When recession hits, many businesses are tempted to phase out training programs to cut costs in a down economy. But without realizing it, they may be driving away some of their best employees just when they need them most.
To make matters worse, employees can become less productive if they#re not trained or can even become pessimistic about their worth within the company. All this can happen during a time when your company may have fewer employees and a greater dependence on the workers who remain.
Employee training is just as important, if not more so, when the economic boom times have receded. But because budgets are tight for many companies in a variety of industries, the key is to focus the training on increasing productivity # thereby cutting costs # and keeping valuable employees.
Increasing productivity: Training can help workers streamline their tasks and get up-to-date info on how to use new technologies.
While the direct effect of training on productivity is unclear, companies that extensively train employees have been found to have a generally high return on their investment.
A 2000 study conducted by the American Society for Training and Development reported that among 500 U.S.-based publicly traded companies, the half that spent the most on training had a total stockholder return that was 86 percent higher than firms at the bottom half and 46 percent higher than the market average.
The bottom half of those studied had an average stockholder return of 19.8 percent, 22 percent lower than the S&P 500 annual return in 2000.
The Council on Competitiveness also found that a 10 percent increase in training and education has a more positive impact on productivity than a 10 percent increase in work hours.
To ensure that the training can help the company#s bottom line, however, here are a few considerations when creating or continuing a training program.
” Determine how the training relates to a business need.
” Set clear objectives for the program.
” Calculate the possible return on investment.
To improve productivity, most training experts agree that computer-related and technical training tend to be the most effective.
Boosting morale: It#s a widely accepted fact that a happy worker is generally a good worker.
Employees enjoy being trained and tend to be more satisfied with their employers if training opportunities are available in the workplace, according to a Gallup Organization survey on job training. The study also found that 99 percent of employees interviewed said that more training than what they currently received would be useful.
Training is also considered an important part of keeping workers actively engaged in their jobs. New methods and technologies can help spice up an otherwise familiar and possibly boring work routine.
Workers that are bored and disconnected from their jobs can definitely affect a company#s bottom line, according to another Gallup survey. The study found that actively disengaged workers make up roughly 19 percent of the workforce. These dissatisfied employees hurt the company though significantly more missed days and sick days than their more satisfied counterparts.
This means that 24.7 million very dissatisfied employees miss 86.5 million more days of work and 13.6 million more because of illness than average workers. When compared to engaged workers (employees happy and challenged by their jobs), the discrepancy is even more striking. Disengaged workers missed 118.3 million more work days and 33.3 million sick days than very satisfied workers.
Retaining employees: If training makes employees happier and more productive, they#re therefore more likely to stick with their current employer. In general, workers are eager to train in the newest technologies and benefit from general educational enhancements.
Employee retention is higher at companies that have significant training programs, according