How Training Employees Can Maximize Profit

It is no secret that employee training is important. However, what may be unrealized to some business owners is how much of an impact employee training can have on their company's bottom line. In this article, we will discuss the importance of employee training and how it can help your business maximize its profits. We will also provide tips on how to make sure your employees are getting the most out of their training!

A study by the American Society for Training and Development found that companies could get up to a 57% increase in sales per employee, and up to a 37% increase in gross profit per employee. In other words, employee training can have a direct and significant impact on your company's bottom line.

Training Reduces Turnover Costs

One of the biggest advantages of employee training is that it can help reduce turnover rates. When employees are properly trained, they are more likely to be satisfied with their job and less likely to look for other employment. In fact, a study by the American Management Association found that businesses with highly effective training programs had turnover rates that were 28% lower than businesses with ineffective training programs.

Many employees feel valued and an increased loyalty to companies who invest in their training. We find that specialized advanced training is something that many people hold as a large benefit. If the company they are with provides this training regularly, they get nervous that they won't find that benefit at other companies. An example is our Blue Sky Certification course. Many Certified Users will stay with a company that provides for their annual certification.

Training Reduces Payroll Costs

It's counterintuitive that training, which usually costs time and money, can lower your expenses. But stay with me here, because when training is done effectively, it can actually reduce your payroll. And I’m not just talking about reducing employee churn. And this is even true when you give employees raises for their skill increases.

If you have an employee who is over capacity, meaning they are too busy and their work is suffering (maybe the quality has decreased because they are rushing, or maybe they are delivering things late) you need to hire an additional team member. Even if your original employee is only 15% over capacity, you still need to hire an additional person, or have unhappy customers.

Alternatively, training this person can easily get them to make up the difference. Even if your employee demands a raise for their new productivity, this will be much lower in cost than hiring a whole new person.

Another way to look at it is that when you hire a new person, training them is required. And training a new hire is usually much more intensive than training an existing employee. So not only do you save expenses, you also save time.

Training Improves Customer Loyalty

When employees are properly trained, they are able to provide better customer service. This leads to happier customers who are more likely to continue doing business with your company. In fact, a study by the Temkin Group found that companies who invest in employee training have three times the customer loyalty as companies who don't invest in employee training.

It's a law of business that acquiring new customers is more expensive than maintaining existing customers. Customer churn can be deadly to many companies, so anything to prevent churn can be a life-saver.

In our experience, we've found that companies with highly trained and knowledgeable employees are often relied upon by their customers for more than just basic project work. Customers will look to these people for advice on other projects, on technology, and for help with difficult jobs. These puts you in the highly enviable position of being the trusted and preferred vendor.

Training Increases Productivity

It's no secret that employees who are properly trained are more productive. This makes sense when you think about it--if your team members know what they're doing and have the tools they need to do their jobs, they will be able to work more efficiently and get more done.

A study by the American Society for Training & Development found that companies who invest in employee training see an average return of $24 for every dollar they spend on training. That's a pretty good return on investment!

We have trained thousands and thousands of people over the years and it is fascinating to watch these professionals grow and develop their capabilities. It is incredibly satisfying to see someone who is struggling at work start to deliver solid projects on time.

Conclusion

As businesses get busier, they often find it difficult to keep up with the demand. This can lead to longer wait times for customers, lower quality products or services, and even frustrated and burned-out employees. One way to combat this is by ensuring that your employees are properly trained. Employee training can help lower turnover rates, lower payroll costs, and maximize customer loyalty.

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