A corporate training is becoming a necessity for every organization to motivate its workforce and to gain profits with the help of a motivated workforce. In this paper, we are going to discuss the advantages of the corporate training, the need of corporate training and the cost associated with it.
Need and Relevance of Corporate Training
“Engagement is the degree to which employees are satisfied with their jobs, feel valued, and experience collaboration and trust. Engaged employees will stay with the company longer, and continually find smarter, more effective ways to add value to the organization. The end result is a high-performing company where people are flourishing and productivity is increased and sustained.” (Catteeuw et al, 2007).
Throughout the last few years, there have been concerns like, whether the training and development of employees can meet a company’s expectations and business aims, what can be the effect of trained employees on a company? Why is it beneficial for a company to offer, implement and execute a training and development program for their employees?
A corporate training program is very beneficial for a company if budget for the organizational learning and training program is available. Further, it is imperative to find out the obstacles associated with it that keep employers and employees away from a better in-house service/job. It is essential to know that the corporate training is a strong predictor of employees’ productivity and has a vast impact on a company’s overall success and value.
David Pollitt (2005) mentions in his article “Spectacular success for D&A training program” two positive examples of the impact of the corporate training on a company. Pollitt describes in his first example, in which the UK optical retailer Dollond & Aitchinson observed a sales rise and a reduction of employees’ turnover by 20 percent. The initial reason to start with a training program was to improve the staff situation and improve the customers’ perception.
“Perhaps the most important finding from the Accenture Survey of Learning Executives, however, is that training organizations exhibiting certain characteristics appear to strongly contribute to better business performance measured in three different ways are that Productivity (as measured by sales per employee) was 27 percent greater, the revenue growth was 40 percent higher, and the net income growth was 50 percent greater” (Brakeley and Miester, 2005).
An advantage of a training program to a business is an increase in the labor contribution. When labor is more skilled, they are able to invest more ideas into a business. Workers are those people who actually conduct the process of all departments, their ideas is more worthy than an idea of any other person in the organization. There are also economical benefits of a training program to a business. Trainings make a worker more productive, and as we know, every production based business has one aim, to produce more and earn more. Training helps workers to produce more – the goal of higher production is also accomplished with it. This also helps a business to increase its profits by being able to sell more.
As a production increases, a company gets benefits due to more satisfied and returning customers because of the availability of its products whenever they need. One of the major aims of every business is Customer Satisfaction. The customer satisfaction means that a product remains in demand for a longer period of a time, and in the long run, the product might be able to create a brand image in the market, which further means that a business will be able to minimize its competitors.
Thus, because of the product the company might be able to create its monopoly in the market and has a bigger market share, which also means higher profits for the. Training even helps workers to learn how to produce good quality of goods – an increase in quality with less wastage of time and resources mean the customers will be satisfied.
The table clearly indicates that, although the cost of training is high, which will be discussed later in the paper, the advantages of training are much higher than the cost – the advantages have been discussed above.
Training & Learning Programs Increase the Employee Satisfaction Index
A training program also increases the job satisfaction for employees. A well motivated workforce is more productive, remains with the company for a longer period of time, and feels proud in working for the company.
The figure above illustrates that a well motivated worker tends to live with a company for a longer time than a less motivated worker.
The article of Gering and Conner (2002) refers to the impact of the job satisfaction as compared to the attrition of employees in the two years. The graph above shows the relationship between employees’ satisfaction and the wish to leave the company in a period of two years. The level of the blue area indicates that more satisfied employees plan to stay longer in their company, which is a good pointer of job satisfaction and less staff turnovers.
“To reduce turnover, managers must show a genuine interest in their employees’ development and success. Employees want to feel that their contributions are important and want employers to demonstrate their commitment to stated corporate values. In addition to their technical skills, employees want to be appreciated for their work ethic, working well with customers and coworkers, and performing high-quality work.” (Gering and Conner, 2002).
This article states that a well-motivated worker stays longer with a business whereas a less-motivated worker stays lesser. It also states that when a worker’s ability is fully used, a company provides chances for promotion and training to its workforce as well as paying well to its workers then workers remain motivated and stays longer than a worker who is not motivated. He may not complete two years with the company and leave – it also increases the labor turnover rate which leads to a bad remark on the company’s name.
A healthy worker takes less leaves and stays away from burning the organization down by misusing its machineries – production units. Training helps workers to remain healthy as they are also taught the proper way of using the machineries.
In the current competitive markets, where everyday a new technology is being introduced by businesses to beat their competitors, it has become very hard to employ new and skilled workers as they demand higher wages. Nowadays, it is better to train older employees and cover the training cost by giving lower wages to them as compared to the wages a business might have to pay for new and fresh employees.
