Tag Archives: Business

Should We Train Our Employees?


Why would a company spend the time, resources and capital to train their employees?  When a company doesn’t invest in employees, it has a difficult time growing it’s business. Since there are skeptics on the subject of employee training and the return of investment to a company, let’s look at the reasons companies don’t have formal training programs for employees:

Training programs can be expensive to implement and can be difficult to add hard return numbers to the expense.

Companies of all sizes note that it takes too much time to train employees because it removes them from their primary duties for too long. Managers must also step away from their responsibilities to set up for training.

Lack of Trust
Companies fear if they train employees, they will take that knowledge and go work for the competition.

Here are a few advantages of providing training to your employees:

Raises bottom line.
Companies that invest $1,500 per employee in training compared with those that spend $125 experience an average of 24 percent higher gross profit margins and 218 percent higher revenue per employee (source: Laurie J. Bassi et al., “Profiting From Learning: Do Firms’ Investments in Education and Training Pay Off?” American Society for Training and Development, 2000).

Saves a company money.
A trained staff reduces time spent problem solving, time correcting mistakes, fewer accidents, lower maintenance costs, reduced downtime, lower recruitment costs, fewer support calls, and increased staff productivity. It frees up the managers to spend more time on other tasks that can earn the company more profits with a fully trained staff.

Increases worker productivity.
Just a 2-percent increase in productivity has been shown to net a 100 percent return on investment in training (source: “The 2001 Global Training and Certification Study,” CompTIA and Prometric).

Motorola calculated that every dollar spent on training yields an approximate 30 percent gain in productivity within a three-year period. Motorola also used training to reduce costs by over $3 billion and increase profits by 47 percent (source: Tim Lane et al., “Learning to Succeed in Business with Information Technology,” Motorola).

Improves employee satisfaction and retention.
A Louis Harris and Associates poll reports that among employees with poor training opportunities, 41 percent planned to leave within a year, whereas of those who considered their company’s training opportunities to be excellent, only 12 percent planned to leave. A Hackett Benchmarking and Research report shows that companies that spend $218 per employee on training have more than a 16 percent voluntary turnover, while companies that spend over $273 per employee have turnovers of 7 percent.  Career development is the No. 1 factor in employee retention, according to a survey of 6,400 employees conducted by consultants Sharon Jordan-Evans and Beverly Kaye.

As noted by Zig Ziglar “What’s worse than training your workers and losing them? Not training them and keeping them.

Training can dramatically increase the productivity of a company and increase its intellectual capital as well.  A company that invests in its employees will find that they are loyal to that company and work hard to provide results that prove their investment was worth it to the company’s bottom line. In a competitive environment it’s the staff that can really set a company apart from its competitor.  Ultimately a company will do business with another company it is confident can do the job they are hired to do.