Why You Need to Invest in More Employee Training

On the budget-cutting block, employee training is a prime target. It’s expensive, it’s time-consuming (and time is money, after all), and it doesn’t seem to have overt or immediate impact on your income. Cutting out employee training seems like a budgetary win.

Employee turnover, low employee morale, and hiring new employees are costly even if they don’t have such a simple and clear line item in your budget. When you do away with training, however, you increase these types of problems.

Whether you realized it or not, you just increased your costs by cutting out training.

Maybe you’re telling yourself lies and you think that only high-level employees need training, or that new hires are all trained and ready to go. Or perhaps you think you can make training a rare and quick occurrence, just enough to check the box on the list of employee incentives and call it good. Or you’re afraid you’ll invest heavily in training only to have a competitor steal your employee, so you’d rather not waste the money.

The truth is that the question isn’t whether you need employee training or not, but whether you’re ready to invest more in employee training, not less.

Trained Employees Aren’t As Likely To Quit

Plainly stated, trained employees don’t quit as easily as untrained employees. But 40% of employees who receive little or no training quit in the first year. Why does this happen?

Because a trained employee is confident and enjoys her work. She meets challenges without fear, because she knows what to do. A trained employee understands her boss appreciates and values her. An untrained employee struggles along as much as they can before finally quitting, feeling unappreciated.

A couple of things about the problem of employees quitting:

1. It’s expensive to replace them.
2. It hurts the team.
3. They may have spread their bad attitude (if that was an issue) to others before they quit.
4. Customers notice the constant turnover and question the culture of your business.

Now, some employers have learned to function on the idea that they’ll offer no real training and basically dump all the new hires in a pot and some will wash out while others will make it. But why waste all of that hiring energy? Hire specifically, and train for the long term.

Because employee turnover is expensive.

Every time a business has to replace a salaried employee, for example, it ends up costing them six to nine months salary. There are also the costs of advertising and holding interviews. And, it takes a new hire about a year or two to reach their peak productivity. So if you have employee turnover that is functioning in the yearly bracket, you are taking a serious hit to your bottom line.

Replacing an hourly employee is also expensive. According to the Center for American Progress,  “the cost of replacing an employee earning less than $30,000 per year is about 16 percent of that person’s annual wage.”

Trained Employees Have Better Morale

If you have a job you are expected to do, and you’re not really sure how to do it, you’re going to feel fear, inadequacy, and be hesitant. And after too many days of this, you’re going to dread coming to work and your morale is going to start to tank.

Not a great situation for the workplace, or for the bottom line. But do you really care about employee morale?

If your answer is no, then you also don’t care if your customers come back. Low employee morale has a direct impact on the experience your customers have. Bad morale, crabby employees. Crabby employees, offended customers. Offended customers…don’t come back.

You know, most employees want to be good employees.

They want to do a good job, not just for you but so they can take pride in knowing they are doing things the right way. They want to delight the customer, complete a project, and achieve something notable. You have to train them in how to do that if you want them to have great morale.

Trained Employees Reduce Costs And Increase Customers

First, let’s list a few qualities of untrained employees:

1. Less efficient.
2. Low productivity.
3. Less knowledgeable on the sales floor.
4. Inability to offer great customer support.
5. May be unsafe.

Looks like an expensive list, don’t you think?

Training is knowledge and knowledge is power.

Untrained employees won’t have the answer to customer questions. They won’t be able to offer top-notch support. They’ll be terrified that some customer will ask them to do something they know they aren’t qualified to do, and will make every effort to avoid customers or situations where that might occur. They won’t work as efficiently or produce as much as a trained employee, because they are effectively trying to train themselves and that eats into what they could do otherwise. And they might not do their work in the safest manner possible, opening themselves (and you) up to injury and missed work.

When an employee is trained, you give them confidence that they can handle any situation that comes their way, whether it is customer-centric or maybe even a computer system that crashes at a bad time. You make your employees competitive, because they can roll with the flow and are quick to rebound.

