The fact that retraining current employees is generally far more affordable than hiring new employees should provide management with the impetus to create a retraining budget; however, there are many additional reasons why retraining makes perfect sense.
Furthermore, this is relevant for and applicable to all levels, from the recent entry level employee all the way to the top and therefore those in senior management positions.
There are, as you undoubtedly know well, seemingly uncountable reasons for retraining, including the following that you’re likely to have experienced or are looking to avoid in your organisation.
1. A slowdown of workplace productivity, i.e. underperformance
2. Low employee morale and poor employee retention levels
3. Uncompetitive standards leading to a reduction in competitiveness
4. A reduction in incoming revenue
5. Failure to train or retrain for some time
There are countless reasons for retraining your staff, or training them for the first time if you’ve been lax in this regard; take a reduction in incoming revenue for instance.
Many business managers are hesitant to provide training or retraining for their employees when incoming revenue is down but that’s often exactly what’s missing and many have noticed, upon providing training or retraining for their workforce, that incoming revenue increases as do profits.
Low employee morale and retention is often met with the same assessment by management but once again training or retraining is often what’s missing here and many have noticed a significant improvement in staff morale in the workplace, and therefore a reduction in staff turnover and this, once again, results in greater incoming revenue and profits.
The cost of letting an employee go and hiring someone new
Some managers, not the savvy ones, feel that it’s perfectly viable to allow an employee to go and hire someone new. That isn’t the case because there’s not only a loss of productivity to contend with but also an increase in outgoing expenditure. Take a look at these considerations.
The cost of allowing an employee to go
1. Accrued paid time off
2. Temporary covering costs, e.g. overtime for other staff
3. Payroll admin and related costs
The cost of hiring someone new
1. Hiring manager’s time or recruitment agency services including advertising, screening, background checks, interview, etc.
2. Orientation time and initial training
3. Hiring inducements, etc.
4. Time taken to become comfortable at the new position
Business impact costs
This is an aspect of letting an experienced employee go and hiring someone new that management often overlook, not that they should have overlooked the abovementioned costs either.
1. Delays in customer service and production
2. Disruptions to teams and their work
3. Potential lost clients
4. Greater competition when the former employee joins a rival business or starts one of their own
5. The potential for other employees to join their former colleague at one of their rivals or their new business
There is also the matter of product quality to consider when you are thinking about retraining. There are some programmes that teach and hone skills that not only increase overall efficiency but also improve services and products.
Retraining does not only educate workers but they also introduce companies to new and advanced production methods. When you offer quality products, you would be able to keep customers and even gain more. Without making an effort to retrain your employees, you might miss out on becoming updated with the latest industry trends and end up eating the dust of your competitors.
When management takes into account the considerations elaborated above it becomes clearly apparent and blatantly obvious why retraining employees is the better decision.
Moreover, many realise why they should look into their own training options (management level training) with London Corporate Training Ltd and other well-known management training providers, plus there are many benefits for businesses that not only retrain their employees, but also provide it for management.
1. Better leadership
2. Better team building
3. Better strategy development
4. Increased management confidence
5. Higher levels of employee engagement
Training and retraining at all levels is therefore inherently advantageous for all business organisations and has outstanding benefits to offer employees, management and the business organisation as a whole.