15 research-backed benefits of employee training
The total annual expenditure for training in the U.S. is now in excess of $100 billion. With high inflation, increasing interest rates, and an atmosphere of economic uncertainty, it’s safe to assume that business leaders will want to know if the benefits of employee training are worth the investment.
It’s more important than ever for learning and development leaders to be able to articulate what the organization and its employees have to gain from training. To get the wheels turning, this article will present a variety of ways L&D has a meaningful impact on the business, backed by recent research.
15 benefits of employee training
People who stop learning stop growing, and the same is true of organizations. In this ever-changing world, an organization that doesn’t keep developing its workforce is not likely to survive very long. In addition to increasing the vitality of an organization, here are 15 benefits of training employees.
1. Positive psychological effects
Chief among the intangible benefits of employee training is the confidence that comes from feeling competent. People who are confident in their roles are typically more motivated to seek new responsibilities and take advantage of upskilling opportunities.
Additionally, learning programs that directly focus on employee wellness produce positive psychological effects. For example, one study analyzing the effects of mindfulness-based training in occupational settings found improvements in employee wellbeing, job satisfaction, and work engagement.
2. Improved individual performance
Another one of the benefits of employee training is the impact it can have when the time for performance assessments comes. Custom learning pathways provide a means for employees to develop in their identified areas for improvement.
Additionally, because performance assessments are typically tied to promotions and salary increases, training can be a key contributor to an individual’s compensation. This is significant because of the correlation between monetary compensation and employee job satisfaction, which increases retention.
3. Reduced turnover
The cost of replacing an employee can be as much as twice the individual’s annual salary. The intangible costs of losing employees are also significant, including the loss of expertise and the negative effect on team morale.
However, a recent study comparing the results of multiple surveys found that companies highly rated for employee training have 53% less attrition than companies with poor ratings for training. And 94% of employees said they’d remain with a company that invests in their development.
Employees who feel valued because of the investment in their development are more engaged and connected with their organization. The competence they gain, one of the key benefits of employee training, gives them the confidence to tackle challenges rather than jump ship in difficult times.
4. Stronger collaboration
In an in-person training, learners typically have the opportunity to interact with their peers, often from different functional areas, in small-group activities. This allows employees to expand their peer networks while exercising their collaboration skills.
And the ripple effect of collaborative exercises is felt far and wide. Collaboration facilitates the exchange of knowledge, promotes innovation and creativity, and improves problem-solving. Not to mention its potential for decreasing the isolation that is often felt in remote workforces – never underestimate the value of including breakout rooms and group chats in virtual instructor-led training.
5. Boosted productivity
Learning and development can have a positive impact on employee productivity by offering training on skills like how to communicate concisely, conduct meetings effectively, and increase focus while working from home.
However, quantifying the impact of training on productivity can be a tricky business that relies heavily on establishing some reasonable basis for comparison. For many organizations, that entails measuring the length of time for a new hire to become fully productive in a given role, and seeing if that time can be reduced through training. For example, Glassdoor reported a 70%+ increase in productivity as a result of onboarding that included advanced learning tools.
6. Better managers and leaders
Facebook conducted a study and discovered certain commonalities among employees who were predicted to leave the company but stayed anyway. They concluded that these employees’ managers played a large role in retaining them.
Leadership development is one of the biggest benefits of employee training for the simple fact that the old adage, “People don’t quit a job; they quit a boss,” rings true. Some of the skills that have become extremely important for managers to develop, even more so in remote-first workplaces, include emotional intelligence, inclusivity, and trust-building.
7. Attracting new talent
Providing opportunities to learn and grow is now deemed the top characteristic of an exceptional work environment. SHRM has also stated that people prefer to work for an employer that helps them develop new skills. Job seekers are well aware of the need to continue adding onto their skillset to remain competitive in the talent marketplace.
To fully realize L&D’s impact on the recruiting process, consider including a description of the organization’s learning programs in job postings, posting employee success stories on the website, and sharing about L&D offerings during interviews with candidates.
