Small business owners tend to shy away from the idea of implementing a strong employee education and training program, for the most part, because they fear that employee development is going to cost them a lot of money.
In reality, this is one of the rare types of business investments that almost ends up paying off for you over time. Whether you are running a business that employs salaried or hourly staff, investing in employee development programs is worth it.
Being afraid of taking this step is completely understandable, however. It’s a tough time to be running your own business and you need to make every dollar count. But setting aside funds for employee development is something that needs to be a part of your budget, no matter what – and here’s why.
It Helps with Retention
Want to talk about leaking money? Employee turnover is one of the biggest ways small businesses are losing money every year. According to a study performed by the Dale Carnegie Training Center, 40 percent of poorly trained employees end up leaving their companies within their first year on the job.
Most of these employees clearly state that poor training and general dissatisfaction with their status within the company are the main reasons behind their departures. What does this mean for you? Well, the same study estimates that employee turnover costs U.S. business owners $11 billion every year.
All these statistics very strongly support the claim that investing in training and developing your employees pays off, because it’s a lot cheaper to train employees and keep them on the job than it is to replace them.
If you have a development program in place, most of your staff members will see that as a fantastic benefit – one that most of your competitors might not offer. Making that a part of your hiring package will more than likely inspire workers to stay with you, because it shows them that you care about their professional development – something a large majority of employees (especially Millennials) tend to find very important.
Most of all, showing employees right off the bat, even while onboarding them, that you are willing to invest in their future with your company helps to build loyalty.
It Helps You Find Great Employees
Not only can investing in employee training help you keep your best employees, it can help you bring aboard great new people as well. When looking to hire people, you are usually trying to present all of the great benefits that you offer – things that they might not be getting if they choose to join one of your competitors.
If your potential employee sees that you are offering them a chance to grow with you, they will immediately understand that your company is one that expects them to participate right from the get-go and grow professionally in stride with the company.
And once the word gets out in your industry circles (and it will, very quickly) that you are a company that promotes employee development and education, your reputation will skyrocket.
This not only impresses potential hires, customers love to hear about it as well. They would rather trust their money to a company that is investing in their talent than one that is not.
It Helps You Promote from Within
According to a study by Matthew Bidwell, a management professor at Wharton University, promoting people from inside your company to managerial positions is a much safer move than making external hires.
He claims that employees who are hired from outside of the company perform significantly worse than people who have been promoted from within. On top of that, external hires are usually paid significantly higher wages and are up to 20 percent more likely to leave your company. So basically, hiring from outside of your company most likely leads to overpaying people to underperform and possibly leave your company within their first two years.
Educating and training your employees makes promoting people internally much easier. Think about it. Who better to take over a managerial role at your company than someone who has been with you for a while, is familiar with the ins-and-outs of your business and has received a steady stream of education and advancement training along the way?
Employee development programs not only prepare your best and brightest for promotions, they also enable you to see which employees are management material. Giving your staff a chance to learn on the job makes it much easier to assess the strengths and weaknesses of all your employees.
It Ensures Longevity
When you are investing in the development of your staff, you are building a strong future for your company. You are working to create future leaders within your organization and you’re making sure that there will be people within your company who are going to be capable of growing your business, inspiring change and promoting innovation.
Continually training your team also enables you to keep up with all industry trends. Through constant development programs, your team will always be looking towards the future – anticipating customer needs and industry innovations.
Providing training will also enable your employees to approach, learn and integrate new technologies constantly.
When you are putting training programs together, you are forcing yourself to think about the future and plan ahead. You are also learning from past training plans and gauging what type of education and programs work best for your team.
Providing these types of programs basically demands that you stay on your toes and refrain from being short-sighted when it comes to your company’s future.
It Increases Engagement and Productivity
Productivity seems to always be something that businesses are trying to improve upon within their ranks. And while there truly are tons of great productivity tools and methods out there right now, nothing is better for increasing team efficiency than keeping your employees engaged.
According to this infographic, having employees who are not engaged at work costs U.S. businesses more than $500 billion annually. When employees are not engaged, they don’t care about their work. This leads to a decrease in productivity, and even worse, sloppy habits and poor attitudes that can affect relationships with management and with customers.
By continually working on employee development, you can keep your employees engaged and productive. Training programs and educational courses provide challenges for employees. When employees see that they are able to move up in the ranks and take on greater responsibilities and more exciting work projects, they are naturally more engaged and more inclined to perform their jobs at a higher level.