A common question we get asked is what is the Return On Investment (ROI) for your training, or any training for that matter? It is a fair question, as we understand that all companies want to get value for their money. Today, I wanted to address the other side of this — the cost of not training someone, especially in a time of crisis. Recruiting, staff satisfaction, and staff retention are all variables that are affected by the hidden costs of not training.
The data shared by industry experts is overwhelmingly in favor of comprehensive training. For example, at a time when manufacturing is trying to attract the next generation of skilled labor, the data suggests that the opportunity for promotions, which comes with expanded training programs, and training itself, are top of mind for Millenials.
- 35% of millennials consider comprehensive training and development programs as the top benefit they would want from a company.
- Employees who feel they cannot develop in the company and fulfill their career goals are 12 times more likely to leave the company.
- Companies that invest $1,500 on training per employee can see an average of 24% more profit than companies who invest less.
- In a study of more than 3,100 US workplaces, a 10% increase in educational development produced a 6% gain in productivity.
With that in mind, let us now consider the cost of replacing staff if they leave. According to industry data, “training and retaining current employees is cheaper than hiring new ones. Hiring someone can cost up to 30% of the job’s salary which for an employee that makes $40,000 a year equals $12,000 to hire someone new.”
This makes the argument for investing in learning compelling, especially in manufacturing when there is a high turnover rate, high recruiting costs, and a lengthy onboarding process. Each $1000 not spent on training has a potential cost of twelve times that amount, as measured by loss of productivity and staff replacement issues.
During the current pandemic, our customers are either in full production mode or have sent workers home. In either case, now more than ever the cost of not training is much higher than training.
It’s important to remember though, that not all training is created equally. One time training is not sufficient, and when a learned skill is not in use regularly, it errores quickly. We know for a fact that our learning decreases significantly when we are not using our skills. Studies show that we forget as much as 60% of what we learn after 48 hours. That means the forgetting curve wastes 60% of your training budget when training is not reinforced. Now imagine what that curve looks like in an extended lock down situation.
Training from home
It is imperative that staff be constantly trained especially during a stay at home mandate, so that when they are ready to go back, they are productive and working efficiently and safely. Using a simulation-based training program like the Simutech Training System lets staff retain 90% of what is learned and can be done from home, it will ensure that staff is ready to go back to work and practice good work habits such as Lock out/Tag out.
The true cost of not training workers, which includes personal injuries, damaged equipment, poor product and low customer satisfaction. We can break that down even further though:
- The average occupational injury costs employers $36,500
- U.S. employers pay about $1 Billion in workers compensation expenses each week
- The U.S. Bureau of Labor Statistics states that a good worker safety and health program can save $4 to $6 dollars for every $1 dollar of investment.
- The cost of medical attention for staff because of injuries sustained from unskilled use of equipment and supplies;
- Compensation to customers for defective products;
- The cost of defending the company against lawsuits from employees who feel their injury was the result of inadequate training, from outsiders injured while visiting the company, or from consumers who purchased faulty products.
Even one of these costs far exceeds the cost of purchasing training upfront. That’s why we recommend that you do the following:
- Now is the time to make sure training is in place, make sure staff that is working hard gets training time immediately after this crunch is over.
- Be sure you schedule training for staff who are at home.
- Use online-based Simulation training to give your team real hands on practical experience.
- Maintain constant check-in and review training data with your team.
- Make sure you use training programs to assess staff and their skill retention before they go back to work.