Employers lament that staff loyalty is no longer what it was in the good old days. There is one sure-fire way to increase retention, though, and that's by investing in staff. One of the best ways to invest is through training: good for the employee and good for business.
It costs between 50% and 150% of an individual's annual salary to replace them, and this figure represents just the 'visible' costs including advertising costs, the hiring process, orientation and training, according to recruitment specialist Hudson, which produced this figure after surveying more than 7,000 employers.
There are, however, additional unknown costs says Simon Moylan, executive general manager for Talent Management in the Asia Pacific at Hudson. The unknown costs include loss of expertise, reduced productivity and lower morale, as well as the disruption to the business during the transition, which means the true cost of turnover "may be up to three times this amount".
Imagine if you could stave off this cost simply by retaining your existing talent for longer. Reducing staff turnover and increasing the period each employee stays would save tens of thousands of dollars. Do this by investing in your employees' careers, and you would also benefit from the outcome: better performance through an increase in skills and knowledge, as well as better retention.
Making a sound investment
Whether you have emerging talent in the form of a junior with the right attitude, or a mid-level worker who needs a skills boost, it is key to handpick the employees who will be most receptive to further education and training. This means looking for someone who is ambitious, and will appreciate your investment. He or she may be underperforming because of a lack of skills or may be in a role beyond their original job description that requires formal training.
Don't forget to have a meaningful conversation with the employee about their career prospects to gauge whether they are willing and able to take on study. Identify the skills and knowledge you are offering them through training and ensure this contributes to the career path they envision for themselves.
Focus on outcomes
Make sure you select a course that is both at the appropriate level for the employee and focused on the outcomes the role requires. The employee may already have a qualification; decide whether the course will build on the foundation or complement it with related skills. The course must also be pitched at the right level so that your staff member can cope with the study load while working, but challenging enough to be interesting and useful.
Also remember to take a comprehensive look at the role and what's required in terms of skills and knowledge so that you can be sure to match the expected course outcomes. If it's a role that's likely to grow and change, choose a course that will give your employee the ability to grow and change with it.
Securing the benefits
When you pay for an employee's training you can claim this amount as a business expense, represented as a tax deduction. Decide whether you will also allow non-financial benefits such as extra leave to cover study, flexible or shorter hours.
Many organisations choose to secure the loyalty of the employee with a contract that states the employee must stay with the company for a certain period following the completion of the training, or pay back the course fee. This is one way to ensure retention, though if you have chosen your candidate correctly you shouldn't need to do this.
Retention is just one of the measurable benefits that training your staff brings. Intangible benefits such as better performance and higher morale also contribute to the reason why training your staff is good for business.
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