There’s no question that employee training is an ongoing debate within organizations: is it really worth the investment?
To help answer this question, ReadyTech developed its Is Employee Training Worth the Investment? infographic. Here’s a preview of what they learned:
About $164 billion is spent on employee training ever year. Direct employee expenditures include: $700 per employee in large organizations (10,000 + employees), $964 per employee in mid-size organizations (500-9,999 employees) and $1,800 per employee in small organizations (less than 500 employees).
But research shows that this might not be enough:
- 46% of U.S. executives are concerned that within the next 2 years, they won’t have the skills needed.
- 51% of companies expect to increase training investment over the next 2 years.
- 35% of executives facing a skill shortage admit they have not invested enough in training.
In fact, the current state of employee training shows that only 26% of employees spend more than 10 hours on training per quarter compared to 40% that spend 6-10 hours on training and an astounding 34% that spend less than 5 hours on training per quarter.
Employees just aren’t spending enough time training and learning.
And just what kind of training are organizations looking to deliver? It varies for each industry, but organizations are looking to create training for several reasons:
- To support succession planning
- To increase employee value
- To reduce employee and customer attrition
- To give software training via virtual training labs
- To enhance the company’s operational efficiency
- To exceed industry training standards
The benefits of providing training is clear. The proof is in the numbers. Research on ROI and training shows that:
- Companies with strong leadership development programs are among the top most admired companies
- Training increases the company’s profit margins by 47%
- Training leads to a 300% reduction in turnover and a 5% rise in customer retention
- Training can improve profit margins by 25% and increase sales by an average of 6.5%
- And due to training, organizations experience a 16.3% increase in cash flow and a 5.2% in employee productivity
So if you need to invest more in training, how do you justify training’s ROI to your team and stakeholders? Download ReadyTech’s Is Employee Training Worth the Investment? infographic to find out training’s effects on cash flow, productivity, customer retention and margins.
And finally, find the 8 variables that will help you begin to calculate the ROI for your training initiative.