Why training employees is good for your bottom line
Training and developing your employees has never been more important. Younger employees are more demanding about workplace conditions. And older workers are retiring, leaving a labour skill shortage for many companies.
For each Canadian retiring 20 years ago, two young Canadians entered the job market. Today, this ratio is one to one, even with immigration. “Clearly there aren’t as many skilled people around for businesses to hire,” says Nigel Robertson, a training specialist at BDC.
Many growing companies report they’re having a hard time hiring and retaining qualified people. Some industries are especially vulnerable—for example, technology, engineering, construction, manufacturing and nursing.
Training motivates your team
Training and developing employees is an important way to attract workers and retain existing staff, Robertson says.
One of the key reasons people leave a job is lack of training and advancement opportunities. Investing in training keeps employees engaged and shows you care about them.
“Training makes people feel they’re growing and becoming more capable. That’s highly motivating,” Robertson says.
While it’s sometimes hard to measure the return on investment from training, a 2014 study found that worker training programs have an average 10% return. Training also led to 3 to 5% more productivity versus employees who didn’t get training, said the study, which was sponsored by the Social Sciences and Humanities Research Council of Canada (SSHRC).
“It’s about investing in your team—just like investing in a more productive machine,” Robertson says.
A recent BDC survey of Canada’s most successful entrepreneurs found that they pay special attention to human resources management. For 85% of these leaders, training is a priority. This study is the first time BDC found that training is a critical strategy for growing businesses.
Training can fill labour gaps
Training can also help you deal with a shortage of skilled workers. You may be able to save on recruiting costs by training existing employees to fill positions. You get the added bonus of having a proven worker who already knows your company.
You can also use training to expand your pool of potential recruits. “Instead of waiting for the perfect candidate to come along, you can hire a motivated worker who is willing to be trained for a position,” Robertson says.
As well, businesses can fill labour shortages by looking to certain groups of workers who are underused by Canadian businesses, according to another SSHRC funded study. Examples include younger and older workers, immigrants, indigenous people and people with disabilities.
Offer programs for underused workers
Training can be a tool to hire underused workers. For example, you can offer apprenticeships, co-op programs and internships to train younger workers. Similarly, training older workers may keep them in your company longer.
Skilled immigrants are often underused in their field because their foreign skills and experience go unrecognized. You can offer training to help them fill any gaps in their knowledge.
You can work with indigenous employment agencies to hire and train workers. Find out about any government grants for doing so.