What’s more expensive for your company? Training or hiring?
Especially in skill-hungry fields, like IT, companies are beginning to find that training employees in new skills may actually be more cost-effective than hiring. Consider that when hiring an employee, the company is not only paying for recruiter fees, but also the cost of interviewing and relocation. According to the American Management Association, the cost of hiring and training a new employee can vary from 25 percent to 200 percent of annual compensation. Costs include customer service disruption, emotional costs, loss of morale, burnout/absenteeism among remaining employees, loss of experience, continuity, and “corporate memory.”
All of this for a new employee that simply may not be a good fit for the company.
All of this for a new employee that may not stay with the company for more than a few months.
A study from the Society for Human Resource Management points out that 50% of hourly workers quit within the first four months of being hired. In addition, half of senior-level hires resign within the first 18 months of taking a new position.
Consistent and systemized training, however, can reduce costs and help lower attrition rates for both new and long-time employees.
Effective training helps bring new employees up to speed on company culture and expectations—making them feel more comfortable and more likely to stay in their new roles.
Moreso, consistent training that starts at onboarding and continues throughout employment is a more cost-effective and sustainable way of creating added value with your current employees and improving company loyalty.
Unfortunately, only 48% of recent college grads received any type of formal training in their first jobs.
Companies can do better, both for their new hires and current employees. Companies can start now by introducing systemized programs that:
- Bake training directly into an employee’s day-to-day work through e-Learning modules and online resources
- Automate training focused on continuous growth and opportunity, thus requiring less hands-on time from upper management
- Allow employees to move through training at their own pace and on their own time
By taking these key components, companies of any type and size can create systems that help employees grow along with the company, rather than requiring additional new hires. Aspect Active Learning Portal, for one, offers these capabilities as a subscription-based service for companies using Aspect systems.
How does your company handle training during onboarding and beyond?