Training can often be one of the first areas of any organisation which has its budget reduced in times of economic difficulties. But is this a false economy? And is training really as expensive as many believe?
Below are five reasons why organisations should think very carefully before slashing the training budget.
- Cost
The initial outlay for training can seem expensive but is it? An average day rate in the public sector is in the region of £350 – 700.
If we use a model of 15 participants per course and a day rate of £550 that is a cost of £36 a head.
This can represent a very cost effective option if specialist expertise is required by an organisation, in drugs and alcohol for instance. Far more cost effective than employing specialist staff full time or running an in house training department.
- Staff retention
Sounds simple but well trained staff tend to stay where they are.
Staff turnover is a killer for business, the CIPD estimates the average cost per employee to be £8,200, if its managers and senior staff that figure rises to £12,000.
So investment in training and development for staff can pay dividends in the long run, if people want to expand their horizons they usually will, either with your organisation or with someone else’s.
- Better Training = Better Employees = Happier Customers
An investment in training is not just about skilling up the workforce; better qualified staff can provide a better service through improved knowledge and skills.
We all now what better service means, happier customers. In a time of mass marketing, the internet, Google and social networks we can’t forgot the most important marketing tool of all, word of mouth.
It’s worth remembering that with all the technology in the world business still lives and dies on the strength of its customer experience, make sure your staff are offering the best service they possibly can.
- Competitive advantage
‘Suddenly it dawned on me. I thought: “I bet (Steve) Ovett’s out there doing his second training session of the day.” I put the kit back on, faced the snow and ice and did a second training session. I ran several miles, including some hill work.
Not long ago, over supper in Melbourne
Sebastian Coe, on training twice one Christmas day.
What if your competitors are investing in training?
Organisations who do not invest in the development of their employees are not investing in the future of their business.
Even in times of economic difficulties companies who have continued to invest in training and development find themselves in a much better position to compete when the up turn begins.
The advantage is gained through up to date knowledge and skills and a better understanding of the market place. Make sure you don’t get left behind.
- Meeting your objectives
Training is also a key element in meeting the strategic objectives of your organisation.
As we have seen in the points above, training hits many of the key elements needed to be a successful, from reducing staff turnover to gaining competitive advantage, investment in training can pay dividends for all who invest in it.
Reduction of a training budget can have far reaching consequences that extend way beyond the initial reduction in cost. For many organisations this cost-saving will be undoubtedly short lived as they see staff turnover increase and competitors over take them.
A strategic view is vital when reviewing your organisations training requirements; don’t ask can you fund it? Instead, ask can you afford not to?
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