Invest in training, improve growth
By Rayanna Anderson, MBA
Your company is struggling, and you know you need to do something. Nevertheless, what to do. Change is inevitable, but implementing change for the future of your organization may be the true challenge. So how do you move forward? Perhaps employee training and development could be the solution.
Here are three simple reasons companies should invest more in the training of their employees, especially key management employees.
1) Training affects the bottom line of any company. According to Watson Wyatt, a human resource-consulting firm, affianced employees produce 26 per cent more revenue per employee. My experience has shown me that every instance of customer service training responded with an immediate 10 per cent growth in sales. Training is key in creating and retaining a happy component staff.
On the other side, we all have heard about the extreme cost of employee turnover. The calculation to determine that cost can easily reach 150% of the employee’s annual salary and even more when the position is for a manager or salesperson. Those costs include expenses related to the individual leaving, such as the lost productively for the time the position is not covered, the cost of the administrative expense of filling out all of the forms to stop payroll and benefits, and the cost of absent knowledge, skills and employee contacts. Additional costs include the cost of recruiting a replacement employee. Those expenses are likely to include job advertisements and recruiters, the cost of interviewing potential replacements, and expenses relating to drugs screening, education verification and background checks. Finally, the cost of training the new person along with lost productivity while they are learning the job must be a consideration.
2) Management training is the basis for company productivity. According to Forbes, the direct relationship between an employee and their direct supervisor is the number one engagement factor. Engaged employees are happy employees and therefore productivity thrives. While there is theory on what makes a good manager, no one is born with all of the skillset to be a successful manager. Developing your leadership of tomorrow will certainly involve training your young managers in place today. Countless experienced and knowledgeable workers will walk out the door over the next decade when baby boomers born between 1946 and 1964 depart the workforce. According to Buck Consultants, a global HR benefits and human resource-consulting firm, the departure of senior managers over the next several years is the greatest potential danger point accompanying the departure of today’s mature workforce. Subsequently, the retirement of middle management is the number two concern.
3) Training may be your key to success. Successful companies tend to view training as a key to corporate well-being. Consider the well know story of McDonald’s Hamburger University, the company’s global center of McDonald’s operations training and leadership development. McDonald’s founder Ray Kroc, is quoted to have said, “If we are going to go anywhere, we’ve got to have talent. And, I’m going to put my money in talent.” Hamburger University, created in 1961, continues to train over 5,000 employees annually.
So, do you know how much to invest and how to train your employees? After reviewing your corporate plan and vision for the future, a professional training organization can help you plan the type of training and development that will make your company thrive.
This article appeared in the October 25, 2014 issue of the Springfield News-Leader. It is available online here.
Rayanna Anderson, MBA, is director of the Small Business Technology Development Center and the Management Development Institute at Missouri State University’s E-Factory. Anderson writes about issues she sees regularly in her consulting with small businesses in Springfield and the state of Missouri. Email: firstname.lastname@example.org.