How employee training impacts employee retention?

Updated:
June 27, 2024
Skills Caravan
Learning Experience Platform
LinkedIn
June 27, 2024
, updated  
June 27, 2024

Employee retention serves as a critical indicator of a company’s organizational health, much like a thermometer measures physical health. High attrition rates, akin to a fever, can severely damage a company’s reputation, onboarding efficiency, training effectiveness, and overall performance. Conversely, low attrition rates suggest a robust, thriving work environment where employees engage in spirited competition, form strong work relationships, and benefit from a positive culture of continuous training and cooperation.

When employees are well-cared for, they tend to stay longer, resulting in impressive, consistent, and engaging outcomes. High employee turnover, however, is costly, with the Center for American Progress noting that turnover expenses can range from 16% to 213% of the departing employee’s salary. Moreover, one employee’s departure can trigger a chain reaction, encouraging others to leave as well.

To mitigate these risks, companies must re-evaluate their training processes and engagements, starting from the very first interaction with potential employees during onboarding and extending through their entire career development journey.

The Importance of Employee Training

Employee training is crucial for enhancing job skills and knowledge, leading to greater workplace effectiveness. Despite the associated costs, the long-term return on investment is substantial if training is consistently applied.

Reasons why employee training is important:

1. Skill and Knowledge Enhancement: Training programs help employees stay current with industry changes, boosting productivity and organizational efficiency. Employees can learn about work ethics, human relations, and safety.

2. Performance Appraisal Fulfillment: Training addresses areas needing improvement as identified in performance appraisals, helping to resolve specific issues and enhance overall performance.

3. Preparation for Higher Responsibilities: Training equips employees for advanced roles by developing necessary skills, such as leadership or specialized software proficiency, ensuring they perform effectively in new positions.

4. Employee Value and Morale: Offering training shows that the company values its employees, boosting their morale and making them feel like integral, productive members of the organization.

5. Performance Management System Efficiency: Training allows companies to test and refine new performance management systems, helping employees understand performance expectations and reinforcing the importance of meeting goals.

6. IT and Computer Skills Improvement: Training programs enhance employees' IT and computer skills, enabling them to use software systems, create graphs, edit databases, and understand network arrangements, thus improving overall workplace efficiency.

An effective onboarding and training program not only makes a strong first impression but also fosters long-term employee retention. Initial training should not be a one-time event; rather, it should be an ongoing process that supports career advancement and makes employees feel valued.

Studies underscore the significance of training in employee retention. For instance:

  • According to a Gallup survey, 51% of employees are considering switching jobs.
  • A recent workplace study found that 87% of employers plan to prioritize employee retention over the next five years.
  • The Allied Workforce Mobility Survey revealed that 25% of employees leave their job within the first year.
  • The Society for Human Resource Management (SHRM) states that 69% of employees are more likely to stay for three years if they have a great onboarding experience.
  • MRINetwork reports that 72% of employees cite career advancement as their primary reason for switching jobs.

Given these statistics, it is evident that companies must proactively divert employees' attention from external opportunities to internal growth and development.

How Proper Employee Training Increases Employee Retention?

Employees face various challenges daily, and their decisions can significantly impact business operations. Companies must consider their employees' lives outside of work and create supportive environments that help them achieve their personal and professional goals. Here are some key advantages of proper employee training:

1. Enhances Workplace Engagement and Productivity

Gallup research indicates that 85% of employees worldwide are disengaged at work. While many factors contribute to this disengagement, it is ultimately the company's responsibility, including its leaders and HR, to foster a culture that values employee input and growth. Investing in training and development can open new opportunities for employees and the company, reducing negative behaviors such as tardiness and careless attitudes. This leads to a more efficient, competitive, and engaged workforce.

By focusing on employee investment and fostering a sense of belonging, companies can increase overall commitment and retention, making the organization more adept at retaining talent.

2. Keeps the Company Competitive

Besides offering competitive compensation, benefits, and a positive work environment, fostering a sense of competitiveness is crucial. Employees motivated by clear goals and career progression are less likely to feel stagnant. Investing in training equips employees for bigger roles, nurtures expertise, and broadens the company's horizons. This approach not only retains loyal employees but also attracts top-tier candidates, enhancing the company’s reputation in the industry.

Career-driven individuals often recommend companies that invest in employee development, further aiding in attracting high-caliber talent.

3. Training is a Worthwhile Investment

Some companies may hesitate to invest in training, fearing employees will leave with the skills acquired. However, SHRM found that training reduces turnover and absenteeism. Additionally, a LinkedIn Learning report showed that 94% of employees are more likely to stay with a company that invests in their career development. Companies should capitalize on this insight by developing training programs that align with both company goals and employee expectations. Showing genuine care for employee development can prevent significant losses due to disconnection.

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Conclusion

Today's workforce values its worth and seeks employers who recognize and invest in their potential. Companies frequently listed as the "Best Companies to Work For" are those that heavily invest in employee development and training.

Improving employee engagement, providing career advancement opportunities, and cultivating a positive work culture form the perfect formula for increasing employee retention. This, in turn, benefits the organization, as employees play a direct role in the company’s operations and performance.

It is crucial to focus on the workforce that supports the business and recognize the mutual benefits that come from effective training and development. By respecting and investing in employees, companies can create an environment where employees have little to no reason to leave.