“Feeling a little uncomfortable with your skills is a sign of learning, and continuous learning is what the tech industry thrives on! It’s important to seek out environments where you are supported, but where you have the chance to be uncomfortable and learn new things.”
– Vanessa Hurst, Co-Founder of Girl Develop It
More than 90% of business leaders agree that learning and development (L&D) programs are instrumental in bridging important skill gaps. An Accenture study also found that for $1 a company invests in employee training, they received $4.53 in return—which is a whopping 353% in ROI. Regardless, many CEOs are still hesitant about offering L&D opportunities to their employees simply because of how time-consuming it is to set up and manage a training curriculum.
Oftentimes, employee training is focused on prevention—of social media blunders, sales mishaps, workplace harassment, or simply everyday designation-specific slip-ups. How do you measure things that don’t happen? Many companies struggle with assigning tangible metrics to employee training programs, and in turn, fail to see the long-term benefits of training in the first place.
Let’s take a look at the biggest losses that come with not training your employees.
An employee’s ability to sell directly affects your company’s bottom line.
Approximately 57% of salespeople are expected to miss their annual quotas, which means an average company is only meeting one-third of their business goals. While economic downturns and fluctuating markets can sometimes be responsible for a drop in sales, chances are that your employees lack the skills for handling customer accounts.
Remember, technology has drastically reduced purchasing barriers across numerous industries in the last decade. Whether they’re buying socks or an enterprise database, customers everywhere are keen on conducting thorough research to weigh all their options before making a decision. In fact, 58% of the people will stop doing business with a company after a singular bad experience.
Many salespeople have successfully adapted to the ever-changing expectations customers have from brands. For example, 78% of B2B customers said that they are not just looking for a salesperson, but a trusted advisor who can help add value to their business. It’s clear that salespeople who assume more of a trusted advisor role when talking to customers are probably closer to their annual targets versus their colleagues who are still following the traditional sales tactics.
By training your sales team, you are helping them improve their communication, negotiation, and presentation skills to form deeper, long-standing relationships with every customer they interact with.
Let’s take a moment to do some quick math to see the bigger picture:
Consider that an average deal at your organization is worth $20,000. Your win rate is 30% without sales training and 50% with sales training. If your sales team captures 40 qualified leads in four months (or 160 a year), you have 80 wins with training and 48 wins without which is a difference of 32 extra deals closed. In monetary terms, that amounts to a total of $640,000 in annual revenue.
The purpose of compliance training is to educate your workforce on the legislative rules and regulations that apply for their job role (or industry) in terms of safety, harassment, and diversity amongst others. With employees exercising compliance, you can ensure proper governance within your company in addition to maintaining a respectable brand image in the industry.
People are the backbone of any company, as an employer, creating a safe working environment for all your employees should always be one of your top priorities. Not to mention, replacing a valuable team member is not easy.
According to Stephen King, the president, and CEO of GrowthForce, it “takes 8-12 weeks to replace a knowledge worker, and then another month or two before the replacement gets to full productivity mode”.
When you lose a high-performer, someone bringing in $100,000 in revenue, your company will experience a $25,000 loss in income and profits for at least the next 3 months. Not to mention, in the absence of an important team member, you’re expecting the remaining workforce to step up and take on additional tasks even when their plates are full already. You can compensate them for overtime, however, your employees will still face productivity and bandwidth issues since they’re taking on responsibilities that are beyond the scope of their job role.
Instead, you can administer mandatory compliance training about anti-harassment for everyone, especially people in leadership positions, to create awareness about appropriate work etiquettes and eliminate any problematic employee behavior.
Soft Skills Training
According to a LeadershipIQ survey, 46% of newly-hired employees are expected to fail within the first 18 months of their tenure. Strikingly, only 11% of them are experiencing failure due to a lack of technical skills. Some of them have trouble understanding or managing emotions, whereas, others aren’t receptive to feedback or have little motivation to succeed.
Overall, anywhere between 64% to 81% of these employees simply fail because of poor soft and interpersonal skills. Not only this, but soft skills like leadership, proactive thinking, empathy, communication, and creativity become even more important as you go higher up on the corporate ladder.
Employee attrition caused by a lack of soft skills can be detrimental to your bottom-line.
EBN reported turnover can cost companies 33% of an employee’s yearly salary, which means, if a person was earning a median yearly salary of $45,000, the company will be paying an additional $15,000 per person — on top of the yearly $45,000 for the replacement. You can imagine how quickly these numbers can add up simply because your workforce is not proficient in soft skills.
In the end…
In today’s competitive landscape, companies, regardless of size, have to overcome many challenges on a daily basis in order to maintain their positioning in the market. The most important thing is to ensure that your employees are skilled enough to be part of the solution and not the problem.
As is evident, the cost of not training an employee is much higher in the long-run, than the one-time investment in creating and maintaining an effective training program. This doesn’t mean you have to do everything at once.
You can start by offering the most basic training programs based on the size and type of your workforce. For example, a sales-heavy team can benefit from product knowledge training. On the other hand, training on hardware procurement is perfect for a tech-heavy team. Certain HR-related training are designed for everyone.