Staff training is often treated as a necessary evil; a box you need to tick to fulfil what is expected of an organisation. Several businesses try to get away with doing the most basic of training workshops, considering such skills development to be a distraction from the actual work.
But quality training delivered at the right time in the right format is not a distraction – it directly affects a company’s bottom line. Businesses that ignore it do so at their own peril.
The importance of quality staff training
Quality staff training involves investing in your employees to help them develop their skills, enabling them to flourish in their roles and grow personally. That’s one of the most important investments you can make in your business. Training can take many forms: weekend retreats, workshops, day seminars, training work trips in another city or country, subsiding educational programmes, or offering your staff courses they would normally not have access to.
According to Forbes, spending on corporate training had reached $70 billion in the United States by 2017. It demonstrates that training is regarded as a worthwhile business investment. It’s a market need. Sixty-eight percent of workers said that training and development is the most important workplace policy; it impacts the organisations they choose to work for.
So why has training become such a cornerstone to how we now do business, and why do we need it?
- The problem with leadership: According to 2017 Deloitte Human Capital Trends report, organisations are facing a leadership problem. Thanks to employee turnover and the changing nature of market needs, more and more organisations are unable to fill their leadership roles. Hiring in-house is the answer here. Training a current employee to fill a leadership role makes more sense than hiring someone new: it is cheaper, the employee is likely to have identified with the company’s culture and he or she will already know the team. The same study by Deloitte showed that 42% of organisations cite ‘leadership development’ as very important and several are investing in strong experiential programmes to train their staff.
- The cost of turnover: According to an IBM study, employees are more likely to leave an organisation if they feel that there is not enough opportunity to grow. Among high potentials (i.e. employees with great skills and who are highly sought-after), 71% said they consider learning a new skill an attractive reason to join a company. Among the millennials, 74% left their jobs for better career development opportunities. Employee turnover can cost a company almost double of the employee’s salary – and one important way to attract and keep talent is through quality training.
Benefits of quality staff training
The benefits of consistent, high-quality training for employees are manifold. Here are just some examples of what an organisation can expect if it invests in training:
- Improved morale: Employees are often stressed and pressurised in their jobs, especially in today’s marketplace where everything moves quickly. In such an environment, it is easy to feel overwhelmed and slightly out of your depth, no matter how talented or capable you are. Employees who have been directly trained in relation to their job and who are actively developing their skills are likely to feel more capable and confident in their talents. This makes dealing with challenges easier, even if they have never encountered the challenge before. This resilience is particularly important if you are trying to create a corporate culture of innovation, as I talk about in the article, Boosting Staff Morale through Innovation and Investment. Innovation means trying out new stuff. Most new stuff fails, so your staff needs to have the capabilities, confidence, and resilience to successfully operate in that environment.
- A more competitive company: Change is happening at such a rapid pace in today’s world that learning has become a life-long venture. It is no longer enough to gain certain skills in university that you then put to use in your work life and grow gradually through real-world experience. Now, the skills required are changing drastically. New technologies need new ways of working and thinking; new processes need new management approaches. Effective training can help keep your staff up to date, and thereby maximise the return on your technology investment. This is of paramount importance if part of your strategy involves leveraging technology to achieve business growth. Research has also shown that training makes employees more competitive and driven – keeping them striving for success and development. Moreover, losing employees without the right skills and hiring new ones is complex and an expensive venture. Companies save a lot more by simply investing in the people they have.
- Better reputation and thus better employees: Companies that invest money in training their employees are far more likely to attract good talent. Employees want an organisation that is willing to invest in their development, as the IBM study shows. And that’s not all – quality staff training can help build loyalty. People stay loyal to the companies that take care of them and they see skill development as an important expression of that care. As mentioned in the article, When Saving Money Costs You More, investing in your staff in general, just makes good business sense.
Staff training as part of a procurement supported corporate strategy
The data referenced in this article make it clear that training and development should not be considered an extracurricular activity. Nor should it be approached in a reactive manner. That means it cannot be undertaken only when the company feels like it is falling behind: when there are new technologies to tackle, when regulations change or when a skill gap opens and the company needs to fill it.
The biggest takeaway from the data, however, is that staff training should not be viewed in isolation. As outlined in this article, the right type of training has the potential to:
- Reduce overall recruitment costs
- Ensure an adequate pipeline of leadership talent
- Help embed and enhance a culture of innovation
- Maximise returns on technology investments
Give the significant company-wide positive impact of training, it would be a grave mistake not to consider it when developing corporate strategy. It would equally be a grave mistake to procure training services in isolation.
A Business Focused Procurement approach is about taking that step back and looking at the bigger picture. It’s about asking the right business questions. What is your company trying to achieve and what are the key challenges? What kind of culture does your company want to establish? Where is the leadership talent going to come from? What role will technology play?
Only when the answers to those kinds of questions are understood should a supporting approach to buying training services be developed.
Get in touch today using the form below to see how training can be made part of a holistic procurement strategy for your business.
