivity won’t be decimated by the departure of one of your key employees.
Additionally, flexibility and versatility are as valuable in the workplace as they are on the basketball court. Cross training your employees in different skill sets not only enables them to easily wear multiple hats, but it also gives teams with different responsibilities insight into their coworkers processes and a common language with which to collaborate. For example, if your sales team has knowledge and experience of the supply chain, they will be able to collaborate more effectively with their colleagues in that department – and vice versa.
Professional development fuels talent acquisition
Having access to opportunities for professional development consistently ranks as one of the key deciding factors for job seekers. A training program is not only a powerful incentive for existing employees to remain and retrain, but can also help convince exceptional talent to join your team.
Training demonstrates a commitment to consistent improvement and innovation because it helps companies get out in front of the competition and stay abreast of new developments in the industry. People always prefer to feel like they’ve hitched their wagon to the right horse; current employees and top candidates alike respect and want to work for a company that’s ahead of the pack.
In short, your training and staff development budget is a vital investment in your bottom line – and your company’s future. To get started providing your employees with the support and professional development they need to succeed, learn more about Ace-up’s personalized communication, leadership, and executive coaches, who can help professionals at all levels improve their skills and boost their confidence.