By John Hales, Global Knowledge VMware, AWS and SoftLayer Instructor. Certifications: A+, Network+, CTT+, AWS Certified Architect & SysOps - Associate, VCP-DCV, VCAP, VCP-DTM, VCI, EMCSA
In tough economic times, training is one of the first areas to experience budget cuts within organizations. It seems to make logical sense, after all, since training is an easily quantifiable expense while the return on investment (ROI) is more difficult to quantify. Think about it this way: would you want a doctor who graduated from medical school 25 years ago, having never learned about the latest developments in healthcare field — operating on you or prescribing medicine that existed 25 years ago instead of one that has fewer side effects created a year ago? Training is critical to the success of both the professionals and companies alike.
According to Global Knowledge’s 2016 IT Skills & Salary Report — an annual report that draws data from over 10,000 North American respondents, providing insight into salary trends, must-have skills and sought-after certifications) — over half of all IT managers reported having either a current or a near-term skills gap. The biggest reason for that gap is that their organizations provide inadequate investment in training and/or experience difficulty in finding qualified applicants.
Training vs. Development
There is an important distinction between the terms training and development, especially as used by Human Resources (HR) departments. Training entails learning new skills (such as cloud computing when your IT work is onsite) while development is an enhancement of existing skills (such as advanced training on a product in use).
During economic downturns, HR departments sometimes see the need for development but not training, which might be OK in the short term, but soon thereafter, development for outdated skills is ineffective. Training is required to keep up with new technologies and to discover better ways of accomplishing tasks. In short, organizations must invest in both training and development to stay competitive in the marketplace.
Training increases productivity and reduces mistakes, which collectively enables organizations to operate more efficiently and effectively. While you can learn from your mistakes, they result in a reduction of quality, which creates indirect costs to the business (such as re-creating the desired outcome — correctly this time — as well as fixing issues retroactively). In the aforementioned IT survey, 74 percent of IT professionals stated that training towards certification led to an increase in effectiveness in their current jobs.
Increase Employee Satisfaction
Additionally, employees who feel their employer invests in the development of their skills are more loyal to the company. When employers advocate for the personal development of their employees, the employees become happier and more satisfied with their work. Under such circumstances, employees usually have a growth plan within the organization, leading to advancement opportunities and pay increases. Sixty-six percent of all those surveyed said they want to develop skills for future positions, and 63 percent said they want to further their career objectives.
Once trained, employees are better prepared to take advantage of cutting-edge technologies and developments in their work, which leads to cost savings as well as greater productivity, thereby directly influencing a business’ competitive edge and thus its success. These newly acquired skills can used to advance the company’s goals, again benefitting the bottom line of the organization. A full 89 percent of those taking training say they wanted to keep up to date on technological changes and 77 percent say they gained insights into their current job role.
A well-trained team is typically more unified and cohesive, helping them to function like a well-oiled machine. This further drives the benefits previously discussed.
With more training, the workers can work with more autonomy, requiring less supervision and the overhead that comes with that. They will still need strategic direction and support, but less micromanagement.
Costs of Not Training
Looking at the other side of the coin, companies that do not invest in training are disadvantaged in several ways.
Untrained employees often feel like the organization doesn’t value them, leading employees to look elsewhere to improve their skills — whether by changing organizations to one that has a more liberal training policy or by paying for their own training to land a better job elsewhere. This is especially problematic in a tight labor market where many companies are looking for qualified candidates in which there is a limited supply.
Cost of Training vs. Cost of Replacing an Employee
If an organization sees employees as expendable — just use them and hire replacements if needed — that approach doesn’t take into account the costs employee turnover (vacation and sick time accrued; severance, if required; exit interviews with management and HR; unemployment while the employee finds a new job, and so forth). Additional costs are required to hire a new employee (significant investment of HR’s time; job posting; applicant screening; and interviewing potential candidates).
Furthermore, companies experience a reduction in productivity with new-hires until they become well versed in the company’s way of doing things (several months are required in order for new employees to become fully acclimated). When all these costs are included, it is much more expensive to replace an employee than to keep one.
In situations where a candidate may receive multiple job offers, the perception of how well a company treats their employees gives that company an edge over others. In many cases, an employee may accept a lower salary with better benefits (such as training and job advancement) over one that works the employees to death with a higher salary.
Tim Williams of the Ignition Consulting Group, writes, "One of the frequent arguments against investing in professional development is 'What happens if I train my people and they leave?' A better question is 'What happens if you don’t train them and they stay?”