Employee training is a prime opportunity to expand the knowledge base of all employees. However, many employers find development opportunities as an expensive expense. But is it?
According to Recruiterbox study, the cost of hiring new workers could be as high as $5,000 per hire or more in a professional or manufacturing industry. Meanwhile, hiring a new employee in a services-related industry typically costs more than $1,000 per hire. These costs include advertising costs, in-house recruiters’ salaries, third-party recruiter fees, travel expenses, sign-on bonuses, and employee referral bonuses.
Hiring new employees can also add risk to having bad hires that will cost a company additional budget. Recruiterbox found that the cost of a bad hire can be greater than $25,000. A bad hire will also cause declined productivity, lost time to recruit and train another worker, declined employee morale, and give a negative impact on client solutions.
See also: Inboarding vs. Onboarding: A Guide for Employers
On the other hand, retraining former employees or providing training programs within the workforce could save up to half or more money of hiring new employees. A 2018 training Industry Report revealed that small businesses spent about $1,096 per employee, mid-sized businesses spent about $941 per employee, and large businesses spent about $1,046 per employee. These budgets are far less than hiring new employees.
“If you believe that training is expensive, it is because you do not know what ignorance costs. Companies that have the loyalty of their employees invest heavily in permanent training programs and promotion systems.” – Michael Lebouef, The Great Principle of Management
Not only can employee training save your company budget, but the training program can also help scale your business to the next level. Investing in employee development is not a waste. It, instead, can help your company thrive in the future competitive business.
Pew Research found that robots, automation, and artificial intelligence could perform more tasks and there might be massive disruptions of jobs. Experts suggested that a wider array of education and skills-building programs should be created to meet new demands. In other words, employers should prepare their own people to meet this demand by providing employee training. Without investing in employee training, there is a big chance that an employer will not survive the future business.
Other than that, having no training initiatives at all could result in dissatisfaction and unhappiness. PwC showed that the current generation, millennials and generation Z who will dominate the workforce today, are generations who value training and opportunity to advance their position. They are aware of the competitive world they are living, thus, jobs that provide training opportunities will satisfy their professional needs.
“Employers should equally invest in employee training and automation for thriving and surviving the future business competition.”
Read also: Psychology Today: Understanding Left vs. Right Brain for Employee Training and Development