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How To Retrain - and Retain - Your Employees
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Business New Haven
11/12/2001
By: Susan Cornell
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Money spent by U.S. businesses on learning and development as a retention tool - from management-skills seminars to leadership-development training - has grown 15 percent since 1998, from $221 per employee annually to $252, according to Hackett Benchmarking & Research, a firm that tracks best practices in finance, HR and other areas of “knowledge work.”
The challenges of hiring, retraining and retaining are consistently at or near the top of the list of issues faced by all types and sizes of organizations daily.
One-third of employers say that applicants are poorly skilled, while an additional third report that applicants have the wrong skills for the jobs available. Thirty percent report that conditions in their local labor market have a negative impact on their company's bottom line. And 40 percent cite “a well-trained staff” as key to remaining competitive. These are among the findings of a study commissioned by the Center for Workforce Preparation, an affiliate of the U.S. Chamber of Commerce. Only 67 percent of employers however, provided some type of training within the six-month period prior to the survey.
The need for well-trained and qualified workers is an already a vital competitive priority and will continue to rise. Training is an employee benefit and an employer benefit, and should be treated as such. Everyone wins when staff performance is at the top of its game.
But, will the investment in learning continue in an economic downturn, or will training get the axe? If training programs are to survive the budget knives, they will have to prove their worth - and they can. Does it bring new customers? Did it increase sales? Can HR show how training affects the bottom line? By demonstrating the link between training and business results, you can justify keeping it and maintain a well-trained workforce.
Here's the short-course of how to show the bottom-line value of training:
1. Determine how the training is connected to a business need;
2. Make sure the program has clear, observable and measurable objectives; and,
3. Calculate the return on investment.
The last step, determining training's ROI, involves: collecting data to reflect how training has changed a behavior (this can include surveys, questionnaires, on-the-job observation, focus groups and post-program interviews); isolating the effect of training; and converting the data to a monetary value.
Retaining quality employees is critical to employers for a wide variety of reasons, one of which is the cost burden each time a worker leaves. “Retaining employees” is ranked as the second highest competitive factor. Estimates regarding actual costs of turnover range from 33 percent of a worker's base salary to as high as 250 percent of compensation.
What can employers do to reduce turnover? Answering this question demands understanding why employees leave. The standard reasons - pay, benefits, attractive offers elsewhere - are not the primary reasons people leave their jobs; instead, factors related to organizational culture have more to do with turnover.
To better understand and reduce turnover, employers must be open-minded. One way is to conduct exit interviews when employees leave (the Center's survey found that fewer than half of the responding companies did so). Once the employer has a sense of the reasons for turnover, effective steps can be taken to reduce the problem. A sizable percentage of employers have reported employees leave because of problems with issues such as child or dependent care, transportation or medical and other benefits coverage. Larger companies are more likely to assist their employees in addressing these barriers to remaining with the organization.
A variety of employment and training initiatives have prepared thousands of individuals locally for jobs and have assisted numerous employers with training and employee transition. The Regional Workforce Development Board (RWDB) offers targeted financial incentives and develops training programs for employees. The RWDB prepares workers to suit the specific needs of businesses, as well as provides tools to assist in the upgrading of incumbent workforce skills. At no cost to employers, an RWDB representative is sent to work with the employer to assist on meeting their needs.
The group provides industry-specific training featuring strong employer involvement in the design and the content of the curriculum. If the need is for assistance in preparing a sector of the workforce for a specific industry, the situation is assessed and the relevant partners can be convened.
Qualified employers can be reimbursed up to 50 percent of the wages paid to workers being trained on the job. The progress of every trainee is tracked during and after the training period. Paperwork involves an on-the-job training contract, a one-page document that is negotiated between the company and the RWDB. The length of the contract is contingent upon job classification but usually runs between eight and 20 weeks.
By retraining and retaining qualified workers, business' changing needs are met as are shifting national economic and workforce trends. Most importantly, it's the best way for employers to remain competitive.
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