This year marks a decade since the global financial collapse of 2008. 10 years may be a long time, but global business is still feeling the aftershocks of the crisis.
In a U.S. article this week, Marketplace reporter Chris Farrell highlighted how the recession has impacted training: “Training budgets were just slashed…And then during the recovery, businesses had multiple lines of workers out the door so they didn’t really have to invest much in training.”
But, as we reported in a recent blog post, investing in training is critical to business success. Here we dig a little deeper into the benefits of employee training and development.
Training and development: The bottom line
According to HR Magazine, companies with a training budget of more than $1,500 per employee per year are 24% more profitable, on average.
What’s more, lost productivity resulting from the under-utilisation of employees can put a major dent in a company’s prosperity. A three-year study commissioned by Middlesex University’s Institute for Work Based Learning revealed 74% of employees feel they are not achieving their full potential at work. Consequently they would value more training and development opportunities. 83% said they would consider studying at home, while 72% would even contribute financially to their training. This demonstrates the enormous appetite for professional development among the UK workforce.
‘Capability loss’ – the risk of underinvesting in training and development
IBM conducted a study to determine the level of capabilities that companies lose over time. They factored in internal and external staff turnover, new technology and other business changes. The study revealed that companies lose between 10% and 30% of their original capabilities each year.
Reticence to invest in training due to market pressures and a lack of ROI data could be responsible for this staggering capability loss. According to the Huffington Post, the fact that it takes time for the impact of training to hit the bottom line makes it harder to track the financial benefits of training and development. But longer-term studies like these leave no doubt as to the importance of investing in people.
Employee training and development “critical for business” – Fidelity Bank
One company that is investing heavily in professional development is Fidelity Bank. Working in partnership with Nichols College, they have created LifeDesign University. This development programme is available to employees from all divisions, and includes subjects such as time management, communication, budgeting and situational management. It also offers trainees the chance to attend talks by subject matter experts and academics.
Chief Operating Officer Christopher W. McCarthy wishes such an opportunity had been made available to him in his early career. He said: “We are investing in people. It is good business. People say, ‘What if you invest in people and they leave?’ But what if you don’t invest in them and they stay?
“The world is changing fast and keeping up is critical for business. The whole concept is a good fit for us, and we’re very pleased with our partnership with Nichols.”
Find a business skills course
Using subject matter experts, as per the example above, ensures your employees are receiving the most up-to-date information, delivered using tried and tested techniques. If you’re looking for a business skills course that’s tailored to your individual needs, look no further than Knight’s Agency. We offer courses on management skills, conflict resolution, assertiveness, project management, emotional intelligence and much more. Get in touch via the form below or call us on 0207 112 8412.
