MIGRATED TO LYNCH LEARNING Why You May Be Looking at Employee Education All Wrong
In today’s job market, workers place a high value on employee training and education. But if you want to attract top talent, you have to consider education as more than just another expense; employee education can be a big factor for job candidates who face similar offerings with similar salaries. Often many businesses look at employee education as only an extension of employee benefits with little return on their investment. But they would be wrong.
While it seems convenient to say that it is a critical component to a company’s growth strategy and investment, many businesses simply do not provide enough employee training. In this blog, we’ll look at the research and point to statistics about the condition of employee education and training, and what it may mean for the future of your business.
Employees Want In-House Training and Career Advancement Opportunities.
Employees want to advance their careers with your company, but they also want to be productive and bring value. Overall, the more you invest in training your employees, the bigger the benefits to your business. Training and employee education shows that you support your employees and gives them one more reason to stay. By investing in their knowledge, you reduce employee turnover which comes at a higher cost than employee retention. According to Right Management, 70 percent of organizations surveyed confirm that employee turnover negatively impacted their finances. According to a 2017 Work Institute report, the average cost of an employee’s resignation is 33 percent of their salary. By the numbers, let’s say an employee earns $12 an hour or roughly $25,000 per year; the turnover cost for that employee would be $8,250. Also noted by Work Institute’s 2020 retention report, when employees were asked why they left their employer a lack of career development was their number one reason.
External or In-house Employee Training Reduces the Cost of Hiring.
Finding ways to incorporate training opportunities also decreases the cost of hiring new employees. According to the Human Capital Benchmarking Report from the Society for Human Resource Management (SHRM), the cost per new hire is approximately $4129.00. Providing career advancement opportunities like external and internal training increases employee satisfaction. Satisfied employees are more likely to stay on which decreases the high cost of hiring a new employee to take that position.
Employee Training Can Reduce Workplace Stress.
A Udemy Workplace report finds that 44 percent of Millennials, 33 percent of Gen Xers and 21 percent of Boomers had an increase in workplace stress from the previous year. Why the increase in stress? A majority of workers reported that the constant fast pace of changing job requirements, information overload, and the feeling of being under skilled for their position they were hired to do were responsible. Even with this uncertainty, ninety-five percent of Millennials still believe that company training is important to their well-being and long-term career success. When asked how their companies could reduce stress, 56 percent of respondents believed that professional development and training would alleviate their workplace stress. Overall, workers of every generation are upskilling like crazy. Did you know that 42 percent of workers pay for skills training, online classes and workshops out of pocket? Considering that stress is responsible for $190 billion in healthcare cost, it would seem that budgeting for the development of an employee training strategy to address the skills gap most employees experience while on the job could substantially reduce workplace stress.
Employee Training is Profitable.
Untrained employees cost businesses money. Ultimately, they lack the motivation and the knowledge to use the available company resources to do their jobs effectively, which not only leads to waste but affects customer or client interaction and retention. According to Gallup’s State of the American Workplace report, businesses that focused on a culture of learning and teaching outperformed those businesses that did not, and saw a 147 percent increase in earnings per share. Even SHRM’s HR Magazine reports companies that invest $1500 on training per year per employee saw a 24 percent higher profit margin than those companies with lower training investments.
For companies who are looking to invest then look no further than employee education and training. An ADT report found the average cost for employee education to be $82 an hour. Using this as a benchmark, make the necessary strategies and budget allocations. Compared to the turnover cost demonstrated in the Work Institute’s 2020 retention report, employee training and education may be the best investment your business cannot afford to miss.