The business decision to implement a new training program, or to improve an existing one, is difficult for many companies to make. If they’re thinking shortsightedly, senior managers and C-level execs focus only on the up-front costs associated with such a change.
But deploying better, more comprehensive training isn’t a short-term initiative: it’s a long-term investment that improves performance across the board over time. The more broadly you implement training plans throughout the enterprise, the more benefits you’ll reap in vital areas of your business.
In the current economic climate, your existing staff is a far more valuable resource to your company than you may realize. After years of a high U.S. unemployment rate, the number of unemployed Americans is now down to just 5.5% - a number economists consider “full employment.” If quality employees leave you right now, it will be more difficult to replace them than it has been in seven years.
Yet no matter how big your hiring pool, retaining staff should always be one of your top business priorities. Continually replacing employees is very bad for your bottom line: The average cost of replacing an employee amounts to fully 150% of the annual salary associated with a position.
A well-informed workforce will stay with you longer. The SHRM (Society for Human Resource Management) Foundation found offering “training and development opportunities” to be one of the most effective retention initiatives for companies, regardless of industry. On a case by case basis, many companies achieve extremely successful retention results from enterprise training programs: The development of “Jiffy Lube University” helped Jiffy Lube International reduce their turnover rate by about 30 percent over just two years.
Since it’s impossible to reach a 100 percent retention rate, C-level execs sometimes push back against expanded training because they are afraid of investing in employees who will walk away. But as motivational speaker Zig Ziglar once put it: “What’s worse than training your workers and losing them? Not training them and keeping them.”
According to business consultant and author Ferdinand Fournies, staff performance problems occur because employees (1) don’t know what they’re supposed to do, (2) don’t know how to do it, and/or (3) don’t know why they should do it. Training is a solution to all three issues.
Not only do well-trained employees and reseller partners tend to stay put in their positions longer, they also work smarter and more efficiently. The exact productivity impact of enterprise training is hard to measure across the economy at large, but researchers have seen remarkable results in specific sectors: one study found that manufacturing firms implementing training programs can expect an average gain of 17% productivity.
Every business professional knows that it’s more cost-savvy to retain an existing customer than to acquire a new one, but it’s staggering to consider just how much: According to a study in the Harvard Business Review, increasing your customer retention rate by just 5 percent can mean increased profits ranging from 25 to as much as 90 percent.
As an offshoot of the advantages above, employee training can vastly improve the customer experience. Broadly, customers are happier and more likely to stay loyal to a business when they consistently receive services from long-term employees performing quality work.
Companies that expand enterprise training to customers receive additional benefits. According to a 2008 survey, 93% of respondents saw strong or moderate improvements in customer satisfaction from customer training. 88% saw similar results in customer retention and 77% increased customer revenue.
Simply put, a customer who is educated about your products and services is more likely to use them and to stay engaged with your business by making additional purchases. We’d say that’s a long-term investment worth pursuing.
Once you make the decision to invest in your enterprise training programs, you can further capitalize on the financial benefits by bringing your training online. Research and select an appropriate learning platform with the right tools to make your training program effective and efficient for workplace learning and development.