Hiring a new employee typically costs three to four times the position's salary, according to Edie Goldberg.

Between recruitment and onboarding, most companies are eager to have the new professional dive into the role. The team has already been running short-staffed and may be growing overstressed without someone to fill the vacant position. Those assigned to train the new hire may be counting every minute away from their existing tasks, eager for their new colleague to immediately pick up the slack.

In an environment where managers are worried about budget and co-workers have no time to train, new employees are judged by their ability to sink or swim. Training is often done in passing - either quickly or with outdated materials because no one has time to make a comprehensive handbook of what they need done. It can be tempting to seemingly save the time and cost of training new employees right away. However, there are hidden costs to not training correctly - even if they don't show up for a while!

In this article, we'll go over the true cost of ignoring or undercutting employee training programs, proving how training ROI pays off in the long run. 


High Turnover and Recruiting Costs

Hiring comes with a known and unpleasantly steep cost - increased turnover constantly multiplies that cost. Quality training gives each new-hire investment a chance to become a far more valuable member of the team. Most modern candidates are now "digital natives" who have been learning new software and skill sets their entire lives. Sink-or-swim hiring, however, is too rapid even for most adaptive learning curves. Each employee who "doesn't work out" without a chance to learn the new skills becomes a new re-hiring cost.

If you really want to see some numbers, check out our article Employee Turnover Statistics That Will Scare Your HR Team Into Action. Here are some of our favorite stats:

  • In 2021, an average of 25% of employees across all industries left their jobs voluntarily. The overall turnover rate across industries was 57.3% (HubSpot)
  • Between 2020 and 2021, the average increase in resignations for employees between 30 and 45 years old was 20%. (Harvard Business Review)
  • In November 2021, a record-breaking 4.5 million people left their jobs (S. Bureau of Labor Statistics)
  • More than 48% of employees are already looking for a new job or will start looking for one within 90 days. (BusinessWire)
  • Employee turnover costs U.S. businesses $1 trillion per year. (Gallup)

In scenarios where appropriate training and onboarding is done correctly, the results are transformed. Companies that use development programs have seen increased retention, new hire success, and a 24% gain in profit margins from each hire. Training employees create engaged, problem-solving team members who are often eager to learn new skills and routines to get the job done. Most employees today expect to train and consider internal development to be a high priority.


Training Creates Engaged, Invested Employees

Professionals can become deeply invested in a new employer. According to McKinsey, one of the top reasons employees leave their workplace is because of a lack of growth and advancement.

59% of professionals confess to being self-taught, and over 70% would pursue advancement if it was offered internally by an employer. In addition, promotions and raises that do not reflect growing technical skills and responsibility are often seen as a reason to seek new employment. If your company does not have a system to handle professional development, you will see turnover. However, a system of both training and recognition of that training will allow you to nurture internal talent and reduce your turnover in the long term.

Employers who provide new skills and certifications become patrons and landmarks in each career. A good training course can become a lasting memory, echoed each time the employee uses a new foundational skill in their professional toolkit.

Training also shows employees that the company is invested in them. People tend to feel that they are just a number or temporary replacements. Training and integration with their new team can help employees to commit their best work to learning, onboarding, and then more successfully taking up the role of their predecessor.


Internal Training Unlocks Internal Hiring

Onboarding a new position takes far less time and money when you are promoting someone internally.  Without internal training, you also lose the opportunity to invest in - and benefit from - your best talent. There is a popular piece of wisdom that says

"If a team runs itself for six months while you hire a manager, you should be promoting."

This needs detailed study but is likely to be essentially true. The internal team who are holding it together while you hire may have what it takes to step up or expand if they care to. They certainly have some insight into what they need from a team member, but may not have the time or temperament to provide sufficient training. 


Untrained Failures are Also Costly

Another downside to dropping new hires directly into the job with minimal or hurried guidance is the cost of failure.

The occasional dropped palette or presentation typo is part of doing business. But lost products, broken machinery, lost clients, and botched projects take their toll. Untrained people are simply more likely to make mistakes than people who have been through engaging and completion-oriented training. In hazardous manufacturing jobs where the cost can be a finger, or an eye, safety training is no joke. 

By providing sufficient training, you can avoid the often uncalculated cost of accidents and failures of untrained new hires as they become part of the turnover problem.


Expanding Your Company's Training and Development

Training is an essential part of your staff's potential. From new hires to trusted standbys, everyone is capable of learning new skills and becoming more valuable employees over time. By giving your new hires a chance to learn the ropes, they can come out of the training gates swinging and ready to impress their new teammates with the energy and skills they have been lacking.

With internal training and advancement, your best talent will often seek their own development and can be promoted internally. To further explore training and development programs for your business, consult one of our eLearning experts for free today!

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