The company-funded training cost is usually covered by lower wages for employees while they're in the training process. It is commonly thought that businesses usually end up incurring greater expenses by funding the training itself as well as through lost productivity from employees during the training period. Both employees and their companies invest significant time and money in company-funded training per year. According to one study, almost half of the workforce participates in some form of company-funded training per year. Also, work training can take up to three work weeks per year.
How important is employee training?
Thanks to a rapidly evolving technological landscape, on-the-job training isn't going anywhere. By providing their employees the skills, tools, and support they need to be successful in their roles, companies can maintain positive company morale and promote general feelings of capability and empowerment among their staff.
This study from the United Kingdom found a substantial 6% increase in productivity when the number of employees who were receiving training increased by 10%.Similarly, a German study found productivity increased by .76% when the number of staff members receiving training increased by 1%. One Portuguese study from the mid-90s analyzed the impact on productivity in multiple companies when considering the opportunity cost of having employees take time out of their work schedule for training. This study found that the return on productivity for these companies was still significant at 8.6%.
Why is employee training important?
- Offering on-the-job training increases productivity and boosts morale by attracting top talent and retaining top talent
- Helps companies identify staff who should be promoted
- Improves engagement among employees by breaking up their work schedule
- Saves company funds by diversifying the skills of existing employees
- Increases company loyalty among employees by making them feel cared about and investing in their development
The argument for company-funded employee training is made even stronger when considering today's cutthroat employee market. As worker expectations continue to increase and the largest U.S. companies weaponize benefits in the competition for top talent, businesses who do not invest in human-centric retention strategies such as employee training will simply be left behind.