Is Training an Investment or an Expense?

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Coleen Gowen
Posted by Coleen Gowen on Jun 22, 2018 8:19:00 AM

Is Training an Investment or an Expense?

Training takes time and money: two resources that are in short supply for small businesses. Many end up putting off training and expect employees to learn as they go. But this plan can lead to many operational problems. So, what is the cost of not training employees?

1. Disruption – You’ve probably had the experience of going to a store to purchase a specific item. You may stop an employee to ask for assistance. After explaining what you want to buy, the employee gives you the “deer in the headlight” look and refers you to another employee.

This scenario is regularly repeated in many small businesses that don’t invest in training. If employees don’t understand your products and services, they cannot effectively communicate the benefits, and don’t know how to sell them to prospective customers. When employees are ignorant about your services, and products, customers will develop a lack of trust in your business.

Management expert Michael Leboeuf says, “If you believe that training is expensive, it is because you do not know what ignorance costs. Companies that have the loyalty of their employees invest heavily in permanent training programs and promotion systems.”

2. Dissatisfaction – Business experts report that when employees don’t receive proper training, they feel ignorant and become dissatisfied with their work. When new hires join your business, research shows that within six months about 90 percent decide whether to stick with your business or look for another job.

3. Mistakes – Employees tend to make more mistakes when they lack training. For example:

  • On-the-job injuries increase because workers don’t know how to properly operated equipment.
  • Sales records may not be accurate because employees don’t know how to use the sales software.
  • Errors are made on customer orders, which can lead to unhappy buyers.

You end up investing time to correct filing insurance claims for accidents, reworking sales reports, or calling customers to soothe-over mistakes and offer an incentive for their return business.

4. Lost productivity – Mistakes and errors can impact employee performance and productivity. Employees cannot work efficiently when they don’t understand the big picture of their job and how each task they complete is connected. For example, if employees don’t understand your business software, it may take them an hour to complete a report that should take less than 30 minutes.

5. High turnover – Hiring employees for a new position or to fill a vacated job, it’s a big expense for employees, especially small businesses. It’s estimated that the cost to replace an employee can be up to three times the position’s salary. While you’re recruiting a new team member, usually some of the work isn’t getting done, orders are missed, and everyone’s stress increases.

6. Lack of skills – Employees look for jobs that provide adequate opportunities for professional growth and advancement. Businesses today move at an incredible speed, with new technology and market opportunities continually introduced. They need employees who are adaptable and willing to enhance their knowledge and learn new skills. Employees need constant training and development to help you remain competitive.

Today, employees are less concerned about fitting into the business establishment. They choose jobs that support their life goals. In fact, 86 percent of American employees seek companies that offer continuous opportunities for training and coaching.

eLearning Solution
A Learning Management System, like Traineaze, simplifies the training process for small businesses. Training programs can be created quickly to address specific concerns or teach new product differences. The online software is easy to set up and modify as needed. Read this blog to learn more about the benefits of eLearning. Employees can watch the training modules any time of the day from anywhere. If they have time between sales calls or meetings, they can login to watch a training session while they wait. An LSM helps employees be more productive.

Developing an eLearning strategy is easier than you think. Learn seven tips to creating a training plan.

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Traineaze
Traineaze is easy-to-use online training software that helps companies provide training to employees, partners, and customers. Please visit Traineaze to learn more about how Traineaze can help you deliver great online training.

Topics: Benefits of Online Training