Fall is officially here! Crisp mornings, warm days, beautiful colors, and pumpkin spiced lattes are abundant. As we approach the final quarter of 2019, we begin look forward and plan for the next year. Yes, fall, (otherwise known in business as budget season), is upon us.
You may be aware that many economic indicators are now hinting at an impending economic downturn. The markets have become more volatile, the global economy is facing some serious difficulties, and this week, the Fed made another noteworthy move in an attempt to brace for tough times ahead. On Wednesday of this week, Fed Chairman Jerome Powell held a press conference announcing the second cut in interest rates this year. The quarter-point interest rate cut indicates fears of an economic slow-down. So what does all of this mean for you? Great question!
As a leader, you are likely looking at 2020 projections, and budgeting for what you believe to be your needs to support them. You’ll likely need to provide supporting information for your budget requests, and you may be asked to rank what you absolutely need versus what would be nice to have if there is enough money left over. Additionally, with the uncertain economic indicators, you may be “encouraged” to be conservative in your 2020 budget. With so many competing priorities, budget limitations, and a possible economic slow-down, what’s a leader to do? Under the circumstances, you might be tempted to reduce your budget request for employee training and development. Or maybe you fear you won’t be able to articulate the reason why you’re not reducing your budget in that area. I want to give you three reasons why even in shaky economic times, you need to commit to investing in your employees. Particularly in employee training and development.
First, focus on the correlation between increased productivity and employee training. For instance, research from the Association for Talent Development (ADT) shows companies who invest in comprehensive employee training yield a 24% higher profit margin than companies who do not. If you can articulate this kind of concrete information, then those who sign-off on your budget will be able to see the ROI. Investing in something with evidence-based data showing it is worth it, speaks them.
Second, focus on the cost of terminating, recruiting, and onboarding employees. The cost is much higher than investing in training, developing and grooming the employees you already have. According to Glassdoor, the average cost to recruit, hire, and onboard a new employee is approximately $4000, and takes roughly 24 days. However, the estimated average dollar amount spent on training and development per employee hovers around $1000-$1500. The math speaks for itself.
Finally, be clear on what type of training will get you the most bang for your buck. Knowing statistics such as training retention rates will help you make the case for investing in this line item. For instance, research shows that an interactive, discovery-based approach to training, produces training retention rates of a whopping 80-90%, while other styles of training show retention rates as low as 5%. This is really important information to consider in your decision making process, and it speaks volumes to those who will review and approve your budget requests.
If you want help determining your 2020 employee training needs, and learn more about our interactive discovery-based trainings, reach out to us via our Techpeopleresources.com contact page, by phone, or through any of our social media platforms which can be found on our website.
Your employees will thank you!