WHY TRAIN YOUR EMPLOYEES?
Firms investing in employee training, compared with those that do not, experience an average of 24 percent higher gross profit margins and 218 percent higher revenue per employee. Trained employees improve your bottom line by saving you time and money through improved performance and productivity. An increase of $680 in a company’s training expenditures per employee generates, on average, a six percent improvement in total return. Based on the training investments of 575 companies during a three-year period, researchers found that firms investing the most in training and development (measured by total investment per employee and percentage of total gross payroll) yielded a 36.9 percent total return as compared with a 25.5 percent weighted return for the same period. That’s a return 45 percent higher than the average. These same firms also enjoyed higher profit margins, higher income per employee, and higher price-to-book ratios.
Training increases customer retention
Poor or no customer service training can have a devastating impact on the bottom line. It costs you six times more to attract a new customer than it does to keep an existing one. A typical dissatisfied customer will tell eight to ten people about their problem. Seven of ten customerswill do business with you again…if you resolve the complaint in their favor. If you resolve a complaint on the spot, 95% of customers will do business again. Of those customers who quit, 68% do so because of an attitude of indifference by the company or a specific individual.
Training enables employees to work smarter
Training employees provides basic skills needed to cope with change in the workplace, improved ability to solve problems; and leads to improved labor-management relations, reduced absenteeism, improved employee morale/self-esteem, positive attitude toward training, and better team performance.
Benefits to the employer of training include increased quantity and quality of work through reduced error rates, reduced waste in production of goods and services, and reduced time per task. These benefits are accomplished by better team performance and improved effectiveness of supervisory staff and translate into financial savings, productivity gains and higher profits. A trained employee better understands how their performance impacts other employees and the company as a whole. Just a 2-percent increase in productivity has been shown to net a 100 percent return on investment in training.
Training improves employee attitude
Employers who support workplace education programs enjoy a more conscientious, resourceful, loyal, and dependable workforce as a result. When employees learn that high-quality work is crucial to the success of the organization and to their own job security, they often become more conscientious. Once they become fully aware of what is expected of them and how their efforts fit into the big picture, and then gain the skills to meet those demands, the quality of their work generally rises. A Louis Harris and Associates poll reports that among employees with poor training opportunities, 41 percent planned to leave within a year, whereas of those who considered their company’s training opportunities to be excellent, only 12 percent planned to leave. A Hackett Benchmarking and Research report shows companies that spend $218 per employee on training have more than a 16 percent voluntary turnover, while companies that spend over $273 per employee have turnovers of 7 percent.
Employers often gain because more skillful employees are more confident employees. Confidence translates into creativity and initiative that, in turn, contributes to the overall performance of the organization resulting in increased employee retention, enhanced company image, and improved recruiting.
 Laurie J. Bassi et al., “Profiting From Learning: Do Firms’ Investments in Education and Training Pay Off?” American Society for Training and Development, 2000
 American Society for Training and Development
 “The 2001 Global Training and Certification Study,” CompTIA and Prometric