Would you rather be the business that customers know they can get great help, or the one where talking to staff is like talking to a brick wall?

You Aren’t At The Mercy Of The Hiring Pool

Let’s face it. Sometimes the job applicants you get aren’t really qualified for the job.

It’s completely disheartening (especially if you’re always in a state of hiring) to constantly feel like you have to choose between the lesser of two evils: unqualified or bad fit. You know that hiring the wrong employee is going to cost you in the long run, but you’re at the mercy of what’s available.

What if you find someone who is a great fit otherwise (great ethics, willingness to learn, positive attitude, personality, etc.), but lack some of the skills required? It’s hard to pass them by. Having a robust employee training model in place can sometimes make up for the lack.

While you can’t be expected to provide a college education in a few weeks, you can help train an employee in basic sales, communication, technology, and so on. This way, when hiring, you can consider great potential employees who might not have every skill yet, but can learn on the job.

Don’t Ignore The Importance Of Entry-Level Employees

A 2014 survey discovered that 52% of new hires don’t receive any type of training.

Do employers see entry-level jobs as insignificant? They shouldn’t. After all, who is often the face of your company to your customer? When customers come in your store or call your business on the phone, who do they interact with? Your entry-level employees.

They are who your business is, as far as customers are concerned. Customers don’t know how great the management and behind-the-scenes staff are. They only know what they experience.

The entry-level position is not a throw away position.

Employees who might never do anything but work a cash register on the sales floor still need training (beyond how to run the cash register), not only because customers come into contact with them, but because without training, those employees often quit. Entry-level positions face the highest level of turnover (between 65-85% annually) and often the lowest levels of morale.

What does turnover mean to you?

It means high hiring costs. It means a team that isn’t cohesive, always in a state of flux. It means customers start to see you as never having skilled staff on hand, and a reputation for always having to deal with a trainee every time they go to make a purchase.

Even if that entry-level job seems too simple for training beyond how to work the cash register or sweep floors, there are still important things those employees need to know.

1. How to communicate with customers. As a customer, have you ever experience the frustration of an employee who mumbles, can’t look you in the eye, and seems scared to communicate? Train entry-level employees on how to communicate professionally and with confidence.
2. How to respect customers. Don’t assume employees know they should be respectful and patient with customers. Ever faced a clerk who seemed annoyed that you’re bothering him as you tried to make a purchase?
3. How to be self-motivated. Too many entry-level employees don’t realize that just because they haven’t been given a specific task to do that they are still to be working and part of the overall success of your business. Train your employees to be self-motivated, and then when they have finished assigned tasks, how to find cleaning or other tasks to do to stay busy and off of their phones. When a customer asks a custodian where to find something, does the custodian say “it’s not my job” and walk away?
4. How to sell. If selling is part of the job, train them on how to sell without being too meek or too aggressive.
5. How to deal with stressful situations. Employees don’t have to be afraid of irate customers or a lunch rush if you train them how to diffuse and deal with these kinds of situations. Do your employees know they can get you to come down and deal with an upset customer, or are they clueless on the policies you have in place for them to use?

For many people, entry-level positions may be their first job. This is especially true with younger workers, or workers who haven’t had much success in the job realm. Giving them training on how to generally conduct themselves as confident professionals can help them down the road.

Get rid of the mindset that entry-level jobs are irrelevant to the bigger picture. You’re going to lose employees and customers if you think that way. Invest in more employee training and don’t leave out the entry-level positions.

—

Employee training doesn’t have an obvious ROI. You won’t necessarily see an immediate and tangible return on all the time and money you put towards training your employees to be able to do their jobs confidently and well.

But, as you’ve seen, studies show that employees now expect it, and that, in the long run, there is a positive ROI.

Don’t cut employee training. Invest in it even more than you do now. Remember: your employees are your most valuable asset.