Another advantage of training to a business is that training creates a more flexible workforce, which means that a certain worker can do more than one task due to the increase in his skills. He can easily shift from one type of a production to another. It really works when a worker is absent and instead of hiring a part-time worker, the worker already in the organization can be given the job.
How a business gets an idea that a worker needs training?
One of the methods is the use of the job description to find out the skills required for a specific job. If there is a difference between the skills of the worker and the skills required for the job, the employer gets an indication that the training is needed.
Employees can also be asked by employers and trainers about the areas where the workers are finding troubles. A gap between the knowledge of a worker and the skills required for that job is lowered with the help of a corporate training.
“The term innovation, most importantly, implies newness. Innovative activity may relate to new products, new services, new methods of production, opening new markets, new sources of supply, and new ways of organizing. But the first thing the customer usually meets with is a new product. Within this context, special attention needs to be paid to product innovation or new product development (NPD) process.” (Liepė and Sakalas, 2008)
A business may need to train workers if there is a change in the process of the business. For example, if a business changes its production process from batch process to just in time process then the workers need to be trained to adopt the new process. A business might need to train the workers as the goals and objectives of a business changes.
Every organization has to alter its technology used in the production department following the changes occur in the technology or in the market where it works. A new technology usually lowers the cost of a production – there is a less wastage of time and raw material. This kind of a change in the production technology will lead to a need for new skills to operate the new machinery. A change in skills of a worker is required, thus, the workers needs to be trained.
Other tools such as an increase in the absence of a worker and increase in the labor turnover also indicate the need of training. If the production level is lower than the expected and the quality of a product is not maintained, it results in complaints from the customers – it clearly means that there is something seriously wrong with the workers and training is needed. As the need of training is identified, it becomes compulsory (to survive in the market) for an organization to train its workforce.
Many businesses, especially those, which are smaller in size, are facing a recession time or facing losses believe in a concept that there is a very less advantage of training; the cost and of training is higher. As we all aware of the fact that today, education and training are become very expensive, especially those, which are related to a production process.
Of the job training is when an employer sends his employee to an institution to learn and develop new skills. In this type of training, the expenses include are: the travelling costs – a huge amount which is to be paid by a business on travelling of the employee, the fees that a businesses has to pay to the institutions that train, equipments needed to practice specially in a production process are really expensive.
There are also some other small costs such as stationery, and in a condition when a worker is sent to a distant area or to another country, then the boarding charges are also being paid by the organization.
On the job training is when a worker is taught the skills required to do a certain operation in the boundaries of an organization where a worker is taught by his senior or some corporate trainer comes to the workplace and teach him. Hiring a trainer is really costly and expensive and a business usually thinks that the time which a worker takes to be trained is wastage as the employee can produce more at the time when he is being trained.
The rise of a well trained staff leaving their jobs and shifting to some other companies in search of higher salaries. Some employers have a misconception that after providing costly trainings, employees may leave the firm without giving any benefit to the company as a return.
When countries and companies face a recession time they give very little importance to trainings, such as in the recession of 1991 in the UK, the number of people employed for training fell by 177,000 from the figure of 1990.
It has been proved that although training is expensive and costly yet the advantages of training to the employer and the worker are much more than the cost. The cost and expenses incurred by the organization are compared with the means of the advantages of training. So when there is a need for training, the workers should be given an opportunity to get trained. It is a responsibility of a worker to payback the business by working hard and showing the interest in the company. For a company, who has educated and polished his or her skills instead of being greedy and leaving the job for a small raise in the wage.
- Catteeuw, F., Flynn, E., & Vonderhorst, J. (2007). Employee Engagement: Boosting Productivity in Turbulent Times. Organization Development Journal, 25(2), P151-P157.
- Harry H. Brakeley and Jeanne C. Miester, Greater expectations, How corporate education can boost performance, Outlook 2005.
- John Gering and John Conner, A Strategic Approach to Employee Retention, Health care financial management, 2002
- Liepė, Ž., & Sakalas, A. (2008). The Three-loop Learning Model Appliance in New Product Development. Engineering Economics, 58(3), 73-80.
- Pollitt, David (2005). Spectacular success for D&A training program Human Resource Management International Digest Retrieved March DOI 10.1108
- Subramony, M., Krause, N., Norton, J., & Burns, G. (2008). The relationship between human resource investments and organizational performance: A firm-level examination of equilibrium theory. Journal of Applied Psychology, 93(4), 778-788.
- The Hay Group, The Retention Dilemma: Why Productive Workers Leave- Seven Suggestions for Keeping Them, Philadelphia, Pennsylvania, The hay Group, (2001)