Companies often cut training to save costs when revenue falls short. However, you can create more efficiency, and cost savings, by training your existing employees. Two thought-leaders on the subject of training and human capital agree that the time put into training produces an “infinite” return on investment.
Training Creates High Efficiency
Seth Godin, author of multiple books on training and marketing, thinks companies underestimate training in its power to pay. Training employees doesn’t just produce a high return on investment, Seth describes it as “infinite.” Untrained representatives can suffer from lack of knowledge on critical subjects, which in Seth’s words provide zero value to the customer, “in fact it’s negative, because you’ve disappointed your customer.”
Seth points out that investing $5 to train employees to return $30 of brand value yields a $25 return. Any improvement from a negative brand experience will return that investment infinitely.
Properly run start-ups place a great deal of emphasis on recruiting and the interview process in order to build their talent base. Unfortunately, often the investment in people stops there. – Ben Horowitz
Efficiency Means Better Work
Ben Horowitz, author of The Hard Thing About Hard Things, agrees. Laid out in his blog post, preparing 4 training courses with 3 hours of prep time means 12 hours of time invested. For 10 employees who will work a total of 20,000 hours next year, a 1% improvement in their efficiency will gain you an extra 200 hours of work.
During his time working at Netscape, Ben found that the second biggest reason for employees leaving (behind hating their manager) was feeling they weren’t learning anything and the company wasn’t invested in them.
With Seth and Ben’s line of thinking, training solves both of these problems.
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