8. Bridged skill gaps
It wouldn’t be a list of employee training benefits without mention of closing skill gaps. Skill gaps were exacerbated by the COVID-19 pandemic and related talent shortage. A McKinsey & Company study found that 87% of companies have either identified current skill gaps in their workforce or expect to experience skill gaps in the near future.
According to the World Economic Forum, more than half of all employees will require significant reskilling and upskilling by 2025. Learning and development teams will be responsible for bridging these gaps, and around the world they’ve identified reskilling and upskilling as their top priority of the year.
9. A more inclusive workplace
According to Newsweek, a recent survey of large companies found that more employees have attended training on diversity, equity, and inclusion (90%) than training programs intended to improve their work performance (78%).
It’s clear that more and more organizations are beginning to recognize the importance of DEI programming. And the benefits resulting from the training investment are an added bonus. For example, research completed by global nonprofit Catalyst found that companies with inclusive cultures report a 59% increase in creativity, innovation, and openness.
10. Breaking down silos
Another one of the benefits of employee training is its ability to break down organizational silos, which have been described as the “greatest threat to organizational performance.” Information silos exist when people in one functional area don’t have easy access to information used and maintained in other areas.
Training on collaboration and cross-functional project work can develop a silo-busting mindset without setting fire to the org chart. With this perspective, employees don’t hesitate to share information or seek input from sources beyond the four walls of their department.
11. A competitive advantage
Most organizations have come to recognize the L&D function is not merely a cost center that provides support but doesn’t generate revenue. Increasingly, learning leaders are being viewed as strategic business partners to operating units and executive leadership. In fact, Forbes has described L&D as a competitive differentiator.
One of the biggest benefits of employee training is that it provides a competitive advantage by enabling employees to stay at the top of their fields. For example, organizations that keep workers’ digital fluency and tech skills up to date are better able to make good use of data and develop new products as soon as customers’ needs shift. In today’s rapidly changing business environment, this ability to innovate on a dime is invaluable.
12. Fewer compliance problems
On average, non-compliance costs U.S. companies about $14.82 million annually. Employees who understand the compliance issues associated with their job are less likely to commit violations and incur fines or penalties.
A 2022 study examined the potential ROI that organizations could realize by implementing a compliance training solution. The researchers found that the composite company used in the study would realize an ROI of 317% and would save $3.37 million due to the lower risk of compliance failure.
13. A proactive strategy
It’s commonly known that employee training creates opportunities for upward mobility, which aids in succession planning. But it’s also preparing workers for entirely new roles as technology, particularly artificial intelligence, eliminates jobs and changes the nature of work.
For example, there is a growing demand for capabilities that enable employees to utilize AI, such as data science, machine learning, and robotics. But the soft skills or “human skills” that technology cannot replicate will become increasingly important for workers to hone as well.
14. Better financial performance
All of the benefits of employee training listed in this article have a combined impact on an organization’s financial performance. Additionally, offering training that is specific to sales techniques can directly impact revenue. A recent survey by ATD found that 70% of organizations intend to maintain or increase their spending on sales training.
Similarly, training on customer service skills can have a significant impact on net promoter scores and customer loyalty, both of which affect revenue. Training can include topics such as empathy, active listening, and effective communication.
15. A culture of learning
One of the greatest benefits of employee training is its potential for building a learning culture throughout the organization. Transformation is the default condition of today’s business world. In these volatile, uncertain, complex, and ambiguous times, reactionary organizations panic and falter. But those with learning cultures evolve, because they provide the time and resources for employees to evolve their skillsets.
A culture of learning fosters a growth mindset that enables organizations to adapt to inevitable change with agility. It also fosters a mindset of inquiry, which can lead to the discovery of new market trends and developments before they become apparent to all.
Final note
Perhaps the best evidence of training’s impact is the year-over-year increase in businesses’ overall L&D spend. A recent Forbes article stated that 67% of HR managers saw their L&D budgets increase in 2022. However, some organizations will experience learning budget cuts this year.
The benefits of employee training that are listed above can serve as a starting point when building a case for resources, but L&D teams should also explore new ways to shine a spotlight on the value of learning. Use technology to your advantage, focus on high-value metrics, and tell a story with the data – minus the L&D jargon – to gain buy-in from decision-makers.
