Six real costs of not providing employee training

March 29, 2019 in Manage Training



Six real costs of not providing employee training

“Times are tough. Let’s cut employee training.” So sounds the words of wisdom from many financial officers at organisations. When training is viewed as an expense, then it will be viewed as something which can be cut without consequence. But there is a cost of not providing employee training. A cost which may far exceed any short-term monetary savings.

In this article, let’s review several key costs of not providing employee training. While you may see tangible costs of providing training, there are often far larger tangible and intangible costs of doing nothing when it comes to employee training.

Employee training boost employee engagement

There are many studies which directly link employee training with employee engagement and many studies which directly link employee engagement with improved organisational outcomes.

If you want employees who are…

  • Happier
  • Willing to go the extra mile
  • Innovative
  • Loyal

…then providing them with training opportunities is a crucial ingredient.

Failure may lead to employee turnover. Even worse, employees who highly value training opportunities tend to be better employees – the ones who want to improve. And it’s those high-quality employees who leave as a result of reduced training – leaving you with an overall lower quality workforce.

Training employees is less costly than hiring new employees

Then you have the issue of replacing those employees. Recruitment costs average 20-40% of salaries. Having to replace disengaged staff who leave is expensive.

Equally, it is typically far cheaper to train up underperforming existing employees than to recruit new employees to replace them (who will require training anyway to learn your organisation’s processes).

In addition, there is no guarantee that a new employee will be any better! You may discover months later that you are no further along, except you have incurred expenses in recruitment costs and time delays.

Trained employees are more productive

Training is knowledge.

It’s really as simple as that. Consider the untrained employee compared to a similarly skilled, but trained employee. The untrained employee is…

  • Less efficient
  • Less productive
  • Less knowledgeable (be it product knowledge, technical knowledge or process knowledge)
  • Less able help stakeholders (team members, direct reports, customers/clients)
  • May be unsafe (causing risk to themselves and others)

As you may have heard before: “While you may worry about investing in training only for employees to leave, you should be more worried about not providing employee training and those employees stay!”.

A lack of training harms your reputation

Word gets around. When your organisation views training as a ‘nice to have’, not a ‘must-have’, that reputation starts to spread.

Recruitment of talented workers – people who naturally value self-development – can be much harder when your organisation’s reputation towards training is poor. It’s hard to position your organisation to those talented workers when you can’t demonstrate recent training activity (or, even worse, when they hear from existing employees about a lack of training opportunities).

Your competitors can even use this information against you in certain industries. Competitors may actively promote the investment in their own employees, keeping them upskilled, compliant and up-to-date, and promote this as a strength over organisations who don’t measure up with training.

A failure to provide training creates compliance risks

Not providing employee training doesn’t just harm individual employees; it also creates risks for your entire organisation.

Mistakes and errors made by your employees can result in lawsuits, fines and possibly charges of criminal negligence. Legislation and regulations can also create a burden on organisations to provide compliance training to employees as a requirement of operation – whistleblowing, anti-money laundering and privacy laws are often required elements of training.

If your organisation has a health and safety incident – harassment, trips, stress, injuries – and employees have received no training to help prevent that incident, your organisation may well have failed in its duty of care to employees. That’s going to hurt in any workplace investigation.

A lack of training leads to a lack of change

OK, so there is one situation where not providing employee training might make sense: Your organisation is perfect. When there is no room for improvement, then perhaps training has run its course.

Is that your organisation?

Listen to your management meetings. Does your management team seem 100% happy with EVERY aspect of the organisation’s performance? Does every employee operate at a best practice standard? Have all errors been eliminated in your workforce performance?

When you fail to train, your organisation accepts the status quo. Very little – perhaps nothing – will change. Employees will keep doing what they are doing. You have resigned your organisation to its current standard.

If your organisation wants a different outcome, it needs different inputs. Changes in employee behaviours are critical to organisational improvement. And change doesn’t happen without training.